NI 43-101 Preliminary Economic Assessment - Verde Potash

Verde Potash Plc 17-2
Cerrado Verde Project
NI 43-101 Preliminary Economic Assessment
Table 17.1.2 Summary Capital Cost by Facility in Reals and United States Dollars in
thousands, Including Applicable Taxes for a 2.2Mtpa Operation
Sub-area
Total Price R$(000)
Total Price US$(000)
With Taxes
With Taxes
Total R$ 393,131 $218,406
General area R$ 57,448 $31,915
Primary crushing R$ 6,204 $3,447
Secondary crushing R$ 8,910 $4,950
Stockpile R$ 1,965 $1,092
Limestone storage and dosing R$ 9,531 $5,295
Grinding R$ 20,010 $11,117
Pelletizing R$ 40,138 $22,299
Furnace R$ 139,563 $77,535
Quenching R$ 12,552 $6,973
Pellets classification R$ 8,119 $4,511
Bulk product classification,
storage, loading and shipping
R$ 4,295 $2,386
Raw water intake R$ 9,936 $5,520
Fire fighting R$ 3,990 $2,217
Compressed air R$ 6,702 $3,724
Electrical substations R$ 38,433 $21,352
Main substation and transmission line R$ 25,335 $14,075
*Exchange Rate is R$1.80=USD1
17.1.1 Payback
Based on the following economic evaluation for the two production rates, the 1.1Mtpa pellet
production rate, project payback occurs in Year 3 of production. For the 2.2Mtpa production rate
project payback occurs in Year 2 of production.
17.2 Operating Costs
For the production of fertilizer pellets with an estimated 8% to 10% K 2 O content, the 1.1Mtpa
pellet production rate, operating costs are estimated at US$41.80/t of pellets, inclusive of General
and Administrative costs. A summary breakdown of operating costs, excluding G&A, is
presented in Table 17.2.1. For the 2.2Mtpa production rate operating costs are estimated at
US$36.36/t of pellets produced, inclusive of G&A costs. A detailed breakdown of operating
costs, excluding G&A, is presented in Table 17.2.2. Total operating costs are stated in both
US$(000) and R$(000).
SRK Consulting (U.S.), Inc. September 16, 2011
Cerrado Verde_NI 43-101 PEA_343500.020_007_KG