Aguia finds profitable gold-phosphate path to redemption

After completion successful June, the squad rapidly acceptable astir moving connected an optimisation program for Santa Barbara and delivered a connection to the marketplace that output could beryllium accrued to 50 tonnes a time for a comparatively tiny outlay of $2.5 cardinal successful superior expenditure and it could past nutrient 10,000 to 12,000 ounces per annum astatine a outgo of US$300 (A$449) to US$400 (AU$600) per ounce. For a further humble capex amount, the works could past beryllium upgraded to 250 tonnes per day.

Additionally, the institution intends to execute a drilling programme that volition present a maiden JORC-compliant resource, with expectations that the excavation volition beryllium producing again by the extremity of adjacent year’s archetypal quarter, bringing successful overmuch needed cashflow.

According to Grigor, the existent communicative of Aguia, though, is its Tres Estrades integrated phosphate task – which seems understandable connected the backmost of an announcement the institution made connected Wednesday.

‘This whitethorn beryllium 1 of the champion projects I person ever travel across.’

Management told the marketplace that it is successful precocious discussions to lease oregon bargain an existing processing works that sits astir 100km from the Tres Estrades excavation site. The works has been utilized for processing limestone, but with the exhaustion of the section proviso of ore, the owners person decided to sell.

For a capex of little than $5 million, absorption has identified lone insignificant upgrades required for it to repurpose the facility, including the summation of a rotary kiln and a bagging installation to the existing circuit.

Aguia Resources enforcement president Warwick Grigor said: “The Tres Estrades integrated phosphate task successful Southern Brazil involves a remarkably elemental mining and accumulation process. This whitethorn beryllium 1 of the champion projects I person ever travel across.”

It could beryllium a hugely important infinitesimal for the institution and the project, fixed the exasperating erstwhile 2 years that it has endured done ineligible challenges from non-government organisations (NGOs) opposing the operation of a processing installation astatine site. Importantly, those challenges – which are yet to adjacent get past the “application for an injunction” signifier and could yet instrumentality years to settee – person been applied for against the operation of a processing installation astatine excavation tract and not the mining itself.

It means that should Aguia’s woody to lease and bargain beryllium successful, successful 1 fell swoop absorption could neatly sidestep a further prolonged ineligible conflict and tin determination guardant to aboriginal accumulation by the mediate of adjacent year. The institution past expects to beryllium capable to enactment to a timeline of astir mid-next twelvemonth to commencement production.

A bankable feasibility survey conducted connected Tres Estrades by Aguia successful March past twelvemonth concluded that by producing 300,000 tonnes per annum successful an 18-year excavation life, with superior expenditure of $26 million, the task would spit retired $22 cardinal a twelvemonth successful EBITDA. The payback play is anticipated to beryllium 2.9 years connected the backmost of a 54.7 per cent interior complaint of instrumentality (IRR).

Impressive arsenic these numbers whitethorn be, a woody to bargain the processing works would not lone trim the capex by 75 per cent, but the payback would besides shrink to little than 9 months.

The main marketplace for phosphate is successful cultivation use. Aguia’s integrated product, marketed nether the marque sanction of Pampafos, has been exhaustively assessed connected antithetic crops astir the satellite during the past 4 years and has consistently performed oregon outperformed against different commonly-used chemic fertilisers.

It is besides good regarded by section farmers arsenic suitable for usage connected their ain crops.

Currently, Southern Brazil meets its phosphate request wholly from imports, chiefly Morocco, astatine semipermanent declaration pricing of astir $400 per tonne.

Not surprisingly, Aguia has been successful progressive discussions with section farmers who similar the merchandise and is looking to acceptable a terms of astir $140 per tonne. Even if an further $15 per tonne trucking outgo was factored successful arsenic portion of the caller plan, taking full costs to $50 per tonne, the institution could inactive support a steadfast margin.

And Aguia believes that the 300,000 tonnes per annum production, being 15 per cent of section demand, would beryllium easy saleable into a marketplace wrong a 300km radius.

With 2 projects that could beryllium slated for accumulation startup wrong the adjacent 12 months, Aguia has a engaged clip ahead. The institution has a beardown section and caput bureau absorption squad successful spot and now, yet appears to person a coagulated program for generating aboriginal cashflow.

Until recently, it has been an disfigured fewer years for Aguia, but affirmative alteration seems to beryllium connected the horizon. Shortly, perhaps, it volition beryllium capable to beryllium up the aged adage that “Sometimes, the champion things travel to those who wait”.

Is your ASX-listed institution doing thing interesting? Contact: mattbirney@bullsnbears.com.au