Aguia Resources has hit the ground running with sales of its Pampafós organic phosphate product, notching up sales of an impressive $A600,000 in the first two weeks since kicking off mining at its Tres Estrades project in Brazil.
With the football World Cup underway, the company has scored its own huge goal by securing a significant 2000-tonne order of Pampafós from Co-operativa Tritícola Caçapavana Ltda. (Cotrisul), a leading agricultural organisation in Rio Grande do Sul, Brazil.
The large Cotrisul order will generate revenue of $A380,000 for Aguia and comes with a valuable 10 per cent upfront payment. The two firms have agreed on a scheduled pickup plan for the product over a two-year contract, aligned with Aguia’s processing plant output.
The agreement provides flexibility to both parties in terms of offtake levels, subject to the company’s production and plant capacity.
Management says a further 1000 tonnes of product have been sold to a group of small farmers. The company added it is in advanced talks to sell a further 5000 tonnes, with more sales announcements expected to roll out over the coming weeks. The product is priced at $190–200 per tonne for small farmers, with a discount available for upfront payment before June 30.
Aguia’s fully-owned phosphate project, Tres Estrades, sits 320 kilometres from Porto Alegre, Rio Grande do Sul, in Brazil. The project was given the nod of approval to begin mining its phosphate material in May after securing a coveted operating licence. Since then, it has wasted no time in presenting the in-demand product to a suite of potential buyers.
The company’s commercial team and third-party sales representatives have presented the product to more than 100 potential customers and received expressions of interest from far and wide. Some parties in the northeast, more than 4000 kilometres from its processing plant, have expressed interest in the product.
Additional enquiries have been received from farmers in the southeast, including Minas Gerais and São Paulo, alongside farmers in the deep south of the massive South American country.
Aguia Resources managing director and chief executive officer Timothy Hoskings said: ‘These initial sales provide strong commercial validation of Aguia Fertilizantes’ strategy. Negotiated directly with a respected agricultural co-operative and regional farmers, it reinforces confidence in Pampafós as a regional phosphorus source for southern Brazil.”
Hosking said the two-year Cotrisul contract has helped to support a long-term commercial relationship and provide a basis for future volume growth as production capacity increases.
Aguia believes its success with Pampafós will result from the product's value as an agronomic solution when used in the right soil and crop management conditions. It says the correct phosphorus source depends on crop type, production system, water availability and soil chemistry, more so than the level of phosphorus content.
It believes Pampafós’ strength lies in its value offering, with its gradual-release profile maintaining phosphorus levels in the soil solution longer during the growing season, providing steadier nutrient supply to plant roots.
With widespread acidic agricultural soils in southern Brazil, Aquia says it’s targeting those regions where Pampafós can deliver clear economic and technical benefits to local farmers.
The company’s Tres Estrades phosphate project benefits from world-class infrastructure, including roads, rail and ports, and sits in the region’s agricultural heartland.
According to management, the company is in final negotiations with a local Brazilian private bank, Banco Daycoval, to secure working capital financing to boost production. Banco Daycoval specialises in corporate credit, payroll loans, foreign exchange and vehicle financing.
Aguia also holds the Santa Barbara gold project in Colombia, where recent mining improvements saw its head grade of greater than 10 grams per tonne gold being fed to its processing plant.
With its long-awaited fertiliser product now on the market and packed with advantages over other similar products, attention is shifting to just how big the Brazilian market could become for this junior agricultural player, especially with a potentially golden bonus on the side?
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Craig Nolan
