ASX-listed multi-commodity company Aguia Resources (ASX:AGR) remains ‘very confident’ in achieving a near-term solution regarding settlement negotiations in the Public Civil Action involving environmental licensing for its Organic Phosphate Project.
In June 2021, a Federal Public Prosecutor in Southern Brazil filed a Public Civil Action before the 1st Federal Trial Court of the City of Bagé, State of Rio Grande do Sul, seeking an emergency injunction to put a stay on the Preliminary Licence (LP) for the Três Estradas Phosphate Project (TEPP) granted on 15 October 2019.
The injunction sought to prevent the granting of the Installation Licence (LI) for the TEPP. Aguia and the Rio Grande do Sul State Environmental Agency (FEPAM) were named as co-defendants in the matter.
Speaking to Mining.com.au ahead of the Brisbane Mining Investor Conference next week where she will present, Executive Chair Christina McGrath says the latest round of negotiations marked a good example of how the parties are working together in good faith. This included where the advisors to the regional Public Prosecutor’s Office confirmed that Aguia had adequately addressed concerns relating to key technical aspects of the project.
“That meeting on February 28th also showed willingness of regulators to consistently advance the settlement process, which doesn’t always happen in Brazil once litigation has commenced. With formal agreement from both parties to move to the next round of technical negotiations, we expect to provide more updates in the first half of 2023 as the litigation moves towards a settlement.”
“With formal agreement from both parties to move to the next round of technical negotiations, we expect to provide more updates in the first half of 2023 as the litigation moves towards a settlement”
Aguia has always remained confident that the work carried out on the Environmental Impact Assessment (EIA), which was approved by FEPAM prior to the granting of the LP, was done so ‘with upmost competence’ by a number of ‘highly regarded experts’ in their fields.
Aguia Resources has 2 well-advanced 100% owned mining projects in Southern Brazil – metallic green copper and organic phosphate.
During Q4 2022, a construction licence for the phosphate project was granted, enabling construction of the mine. However, the company has determined that construction will not start until there is a resolution of the Public Civil Action. A conciliation hearing with the Federal Public Prosecutor and Federal Trial Court Judge was set in February.
In the meantime, on 22 February Aguia closed a private placement raising some $1.436 million before costs for working capital and to fund the initial construction of the Organic Phosphate Mine. The funds were raised via the issue of more than 33.34 million fully paid ordinary shares to sophisticated and institutional investors at a price of $0.045 per share.
McGrath tells this news service the capital raised marked another vote of confidence from Aguia’s network of sophisticated and institutional investors, both for the operational development strategy at the company’s fully owned phosphate mine and the outlook for settlement negotiations.
“As part of the capital raising process, we received positive feedback from investors about the company’s capacity to secure a settlement resolution, and in turn our development plans at the phosphate project. These include the appointment of a project manager, Anderson Visconcini, a chemical engineer with 20-plus years’ experience who has already moved with his family to the area, and an experienced regional sales team who have 35-plus years of experience with the Brazilian agriculture market.
“From a mining perspective, Aguia has applied for net zero certification for the on-site processing plant and is currently finalising a Banking Feasibility Study…”
From a mining perspective, Aguia has applied for net zero certification for the on-site processing plant and is currently finalising a Banking Feasibility Study, which will comprise sourcing agreements and the confirmation of supply chain stability, as well as the availability of materials and equipment and detailed revenue estimates. From an investment perspective, the project will serve end-user customers in the southern state of Rio Grande do Sul (RS), which is the third largest grain producer in Brazil.”
The Exec Chair adds that Aguia’s phosphate project will also be the first phosphate mine in the South of Brazil once in production. From that perspective, she notes the company stands to benefit from compelling unit economics underpinned by strong phosphate prices and strong domestic demand, given that over 70% of phosphate used in Brazil is currently imported.
McGrath adds that by attending the Brisbane Mining Investor Conference on 22-23 March, Aguia can engage current and prospective investors about the questions they may have about the phosphate project, including Aguia’s fully owned copper project in the same region of Brazil. The latter project is also moving towards economically viable status with the completion of a Prefeasibility Study (PFS) scheduled for H1 2023.
“Both of these are well-advanced mining projects which are the by-product of a successful multi-year development process. In that context, the conference gives our management team a good chance to speak with investors and analysts directly about the outlook for the next 12-months. Based on our experience, face-to-face forums like the BMIC are an opportunity to discuss a company’s value proposition in a different way to other formats such as investor briefings and webinars.
This is particularly true for Aguia given that we are fairly advanced in the transition from exploration to project development. Conferences are also an effective way to bring investors, analysts, and industry veterans together, so we’re looking forward to having plenty of meetings and discussions about how the company is positioned with people who understand our industry.”
Write to Adam Orlando at Mining.com.au
Images: Aguia Resources Ltd
