Verde Potash’s new appointment should reassure investors, says broker

Friday’s appointment of mining and finance executive Leonardo Moretzsohn to the board of Brazil-focused Verde Potash(TSE:NPK) should go a long way to reassure investors, according to Ocean Equities. 

“Mr Moretzsohn has an impressive track record in the mineral space in South America and will be well known to potential financing partners,” analyst Adam Lucas said in a note.

“The broad experience base that Mr Moretzsohn has acquired, particular in regards to raising project finance with the Brazilian development banks, will help steer Verde in the right direction as it continues to progress the Cerrado Verde Potash project in Minas Gerais, Brazil.” 

Moretzsohn, who will begin the role following the AGM on June 5, has three decades of project finance experience and served for 24 years with Brazilian mining major Vale SA. 

Ocean highlights that the new appointment comes after chief financial officer Milson Mundim stepped down and a key contractor was unable to provide a performance guarantee for a large rotary kiln, which is a requirement for the banks that would potentially finance project development.

Lucas says Verde is currently assessing its options in regards to obtaining a performance guarantee for a 12,000tpd rotary kiln, which would economically process ore into potassium chloride.

“We currently await Verde’s decision on how it will progress this – either by commissioning a semi-commercial demonstration plant (200tpd) or engaging Metso or ThyssenKrupp (Verde has been in discussions with the two firms) to potentially provide a performance guarantee for a 12,000tpd kiln without the need to build a 200tpd demonstration plant.”

In Friday’s statement Verde chief executive Cristiano Veloso, said: "The company's stage of transition from development to project finance and construction warrants directors strongly integrated with capital markets and development banks. 

"Leonardo is a singular talent with a wealth of relevant experience and relationships that will open a number of important doors for the company."