Arianne Moves Closer to Downstream Phosphoric Acid Facility

Arianne Phosphate (TSXV:DAN,OTCMKTS:DRRSF,FWB: JE9N),has announced it is continuing its initial in-house review regarding the construction of a downstream phosphoric acid facility. In conjunction with this review, the company has entered into a memorandum of understanding (MoU) for the supply of sulphuric acid.

The Canadian-based Arianne Phosphate is developing the Lac à Paul phosphate deposits located approximately 200km north of the Saguenay/Lac St. Jean area of Quebec.

As quoted from the press release:

Since first announced, Arianne and potential partners have completed a preliminary look at the opportunity of constructing a phosphoric acid facility capable of producing high-purity phosphoric acid for domestic and international markets.  Several potential sites have been reviewed and further work is currently being done to try and finalize on a potential location before doing greater work around the opportunity, namely, getting a better understanding around the logistics, economics and end-product specifics.

The decision on whether to move forward on this project comes down to several factors.  Arianne believes that the most important component for a successful venture would be having access to a steady phosphate rock supply.  With roughly 85 percent of all global downstream facilities vertically integrated, the ability to source phosphate rock is key and, it is the biggest challenge to the operations that do not have their own supply.  An Arianne facility would be well positioned as it would have access to its own rock supply and would derive the economic benefits of vertical integration.

Aside from phosphate rock, a phosphoric acid plant would also require a supply of sulphuric acid that could be consistently delivered in timely fashion.  It is on this basis, that Arianne has entered into an MoU with a large marketer of sulphuric acid.  This agreement will allow the company to work with a strong industry player that can provide the venture ongoing guidance on pricing, logistics and industry supply/demand trends; all necessary aspects in determining the project’s viability.

“The cure to a low commodity price is a low commodity price,” said Brian Ostroff, CEO of Arianne Phosphate. “Demand for phosphate grows every single year, yet consistently lower prices for phosphate over the last five years affected supply growth with expansion plans curtailed and new projects being shelved.

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