A scoping study for Harvest Minerals' (LON:HMI, ASX:HMI) Maximus project in Brazil confirmed that fertiliser could be produced at low cost with a very simple processing method.
The Maximus target is part of the group's Arapua fertiliser project, and significantly the study is based on an initial resource of 883,000 tonnes, which represents only around 3% of the estimated mineralisation.
Production is put at 100,000 tpa (tonnes per annum) for seven years with initial capital expenditure (capex) of US$800,000 for equipment.
Importantly, the entire project can be funded from existing cash reserves, with first production expected later this year.
Processing of what's called a DANF (direct application natural fertiliser) product involves very simple dry processing, including only crushing and milling.
Operating costs are put at US$4.77/t mined and processed, and US$ 7.34/t including selling costs and general and administrative expenses.
At sales prices of US$50/t and US$65/t, net present values of US$15mln and US$21mln post-tax were generated.
Harvest's executive chairman Brian McMaster said: "There is significant upside to the project both in terms of the current resource and potential to expand the planned initial production with the project ideally located in the prime agricultural Cerrado region where fertiliser demand is high.
"We expect to be able to refine and improve on the numbers presented in the scoping study and we are in the process of appointing contractors to carry out the mining and processing, which could significantly reduce the initial CAPEX requirements and potentially reduce these already low OPEX [operating expenditure] costs even further.
"We are busy working towards first production later this year and whilst our trial mining permit application is being processed, our technical team and consultants continue to conduct further test work including an agronomic study, the initial results of which we expect to receive during the current quarter."