The new plan will reduce scale-up risk and accelerate cash flow generation through the sale of ThermoPotash from its Brazilian potash project.
The new strategy will comprise two phases, and the first phase will see the company build a rotary kiln flex plant with a capacity of around 1,000 tonnes per day (tpd) for the production of ThermoPotash, a controlled-release, non-chloride, multi-nutrient fertilizer that is ideally suited for Brazilian soils..
The flex plant will also be operated to process potassium chloride (KCl) in order to further develop scale-up and commercialisation of the process and with the intent of securing performance guarantees on a 12,000 tpd kiln for KCl production.
Phase 2, developed in parallel with Phase 1, would focus on large scale KCl production. This two-phased strategy expects to reduce up front capital expenditure by initially establishing the less capital intensive ThermoPotash product.
Verde said it expects to publish a prefeasibility study (PFS) in the first quarter of next year for Phase 1 and Phase 2. The group revealed it had C$13.3mln in cash at the end of June, while its burn rate in recent months has been in the region of C$600,000 per month, and is confident it has sufficient cash to complete the PFS and a definitive feasibility study without the need for raising more equity.
Verde has been engaged in discussions with Brazilian institutions regarding debt finance for Phase 1 and continues to believe that Brazilian federal and state development banks will play an important role in funding Cerrado Verde.
Verde is undertaking to meet the demands of the regulator in order to receive all necessary environmental approvals in a timely manner so that permitting will not act to delay the project.
The company will first request an environmental permit for the flex plant because the reduced environmental impact for this phase allows for an accelerated application process.
The February 2012 preliminary economic assessment for Cerrado Verde was focused on KC1 production and was structured in three phases, with phase one envisaging 600,000 tonnes of potassium chloride, rising to 1.6mln tonnes in phase 2, with total plant capacity rising to 3mln tonnes at the end of phase 3.