Aguia Resources Limited (ASX:AGR) Signs 10-Year Lease for Phosphate Processing in Brazil
Lease Agreement Details
Aguia Resources Limited (ASX:AGR) has signed a 10-year lease with Dagoberto Barcelos S.A. to process Pampafos ore at DB’s facility near Caçapava do Sul, Brazil. The agreement includes an option to extend the lease for an additional 10 years.
Financial Terms
Aguia will make a BRL$5 million (A$1.4 million) once-off payment to Dagoberto Barcelos S.A. The monthly lease fee is BRL$163,000 (A$43,000), starting six months after signing.
Operational Plans
The processing facility currently operates at approximately 100,000 tonnes per day. With planned upgrades, Aguia expects to increase annual production to up to 300,000 tonnes per day. Aguia aims to begin processing first ore by Q3 2025 and is fast-tracking exploration of nearby deposits.
Future Outlook
With Rio Grande do Sul heavily reliant on phosphate imports, Aguia aims to sell its high-grade product at A$150-$160 per tonne, compared to current import costs of A$344 per tonne. Negotiations are ongoing with another processing facility for expanded production.
Executive Comments
Executive Chairman Warwick Grigor commented, “This Binding Lease Agreement with DB is a major step forward for Aguia in Brazil. It is expected that processing of Pampafos ore will commence in Q3 2025, after completing some capital works, at the plant’s current rate of 100,000 tpa. Depending upon the speed of market penetration, Aguia will look to expand production at the plant as early as the start of 2026. When I became Chairman of Aguia I stated that our goal was to clear the way to commence production of phosphate in Brazil as soon as possible. I am pleased to report that we are now close to realising that goal with our eye on progressive expansion through one or more processing plants and with significantly less capex than previously expected. With Brazil largely dependent on phosphate imports, we are confident of carving out a meaningful market position in southern Brazil, the country’s pre-eminent agricultural region. We look forward to bringing on a second meaningful revenue stream this year, adding to our gold processing operations at the high-grade Santa Barbara project in Colombia which is advancing very favourably.”
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
This article was generated using GPT-4o mini, a Large Language Model (LLM), to generate summaries of investing news. While AI is generating the content, we know better than to blindly trust our future robot overlords, and every article is edited and fact-checked by an editor holding the appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content of everything published by The Capital Club.