Stonegate Agricom: Phosphate Exploration in the Americas

- December 19th, 2011

Stonegate Agricom CEO Mark Ashcroft spoke about his company’s start, its current strategy, and the fundamentals of the phosphate market.

By Leia Toovey- Exclusive to Potash Investing News

stonegate agricom phosphate As one of three essential fertilizers, phosphate has recently been on a tear, buoyed by robust grain prices. FAO forecasts global fertilizer consumption to grow by 45 percent between 2005 and 2030. Phosphate alone is expected to grow at 9 percent to 8.59-million tonnes by 2011/12, and to 13.22-million tonnes by 2016/17. 

With rising need to expand global phosphate operations, Stonegate Agricom (TSX:ST) is working to bring new phosphate reserves online. Stonegate currently has two key projects in the Americas, the Mantaro in Peru and Paris Hills in Idaho, United States.

Mantaro

The company’s Mantaro project is located about 250 km east of Peru’s capital, Lima, and lies at the south end of a historically significant copper-lead-zincsilver mining belt. To date, Stonegate’s exploration work on the property has uncovered a measured and indicated 39.523 million tonnes at 10.0%, P2O5, inferred 376.265 million tonnes at 9.0% P2O5.

Paris Hills

The Paris Hills Phosphate Project in Bear Lake County, Idaho, is approximately 72 kilometers south of active phosphate mining and processing operations at Soda Springs and Pocatello.

In August of 2011, Stonegate announced positive fertilizer test results for the Lower Zone deposit at Paris Hills. A 105-kg composite sample of Lower Zone phosphate material was assayed (without beneficiation). The sample returned 32.33% P2O5. The sample was then successfully processed into e merchant grade phosphoric acid and both diammonium phosphate (DAP) and monoammonium phosphate (MAP). The DAP and MAP fertilizers manufactured during the testing exceeded industry specifications.

In an exclusive interview with Potash Investing News, Stonegate Agricom CEO Mark Ashcroft spoke about his company’s start, its current strategy, and the fundamentals of the phosphate market.

Potash Investing News (PIN): What made Stonegate interested in the phosphate industry?

Mark Ashcroft (MA): Stonegate’s founders had a mining background and were looking for new opportunities in the sector. When pursuing new opportunities, the agricultural sector (fertilizers) came up, and ventures into both phosphate and potash were considered. What they found is that there were lots of exploration companies searching for potash, and not many companies looking into phosphate.

PIN: Your two projects are in very different locations; what made you choose such diverse locales to explore for phosphate?

MA: Not only are they in different locations, Mantaro and Paris Hills are polar opposite in terms of what type of phosphate deposits they are. Paris Hills is a high grade underground mining operation that will be amenable to direct processing. Peru will be a large scale open pit project. Currently, Paris Hills is the focus because Peru is currently in limbo with Stonegate waiting for the second round of permitting to be approved.

PIN: Was choosing to explore for phosphate in the Americas a strategic decision? Will the product be marketed to the local markets?

MA:  While the locations are ideal (North America is a net-importer of phosphate), we have not chosen the locations to exclusively market to the local area, and we will sell our product to whoever is willing to buy it.

PIN: We have recently seen a weakening of phosphate prices; India was able to win a price decrease for phosphate and last week JP Morgan (NYSE:JPM) downgraded some phosphate producers citing weakening prices, do you think phosphate prices are sustainable or are we due for a correction?

Ashcroft: While DAP and MAP prices have been decreasing in price, phosphate has not, in fact, it is still climbing. The phosphate concentrate is what we will produce, and sell.

 

Securities Disclosure: I, Leia Toovey, hold no equity interests in any company mentioned in this article.

 

 

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