TORONTO, March 24, 2015 /PRNewswire/ --
Verde Potash (TSX: "NPK")
("Verde" or the "Company") is pleased to announce that funds from
Brazil's National Council for
Scientific and Technological Development ("CNPq") have been
received by the Federal University of Uberlândia ("UFU"), who has
reimbursed the Company for costs to process its potassium silicate
rock into the fertilizer ThermoPotash ("TK") for UFU's experiments.
The funds allow the Company to provide UFU with the necessary TK
tonnage to carry out its agronomic research program, as previously
announced on October 6, 2014. Verde
would also like to provide an update on engineering and
environmental permitting.
Funding from CNPq
In October 2014, Verde announced
that CNPq, a research financing branch of the Federal Government,
awarded Dr. Gaspar Korndörfer,
Professor at UFU, a grant of R$513,693.90 (around CAD $236,000 at the time) to fund a research program
to further demonstrate the full range of agronomic applications of
TK. Dr. Korndörfer received the disbursement of these funds at the
end of last year. In February 2015,
Verde received R$161,800 (~ CAD
$70,794) to produce the necessary
amount of TK for the agronomic trials coordinated by Dr.
Korndörfer. The focus of Dr. Korndörfer's work is on sugar cane, an
area where the professor is a leading expert and consultant.
Engineering and Environmental License
The Company has reached essential milestones with respect to the
engineering and environmental work necessary to obtain an
environmental license:
- Lima & Zanette, a
Brazilian engineering and consulting firm, completed the mine
engineering work (mechanical, electrical and civil) in November 2014.
- Engineering studies, developed by IC Ambiental, were concluded
in January 2015. The work delineated
some improvements required on secondary roads accessing the mine
site, for which an environmental impact study is required. The
Company expects the study to be completed in April 2015.
- The hydrogeological study, initiated in August 2014 by MDGEO - Serviços de Hidrogeologia
Ltda, a Brazilian consulting firm, was completed in February 2015. This study was required to
identify and measure the mine's impact on groundwater during the
dry and wet season. The Company initially expected completion of
the study in Q4 of 2014 (as previously announced on August 13, 2014), however, due to Brazil's current water shortage crisis, the
study could only be finalized in February
2015. Normally the wet season starts in November and
continues until March. The wet season only began at the end of
December 2014, delaying the Company's
ability to measure the water level.
- In September 2014, the Company
filed a request with The Institute of Historical and Artistic
Heritage (IPHAN)[1], to obtain
permission to commence an archaeological study to identify if the
deposit and surrounding areas contain any archaeological material.
IPHAN is a federal agency under the Ministry of Culture,
responsible for preserving the different elements that make up the
Brazilian society. Archaeological work is a standard requirement to
obtain an environmental license, but cannot be carried out without
first obtaining IPHAN's approval. Verde only received approval in
January 2015. The Company believes
the delay between the time the application was filed and the time
it was approved was due to the change in government as a result of
the 2014 election. As soon as Verde received approval, its team
initiated work early February 2015
and expects the study to be completed by the end of March 2015.
Environmental Licensing
In recent weeks, the Company has been receiving questions from
shareholders about obtaining an environmental license and would
like to add some clarifications on this issue. Specifically, the
questions being asked are around the following lines:
- If the Company's project is so important to Brazil, why is it not being prioritized?
- Is there any specific aspect of the project that creates a
hurdle to obtaining a license?
- Has anything else happened or is happening in Brazil that might be interfering with
timelines?
1. If the Company's project is so important to Brazil, why is it not being
prioritized?
The state environmental agency for Minas Gerais
("SUPRAM[2]") has a significant
degree of autonomy, which allows for reduced political influence
over matters of environmental licensing. The system adheres to the
strict rule of law, with individual liability and high penalties
for officers caught misapplying or overlooking the law. As SUPRAM
is an independent agency, the environment regulations are applied
in a manner that is significantly immune to political pressure. As
it is an agency, there is only so much one can do to push it beyond
its sphere of autonomy without risking prosecution.
The degree of relevance or priority a project is to the country
does not allow for leniency in how the regulations are applied; a
Company has to fulfill every single legal requirement with respect
to completion of various environmental studies to obtain a license.
SUPRAM outlines demanding, rigorous and extensive requirements that
are similar, if not more stringent, than those standards applied in
advanced economies.
Although the requirements are clearly identified, the specifics
are subjective. For example, archeological regulations outline that
an excavation study is required. However, one officer may want to
see a full excavation study and another may not think a full
excavation study is necessary. Another example is the requirement
for a fauna study. Depending on the officer responsible for
reviewing the study, a fauna study completed in the dry or wet
season is enough while another officer may deem that two studies
are necessary, one in the dry season and one in the wet season.
2. Is there any specific aspect of the project that creates a
hurdle to obtaining a license?
There are no issues that can be attributed specifically to the
Company's project that could make it a difficult project for which
to obtain an environmental license. It is a relatively small
project without any waste by-product and very little overburden.
The mine pit occupies only 32 hectares and because of its smaller
footprint and minimal environmental impact, Brazilian environmental
authorities classify the project as Class III, which allows the
Company to apply for the preliminary permit and construction permit
simultaneously.
3. Has anything else happened or is happening in Brazil that might be interfering with
timelines?
The State of Minas Gerais, as Brazil's most prolific mining region, has the
largest number of applications for environmental licenses in the
mining sector, which contributes to slower than average
proceedings. In addition to what is already an inherently slow
process, in 2014, the FIFA World Cup, the federal and state
elections for the executive and legislative branches, and the
subsequent transitions in governments all had a significant impact.
Additionally, the following specific facts have all impacted
timelines:
- Since August 2014, staff at
SUPRAM has been negotiating for better wages, drastically reducing
the number of hours effectively worked;
- Government budget cuts have affected agencies across the board;
most teams are now smaller than necessary; and
- The presence of new bureaucracy, where different steps require
permits from intervening agencies (i.e. in December 2014, the State of Minas Gerais
introduced an additional study required prior to issuing an
environmental license).
President & CEO, Cristiano
Veloso, commented: "I have full confidence that Verde will
be issued the license given the high caliber of the assessment work
completed and the minute environmental impact our project has. The
Company is prepared to withstand extended timelines having cut its
burn rate substantially last year. In February 2015, Verde's cash burn rate was
approximately C$120K."
Brazilian Currency
The Brazilian currency has weakened in face of the US Dollar and
all major foreign currencies. This has rendered inputs for farmers
more expensive; conversely, the commodities most farmers produce
and sell are priced in US dollars, more than making up for the
shortfall. The falling Real also benefits Verde because the bulk of
the Company's costs are in Brazilian Reais while most of the funds
are held in Canadian dollars.
About Verde
Potash
Verde Potash, a Brazilian
fertilizer development company, is focused on advancing the Cerrado
Verde Potash Project located in the heart of Brazil's largest agriculture market. Cerrado
Verde is the source of a potash-rich deposit from which the Company
intends to produce both ThermoPotash ("TK") and potassium chloride
("KCl"). TK is a controlled-release, non-chloride, multi-nutrient
fertilizer that is ideally suited for Brazilian soils. In addition,
the Company is developing its Calcario limestone project, limestone
being a key raw material in the Company's process to produce both
TK and KCl.
About the Cerrado Verde Potash Project
Cerrado Verde is a unique project: 1) its high grade potash rock
outcrops and is amenable to strip mining, allowing fast
construction of a scalable operation; 2) it is located in the midst
of the world's third largest and fastest growing fertilizer market;
3) it connects to Brazil's largest
fertilizer distribution districts via existing and high quality
infrastructure; 4) it has the potential to supply both TK and KCl
to Brazil's local agriculture
market from its large potash-rich deposit.
Cautionary Language and Forward Looking Statements
NEITHER THE TSX EXCHANGE NOR ITS REGULATION SERVICES PROVIDER
(AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX EXCHANGE)
ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS
RELEASE. THIS PRESS RELEASE CONTAINS CERTAIN "FORWARD LOOKING
STATEMENTS", WHICH INCLUDE BUT IS NOT LIMITED TO, STATEMENTS WITH
RESPECT TO THE FUTURE FINANCIAL OR OPERATING PERFORMANCE OF THE
COMPANY, ITS SUBSIDIARIES AND ITS PROJECTS, AND STATEMENTS
REGARDING USE OF PROCEEDS. FORWARD LOOKING STATEMENTS CAN GENERALLY
BE IDENTIFIED BY THE USE OF WORDS SUCH AS "PLANS", "EXPECTS", OR
"DOES NOT EXPECT" OR "IS EXPECTED", "ANTICIPATES" OR "DOES NOT
ANTICIPATE", OR "BELIEVES", "INTENDS", "FORECASTS", "BUDGET",
"SCHEDULED", "ESTIMATES" OR VARIATIONS OF SUCH WORDS OR PHRASES OR
STATE THAT CERTAIN ACTIONS, EVENT, OR RESULTS "MAY", "COULD",
"WOULD", "MIGHT", OR "WILL BE TAKEN", "OCCUR" OR "BE ACHIEVED".
FORWARD LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS,
PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY
DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS
EXPRESSED OR IMPLIED BY SAID
STATEMENTS. THERE CAN BE NO ASSURANCES THAT FORWARD-LOOKING
STATEMENTS WILL PROVE TO BE ACCURATE, AS ACTUAL RESULTS AND FUTURE
EVENTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN SAID
STATEMENTS. ACCORDINGLY, READERS SHOULD NOT PLACE UNDUE RELIANCE ON
FORWARD-LOOKING STATEMENTS.
Readers are cautioned not to rely solely on the summary of such
information contained in this release and are directed to the
complete set of drill results posted on Verde's website
(www.verdepotash.com) and filed on SEDAR (www.sedar.com) and any
future amendments to such. Readers are also directed to the
cautionary notices and disclaimers contained herein.
[1] Instituto do Patrimônio
Histórico e Artístico Nacional
[2] Superintendências Regionais
de Regularização Ambiental
For further information:
Cristiano Veloso, President
& Chief Executive Officer
Tel: +55(31)3245-0205; Fax: +55(31)3245-0205; Email:
cv@verdepotash.com
http://www.verdepotash.com
Iwona Zakrzewski, VP Investor
Relations & Corporate Secretary
Tel: +1(416)844-7337 / +1(416)866-2966; Email:
iz@verdepotash.com