viewFertoz Ltd

Fertoz establishes strong foundation for North American growth during 2020


The organic phosphate development company is focused on growing its customer base and phosphate sales in North America.

Fertoz Ltd - Fertoz targets North American markets for 2020

Quick facts: Fertoz Ltd

Price: 0.07 AUD

Market: ASX
Market Cap: $10.81 m

Fertoz Ltd (ASX:FTZ) is continuing to expand partnerships and distribution in North America for its rock phosphate products.

During the December 2019 quarter, the company made strong progress in this regard, setting some firm foundations for growth in 2020.

Fertoz executive chairman Patrick Avery said: “We are pleased to advise that our December quarter was a significant one for the company in securing our future.”

“We identified and secured more phosphate rock in Montana [USA] that provides us sufficient material to meet expected orders over the next two to three years.

“We found more in our Marten project [Canada] on both sides of the border, and as shareholders would recall, this is shallow phosphate with much easier logistical and potential mining conditions and much closer to transport than our Wapiti project.

“Our push to dominate the organic phosphate market on the west coast of the USA and the Canadian Prairies continued with the appointment of more distributors and additional orders.”

Expanding North American distribution

During the quarter Fertoz signed a distribution agreement with South Dakota-based Soil Works LLC, which provides easier access to organic farmers in the region.

The company undertook numerous sales meetings and attended farming conventions in the Canadian prairies, Pacific North West and in California, which resulted in an order for Krezco ore from an organic farmer in Texas.

Avery said the company’s distribution agreements came down to building a good reputation in North America.

“Favourable field trial”

He said: “Favourable field trial results and attendance at numerous farm expos and conferences have enhanced our reputation.

“We are seeing the results of this in the first few weeks of 2020, with new farmers and distributors placing orders for our products.

“We also received our first order for our Krezco ore and an additional order in South East Asia for our FertAg products – two additional important markets that add to overall sales and enhance our reputation as being a credible organic fertiliser supplier.”

The year-long trials of Fertoz rock phosphate on Canadian farms showed better emergence in 83% of the total counts with an average increase of 15% emergence from treated strips.

Further tests are planned in the coming year to modify the rock phosphate/sulphur blend.

Strengthening supply

The company’s 2019 summer exploration program identified more phosphate zones at its Fernie project in British Colombia and Alberta, and approvals were received to extract phosphate rock from both its Marten and Alberta permits.

The company is targeting the extraction of 3,000-5,000 tonnes from these assets in 2020.

An exploration and mapping campaign was completed at the Marten project with the results to be released shortly.

In Montana, Fertoz identified additional stockpiles around Deer Lodge of up to 200,000 tonnes.

The company is carrying 15,769 million tonnes of phosphate inventory in North America, which is expected to meet future sales growth in 2020.

Share purchase plan

Avery said: “To mitigate the cash flow timing effects of snow and cold weather in the [Canadian} prairies, in December we announced a Share Purchase Plan to secure additional capital that will fund us to expand into the largest organic market in the USA – California.

“We are doing this with a number of satisfied customers, farm trials and results to back us up.”

The plan aims to raise up to $2.5 million for accelerated expansion into California and will be concluded in mid-February 2020.

2020 strategy

Avery said: “We are expecting a solid year in 2020, with the addition of sales personnel focused on the Californian market and southern states.

“Sales here will complement our marketing efforts in the Canadian Prairies, Montana, Oregon, Washington State, Texas, Australia and South East Asia.”

For the coming quarter, the company is focused on promoting the results of field trials to all distributors and partners to generate interest and sales as well as ramping up deliveries now that the weather has stabilised in key North American target markets.

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