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Verde Potash negotiating off-take agreement

Verde Potash negotiating off-take agreement

Verde Potash (TSX:NPK) successfully processed 42 tonnes of feed material during a four week test of its potash rock to potassium chloride (KCI) process at FLSmidth's rotary kiln facility in Pennsylvania.

The testing allowed for the optimisation of variables in the KCl production process, including the quantities of potash rock, salt and limestone used, kiln temperature and kiln residence time.

The results will be incorporated into the Brazilian fertiliser exploration and development company’s bankable feasibility study (BFS), which is due to be published in the first half of 2013.

The company also revealed it is currently talking to a number of potential counterparties about an off-take agreement for the company’s granular KCI product. Such an agreement would assist potential lenders to the Cerrado Verde Potash project in completing their due diligence, and would speed up the process of securing debt financing.

All of the parties being spoken to are currently buyers of granular KCI in Brazil.

Management has entered into discussions with key development agencies regarding debt funding of the Cerrado Verde project, and has begun providing these lending agencies with financial and technical data regarding the project.

The company stressed that it is confident it has enough cash to fund the completion of the BFS and all other necessary corporate activities through 2014.

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