Great Quest Fertilizer (TSXV:GQ) announced it had entered into a memorandum of understanding with Societe Africaine de Developpement Agricola S.A. to establish a partnership to construct a new Malian company, with Great Quest owning 67 percent of the new company. A new Malian corporation, named Great Quest NPK, will be formed.

According to the press release, the memorandum of understanding provides for the following:

• Great Quest NPK’s ownership and contribution of capital: 67% from Great Quest Fertilizer and 33% from SADA Group.
• Great Quest NPK will be in the business of beneficiating raw phosphate ore into GQ High Grade (P2O5 35%) and GQ Medium Grade (P2O5 27%), and the manufacturing of complex NPK granules; Great Quest fertilizer will mine the phosphate ore at its Tilemsi project and the ownership of the deposit remains unchanged
• SADA will purchase and sell the beneficiated phosphate and the complex granules, and will import the nitrogen and potash components.
• The Great Quest fertilizer will manage the operation and finances of Great Quest NPK; SADA will be responsible for marketing and sales.
• In addition to SADA’s contribution of 33% to the construction capital, SADA has declared an intention to invest up to $5 million CAD directly into Great Quest Fertilizer Ltd.
• SADA will have exclusive right for the distribution of products in Mali from Great Quest Fertilizer’s planned full-scale production in Mali.

Jed Richardson, president and CEO, said:

SADA, as a strong local partner and with a material financial interest in our production, is an ideal situation for the Company and our shareholders. This initial Malian production facility is intended as a pilot production plant and the agreements for the off-take and local partnership, will strengthen profitability for this first stage of production.

Click here to read the Great Quest Fertilizer Ltd. (TSXV:GQ) press release