Aguia Resources (ASX: AGR) is looking to complement its current Brazilian phosphate projects with the acquisition of a large potash project.
The area is known for potash, with Vale's (NYSE: VALE) Taquari-Vassouras underground mine adjacent.
Aguia will look to acquire Potassio do Atlantico Ltda, a private mineral exploration company, with a primary focus on potash exploration and development in the Sergipe Basin of Brazil.
The initial land position is around 1790 square kilometres, located in proximity to existing infrastructure including power, gas, road and port facilities.
This infrastructure appears set to improve, with Vale developing a 1.2 million tonne per year carnallite solution mining project.
Vale has built a functioning pilot plant which has proved solution mining of carnallite in the Sergipe basin, which is commercially feasible with acquired environmental permitting.
Highlighting the potential for sales to the domestic market in the future, Brazil currently imports 90% of its potash requirements annually.
The market has welcomed the news, with Aguia shares up 22% to $0.67 in intra-day trading.