MBAC Resource Update for Santana Phosphate Project
Fully Diluted: 120,019,030
TORONTO, March 5, 2012 /PRNewswire/ - MBAC Fertilizer Corp. ("MBAC" or the "Company") (TSX: MBC and OTCQX: MBCFF) is pleased to announce the results of the National Instrument 43-101 ("NI 43-101") compliant mineral resource update for its 100% owned Santana Phosphate Project ("Santana" or the "Project") located in Pará State, Brazil. The updated mineral resource estimate shows the deposit containing indicated resources of 66.1Mt at 10.5% P2O5 and an inferred resource of 21.8Mt at 7.9% P2O5 (using a 3% P2O5 cut-off).
This mineral resource update is a follow-up to the preliminary economic assessment ("PEA") entitled "Preliminary Economic Assessment - Santana Phosphate Project, Pará State, Brazil, As Amended" dated September 22, 2011, as amended January 31, 2012 (the "Santana PEA"), which highlighted the robust economic potential of the Project. MBAC has continued an aggressive infill and extensional resource drilling program comprised of114 diamond holes (5,895m) and 274 reverse circulation ("RC") holes (12,936m) since publishing the PEA. Four drill rigs continue to drill the mineralized trend to the east, southeast and northwest.
Antenor Silva, Vice Chairman and CEO, stated "These results have exceeded our expectations and confirm our belief that Santana is a significant phosphate deposit due to its grades and unique location. This deposit is located very close to the lucrative agricultural markets of Mato Grosso State and Pará State in Brazil which provides a competitive advantage for this Project over other producers as a result of the logistics involved. MBAC is currently undertaking a pre-feasibility study ("PFS") and expects to have the results of the PFS released by the end of March 2012."
Summary of the Resource Estimate
The updated Santana mineral resource estimate is based on 114 diamond holes (5,895m) and 274 RC holes (12,936m) drilled at a spacing of approximately 100m by 100m. Data received as of February 8, 2012 has been used for this estimate. MBAC has an ongoing infill drill program and an extensional drill program underway.
RC and diamond core samples were taken at one metre intervals by MBAC technical staff, utilizing internationally accepted drilling and sampling techniques. All samples are analyzed for P2O5 using standard Whole Rock XRF by ALS laboratories. QA/QC programs show industry acceptable precision and accuracy limits on both certified standards and field duplicate samples. Bulk density samples are routinely measured in all diamond drilling.
Santana is defined by flat lying phosphate rich metavolcaniclastic and carbonate rocks within the Iriri group of Precambrian age. The main mineralization is located within a supergene enriched saprolite zone and is between 10m and 80 m thick. Additional large widths of fresh hydrothermally altered carbonate rocks have been intercepted in deeper drill holes down to 200m depth, but this has not been comprehensively drilled. The bulk of the current mineral resource has been defined outcropping from surface down to 100m in depth.
The mineral resource estimate has focused on this main oxide mineralization with two (2) flat lying mineralized domains defined using the saprolite and fresh geological boundary along with a 3% P2O5 cut-off grade to guide the wire-framing process. The mineral resource estimate comprises indicated resources of 66.1Mt at 10.5% P2O5 and an inferred resource of 21.8Mt at 7.9% P2O5 (using a 3% P2O5 cut-off). The resource has no meaningful traces of contaminants (including Cadmium, Mercury, Uranium and Thorium).
Table 1 - Grade Tonnage Report Santana Phosphate Project
Ordinary Kriging (OK) estimate - 29 February 2012
(Block Model - 25mE X 25mN X 4mRL - Cut off 3% P2O5 utilized)
Notes: Appropriate rounding has been applied
The Santana Project is located in the southeast of Pará State, Brazil (see map below). The target phosphate markets for the Project are the northern and eastern regions of Mato Grosso State ("MT") and southern region of Pará State ("PA"). Mato Grosso State is the largest grain producing state in Brazil and the largest fertilizer consuming state in Brazil. Pará State is also a large beef producer in Brazil making it a large market for the animal supplement known as Di-Calcium Phosphate ("DCP"). Single superphosphate ("SSP") demand in Mato Grosso State alone is approximately 1.5 million tonnes per annum. This demand is expected to grow at least 25% by 2015, with an estimated demand for SSP in 2015-2016 of approximately 1.9 million tonnes of SSP per year according to Argoconsult Estudos Setoriais LTDA, a Brazilian agricultural market consultant.
MBAC believes that the Project will have significant competitive advantage given its proximity to its target market and the significant distance of this target market from the main phosphate fertilizer producers. Currently most of the fertilizer brought into the region is imported through Paranaguá Port, located approximately 2,150 km away. Other potential suppliers are located in southwest Minas Gerais State and south Goias State which is approximately 1,000 km away. Phosphate products can also be imported from the Itaquí Port in the northern part of Brazil which is approximately 1,600 km away, but the inland logistics to reach the region are poor.
MBAC is currently undertaking a PFS and expects to have the results of the PFS by the end of March 2012. With respect to the metallurgy, over 80 laboratory tests have been performed and the concentrates produced range from 34% up to 38% P2O5. In March MBAC plans to initiate a pilot test campaign aimed at establishing the parameters that will be used in the preparation of a Bankable Feasibility Study which is expected to be completed in Q1 2013 and aimed to to produce larger quantities of concentrate for further testing. To date, 12 successful SSP laboratory test have been performed, and the Company has been successful in producing high grade phosphoric acid.
Update on the Itafós Arraias SSP Project
MBAC has recently received the necessary mining permit or "Definitive Mine Title" as it is referred to in Brazil, for its Itafós Arraias SSP Project currently under development. The Definitive Mine Title provides MBAC with the right to mine the area for an indefinite period of time. The "Portaria de Lavra" or the Definitive Mine Title, which has been approved by the DNPM (Brazilian Bureau of Mines) and signed by Brazil´s Minister of Mines and Energy, and was published in the country´s Official Gazette on February 13, 2012.
Beau Nicholls (MAIG), principal consulting geologist of Andes Mining Services SAC ("AMSS"), is the qualified person responsible for the updated mineral resource estimate for Santana. AMSS has validated the database and QA/QC programs, managed geological and grade wireframing along with block modeling and resource estimation. Beau Nicholls has approved the resource estimation portion of this news release.
MBAC is focused on becoming a significant integrated producer of phosphate and potash fertilizers in the Brazilian and Latin American markets. MBAC has an experienced team with over 150 years of combined 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.
Vice Chairman and Chief Executive Officer
FORWARD LOOKING STATEMENTS
This news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements that address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as the advancement of the expected timing for completion of a DFS and bankable feasibility study for Santana, the anticipated results of the ongoing infill drill program and an extensional drill program underway at Santana, the expected demand for SSP, the expected competitive advantage of the Santana Project.
Often, but not always, forward-looking statements can be 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 material factors and assumptions made by management and considered reasonable at the time such assumptions were made, including, the result of drilling and exploration activities, that contracted parties provide goods and/or services on the agreed timeframes, that equipment necessary for exploration is available as scheduled and does not incur unforeseen break downs, that no labour shortages or delays are incurred, that plant and equipment function as specified, that no unusual geological or technical problems occur, and that laboratory and other related services are available and perform as contracted. Forward-looking statements involve known and unknown risks, future events, conditions, uncertainties and other factors may cause the actual results, performance or achievements to be materially different from any future results, prediction, projection, performance or achievements expressed or implied by the forward-looking statements. 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 factors include, among others, the interpretation and actual results of current exploration activities; changes in project parametres as plans continue to be refined; future commodity prices; possible variations in grade or recovery rates; failure of equipment or processes to operate as anticipated; failure of contracted parties to perform; labour disputes, delays in obtaining governmental approvals and other risks of the mining industry, as well as those factors disclosed in the Company's annual information form and management's discussion and analysis 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, as actual results and future events could differ materially from those anticipated in such statements. The forward-looking statements contained herein are presented for the purpose of assisting investors in understanding the Company's current plans, objectives and expectations and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update forward-looking statements, except as required by applicable securities law.
SOURCE MBAC Fertilizer Corp.
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