TORONTO (miningweekly.com) – Brazil-focused DuSolo Fertilizers will implement several sales and production strategies in an attempt to increase revenues from its Bomfim mine after demand for its product failed to meet the company's expectations.
"In light of the current market conditions in Brazil and the effect it has had on the company's performance, DuSolo's new board and management have undertaken a strategic review of all operations," DuSolo CEO Darren Bowden advised in a statement on Tuesday.
To combat the demand dearth, DuSolo had drawn down its bridge loan facility as working capital as it started to accept forward sales contracts.
The Bomfim processing plant would also potentially be reconfigured to expand direct application natural fertiliser (DANF) output without installing additional hammer mills, saving the company about C$400 000.
After a longer-than-expected rainy season, the TSX-V-listed company had started excavating and processing DANF product at Bomfim in June.
However, DANF sales had been less than estimated, owing to soft fertiliser demand in Brazil. Of the 81 100 t in signed commitments, only about 3 290 t of product had been delivered and a further 3 363 t would be delivered in the short term. All of these contracts were still in good standing, despite buyers being slow to perform as a result of soft market conditions.
This was a result of weaker crop prices, the lower purchasing power of the real currency and delayed credit availability from the government to farmers and agribusinesses.