Business
Verde Advances Potash Greenfield Plant
TORONTO , Aug. 13, 2014 /CNW/ - Verde Potash (TSX: "NPK") ("Verde" or the "Company") ...
About this update from Verde Agritech Ltd
[{"type":"text","content":"\n\nTORONTO, Aug. 13, 2014 /CNW/ - Verde Potash (TSX: \"NPK\") (\"Verde\" or the \"Company\") is pleased to provide an update on the development of its low capital expenditure (\"capex\") ThermoPotash (\"TK\") plant for 330,000 tonnes per year (\"tpy). \n\nThe project has robust economics, with a net present value of $145M and a capex of $113M (see press release dated April 1, 2014). The initial TK production of 330,000 tpy represents a small fraction of Brazil's potash market and the Company's mineral resource, it will, however, allow Verde to minimize shareholder dilution by building a greenfield plant with the lowest possible capex and grow the business from accumulated cashflow and further financing. \n\nFinance and Inova Agro\n\nThe Brazilian Development Bank (\"BNDES\") has briefed Verde on its available lines of credit. According to Inova Agro's parameters, and Verde's business plan, the Company can access the following three credit lines: (1) the \"BNDES Finem Inovação\", the bank's main line of credit that supports innovative investments; (2) the \"BNDES PSI – Projetos Transformadores\", a special line of credit for innovative projects that can also generate significant gains across the production chain; and (3) the \"BNDES Proengenharia\", a credit line suitable for engineering investments and studies. Verde's project fulfills the requirements for BNDES' lowest cost-of-capital line of credit, the \"BNDES PSI - Projetos Transformadores\". This latter line of credit has an annual interest rate of 4% with a 12-year payback period (including a 2-year grace period). The annual interest rates for BNDES' other two lines of credit are approximately 8% and 10%, respectively (1) and (3) above. Brazil's benchmark interest rate is currently 11%. In order to access these funds, Verde is working to secure an environmental license. This process has already begun and is steadily advancing. \n\nPresident & CEO, Cristiano Veloso, commented, \"In today's markets, companies are facing chronic uncertainty with regard to the source of their project's construction funding. With the support of the Brazilian government and BNDES, Verde has a clear pathway to secure funds and start construction as soon as it obtains standard regulatory approvals\".\n\nEngineering and Environmental License\n\nThe mine engineering work (mecha...