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Verde Agritech sees pace of Super Greensand sales picking up

Last updated: 22:45 15 Aug 2018 AEST, First published: 17:45 15 Aug 2018 AEST

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Verde Agritech sells a fertilizer called Super Greensand

Fertilizer group Verde Agritech PLC (TSE:NPK) says the pace of sales of its Super Greensand product is picking up, thanks to the sowing season of the second half in 2018.

Super Greensand contains 68 minerals and trace elements, including potassium, iron, magnesium and manganese, but significantly does not contain chloride.

The firm says the product offers farmers an economical way to fertilize land but also give back  nutrients to food and the soil.

Last month, the group announced the start-up of its processing plant - a milestone moment.

The cost of the facility was US$600,000, part of which was spent on ground work to expand to reach the 600,000 tons per annum capacity projected for phase 1 in the pre-feasibility study.

In the quarter to end June, Verde sold US$166,850 of Super Greensand produced from its Cerrado Verde project in Brazil.

In May this year, the company secured funding from BNDES (Santander) of around  $350,000 to finance the turnkey agreement to build the processing plant.

"The first sales of Super Greensand have not been easy and we expect that will be the case for, at least, the first 50 thousand tons of the product," said Cristiano Veloso, president and chief executive at Verde.

"The pace of sales is accelerating thanks to the sowing season of the second half of 2018 and return costumers who, for the second consecutive harvest, have opted to use Verde's Super Greensand," he added.

In keeping with a company at this stage of evolution, for the three months, it posted a net loss of C$457,000 versus a loss of C$363,000 in the same period of 2017.

According to the PFS, the project has a net present value (NPV) with an 8% discount rate was put at around US$2bn and an IRR (internal rate of return) of 287% after tax.

That valuation is based on a mine life of 36 years, 777 Mt (metric tonnes dry) of product produced with an average operating cost of US$8.16per tonne.

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