Brazil Potash eyes Q4 $300m-$500m Bovespa IPO, CEO says

31st May 2012 By: Matthew Hill

JOHANNESBURG (miningweekly.com) – Brazil Potash, hot on the heels of raising $58.6-million in equity this week, aims to sell another $300-million to $500-million worth of shares in a Brazilian initial public offering either in the last quarter of 2012 or the first three months of 2013, CEO David Argyle said in an interview on Thursday.

The company, backed by Toronto’s Forbes & Manhattan, owns potash in the South American State’s Amazonas basin, where it hopes to build a $3.5-billion to $4-billion mine, he said.

“The Brazilian Potash story will change the balance of the country’s imports and exports [of potash],” Argyle told Mining Weekly Online.

“It will take 25 years, but Brazil will become a potash exporter.”

Brazil Potash, based out of Toronto, aims to publish an initial resource estimate in “the next month or two”, to be followed by a larger resource estimate and scoping study in the last quarter of the year.

The company is hoping to prove a 650-million to 700-million ton resource capable of producing 4-million tons yearly of potash, used as a fertiliser ingredient, Argyle confirmed.

Drilling has shown Brazil Potash’s deposits have the same depth and geological structure as those in Saskatchewan, he said.

The company has already signed offtake deals with two Brazilian agricultural firms and aims to start building a mine in early 2014, with first production pencilled in for mid-2017.

Brazil, the biggest exporter of soya, sugar and orange juice, is the second-biggest potash importer globally.

The government has indicated its aim for the country to become self-sufficient in fertilisers.

Brazil Potash said it sold shares to existing owners as well as new Brazilian investors in the latest financing.

UK-based CD Capital Natural Resources Fund II committed to take up nearly half of the $58-million. The junior said it sold shares for $2.00 apiece and that it has 87.2-million in issue post the latest funding, implying an enterprise value of around $175-million.

Other potash juniors hunting for the crop nutrient in Brazil include Verde Potash and Rio Verde Potash, both listed in Toronto, as well as ASX-quoted Aguia Resources.