Verde Potash Successfully Produces KCl from its Potash Resources Amenable to Strip Mining

30 Nov, 2011, 16:01 ET from Verde Potash Plc

TORONTO, Nov. 30, 2011 /PRNewswire/ - Verde Potash Plc (TSX-V: "NPK") ("Verde" or the "Company") has successfully operated a continuous rotary kiln pilot plant to produce Potassium Chloride ("KCl"), the conventional potash fertilizer. Verde has engaged SRK Consulting (U.S.), Inc. ("SRK") to complete a review of capital and operating costs and should be in a position to reveal results in Q1 2012. This achievement marks a significant possible opportunity for Brazil, one of the world's largest importers and consumers of KCl, to supply more of its potash requirements from its domestic resources.

Verde controls a very large potash resource amenable to strip mining and strategically located in Minas Gerais State, Brazil (see press release August 3, 2011). The Company's current potash resource could support a six million tonnes per annum KCl production scenario for over twenty years, though Verde is considering a scalable production strategy.

The current selling price for KCl in Brazil's Cerrado is US$660/tonne. Brazil imported 6.4 million tonnes of KCl from January to October this year (source: Associacao Nacional para Difusao de Adubos "ANDA").

Verde has made significant progress in deriving an economic scalable production flow sheet for KCl. SRK, Hatch Consulting, GEA Messo, FLSmidth and Hazen Research (the "Engineering Consortium", see below for further details) have assisted the Company in overcoming foreseeable technological and operational challenges by using long established rotary kilns and evaporation/crystallization equipment for this new application.

During this month, the Company successfully operated its pilot plant's rotary kiln validating the production flow sheet. In two tests, KCl was produced continuously for thirty and twenty hours. The kiln feed rate was 130kg per hour. As a result of this progress, the Company has filed two additional patents relating to KCl production.

Given these successes, the Company has commissioned SRK to complete a Preliminary Economic Assessment ("PEA"). SRK is working closely with the rest of the Engineering Consortium to estimate operating and capital costs for KCl production based on the flow sheet developed by Verde and the Engineering Consortium.

Verde initiated KCl production studies for its potash rock in 2008. Over the last three years the Company undertook hundreds of tests pursuing a simple production flow sheet that relied on long proven production technology as well as abundantly and readily available reagents. In 2010, the Company announced a first patent filing as a result of a research agreement with the University of Cambridge and Professor Dr. Derek Fray. In 2011, the Company assembled the Engineering Consortium to advance the project. Below is a summary of the work completed throughout 2011 leading Verde to this point:

First Quarter

  • Verde, Brazil: Scale up and optimization tests completed at the Company's laboratory in Brazil;
  • University of Cambridge, U.K.: Further bench tests concluded.

Second Quarter

  • Hazen Research, Colorado, U.S.: Work began by Hazen's commercial laboratory on research and development to continue scale up work, completing more than 300 tests and more than 6,000 check points assayed in Q3;
  • Verde, Brazil: Advances on reagent optimization.

Third Quarter

  • Hazen Research, Colorado, U.S.: Satisfactory results obtained from scale up work;
  • Discussions with equipment manufacturers regarding equipment specifications and use for KCl production;
  • FLSmidth, Pennsylvania, U.S.: engaged to test heat consumption;
  • GEA Messo, Germany: engaged to test and optimize leaching/evaporation/crystallization;
  • Hatch Consulting, Ontario, Canada: engaged and contributed on the review of the results.

Fourth Quarter

  • Engineering Consortium: Flow sheet finalized;
  • SRK: Preliminary Economic Assessment with an updated National Instrument 43-101 technical report to be completed by Q1 2012.

Cristiano Veloso, President and CEO said: "We congratulate Pedro Ladeira, VP Engineering, and the Engineering Consortium for their outstanding achievement. Verde's work to convert our at-surface potash resources into potash fertilizer has the potential to decrease Brazil's import dependency on a commodity essential for feeding the world's growing population of seven billion."

ThermoPotash Progress

Verde's engineering team has also continued to develop its ThermoPotash product. Using the Company's same pilot plant kiln, the team completed work to transfer the pellet making process from pre-calcining (in the kiln) to a post-calcine step. This modification to the flow sheet reduces heating requirements and water consumption, and produces better performing pellets. In the improved process flow sheet the kiln is fed with powder as opposed to wet pellets.

The Company has also tested the process of air cooling the product from the kiln using the same type of dryer employed by the cement industry. This process adjustment reduces heat consumption by pre-heating air entering the kiln with hot gases resulting from cooling the material with air. In the original flow sheet, the kiln emptied its contents into tanks of water to cool the product. FLSmidth has also undertaken independent tests to verify achievements and propose equipment.

Verde's Brazilian pilot plant facility has been successfully re-configured for the noted changes and has produced over 60 tonnes of ThermoPotash. The changes have reduced heat input and the process' use of water. Verde has also operated a leased semi industrial plant where it produced 70 tonnes of ThermoPotash.

Cristiano Veloso, President and CEO said: "We are pleased with the successful conclusion of our pilot plant tests for ThermoPotash production. Pedro Ladeira's extensive cement production experience was fundamental in improving the original production flow sheet".

About the Engineering Consortium

FLSmidth

FLSmidth of Denmark is the leading supplier of equipment and services to the global cement and minerals industries. FLSmidth is a global company with a local presence in 50 countries world-wide, employing more than 12,000 people. FLSmidth supplies everything from single machinery to complete cement plants and minerals processing facilities, including services before, during and after the construction. FLSmidth is listed on NASDAQ OMX Copenhagen and has more than 42,000 registered shareholders.

GEA Messo

GEA Messo of Germany has focused worldwide in the field of crystallization for more than 50 years with all engineering services for the chemical, food, steel technology and environmental industries. Messo references comprise around 700 installations. Messo offers the entire plant periphery necessary to complete any crystallizer installation for a crystallization plant. Messo operates a 300m² mini plant test laboratory for the development of the wide range of the process designs needed in the field of crystallization plants.

Hatch Consulting

Hatch Consulting of Canada supplies engineering, project and construction management services, process and business consulting and operational services to the mining, metallurgical, energy and infrastructure industries.

Hazen Research, Inc.

Hazen Research of the United States was organized in 1961 to provide process research and development services to the extractive metallurgy and chemical industries. Over the years, it has assembled an experienced and competent staff supported by laboratory and pilot plant facilities. Services include laboratory-scale research on new processes or adaptation of known technology to new situations, followed by pilot plant demonstration, preliminary engineering, and cost analysis. Projects range from beaker-scale experiments and analyses to multimillion-dollar continuous pilot or demonstration plants.

SRK Consulting (U.S.), Inc.

SRK Consulting of the United States is an independent, international consulting practice that provides focused advice and solutions to clients, mainly from earth and water resource industries. For mining projects, SRK offers services from exploration through feasibility, mine planning, and production to mine closure. Formed in 1974, SRK now employs more than 1,200 professionals internationally in 38 permanent staffed offices on 6 continents.

About Verde Potash Plc

Verde is a fertilizer exploration and development company; it was founded and is led by Brazilians. Verde is developing the Cerrado Verde project in Brazil, a source of potash-rich rock from which the Company plans to produce a potash fertilizer product. Founded as Amazon Mining Holding Plc in 2005, the Company changed its name to Verde Potash Plc in April 2011 to better reflect its core business.

About the Cerrado Verde Potash Project

Cerrado Verde is a unique project: 1) its high grade potash rock outcrops and is amenable to strip mining, allowing fast construction of a scalable operation; 2) it is located in the midst of the world's third largest and fastest growing fertilizer market; 3) it connects to Brazil's largest fertilizer distribution districts via existing and high quality infra-structure.

Qualified Person

All scientific and technical disclosures in this press release have been prepared under the supervision of Neal Rigby and Robert Bowell of SRK Consulting who are Qualified Persons within the meaning of National Instrument 43-101.

On behalf of the Board of Directors of Verde Potash, Cristiano Veloso, President and CEO.

Cautionary Language and Forward Looking Statements

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE. THIS PRESS RELEASE CONTAINS CERTAIN "FORWARD LOOKING STATEMENTS", WHICH INCLUDE BUT IS NOT LIMITED TO, STATEMENTS WITH RESPECT TO THE FUTURE FINANCIAL OR OPERATING PERFORMANCE OF THE COMPANY, ITS SUBSIDIARIES AND ITS PROJECTS, KCL PRODUCTION SCENARIOS, BRAZILIAN IMPORTATION LEVELS OF KCL DURING 2011, TIMING AND COMPLETION OF A PRELIMINARY ECONOMIC ASSESSMENT FOR KCL PRODUCTION AND THE TIMING AND COMPLETION OF A FEASIBILITY STUDY FOR THE PRODUCTION OF THERMOPOTASH. FORWARD LOOKING STATEMENTS CAN GENERALLY BE IDENTIFIED BY THE USE OF WORDS SUCH AS "PLANS", "EXPECTS", OR "DOES NOT EXPECT" OR "IS EXPECTED", "ANTICIPATES" OR "DOES NOT ANTICIPATE", OR "BELIEVES", "INTENDS", "FORECASTS", "BUDGET", "SCHEDULED", "ESTIMATES" OR VARIATIONS OF SUCH WORDS OR PHRASES OR STATE THAT CERTAIN ACTIONS, EVENT, OR RESULTS "MAY", "COULD", "WOULD", "MIGHT", OR "WILL BE TAKEN", "OCCUR" OR "BE ACHIEVED". FORWARD LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS EXPRESSED OR IMPLIED BY SAID STATEMENTS. SUCH FACTORS INCLUDE FLUCTUATION LAB AND CONSULTANT AVAILABILITY, MATERIAL CHANGE IN COMPANY FINANCES AND OTHER FACTORS DISCLOSED UNDER THE HEADING "RISK FACTORS" IN THE COMPANY'S CURRENT ANNUAL INFORMATION FORM AVAILABLE ON SEDAR AT WWW.SEDAR.COM. THERE CAN BE NO ASSURANCES THAT FORWARD-LOOKING STATEMENTS WILL PROVE TO BE ACCURATE, AS ACTUAL RESULTS AND FUTURE EVENTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN SAID STATEMENTS. ACCORDINGLY, READERS SHOULD NOT PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS.

 

SOURCE Verde Potash Plc