NI 43-101 Preliminary Economic Assessment - Verde Potash

Verde Potash Plc 15-3
Cerrado Verde Project
NI 43-101 Preliminary Economic Assessment
Table 15.1.3.1: Example of Fertilizing System Adopted for Each Crop Analyzed
Cotton Soybean Sugar Cane Corn Corn (Winter) Rice (Dry) Rice (IRR)
05.20.15 00.20.20 05.25.25 03.16.16 08.16.16 04.20.20 04.20.20
08.25.15 02.20.18 20.05.20 08.20.20 08.25.15 04.20.15 04.20.15
05.25.15 00.18.18 14.07.28 08.25.15 12.15.15 04.22.15 05.25.15
08.28.16 00.20.10 15.05.15 06.30.15 08.20.20 04.25.15 04.25.15
20.00.20 02.20.10 20.00.20 20.00.20 20.00.20 20.00.20 20.00.20
36.00.12 00.20.18 36.00.12 36.00.12 36.00.12 36.00.12 36.00.12
Source: AgroConsult
15.1.4 Formula Optimization Process
The optimization model, structured by linear programming, takes into account:
List of the main raw materials available at mixing centers;
Raw material nutrient levels;
Chemical incompatibility between raw materials;
Nutrient supplies (primary, secondary and micronutrients);
Lowest cost; and
Market price system. For nitrogenous fertilizer and potash prices, imported raw materials
were taken into account. For phosphates, imported and domestic prices for used, given
the level of supply in the Minas Gerais and Catalão, GO regions.
The formulas were optimized using the following criteria:
Conventional formula not including ThermoPotash;
The same formula using ThermoPotash at zero price, in order to determine the maximum
volume of the product in the composition;
A likely end price for ThermoPotash was determined so that the formula including
ThermoPotash cost the same as the formula without ThermoPotash; and
We then determined the average dose of ThermoPotash per ton and per crop.
For raw material prices; the price composition in each mixing center was calculated based on
raw material cost, transport value and breakage and inventory expenses. As an example, the
prices from the Uberaba center are shown in Table 15.1.4.1. The exchange rate used was 1.8
BRL/US dollars.
SRK Consulting (U.S.), Inc. September 16, 2011
Cerrado Verde_NI 43-101 PEA_343500.020_007_KG