MBAC provides update on the progress of the Itafós Arraias SSP Project
TORONTO, June 13, 2013 /CNW/ - MBAC Fertilizer Corp. ("MBAC" or the "Company") (TSX:MBC and OTCQX:MBCFF) is pleased to provide a progress report on the completion of construction and the start up of operations for the Itafós Arraias Single Super Phosphate ("SSP") Project ("Itafós" or the "Itafós Project"):
- Near completion of construction and at current trends the Company expects the construction to be completed in the next several weeks, consistent with its previous guidance.
- Cost to completion has progressed consistent with previous capital cost estimates.
- The Company has produced and is stockpiling phosphate concentrate from the beneficiation plant and the Company is very pleased with the quality of the concentrate.
- The Company expects to be in a position to deliver SSP in July with the ramp up of operations to reach capacity by October 2013.
- Operations team is in place and involved with the plants' commissioning.
- Sales volumes of SSP to date have increased from 35,000 tonnes in the previous update to 50,000 tonnes.
- The working capital needs of the Company, which is entirely for the operational phase as the Company begins to generate cash flow, are expected to be entirely funded through ordinary course working capital loans and other debt. The Company has recently received credit approval from Banco Votorantim S.A. for an initial working capital line of credit in the amount of US$10 million. The Company is also in advanced discussions with banks and other lenders to structure the balance of the working capital financing.
Management is entirely focused on ensuring that the transition to operations is smooth and efficient. Since the management reorganization and realignment, the Itafós Project has progressed very effectively. Antenor Silva remains focused on completing and ramping up the operations and Roberto Busato Belger remains solely focused on the sales effort. The Company is pleased with its sales progress to date given that it has sold a significant amount of product prior to being in production. This provides the Company with increased confidence that it can capture market share and hit the production targets for 2014 and beyond. Corporate efforts on funding working capital have also advanced well and are timed to coincide with the transition to operations and sales from development stage.
MBAC is focused on becoming a significant integrated producer of phosphate and potash fertilizers and related products in the Brazilian and Latin American markets. MBAC has an experienced team with significant experience in the business of fertilizer operations, management, marketing and finance within Brazil. In October 2008, MBAC acquired Itafós Mineração Ltda., which consisted of a phosphate mine, a mill and plant and related infrastructure, all located in central Brazil. MBAC's exploration portfolio includes a number of additional exciting phosphate and potash projects, which are also located in Brazil. The Santana Phosphate project is a high grade phosphate deposit located in close proximity to the largest fertilizer market of Mato Grosso State and animal feed market of Pará State. The Company continues to search for additional fertilizer opportunities in the Brazilian and other Latin-American markets, where strong agricultural fundamentals and unique opportunities are expected to provide attractive growth opportunities in the near future. Further information on MBAC can be found on the Company's website at www.mbacfert.com and on SEDAR at www.sedar.com.
FORWARD LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements related to activities, events or developments that the Company expects or anticipates will or may occur in the future, including, without limitation, statements related to the Company's business strategy, objectives and goals; the completion of Itafós Project within a timely and costly manner; the expectation that first deliveries of SSP being delivered in July 2013, the expectation that operations will be fully ramped up by October 2013 and the Company's expectations in connection with funding working capital. Forward-looking statements are often identified by the use of words such as "plans", "planning", "planned", "expects" or "looking forward", "does not expect", "continues", "scheduled", "estimates", "forecasts", "intends", "potential", "anticipates", "does not anticipate", or "belief", or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements are based on a number of factors and assumptions made by management and considered reasonable at the time such statements are made, and forward-looking statements involve known and unknown risks, uncertainties and other factors may cause the actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Such risk factors include, among others, the Company not being successful at completing construction at without cost and timing estimates, the Company not having operations fully ramped up by October 2013 or achieving the necessary working capital funding in a timely manner, as well as those factors disclosed in the Company's current Annual Information Form and Management's Discussion and Analysis, as well as other public disclosure documents, available on SEDAR at www.sedar.com. Although MBAC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate. The forward-looking statements contained herein are presented for the purposes of assisting investors in understanding the Company's plan, objectives and goals and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking statements.
SOURCE MBAC Fertilizer Corp.