Aguia is planning to produce 306,000 tonnes of Pampafos (the Company’s natural phosphate fertiliser) per annum from the TEPP site. Image credit: Aguia Resources.
Aguia Resources Limited (Aguia or the Company) has closed a private placement raising approximately A$4.07 million (the Placement) before costs. Together with existing cash reserves and likely pending debt funding, Aguia is well-funded to commence construction at the Três Estradas Phosphate Project (TEPP).
The TEPP is an open‐pit, truck and shovel operation located approximately 320 kilometres southwest of Porto Alegre, the capital city of Rio Grande do Sul State in southern Brazil, in a major farming region that imports 100 per cent of its phosphate.
In December 2020, Aguia released an independent Bankable Feasibility Study (BFS) for the TEPP, compliant with JORC (2012), that reaffirmed the excellent economics of the project reported in the independent Scoping Study released in February 2020.
The study was conducted by independent consulting firm GE21 Consultoria Mineral Ltda (GE21) in Brazil. Some highlights from the BFS included:
- Post‐Tax NPV at 8 per cent Discount Rate: A$69.3 million
- IRR: 51 per cent post‐tax
- Production rate: 300,000 tons of Run of Mine (ROM) after 3 years of ramp-up
- Life of Mine (LOM): 18 years
- CAPEX: A$9.72 million and A$10.57 million with contingency
- OPEX A$11.87/tonne of DANF
- EBITDA (Average for Years 1 to 18): Phase 1 (Saprolite): A$14.8 million/year
- Strip Ratio (average LOM – Phase I): 0.49 (tonnes waste to tonnes phosphate)
- ROM: 5.1 million tonnes
- Payback: 3.3 years
Placement overview
Aguia announced this morning that the Placement funds were raised via the issue of approximately 45,236,444 fully paid Ordinary Shares to sophisticated and institutional investors at a price of A$0.09 per share.
Under the terms of the Placement, for each Ordinary Share subscribed for, one half of one Unlisted Option will be issued for nil additional financial consideration with an exercise price of A$0.18 and an expiry date of 31 March 2023.
Where a subscriber does not have a whole number of options allocated, the number of options granted will be rounded up. Ms Christina McGrath (Non-Executive Chair), Dr David Carland (Non-Executive Director) and Mr Martin McConnell (Non-Executive Director) all participated in the Placement.
The Company will seek shareholder approval for the issue to these related parties at an Extraordinary General Meeting later this year.
The issue of approximately 45,236,444 Ordinary Shares and approximately 22,618,222 Unlisted Options under the Placement will be undertaken using Aguia’s full existing placement capacity pursuant to Listing Rules 7.1 and 7.1A [1].
These Ordinary Shares and Unlisted Options are expected to be issued on or around Thursday 8 April 2021.
Use of Proceeds
The Company intends to use the Proceeds from the Placement as follows:
- Commence construction of the TEPP upon receipt of the pending project Installation Licence; and
- Working capital and strengthening of the balance sheet.
In commenting on the news, Aguia’s Managing Director, Dr Fernando Tallarico, said: “We are very pleased with the strong support shown by existing shareholders through their participation in the Placement and we welcome new shareholders to the register.”
“As well as the equity we are raising, discussions with experienced agribusiness debt financiers in Brazil are well-advanced. They clearly recognise the project’s value and its strong, long-term cash-generating characteristics. With interest rates at record lows, Aguia is now very well-placed to take advantage of attractively priced, non-dilutive debt, and this is an important part of our funding mix for Três Estradas and for the future development of the Andrade copper project.”
“Aguia is now funded to commence construction of the Três Estradas Phosphate Project once the Installation Licence is granted. We are confident that this is not too far away. This is an exciting time for Aguia as the Company approaches first production and cash flow, which remains on target for Q4 2021. As project development activities ramp up, we anticipate a steady stream of updates which we look forward to delivering,” Dr Tallarico commented.
The Co-Lead Managers of the placement were Kemosabe Capital and Lodge Corporate.
More information on the TEPP can be found here.
[1] For the purposes of ASX Listing Rule 7.1B.5, the Company will issue 17,199,932 Ordinary Shares under the Placement in reliance on ASX Listing Rule 7.1 and 28,036,512 Ordinary Shares under the Placement in reliance on ASX Listing Rule 7.1A. The 22,618,222 Unlisted Options will be issued in reliance on ASX Listing Rule 7.1.