VANCOUVER, BRITISH COLUMBIA / TheNewswire / January 10, 2018 – FENGRO Industries Corp. (TSX-V:FGR) ("FENGRO" or "the Company") is pleased to update shareholders on progress at it’s operations in Brazil, corporate activities and to summarize its progress and development in 2017 and plans for 2018.
FENGRO produces phosphate rock from its Direct Application Natural Fertilizer ("DANF") Santiago Project in Tocantins State, Brazil ("Santiago Project"). Having restructured its business and re-started extraction and sales of its DANF products in 2017, the Company is now positioned to expand its existing operations, add additional products and pursue opportunities for increasing shareholder value in both organic growth and corporate transactions. The Company has assembled a first class management team and board, giving it a significant project development and operational capacity in Brazil.
-Received a new Guia de Utilizacao ("GUIA") issued by the National Department for Mineral Production ("DNPM"), granting permission to extract at an annual rate of up to 200,000 tonnes tonnes per annum and renewable until the permanent licence is received.
-Completed a Preliminary Economic Assessment ("DANF PEA") released March 23, 2017 (see highlights below). The Company intends to increase production to 100,000 tonnes in 2018. Please note the disclosure included under "Forward Looking Statements" below regarding the Company’s decision to operate the Santiago Project.
-Agronomic trials with EMBRAPA – Federal Brazilian Agricultural Research Agency, COMIGO – a large co-operative of farms and plantations based in the Rio Verde region. Results of field trials are expected in June 2018, and greenhouse results to date are very encouraging, demonstrating the efficacy of the DANF products.
-Completed process design and engineering work for plant expansion to produce partial and full granulation products, which would significantly expand the Company’s potential market in the soya bean and corn sectors.
-Re-branded the company as "Fengro Industries" and launched an updated web-site.
Giles Baynham, CEO of Fengro, noted "We are very pleased with the Company’s production and deliveries in 2017, which were a significant improvement on 2016. The Company will continue its drive to generate shareholder value, utlilising the expertise and capacity of its management team to pursue accretive acquisitions and business opportunities as they arise. Combined with the positive DANF PEA results and GUIA earlier this year, we can now continue to expand our market and aim to lift production in 2018 to 100,000 tonnes of DANF."
On March 23, 2017, the Company released the results of its DANF PEA, and subsequently the NI43-101 report was filed on SEDAR (www.sedar.com, May 8, 2017) and posted on Fengro’s website (www.Fengro.com). Highlights of the PEA include:
The Company’s decision to produce DANF, its DANF production targets and cash flow projections were not based on a feasibility study of mineral reserves demonstrating economic and technical viability. Without a technical report demonstrating economic and technical viability, there is uncertainty as to whether the Company will be able to economically produce DANF in the long run and as to whether the Company will be confronted with any unforeseen technical impediments. The Company has now completed a PEA. Note that the DANF PEA is preliminary in nature as it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability, and as such there is no certainty that the preliminary assessment and economics will be realized.
Brazil remains a substantial agricultural market and imports significant quantities of fertilizer including phosphate-based products. Estimates for 2017 are a total phosphate product market of 13.5 million tonnes, with approximately 60% being imported(1). Domestic phosphate production is a priority for the Brazilian government, and phosphate is considered a ‘Strategic Mineral’ by DNPM because of the Brazilian Government policies to increase domestic production of fertilizers(2). In addition, the Company is working with EMBRAPA, the state-owned agricultural research organization, to enhance the DANF products and complete agronomic tests to expand the range of crops utilizing DANF. Assessment of new coarse grain and granulated DANF products continues with various engineering consultants to develop the process design, operating and capital costs for products utilizing various additives to improve the overall physical and agronomic characteristics of DANF. The Company continues to work with Agroconsult, the leading Brazilian consultancy for agriculture and fertilizers, to determine market potential, pricing and Brazilian fertilizer market intelligence for the various product options.
The Company is now permitted to extract up to 200,000tpa of phosphate mineralization from the Santiago Project by a GUIA issued by the DNPM, and an Environmental Licence issued by Naturatins, the Tocatins State Environmental Agency, and valid until August 2018. GUIA’s are issued under the terms of the exploration concessions, and are replaced by the life of mine licence known as a Portaria de Lavra, issued by the DNPM.
Approval of the Final Exploration Report allows the Company to finalize its application to DNPM for its Portaria de Lavra, based on the DANF Preliminary Economic Assessment published in March 2017. In a parallel process, the Company will apply for its permanent Environmental Licence from Naturatins. The Company and its consultants meet regularly with both DNPM and Naturatins and do not anticipate any issues in obtaining the permanent licences for the Santiago DANF operation.
The technical content of this news release has been reviewed and approved by Mr. Porfirio Cabaleiro Rodriguez and Mr. Bernardo Horta de Cerqueira Viana, both Managing Partners of GE21 Consultoria Mineral, in compliance with the standards of disclosure as set out in NI43-101. Mr. Rodriguez and Mr. Viana are "independent qualified persons" for the purposes of NI43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators.
Certain information contained in this press release constitutes "forward-looking information", within the meaning of Canadian legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "aims", "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "target", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur", "be achieved" or "has the potential to". Forward looking statements contained in this press release may include statements regarding the future operating or financial performance of Fengro which involve known and unknown risks and uncertainties which may not prove to be accurate. Actual results and outcomes may differ materially from what is expressed or forecasted in these forward-looking statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Among those factors which could cause actual results to differ materially are the following: market conditions and other risk factors listed from time to time in our reports filed with Canadian securities regulators on SEDAR at www.sedar.com. The forward-looking statements included in this press release are made as of the date of this press release and Fengro disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation.
For more information please refer to the technical reports filed on SEDAR and titled "Bomfim Agro-Mineral Phosphate Project, Technical Report and Initial Resource Estimate Tocantins and Goias States, Brazil," filed on March 5, 2014, effective December 31, 2013, and amended on February 6, 2015, and the "DANF Santiago Project, Tocantins, Brazil, Independent Technical Report – Preliminary Economic Assessment", effective date September 1, 2016, and filed on May 8, 2017.
The resource estimate was signed off by Mr. Porfirio Cabaleiro Rodriguez an Associate Consultant of Coffey Consultoria e Servicos Ltda., and was prepared in compliance with the standards of disclosure as set out in NI43-101. The PEA was prepared in compliance with the standards of disclosure as set out in NI43-101 and was signed off by Mr. Porfirio Cabaleiro Rodriguez – BSc (Min Eng), MAIG Mario Conrado Reinhardt – BSc (Geology), MAIG Bernardo Cerqueira Viana – BSc (Geology), and MBA, MAIG Fabio Valerio Xavier – BSc (Geology), MAIG of GE21 Consultoria Mineral Ltda. Mr. Rodriguez, Mr. Reinhardt, Mr. Viana and Mr. Xavier are each an "independent qualified person" for the purposes of NI43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators.
Disclosure – The Company’s decision to produce DANF, its DANF production targets and cash flow projections were not based on a feasibility study of mineral reserves demonstrating economic and technical viability. Without a technical report demonstrating economic and technical viability, there is uncertainty as to whether the Company will be able to economically produce DANF in the long run and as to whether the Company will be confronted with any unforeseen technical impediments. The Company has now completed a preliminary economic assessment.
Disclosure – Note that the DANF PEA is preliminary in nature as it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability, and as such there is no certainty that the preliminary assessment and economics will be realized.
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