Shares of Toronto-based MBAC Fertilizer (TSE:MBC) (OTCQX:MBCFF) advanced Wednesday after the company posted record daily production of single super phosphate fertilizer at its Itafós operations in Brazil.
The company, in a statement released earlier today, told investors that the new daily production record is a total of 1,700 tonnes, exceeding the expected daily amount for which the project was initially designed.
"Our production ramp up at Itafós is clearly advancing in the right, positive direction," said president and chief executive officer, Cristiano Melcher, in the release.
"Our progress since we resumed continuous operations in early September gives us confidence that we should reach commercial production in the coming weeks."
In the first half of September, the company produced a total of 9,165 tons of SSP and 6,488 tons of sulphuric acid. Commercial production is equivalent to a monthly production volume of 25,000 tons of SSP, or approximately 60 percent of nominaly capacity.
Separately, MBAC said it is continuing to explore financing arrangements, including the sale of non-core assets and other alternatives that will allow it to accelerate the ramp up at Itafós.
Continuous production resumed in early September following the receipt of funds from the recently obtained Santander working capital facility at the end of August. The company has also implemented a number of initiatives aimed at optimizing its operations and reducing costs.
The restructuring, which included a reduction in MBAC's workforce by more than 15 percent, re-negotiation of agreements with suppliers and the more efficient use of equipment and office facilities, is expected to generate annual savings of approximately $4 million.
MBAC acquired Itafós Mineração Ltda., which consisted of a phosphate mine, a mill and plant and related infrastructure in October 2008. Since late 2012, such operations have been phased out as the company completed the construction of the Itafós Arraias SSP project.
Shares of MBAC rallied 12.5 percent on Wednesday to 18 Canadian cents. Year-to-date, the stock has sunk more than 88 percent.