Bayovar12 Reactive Phosphate Rock

Bayovar12 Reactive Phosphate Rock
Focus Ventures Ltd
February 2, 2016
1

FORWARD LOOKING STATEMENTS
Certain statements contained in this news release constitute forward-looking statements within the meaning of Canadian securities legislation. All statements
included herein, other than statements of historical fact, are forward-looking statements and include, without limitation, statements about the Company’s
Bayovar 12 project including details from the prefeasibility study prepared on the project. Often, but not always, these forward looking statements can be
identified by the use of words such as “estimate”, “estimates”, “estimated”, “potential”, “open”, “future”, “assumed”, “projected”, “used”, “detailed”,
“has been”, “gain”, “upgraded”, “offset”, “limited”, “contained”, “reflecting”, “containing”, “remaining”, “to be”, “periodically”, or statements that
events, “could” or “should” occur or be achieved and similar expressions, including negative variations.
Forward-looking Statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any results, performance or achievements expressed or implied by forward-looking statements.
Such uncertainties and factors relate to, among other things, information contained in the prefeasibility study prepared for the Bayovar 12 project; changes in
general economic conditions and financial markets; the Company or any joint venture partner not having the financial ability to meet its exploration and
development goals; risks associated with the results of exploration and development activities, estimation of mineral resources and the geology, grade and
continuity of mineral deposits; unanticipated costs and expenses; and such other risks detailed from time to time in the Company’s quarterly and annual
filings with securities regulators and available under the Company’s profile on SEDAR at www.sedar.com. Although the Company has attempted to identify
important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be
other factors that cause actions, events or results to differ from those anticipated, estimated or intended.
Forward-looking statements contained herein are based on the assumptions, beliefs, expectations and opinions of management, including but not limited to:
that the Company’s stated goals for the Bayovar 12 project will be achieved; that a feasibility study will be completed for the project; and that there will be no
material adverse change affecting the Company or its properties; and such other assumptions as set out herein. Forward-looking statements are made as of
the date hereof and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or
results or otherwise, except as required by law. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on forward-looking
statements.
Qualified Person
The information in this presentation was reviewed by David Cass, Focus’s President, who is a member of the Association of Professional Engineers and
Geoscientists of British Columbia, and a Qualified Person in accordance with National Instrument 43-101.
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OUR VISION
Focus’ vision is to become a leading producer of organic Reactive Phosphate Rock
from our Bayovar12 project in northern Peru. We aim to supply the growing
market for DAPR , contributing to high crop yields and a sustainable agricultural
industry
• Bayovar rock concentrate, with no chemical additives, can be used directly as fertilizer
and is especially suited for use on the acid soils of the tropical regions of the world. It is an
extremely effective source of P that has been proven to out-perform the more expensive
chemical fertilizers sold throughout the region.
• The deposit is located on tidewater, in the Tropics, within one of the fastest growing
fertilizer markets in the world.
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PROJECT LOCATION
• Bayovar 12 is in the Sechura desert of northern Peru, 45 km from the Port of Bayovar, and 180 km from the
port of Paita. Infrastructure is good with paved roads, grid power line.
• Focus has defined a large sedimentary phosphate deposit at Bayovar12 containing hundreds of millions of
tonnes of phosphate rock.
• Vale’s Bayovar mine is located 15 kilometres to the south-west of Bayovar 12
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WHAT DO WE WANT TO PRODUCE?
Reactive Phosphate Rock (RPR) for use as a Direct Application Fertilizer (DAPR)
• The PFS examines production of a 24% P 2 O 5 product and a 28% P 2 O 5 phosphate rock concentrate
• Bayovar RPR is an extremely effective, gradual-release source of P that can out-perform many
manufactured fertilizers under tropical soil & climate conditions
• Focus is planning to produce up to 1-million tonnes per year of RPR by mining up to 13 different beds of
phosphate rock
• The RPR should be certifiable as ORGANIC: no chemicals will be used in the processing
Concentrated to 24-28 % P 2 O 5 by washing and sizing using
sea water
High solubility in citric and formic acid
Should qualify as organic as no chemicals used in upgrading
Contains micro and macro nutrients
Can be used as raw material for blending bespoke NPK
mixtures
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A WORLD CLASS RESOURCE
Focus’ drilling has defined a large sedimentary phosphate deposit at Bayovar12 containing hundreds of
millions of tonnes of phosphate rock.
Resources reported below are inclusive of tonnes converted to Reserves.
Resources * Tonnes (Mt, dry) P 2 O 5 %
Measured 17.7 13.16
Indicated 209.5 13.04
Inferred 102.2 13.11
Reserves Tonnes (Mt, dry) P 2 O 5 %
Proven 14.2
Probable 40.5
Total reserves 54.7 12.99
Notes: * No minimum thickness, grade cut-off or other mining parameters applied. Phosphorite bed specific wet and dry
relative densities used for tonnage calculations. Resources outside of the designed pit were not considered in the Reserves
estimation. Resources that have not been converted to Reserves have not undergone analysis to yet to demonstrate
economic viability and there is no guarantee that they will be viable. The Study assumes prices of US$145/tonne and
US$185/tonne on a dry basis used for Plant 1 and Plant 2 phosphate concentrate respectively.
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PRODUCT SPECIFICATIONS
Specification
Typical levels
P 2 O 5 24-28%
NAC 6.5–9
2% Citric Acid
Solubility
2% Formic Acid
Solubility
9.5-15%
14-19%
% passing 0.5mm 95%
The product will be an apatite (calcium phosphate)
concentrate with trace elements.
CaO 40%
MgO 0.50%
Cl 3%
K 2 O 0.15%
S 1.50%
Fe 2 O 3 0.60%
Mo
Zn
B
Cu
10 ppm
200 ppm
50 ppm
30 ppm
Moisture 4-6%
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REACTIVITY OF SECHURA ROCK
Sechura RPR has been shown to be one of the most reactive in the world, and an effective slow-release
phosphate fertilizer under favorable conditions. The table below shows the solubility spectrum
developed by the International Fertilizer Development Center (IFDC) for phosphate rocks.
The Solubility Spectrum of Phosphate Rocks *
Potential
Solubility (%P 2 O 5 )
response
NAC ** 2% Citric acid 2% Formic Acid
High >5.4 >9.4 >13.0
Medium 3.2-4.5 6.7-8.4 7.0-10.8
Low

HOW EFFECTIVE IS SECHURA RPR?
Sechura RPR is highly reactive in acid- to mildly-acid soils
(pH

HOW EFFECTIVE IS SECHURA RPR?
Oil Palms
• There is a massive expansion of oil palm cultivation globally. RPR is one of the best fertilizers for oil palms, helping to
maximize fruit yields.
• Oil palms thrive on acidic soils & require a lot of fertilizer. Phosphate (P) is a major element required for palm growth
especially for root development in immature plants.
• In Southeast Asia RPR is the preferred oil palm plantation fertilizer. Depending on plant maturity and soil characteristics
optimum annual application rates of natural phosphate rock concentrate range from 300 kg to 1 tonne per hectare.
• In the past, water soluble P was normally applied to oil palms in the first 12 to 18 months after field planting but this
practice has lost its importance with the use of highly reactive PR. *
• An extensive study by Ng et al (2013) of Indonesian and Malaysian plantations found that the application of RPR from
Bayovar optimized palm nutrition and oil yields.
*
Patrick Ng, Kah Goh and Zaharah, 2010, Direct applications of phosphate rocks on
sustainability of oil palm plantations.
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HOW EFFECTIVE IS SECHURA RPR?
Cruciferous Crops
The agronomic research literature contains numerous studies showing how effective Bayovar RPR is. e.g. field trials by an
agricultural company in Chile* found Bayovar RPR out-performed TSP for cruciferous crops: rapeseed, kale and turnips
Rapeseed Turnips Kale
They concluded…
Bayovar phosphate rock also provided other nutrients: Ca, Mg, K, S, B
It also raised the pH and lowered the aluminum saturation in the soil.
Because of its high reactivity and grain size, even when it was applied to cover crops it was able to provide
nutrients to the soil.
That “Sechura Phosphate rock is … an economic alternative fertilizer because of its lower cost compared to water
soluble fertilizers.”
*Source: “Ensayo Fosfato Bayovar v/s SFT en Cruciferas forrajeras” in Informativo
Agrolechero Soprole Ano 8, Numero 23, Edicion Mayo-Juin de 2011 pages 10-12
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BAYOVAR 12 - ENGINEERING STUDY HIGHLIGHTS
Production will be from 13 horizontal phosphorite beds hosted in free-digging diatomite. At full capacity the Bayovar 12 Mine
will produce 1.0 Million tonnes per year (Mtpy) over a 20 year mine life for a total of approximately 18.5 M tonnes of dry
product.
• Production of 18.5 Mt of RPR concentrate from 52.3 Mt of ore over a 20 year mine life via haul-back strip mining.
• Two RPR product lines grading +24% and +28% P 2 O 5 through simple beneficiation and upgrade by washing using seawater.
• Post-Tax IRR of 17.2% and NPV of $252.9 million at a 7.5% discount rate.
• After-tax cash flow of $847 million.
• Payback of 6.6 years from start of operations.
• Proven and Probable Reserves of 54.7 Mt of ROM ore (dry basis) considered in the designed pit. Substantial mineral
resources remain in inventory to extend mine life.
• Initial Capex of $127 million including pre-production stripping, process plant, tailings storage, water pipeline and power
line, owners costs and contingency.
• Opportunities identified to improve economics via optimization studies including review of mine schedule, infrastructure
requirements and extension of mine life.
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STUDY CONSULTANTS
The PFS report is the product of technical contributions from a number of consultants & FCV personnel.
The primary contributors by area of expertise were:
M3 Engineering & Technology - the principal Qualified Person (“QP”) and
author of the study, Process Engineering
Golder Associates (Golder) – Geological Modeling and Mineral Resource
Estimation, Mine Engineering and Mineral Reserve Determination,
Geotechnical, Hydrology, and Tailings Storage Facility
Jacobs – Metallurgical Testwork, Process Design
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PROPERTY OWNERSHIP & MINERAL TENURE
• Juan Paolo Quay S.A.C (JPQ) is the title holder of
the concession.
• JPQ is owned by Focus’s subsidiary Agrifos (70%),
and Trabajos Maritimos S.A. and Inca Terminals
and Mining Inc., marine transport and service
providers owned by subsidiaries of Grupo Romero
(Peru) and Mamut Andino C.A. (Ecuador),
respectively.
• The 12,575 hectare concession was acquired by
JPQ in 2007 for the exploitation of gypsum rock by
open pit mining from the claim
• Connected by sealed road to tidewater and the
JPQ marine port facilities 40 km to the west.
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FOCUS’ DRILLING & RESOURCE DISTRIBUTION
• 62 holes drilled over
8km by 3.6km (30% of
total area of concession)
• Indicated Resources
defined on 800 x 800m
drill spacing
1.6km
• Measured Resources on
400 x 400 hole spacing
• All holes cut the same
sequence of phosphate
beds
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GEOLOGY IN CROSS SECTION
• Simple layer cake geology allowed for rapid exploration progress
• No faults, folds or significant structures detected
• Rock is soft and free digging in nature
S
N
PHOSPHATE SEAMS
PIT SHELL
Cross Section
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MINERAL RESERVES
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METALLURGICAL PROCESS
Metallurgical testing was directed at recovering +24% and +28% P2O5 concentrates suitable for use as direct
application phosphate rock (DAPR), to take advantage of the rock’s high reactivity.
Flow-sheet for producing two different DAPRs is shown on right.
• Plant 1 produces 24% P2O5 DAPR by tertiary desliming at 53 μm
• Plant 2 produces higher grade +28% P2O5 DAPR by coarsening
the tertiary desliming cut point to reject lower grade near-size
material.
Process consists of desliming, dewatering to 15% moisture and
drying to 4% moisture using unit operations including drum
washing, size classification, attrition scrubbing, hydraulic
classification, filtering, and fluid bed drying. The process uses
seawater throughout: the product is not rinsed with freshwater
to remove salts.
Phosphate recovery Plant 1 = 81.1% P 2 O 5
Plant 2 = 72.3% P 2 O 5
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GENERAL PROCESS FLOW SHEET
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PLANT LAYOUT
View of the Bayovar12 Process Plant and Facilities
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MINING METHOD
Schematic layout of mining methodology, Bayovar 12
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INFRASTRUCTURE TO INCLUDE..
• site access and concentrate haulage roads,
• a port facility for shipping concentrate overseas,
• power supply and a new power transmission line,
• a seawater pipeline for process water supply,
• ancillary building facilities,
• a reverse osmosis water treatment plant to deliver potable water fire protection and sanitary septic
facilities,
• site communications
• Tailings Storage Facility (TSF).
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SITE ACCESS AND CONCENTRATE SHIPMENT
• Access to the Bayovar 12 plant is from the Bayovar-Chiclayo Highway, located 17 km west of the Pan American Highway.
• Concentrate will be trucked to the Port of Bayovar along the Bayovar-Chiclayo Highway over a distance of approximately 43
km to the port facility using contractor- owned, 35-tonne end-dumping trailers.
• The project is planning to use the port facilities owned by its partner, JPQ, located in the Port of Bayovar.
• The facility is a medium depth port that handles Handysize ships that have a capacity of 20,000 long tons deadweight (DWT) –
28,000 DWT and Handysize ships, with a capacity of 28,000 – 40,000 DWT. The port has been actively shipping gypsum for
JPQ from open stockpiles.
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MARKET STUDIES
Bayovar 12 hosts a world-class deposit of arguably the most reactive phosphate rock (RPR) fertilizer in the world. The project
will produce a highly sought-after, organic DAPR fertilizer. The project will service the rapidly-growing oil palm market in the
Americas: the organic palm oil plantations of Colombia and Ecuador, and the local Peruvian market where phosphate nutrient
needs are currently met entirely by imports.
• Two mines close to Focus’ Bayovar project have been producing and selling DAPR for several years. Fosyeiki S.A.C. and Corporación
Agrosechura Peru S.A.C. produce and export ~22-24% P2O5 rock by truck and ship to Ecuador, Nicaragua, Bolivia and Colombia. FOB
prices by ship to Central America have ranged from US$163/T to US$195/T. FOB prices achieved by Agrosechura by truck to Bolivia
and Ecuador have ranged up to US$220/T.
• Retail prices of DAPR to organic farmers in Peru have remained fairly constant at about US$320 per tonne for the past few years. In
Malaysia, Bayovar rock is currently being marketed by Union Harvest for US$160-170/T. This PFS assumed a wholesale price of
US$145/T for Focus’ 24% P2O5 product.
• Several studies conducted by governmental organizations over the past decade have shown that on plantations located in areas
with acidic soils and high rain fall, Bayovar RPR competes agronomically with Super Single Phosphate (SSP), achieving similar or
higher crop yields (Appendix E). Consequently RPR and SSP tend to compete directly and prices are similar, as seen in countries
such as Brazil.
• Focus is looking to displace SSP sales in South and Central America with a cheaper but more effective product. The PFS assumed a
wholesale price of US$185/T for Focus’ higher grade product, which represents approximately a 25% discount to SSP prices in Latin
America.
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CAPITAL COST SUMMARY
The initial CAPEX includes mine design, permit, pre-strip, construct, plant facilities, ancillary facilities, and utilities, plus
indirect costs for engineering, construction management, and Owner’s costs. Sustaining CAPEX covers facilities
expansions, mining equipment replacements, and expected replacements of process equipment
Initial Capex
($000s)
Sustaining Capex
($000s)
Total Capex
($000s)
Mine
Processing Plant
Tailings Facility
28.72
81.68
14.41
122.4
40.2
58.9
151.1
121.9
73.3
Owner’s Costs*
2.51
-
2.51
Total CAPEX with contingency
127.3
221.5
348.8
*Owner’s costs were estimated for several categories based on approximately 12 months of field
construction for the mine and plant site. Owner’s costs include Owners staff build-up and field
expenses, staff hiring and training, Owner’s commissioning team, construction insurance,
environmental, legal and community development costs.
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OPERATING COST SUMMARY
The Life-of-Mine operating costs were developed for mining, processing and G&A costs. Operating
costs include labor, equipment operation, power, fuel, reagent, and consumable consumption,
maintenance and repairs, and outside services.
Unit Cost
($ per product tonne)
LOM COst
($000s)
Owner Mining
Contract Mining
Process Plant
G&A
Transportation
Total Cost
32.23
20.29
10.49
2.58
10.09
75.69
596,292
375,456
193,110
47,771
186,675
1,400,184
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STUDY RECOMMENDATIONS
Many significant opportunities recognized in the study to improve OPEX & CAPEX
OPEX
- Review the mine plan and production schedule to…
- Reduce waste haulage distances and ex-pit storage
- Provide in-pit backfill opportunities earlier in the mine life
- Achieve nameplate production capacity earlier for both lines
- Additional metallurgical studies to further improve beneficiation process
- Drilling and definition of Reserves to north and north-east
CAPEX
- Source used & new equipment locally, infrastructure power and pipeline
- Cost sharing opportunities with adjacent projects
- Relocation of road and TSF
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BAYOVAR 12 – CURRENT STATUS
Current Status :
NI 43-101 mineral resource calculation completed
Prefeasibility Study for 1.0 Million tonnes per year of DAPR over a 20 year mine
life completed
EIA Mine Permitting commenced
Next Stage:
- Completion of a Bankable Feasibility Study (subject to financing)
- Approval of EIA (mine permit)
- First production (2 – 3 years)
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PARTNERING WITH FOCUS
Focus is currently considering:
• Offtake agreements/letters or expressions of interest in offtake of DAPR.
• Potential strategic investors (at the equity or project level) or partners with an interest in
assisting in the development of Bayovar12
• Assistance in securing financing to develop the project
• Cooperation in running crop trials using Bayovar12 DAPR
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CORPORATE SUMMARY: MANAGEMENT & BOARD
SIMON RIDGWAY
CHAIRMAN & CEO
• Founder Fortuna Silver, Radius Gold, Focus Ventures
• Raised over $500m in mining finance
• 30+ years experience in the junior sector
• Multiple discoveries through the Americas
DAVID CASS
PRESIDENT & DIRECTOR
MARIO SZOTLENDER
DIRECTOR
• Specializes in Latin American business relationships
• Fluent in several languages
• Extensive experience in the junior mining sector
RALPH RUSHTON
BUSINESS DEVELOPMENT & DIRECTOR
• Nearly 30yrs international exploration experience
• Anglo American’s exploration manager North America
for 6 years
• MSc Mineral Exploration & P. Geo
• QP for Focus Ventures
TIM OSLER
DIRECTOR
• Owns a mining consultancy & mining equipment business
• Has developed and operated placer mines in Yukon Territory
• Holds directorships in a number of junior companies
• 18yrs experience in exploration & mining geology in
Africa & the Middle East
• MSc Economic Geology & Certificate in Business
Communications
• 12 years investor relations & business development
experience
MANAGEMENT & CONSULTANTS
KEVIN BALES
CFO
• Over 15 yrs experience in financial reporting for
mining and IT companies
• Bachelor of Management with a major in accounting
• CFO for several junior companies
KEVIN ROSS
PRINCIPAL MINING ENGINEER
• Mining engineer with 39 yrs operational experience
• Experience in Nth & Sth America, Europe and Africa
• COO of Red Back mining until acquisition by Kinross
• Graduate of the Royal School of Mines in London
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CORPORATE STRUCTURE
SHARE STRUCTURE
ISSUED 116.56M
WARRANTS 41.41
OPTIONS 5.08
FULLY DILUTED 163.05
AVE DAILY VOL. 105K
52 WK RANGE 27C – 6C
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CONTACTS
Focus Ventures Ltd.
Vancouver, Canada
Contact Person: David Cass or Ralph Rushton
info@focusventuresltd.com
Telephone: +1 604.688.5288
Lima, Peru Pedro Garcia Valeria
pgarcia@goldgroup.com
Telephone: +51 1 637 8171
http://www.focusventuresltd.com/s/Home.asp
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