Agriculture

This week Arianne Phosphate and DuSolo Fertilizers made headlines in the phosphate space. Here’s a look at what’s been going on.

When it comes to investing in phosphate companies, there aren’t very many junior and development-stage companies for investors to consider. However, this week, both Arianne Phosphate (TSXV:DAN) and DuSolo Fertlizers (TSXV:DSF) released good news.

While neither company saw a pick up in share price — quite the opposite, in fact — food security is a long-term fundamental in the sector and essentially guarantees that phosphate will have a role to play across the globe in the future. Investors thus might want to take note of what these companies are up to.

Arianne updates resource

First up is Arianne Phosphate, which is working on developing the Lac à Paul phosphate deposit in Saguenay-Lac-Saint-Jean, Quebec. Using results taken from its 2014 drill program, the company has increased the mineral resource estimate for the Paul Zone. Specifically, the measured and indicated resource at the Paul Zone has seen a bump of 13 percent, meaning that it is now sitting at 668 million tonnes of 7.01-percent P2O5 with a 4-percent P2O5 cut-off grade. Arianne has also identified a new inferred resource at the Paul Zone — it comes to 38 million tonnes at 6.13-percent P2O5, also at a 4-percent cut-off grade.

Jean-Sebastien David, COO of Arianne Phosphate, is encouraged by the resource update, and said in a press release, “[o]f particular interest is the new resource shown in the Western Extension. It is located near the surface and is a real positive for us since it could reduce our stripping ratio and thus our operating costs (OPEX). Our team has been hard at work to define more mineralised targets near the Paul Zone so that we can achieve our stated goal of a 50 year mine life at our world class Lac a Paul Project. To this end, Arianne recently concluded a 3 000 meter diamond drilling campaign on the eastern extension of the Paul Zone.”

The update is the second piece of good news for the company in the last month. In mid-September, Arianne received a $2-million investment from the Quebec government for the advancement of the Lac à Paul project.

From exploration to production

Another phosphate play that investors can look at is DuSolo Fertilizers, which, following Tuesday’s news, has completed the transition from exploration company to producer. The Brazil-focused company announced that it has obtained the final permits required to start mining operations at the Santiago phosphate target at the Bomfim project.

“We now have all the elements in place to deliver on our goal of becoming a phosphate producer in arguably the world’s hottest fertiliser market. Our processing facility is operational and permitted, we are fully funded, and we have received all the necessary licences,” DuSolo’s president and CEO, Eran Freidlander, said in a press release.

And indeed, the company has wasted no time getting started. With its permits now in hand, DuSolo has commenced extracting and processing high-grade phosphate into direct application natural fertilizer (DANF). DANF, according to DuSolo, is a highly sought-after fertilizer product amongst the farmers and agricultural centers in Brazil’s Cerrado region, the fastest-growing agricultural district in the world.

The company is looking to produce 80,000 tonnes of DANF per year, while also pursuing an aggressive drill program to expand the resource at Bomfim.

 

Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned. 

Editorial Disclosure: Arianne Phosphate is a client of the Investing News Network. This article is not paid-for content.

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