Aguia set for second cashflow stream by mid-year
Aguia Resources is shifting gears and gunning for a second major revenue stream - this time from its phosphate project in Brazil's booming southern agricultural heartland.
Hot on the heels of its maiden gold pour at the Santa Barbara mine in Colombia just six weeks ago, the company is planning to become Brazil's newest phosphate producer, with its Três Estradas project expected to lock in first organic fertiliser sales in for the first quarter of the 2026 financial year.
In an effort to fast-track its phosphate production, Aguia has inked a deal to lease a fully operational 100,000 tonne per annum (tpa) fertiliser plant owned by local fertiliser group Dagoberto Barcelos 110 kilometres from the mine site.
Under the terms of the 10-year agreement - including a built-in 10-year option extension - Aquia is shelling out R$5 million (A$1.38M) in upfront payments, split into six monthly instalments to smooth the company's cashflows ahead of commissioning in July.
Aguia has also agreed to pay a monthly rent of AU$43,000 from July which equates to just AU$5.13 per tonne at the current maximum capacity.
The company's decision to lease the plant will see it sidestep a potential $26 million price tag for a 300,000tpa standalone facility - a figure highlighted in a 2023 bankable feasibility study. That study painted a compelling picture, forecasting annual EBITDA of $22 million over an 18-year mine life and a rapid payback period of just 2.9 years.
To keep operating costs low, Aguia has also cut a deal with local contractor, Contrasapper, to outsource mining and haulage under a per-tonne delivery agreement.
Contrasapper's services will also include everything from early works and vegetation clearance to haulage and road maintenance.
Aguia's initially targeted 100,000 tonne per annum phosphate production rate is likely to only scratch the surface of Brazil's fertiliser-hungry agriculture sector. Within a 200-kilometre radius of the plant, the company says it can only meet 10 per cent of local phosphate demand. Even across the broader Rio Grande do Sul region, Aguia's expected contribution will fill less than 2 per cent of the market, leaving the door wide open for expansion.
Once the wheels are turning Aguia immediately plans to upgrade the plant. The company says surplus cash from early operations could bankroll a second dryer at the plant to triple output to 300,000 tonnes per annum by 2027.
Sales of Aguia's 'PAMPAFOS' product - a high-grade 12 per cent reactive phosphate - are slated to start pending final Ministry of Agriculture approvals. A second lower-grade 6.27 per cent phosphate product with added sulphur called 'LAVRATTO' is planned for rollout in 2026 following agronomic testing.
Aguia is tipping its premium PAMPAFOS product to retail between A$200 and A$230 a tonne, offering a competitive, homegrown alternative to imported chemical phosphate, which it says is currently landing in Brazil at a hefty US$680 (A$1046) per tonne including freight costs.
The company believes its PAMPAFOS product will be a hit with Brazilian farmers, not just for its price edge, but for its proven punch in the paddock. The organic fertiliser has been put through its paces on crops worldwide over the past four years and is shaping up as a more effective alternative to traditional chemical blends.
Although the Três Estradas deposit will serve as the early feeder for Aguia's plant, the medium-term plan is to switch to two closer phosphate deposits, Mato Grande and Passo Feio, which are both close to the plant and could save precious dollars on haulage costs.
Recent augur drilling on the northern end of Paso Feio, 20km from the processing facility, has already shown early promise after revealing a distinct carbonatite target, despite the lack of outcropping and will be shortly followed up with ground magnetic surveys.
A similar phosphate-bearing carbonatite at Mato Grande - only two kilometres from the plant – has also been identified and will be tested with the rotary truth teller once exploration permits have been issued.
Notably, Aguia has already locked in a seasoned distribution partner with an established sales force that is already on the ground and has more than 40 years of market experience across Brazil, Uruguay and the broader South American agricultural sector.
Aguia says the local presence and credibility of its distribution ally will play a crucial role in winning the hearts and minds and building community support to fast-track acceptance of its PAMPAFOS fertiliser.
With mining contracts signed, plant modifications underway and marketing set to launch within weeks, Aguia appears close to zeroing in on first fertiliser revenues to complement its Colombian gold play which itself is shaping up as a potential serious bottom line contributor.
With two potential walls of cash on the near horizon, the $61m market-capped Aguia is now very close to realising its strategic plan – and in record time too.
Is your ASX-listed company doing something interesting? Contact:
matt.birney@wanews.com.au
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a day ago
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ON THE ASX: * The benchmark S&P/ASX200 index finished Friday 17.7 points lower, or down 0.21 per cent, to 8,547.4 * The broader All Ordinaries lost 25.4 points, or 0.29 per cent, to 8,770.6 CURRENCY SNAPSHOT: One Australian dollar buys: * 64.76 US cents, from 64.96 US cents on Thursday at 5pm * 92.99 Japanese yen, from 93.39 Japanese yen * 56.10 Euro cents, from 56.39 Euro cents * 47.83 British pence, from 47.89 pence * 107.67 NZ cents, from 107.80 NZ cents Australia's share market has lost much of the week's gains, after Israel's attack on Iran proved a brutal reality check for risk sentiment. The S&P/ASX200 fell 17.7 points, or 0.21 per cent, to 8,547.4, as the broader All Ordinaries gave up 25.4 points, or 0.29 per cent, to 8,770.6. Wednesday's dual-record intraday peak and best-ever close for the top-200 became a distant memory as Israeli air strikes on Iranian military targets and nuclear facilities prompted retaliatory drone attacks. The escalating conflict also weighed on markets in Asia, as Hong Kong's Hang Seng index, Japan's Nikkei and South Korea's KOSPI all fell between 0.8 per cent and one per cent. Eight of 11 local sectors lost ground on Friday, while energy and utilities stocks surged after oil prices spiked to four-month highs in the wake of the attacks. Brent Crude futures had since eased, but were trading at $US72.40 a barrel at 5pm. The elevation of global risk came at an inopportune time for the ASX and its financial sector, both of which hit new highs this week and showed signs of being overbought, IG Markets analyst Tony Sycamore said. "You wouldn't want to be going home long on risk (assets) ahead of this weekend, because there's just so much uncertainty out there," he told AAP. Meanwhile, the oil price spike could stoke inflation, just as central banks were easing monetary policy after finally tempering post-pandemic price growth. 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Materials stocks fell 0.2 per cent, as rallying gold miners helped soften a sell-off in large cap miners BHP (-2.6 per cent) and Rio Tinto (-1.1 per cent), tracking with an uplift in gold and continued weakness in iron ore prices. Gold itself rose to its highest level since the beginning of May to trade at $US3,445 ($A5,320) an ounce, spiking to within roughly one per cent of its $US3,500 all-time high. Australia's tech sector took the biggest hit on Friday, down 1.2 per cent as investors fled to safety. The Australian dollar is buying 64.76 US cents, down from 64.96 US cents on Thursday at 5pm. Next week, four major central banks will set their policy rates, and while investors expect no changes, they will be looking for any pivots towards dovish rhetoric in light of escalating conflict in the Middle East. "Not rate cuts, but setting up the idea that things have now become more uncertain and there is now more risk to global growth because of what happened this morning," Mr Sycamore said. ON THE ASX: * The benchmark S&P/ASX200 index finished Friday 17.7 points lower, or down 0.21 per cent, to 8,547.4 * The broader All Ordinaries lost 25.4 points, or 0.29 per cent, to 8,770.6 CURRENCY SNAPSHOT: One Australian dollar buys: * 64.76 US cents, from 64.96 US cents on Thursday at 5pm * 92.99 Japanese yen, from 93.39 Japanese yen * 56.10 Euro cents, from 56.39 Euro cents * 47.83 British pence, from 47.89 pence * 107.67 NZ cents, from 107.80 NZ cents Australia's share market has lost much of the week's gains, after Israel's attack on Iran proved a brutal reality check for risk sentiment. The S&P/ASX200 fell 17.7 points, or 0.21 per cent, to 8,547.4, as the broader All Ordinaries gave up 25.4 points, or 0.29 per cent, to 8,770.6. Wednesday's dual-record intraday peak and best-ever close for the top-200 became a distant memory as Israeli air strikes on Iranian military targets and nuclear facilities prompted retaliatory drone attacks. The escalating conflict also weighed on markets in Asia, as Hong Kong's Hang Seng index, Japan's Nikkei and South Korea's KOSPI all fell between 0.8 per cent and one per cent. Eight of 11 local sectors lost ground on Friday, while energy and utilities stocks surged after oil prices spiked to four-month highs in the wake of the attacks. Brent Crude futures had since eased, but were trading at $US72.40 a barrel at 5pm. The elevation of global risk came at an inopportune time for the ASX and its financial sector, both of which hit new highs this week and showed signs of being overbought, IG Markets analyst Tony Sycamore said. "You wouldn't want to be going home long on risk (assets) ahead of this weekend, because there's just so much uncertainty out there," he told AAP. Meanwhile, the oil price spike could stoke inflation, just as central banks were easing monetary policy after finally tempering post-pandemic price growth. "In the worst-case scenario, then potentially we see crude oil spike up towards $US100 (a barrel) and that takes inflation significantly higher," Mr Sycamore said. "That reduces the ability of central banks around the world to ease interest rates, because they're then fighting another re-acceleration in inflation." Energy stocks and utilities both surged more than four per cent, and the defensive consumer discretionary sector was the only other division in the green, up 0.25 per cent. The spike in crude prices was good news for Woodside investors, as the oil and gas giant rallied more than seven per cent to $25.21, the top-200's best performer. Financial stocks, which account for roughly half of the top-200's value, fell 0.4 per cent as three of the big four banks - excepting a flat Westpac - grinded lower. The sector is roughly flat for the week. Materials stocks fell 0.2 per cent, as rallying gold miners helped soften a sell-off in large cap miners BHP (-2.6 per cent) and Rio Tinto (-1.1 per cent), tracking with an uplift in gold and continued weakness in iron ore prices. Gold itself rose to its highest level since the beginning of May to trade at $US3,445 ($A5,320) an ounce, spiking to within roughly one per cent of its $US3,500 all-time high. Australia's tech sector took the biggest hit on Friday, down 1.2 per cent as investors fled to safety. The Australian dollar is buying 64.76 US cents, down from 64.96 US cents on Thursday at 5pm. Next week, four major central banks will set their policy rates, and while investors expect no changes, they will be looking for any pivots towards dovish rhetoric in light of escalating conflict in the Middle East. "Not rate cuts, but setting up the idea that things have now become more uncertain and there is now more risk to global growth because of what happened this morning," Mr Sycamore said. ON THE ASX: * The benchmark S&P/ASX200 index finished Friday 17.7 points lower, or down 0.21 per cent, to 8,547.4 * The broader All Ordinaries lost 25.4 points, or 0.29 per cent, to 8,770.6 CURRENCY SNAPSHOT: One Australian dollar buys: * 64.76 US cents, from 64.96 US cents on Thursday at 5pm * 92.99 Japanese yen, from 93.39 Japanese yen * 56.10 Euro cents, from 56.39 Euro cents * 47.83 British pence, from 47.89 pence * 107.67 NZ cents, from 107.80 NZ cents Australia's share market has lost much of the week's gains, after Israel's attack on Iran proved a brutal reality check for risk sentiment. The S&P/ASX200 fell 17.7 points, or 0.21 per cent, to 8,547.4, as the broader All Ordinaries gave up 25.4 points, or 0.29 per cent, to 8,770.6. Wednesday's dual-record intraday peak and best-ever close for the top-200 became a distant memory as Israeli air strikes on Iranian military targets and nuclear facilities prompted retaliatory drone attacks. The escalating conflict also weighed on markets in Asia, as Hong Kong's Hang Seng index, Japan's Nikkei and South Korea's KOSPI all fell between 0.8 per cent and one per cent. Eight of 11 local sectors lost ground on Friday, while energy and utilities stocks surged after oil prices spiked to four-month highs in the wake of the attacks. Brent Crude futures had since eased, but were trading at $US72.40 a barrel at 5pm. The elevation of global risk came at an inopportune time for the ASX and its financial sector, both of which hit new highs this week and showed signs of being overbought, IG Markets analyst Tony Sycamore said. "You wouldn't want to be going home long on risk (assets) ahead of this weekend, because there's just so much uncertainty out there," he told AAP. Meanwhile, the oil price spike could stoke inflation, just as central banks were easing monetary policy after finally tempering post-pandemic price growth. "In the worst-case scenario, then potentially we see crude oil spike up towards $US100 (a barrel) and that takes inflation significantly higher," Mr Sycamore said. "That reduces the ability of central banks around the world to ease interest rates, because they're then fighting another re-acceleration in inflation." Energy stocks and utilities both surged more than four per cent, and the defensive consumer discretionary sector was the only other division in the green, up 0.25 per cent. The spike in crude prices was good news for Woodside investors, as the oil and gas giant rallied more than seven per cent to $25.21, the top-200's best performer. Financial stocks, which account for roughly half of the top-200's value, fell 0.4 per cent as three of the big four banks - excepting a flat Westpac - grinded lower. The sector is roughly flat for the week. Materials stocks fell 0.2 per cent, as rallying gold miners helped soften a sell-off in large cap miners BHP (-2.6 per cent) and Rio Tinto (-1.1 per cent), tracking with an uplift in gold and continued weakness in iron ore prices. Gold itself rose to its highest level since the beginning of May to trade at $US3,445 ($A5,320) an ounce, spiking to within roughly one per cent of its $US3,500 all-time high. Australia's tech sector took the biggest hit on Friday, down 1.2 per cent as investors fled to safety. The Australian dollar is buying 64.76 US cents, down from 64.96 US cents on Thursday at 5pm. Next week, four major central banks will set their policy rates, and while investors expect no changes, they will be looking for any pivots towards dovish rhetoric in light of escalating conflict in the Middle East. "Not rate cuts, but setting up the idea that things have now become more uncertain and there is now more risk to global growth because of what happened this morning," Mr Sycamore said. ON THE ASX: * The benchmark S&P/ASX200 index finished Friday 17.7 points lower, or down 0.21 per cent, to 8,547.4 * The broader All Ordinaries lost 25.4 points, or 0.29 per cent, to 8,770.6 CURRENCY SNAPSHOT: One Australian dollar buys: * 64.76 US cents, from 64.96 US cents on Thursday at 5pm * 92.99 Japanese yen, from 93.39 Japanese yen * 56.10 Euro cents, from 56.39 Euro cents * 47.83 British pence, from 47.89 pence * 107.67 NZ cents, from 107.80 NZ cents
