Eagle Star switches to agro-minerals to meet Brazil's fertilizer "gold rush"

Junior explorer Eagle Star Minerals (CVE:EGE) has changed its focus from iron ore after seeing opportunistic trends in the agro-minerals space.

The company was initially focused on developing an iron ore project in Brazil but it took note of a significant lack of domestic supply of fertilizer commodities in the nation and opted to reposition itself.

"We came to realize that we weren't in the most effective commodity for a junior company like ourselves," Eagle Star's Senior Corporate Development Manager Patrick Brandreth told Proactive Investors.

"Down there, agricultural commodities are the absolute gold rush. All the major Brazilian companies are looking for agro-minerals," Brandreth said.

Brazil is the world's fourth-largest fertilizer market and the biggest importer of fertilizer.

"It became clear that the opportunity was there," Brandreth added.

Helped by senior advisors and a local geological team, the company identified and staked areas with significant potential to host large phosphate deposits. Phosphates are a key ingredient for inorganic fertilizer.

Eagle Star was drawn to a property in the region of Piauí state covered by the Pimenteiras Formation (Parnaiba Basin). Three sub areas of the Parnaiba Basin were identified with rock types carrying phosphate mineralization, leading the company to acquire the Ruth Project.

Ruth is located in the center of Piauí state, near the cities of Picos and Eliseu Martins. Within Ruth’s claims boundaries lay widespread phosphate bearing rock types, which are believed to host a large phosphate deposit.

The project is in the vicinity of a large agricultural center while also surrounded by favorable infrastructure.

"Much of the reasons for leaving iron ore were very simple," Eagle Star's Brandreth said.

"Agro-minerals, and specifically phosphate in our case, require significantly less capital and time to develop and put into production as compared to iron ore. It’s also any junior company’s dream to be able to prove up a resource and sell it in their backyard at international prices," Brandreth commented, referring to both Eagle Star’s close vicinity to two very large agricultural districts and their short supply of phosphate.

Eagle Star's other phosphate project, Samba, is also believed to host a large phosphate deposit and is located within the central western portion of Piaui state along the Longá Formation near the cities of Valença and São José do Peixe.

In addition to being close to two large agricultural centers Samba is also situated right beside the East-West Transnordestina railroad.
 
At Samba, Brandreth said that as soon as the company gets the official exploration permits from the Brazilian National Mining Agency, it would continue a much more intrusive sampling program to assist with drill targeting and eventually outline the resource by drilling before filing paperwork towards an NI 43-101 estimate by the end of the summer.

"To date we know we have a 3.5 meter package averaging 6% phosphate - we need to now find out if this package is repetitive, which we believe it is, by what we have seen on different topographic levels. It’s also important for us to determine how deep, and how wide it extends laterally by drilling.”

"We have identified seven potential areas on the property. Our goal is to move one of those into a 43-101 measured and indicated category by the end of summer."

"We like to think that our strong local geological team has put us one step ahead of our competition, but on the other hand there is so much of a need for agro-minerals in Brazil we really don’t look at other companies so much in a competitive way." Brandreth said.