TORONTO, February 19, 2014 /PRNewswire/ --
Verde Potash (TSX: "NPK")
("Verde" or the "Company") is pleased to provide a summary of the
Company's business plan that was selected by Inova Agro. Verde's
business plan for the development of the Cerrado Verde Potash
Project consists of building a greenfield 1,000 tonnes per day
("tpd") plant capable of producing ThermoPotash and also of seeking
performance guarantees for a large-scale KCl kiln. Inova Agro
approved Verde's business plan that requested funding for
approximately 90% of the business plan, which includes investments
in market development, pre-construction costs and working capital
post commissioning for six months.
Verde submitted its application and support documentation to the
Inova Agro program in August 2013. In
September 2013, the Company was
notified of its selection to advance to the program's next round of
evaluation. For the final selection round, Verde submitted its
business plan for the development of Cerrado Verde, at an estimated
total of R$ 280 million
(approximately US$ 115 million), of
which R$ 250 million (approximately
US$ 105 million) was asked from Inova
Agro. This capital is to be provided via loans with subsidized
interest rates, equity investment and non-reimbursable project
investment grants from the Brazilian Development Bank ("BNDES")
and/or the Financing Agency for Studies and Projects ("FINEP"),
both of which are branches of the Brazilian government that operate
Inova Agro. Of the total capital, up to R$
10 million (approximately US$ 4.2
million) can be provided as a non-reimbursable project
investment grant.
Commenting, President & CEO, Cristiano Veloso stated: "The selection for the
Inova Agro funding is a strong endorsement from the federal
government, acknowledging both Verde's competence to bring the
project into production and the importance of the project for
Brazil's long term agricultural
development."
Commencing March 19th,
2014, BNDES and FINEP will meet with the selected companies to
define a "Plano de Suporte Conjunto" (a joint support plan) where
the funding structure will be defined, including the pre-conditions
and a timeline for fund disbursements.
Any applicant to the program can file an appeal regarding the
selection results. The appeal must be filed within ten calendar
days and final results will be confirmed on March 18th, 2014.
Inova Agro
Inova Agro is an initiative of the Brazilian government aimed at
coordinating the resources of BNDES and FINEP to provide financial
support to innovative projects in the agriculture sector. The Inova
Agro support program involves a specific set of criteria and a
schedule for the distribution of funds. Companies and projects that
are successful in securing financial support from Inova Agro will
have funding plans set starting in March
2014.
The Inova Agro program targets three business sectors for
funding: agribusiness inputs, food industry processing and
agribusiness equipment. The Company's Cerrado Verde project expects
to significantly contribute to Brazil's production of potash fertilizers and
therefore fits into the inputs for agribusiness (fertilizers)
portion of the program.
Inova Agro is part of the larger Inova Empresa program, which
spans a number of sectors. The total budget for Inova Empresa is
R$32.9 billion (approximately
C$15.0 billion). While the budget for
Inova Agro provides for R$1 billion
in funding, this figure could increase at the discretion of the
funding institutions (BNDES and FINEP).
About BNDES
The Brazilian Development Bank (BNDES), a state-owned company,
is the main financing institution for development in Brazil. Since its foundation in 1952, the
BNDES has played a fundamental role in stimulating the expansion of
industry and infrastructure in the country. Over the course of the
Bank's history, its operations have evolved in accordance with the
Brazilian socio-economic challenges; today they include support for
exports, technological innovation, sustainable socio-environmental
development and the modernization of public administration.
The Bank offers several financial support mechanisms to
Brazilian companies of all sizes as well as public administration
entities, enabling investments in all economic sectors. In any
supported undertaking, from the analysis phase up to the
monitoring, the BNDES emphasizes three factors it considers
strategic: innovation, local development and socio-environmental
development.
About FINEP
The Financing Agency for Studies and Projects (FINEP) is a
state-owned company under the Brazilian Ministry of Science and
Technology that promotes economic and social development by
fostering innovation in public and private companies, universities,
technological institutes and other public and private institutions
in the country.
Founded in 1967, the organization has funded thousands of
successful initiatives, including the development of Embrapa,
Brazilian agribusiness projects, oil exploration and development of
the aircraft Embraer Tucano.
About Verde
Potash
Verde Potash, a Brazilian
fertilizer development company, is focused on advancing the Cerrado
Verde 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 and potassium chloride (KCl).
ThermoPotash 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
ThermoPotash 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 ThermoPotash
and KCl to Brazil's local
agriculture market from its large potash-rich deposit.
Forward Looking Information
This news release contains certain forward-looking information,
which includes but is not limited to, statements with respect to
the Company's strategy, funding of the Cerrado Verde project, the
commercial production of ThermoPotash and KCl, design and building
of a Flex Plant, timing and completion of a prefeasibility study,
receipt of environmental permits, and the generation of cash flow
from Phase 1 of the new strategy. Forward-looking information
involves known and unknown risks, uncertainties and other factors,
which may cause actual results, performance or achievements of the
Company to differ materially from the forward-looking information.
Material risk factors that could cause actual results to differ
materially from such forward-looking information include, but are
not limited to, the failure to obtain necessary regulatory
approvals, failure to obtain financing on acceptable terms, risks
associated with the mining industry in general (e.g., operational
risks in development, exploration and production; delays or changes
in plans with respect to exploration or development projects or
capital expenditures; the uncertainty of estimates and projections
relating to production, costs and expenses, and health, safety and
environmental risks), commodity price, demand for ThermoPotash and
KCl in Brazil, exchange rate
fluctuations and other risk factors set out in the Company's most
recently filed Annual Information Form under the heading "Risk
Factors". Currently, ThermoPotash is not commercially produced or
sold in Brazil. As a consequence,
there is no current market for this product. Should commercial
demand for ThermoPotash fail to develop, the Company's business
model may not be appropriate. Accordingly, readers should not place
undue reliance on such forward-looking information. Material
factors or assumptions used to develop such forward-looking
information include, but are not limited to, the demand for
ThermoPotash and KCl in Brazil,
the ability to secure necessary environmental and mining permits,
the ability to secure financing, and other assumptions set out in
the Company's current technical report. The Company does not
currently intend to update forward-looking information in this news
release except where required by law.
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, Investor
Relations
Tel: +1(647)295-8120 / +1(416)866-2966; ext. 224; Fax:
+1(416)866-8829; Email: iz@verdepotash.com
(NPK.)