Aguia gets green light, kicks off Brazilian phosphate mine

Aguia Resources has just kicked a major goal in South America, securing the final and all-important operating licence for its Tres Estradas phosphate project in southern Brazil and immediately kicking off mining operations.

The ASX-listed multi-commodity explorer has now officially made the leap from developer to producer after Brazil’s environmental agency, FEPAM, granted the licence that provides the catalyst for the company to mine and process phosphate for sale into the domestic market. 

With the final piece of the permitting puzzle now in place, Aguia has wasted no time getting to work, with mining equipment already mobilised to site and operations commencing immediately. The company says it will initially focus on removing topsoil and extracting high-grade blocks from the pit's north-eastern area. 

The first ore is expected to arrive at Aguia’s refurbished processing plant in Caçapava do Sul for processing and bagging in the first week of June. 

The move is a significant one for Aguia, establishing it as one of the few domestic phosphate producers in Brazil – a country heavily dependent on fertiliser imports, which have recently been subject to severe supply disruptions and higher prices.

The project is in Rio Grande do Sul, a major agricultural hub that currently imports 100 per cent of its phosphate needs, totalling more than five million tonnes annually. 

Aguia Rsources managing director and chief executive officer Timothy Hosking said: “Securing the operating license is a major milestone for Aguia and marks Tres Estradas’ move into production. With all environmental approvals now secured, we are ready to begin operations, build stockpiles, and start processing through our plant at Caçapava do Sul.”

The company’s strategy has been to advance the project using a low-capital and low-operating cost model. Rather than building from scratch, Aguia secured and extensively refurbished an existing processing plant, positioning it to enter production with minimal capital outlay. 

The Tres Estradas project is underpinned by a massive JORC-compliant mineral resource of 105.06 million tonnes, with a measured and indicated component of 83.21 million tonnes grading 4.11 per cent phosphorus pentoxide. 

A 2023 bankable feasibility study on the project outlined a mean annual EBITDA of A$25 million based on a 300,000-tonnes-per-annum operation. 

Aguia’s natural phosphate product, branded “PAMPAFOS”, has already received its official product registration from Brazil’s Ministry of Agriculture, Livestock and Food Supply, or “MAPA”. 

The company says it is strategically well-positioned to replace imported phosphate products, with recent market intelligence indicating a significant shortage of alternatives, such as Super Simple Phosphate, Bayovar, and Moroccan phosphate, at the nearby Rio Grande port. 

Aguia appears to hold a significant cost advantage, offering its Pampafos product at about A$222 per tonne, which is roughly 30 per cent cheaper than imported MAP fertiliser. 

The company has already seen strong inbound interest in its product, having launched it at Brazil’s largest agricultural fair in March. It has also inked non-binding memorandums of understanding for 44,000 tonnes with major commercial farms and cooperatives in Brazil and Uruguay. 

While the Brazil phosphate operation is now front and centre, Aguia also holds a portfolio of gold projects in Colombia, including the cash-flowing Santa Barbara mine, where production and recoveries have been steadily improving. 

The journey from explorer to producer is notoriously difficult, littered with hurdles, particularly in a jurisdiction such as Brazil. For Aguia, after years of patiently navigating the complex permitting process, the final green light is now on. 

With mining underway and the first ore set to be processed in a matter of weeks, the company has rung the till and is now on the cusp of generating its first revenues from phosphate.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au