Fertiliser mining and development company Rio Verde Minerals Development Corp is making good progress in growing both its business and Brazil’s domestic fertiliser supply.
Phosphate is a key element required in fertilizers. With a similar need for nitrogen and potash, companies need to explore in areas that have known reserves of all of these types of agro-minerals. Canadian Rio Verde Minerals Development Corp. (TSE:RVD) focuses on the acquisition, exploration and development of fertilizer projects in Brazil.
According to the IFA, Brazil ranks fifth in the world for nitrogen, fourth for phosphate and third for potash, making it a region of unique agricultural supply. Rio Verde is committed to being socially and environmentally responsible, and on its way to becoming Brazil’s leading fertilizer mining and development company.
Alongside its collection of phosphate projects – including the Bonito Phosphate Project and the Phosphate Pipeline – in the North and Northeastern regions of Brazil, Rio Verde has the Sergipe Potash Project located near the coastline city of Aracaju in Sergipe State.
The estimated budget for Rio Verde’s Bonito Phosphate Project’s construction and development is $10 million for construction and working capital, with expected near-term cash flow. This project was acquired in August 2011 and is currently shovel-ready, with equipment on site and an expected mine life of eight years. It is located near Belém in Pará State, which has favourable infrastructure and access, as well as proximity to highly productive agricultural states.
Pará State is the largest palm oil producer in Brazil, with 118,000 hectares of cultivated land; Mato Grosso State is the largest soybean, beef and cotton producer in Brazil, and Maranhão State is one of the country’s largest producers of rice. These states currently import fertiliser from international and national sources, with the shortest shipping distance being approximately 1,000 kilometres.
The Phosphate Pipeline has an estimated exploration budget of $5 million over the next two to three years, and is only expected to grow. The Phosphate Pipeline is cheaper to explore and construct, and has multiple exploration targets with known mineralisation. The timeline from exploration to development is estimated at two to four years. The pipeline has projects in advanced and early exploration stages, and Rio Verde is looking at additional assets to unlock the value of through exploration, as well as to promote development or sale.
The Sergipe Potash Project is estimated at $20 million to $40 million for exploration and feasibility over the next two to three years, and is believed to be advantageous for Rio Verde. There is potential with this project for world-scale potash resource deposits, and the company’s objective of being fertilizer independent by 2020 aligns with the Brazilian Government’s policy to develop the country’s domestic supply.
There are seven regional targets, each with drilled intersections and potash minerals, and an estimated 11 drill holes identified with potash mineralization. Rio Verde completed the first drill hole in Novemeber 2011 and was 1,350 metres deep. There was approximately 79 metres of potash horizons and an average weighted grade of 25.01 per cent KCL.
Brazil’s established infrastructure, natural resources and internal demand for resources are just a few of the reasons the economy is on the rise. Brazil has a large infrastructure and the government is promoting further advancement of it. With the demand for agro-minerals and exploration in mineral-rich areas, Brazil is one of the largest growing countries to supply this by developing their agro-minerals sector. As the Brazilian economy grows, the nation will start to have more money than it did before. This means that Brazil now has a growing middle class who are able to buy their own cars and homes, which will increase the demand for supply and the need for more jobs.
Rio Verde works with the various communities it encounters and makes sure to benefit those communities by promoting professional training of skilled labour and encouraging the development of local organizations. The company is committed to continuous improvement and operation in Brazil, with aims to reduce costs and increase value, while striving to minimize negative impacts on the environment.
With the cost advantage of fertilizer exploration and development in Brazil, Rio Verde aims to increase shareholder value and become the leading agro-minerals development company in Brazil. The company’s focus on people as the core of a businesses’ success allows it to grow through utilizing the talents and resourcefulness of the Rio Verde team.