TORONTO (miningweekly.com) – Brazil-focused Verde Potash on Thursday reported results from its latest drilling programme at its Cerrado Verde potash project, saying that the results had shown a significant increase in the size of Verde’s resource.

The new Cerrado Verde resource represented more than 295-million tonnes of in-situ potassium oxide (K₂O), an increase of 16.5% on the previously announced 253-million tonnes. More than 1.4-billion tonnes of resource were also upgraded from the Canadian National Instrument 43-101-compliant inferred resources category, to the measured and indicated categories.

The new mineral resource estimate comprised a measured resource of 83-million tonnes with an average grade of 10.1% K₂O, an indicated resource of 1.39-billion tonnes with an average grade of 9.2% K₂O and an inferred resource of 1.85-billion tonnes with an average grade of 8.6% K₂O, all applying a 7.5% K₂O cutoff.

"The company is on track to complete and publish the prefeasibility study (PFS) in the first quarter for its Phase 1, 1 000 t/d ThermoPotash facility (the 'Flex Plant'). The Flex Plant will also be operated to process KCl [potassium chloride] in order to secure the necessary performance guarantees.

“The upcoming PFS will address ThermoPotash, not KCl, so that the company can gradually and ultimately maximise production from its large potash resource in the heart of Brazil in order to become a significant domestic producer,” president and CEO Cristiano Veloso said.

The large potash resource is located at surface with very little, to no overburden, making the deposit amenable to openpit mining. The nature of the resource allows for a low capital requirement and a scalable project, placing the company on an accelerated route to cash flow, while preserving the upside of a large-scale KCl operation.

In contrast, a conventional KCl deposit in Saskatchewan, Canada is typically located 1 000 m to 2 000 m below the surface, necessitating a conventional shaft or solution mining operation with a minimum capital requirement measured in billions of dollars.

Brazil's yearly potash consumption, expressed in K₂O terms, is about 4.9-million tonnes.

Early this week, Verde Potash also announced confirmation of about $105-million in funding for the Cerrado Verde project from Inova Agro, an initiative of the Brazilian government aimed at coordinating financial support to innovative projects in the agriculture sector.

News of the increased resource sent the project developer's TSX-listed stock up C$0.27 apiece, before settling at late-morning trading levels of C$1.69 a share.