NI 43-101 Preliminary Economic Assessment - Verde Potash

Verde Potash Plc 16-2
Cerrado Verde Project
NI 43-101 Preliminary Economic Assessment
competence between the two environmental bodies may cause overlap which may result in some
cases in problems and delays for mining companies.
The proposed project, while in this phase of exploration, at first, will not require an
environmental license. Parallel, the environmental reports that will be necessary to the
application of the exploitation are already been prepared (EIA).
The EIA is ongoing during 2011. Verde has hired the specialized company SSMA Assesoria de
Consultoria LTDA (SSMA) to do all the EIA, which should be finished by the end of 2011.
SSMA is in the course of preparing the study of environmental impacts (in Brazilian legislations
it is named: EIA – Estudo de Impactos Ambienta) and the plan for the restoration of degraded
areas (in Brazilian legislations it is named: PRAD – Plano de Recuperação de Áreas
Degradadas), which is a requirement for filing the application for the Provisional License.
The company filed the Description of the Activity Form (in Brazilian legislations it is named:
Formulário de Caracterização do Empreendimento – FCE) on May 25, 2011, which is the first
step of the environmental licensing procedure. Based on such form, the Minas Gerais
Environmental Agency (which is named: Secretaria de Estado de Meio Ambiente e
Desenvolvimento Sustentável – SEMAD) issued the Basic Instructions Form (in Brazilian
legislations it is named: Formulário de Orientações Básicas – FOB) on September 13, 2011,
which contains instructions on the issues to be addressed by the study of environmental impacts
and the manners it should be prepared.
Based on records available for review, Verde operates in accordance with Brazil legislation.
With the completion of this Scoping Study, Verde will formalize reliable information of the
project and have elements to complete the preparation of the necessary reports for obtaining the
environmental permits.
The selection of SSMA, a company qualified and specialized in making those reports, with
experience and commitment to the observance of legal standards and best practices for
implementing this will mitigate the risk of future remediation costs.
It is difficult to determine the exact amounts which will be required to complete all land
reclamation activities in connection with Cerrado Verde Project.
The project is in an exploration phase and the reclamation bonds and other forms of financial
assurance represent only a portion of the total amount of money that will be spent on reclamation
activities over the life of a potential mine. Accordingly, it may be necessary to make a complete
planned expenditures and operating plans in order to fund reclamation activities.
As the Project seems to have a good recoverability, it appear won`t going to have the usual
potential future liability for cleanup of tailings deposited on the expected future mining license
areas and reprocessing. It is not possible to quantify at this time what the potential liability may
be and detailed assessments need to be made to determine future land reclamation costs.
The Project does not have a final Mine Plan of Operations and the conceptual level closure plan
for the property, and therefore no reclamation and closure cost estimate budget due to the
project’s preliminary nature.
SRK Consulting (U.S.), Inc. September 16, 2011
Cerrado Verde_NI 43-101 PEA_343500.020_007_KG