DuSolo Fertilizers recently announced its new agreement with Mineração Batalha e Participações (JV Partner) to acquire the São Roque Phosphate Project in southeast Brazil.
The project is in Minas Gerais and São Paulo and high-grade phosphate mineralization has been identified at the soil's surface, with multiple grab samples from outcrops confirming P2O5 superior to 20 percent. Furthermore, geophysics anomalies are well-defined and confirmed by surface sampling.
The region presents good infrastructure, including rails and roads. JV Partner will not receive direct payments, and there will be 70 percent interest earned through commitment to invest in exploration and project development.
Under the terms of the agreement, DuSolo will carry out an approximately $75,000 drill program in lieu of payment to the JV partner and will drill a minimum of 200 meters to test the thickness and extension of the mineralized profile. Contingent upon receipt of positive results, the parties will then form a partnership with participation interest allocated at 70 percent to DuSolo and 30 percent to the JV Partner.
The cost of exploration will be funded by DuSolo, while any future production costs will be distributed among the partners. DuSolo can choose to end the partnership or exercise a call option to acquire the remaining 30 percent for a cash payment of $3 million.
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