Aguia Resources Limited (ASX:AGR) has secured a A$3.75 million loan from the Board of the Development Bank of Southern Brazil (BRDE) to help fund capex for the Três Estradas Phosphate Project (TEPP) in Brazil.
This approval follows a letter of support received from BRDE in December 2020 after an extensive review of the TEPP which confirmed that the project meets its investment criteria.
Combined with cash at a bank of A$4.48 million as of May 31, 2021, the approval of this loan gives Aguia sufficient capital to fund the A$7.37 million capex for the construction of the TEPP.
Land acquisition
Aguia is in the final stages of project land acquisition.
Receipt of an Installation Licence (LI) will provide the right to commence mine construction and this is dependent upon completion of the land acquisition
The company anticipates being able to provide a comprehensive update on land acquisition shortly with the majority of land purchases completed.
Following receipt of the LI, construction is expected to take 6-8 months followed by the first production which is anticipated to occur during the first quarter of 2022 based on receiving the necessary approvals and the timeframe to order long lead time items.
Additional financial capacity
Aguia managing director Fernando Tallarico said: “BRDE’s funding support is a major vote of confidence in Três Estradas and a key milestone that we have met to deliver the project into production.
“This is a straightforward loan that gives Aguia additional financial capacity to fund the capex for the TEPP.
“I commend the whole Aguia team on the work undertaken to receive approval and look forward to working further with BRDE as a key stakeholder that clearly recognises the value that Aguia can deliver by bringing into production Southern Brazil’s phosphate mining and processing operation.
“Excellent support”
Tallarico added: “We reiterate that we have excellent support for the project from within RS State, Federally and of course amongst the local community where we are operating.
“Finalisation of the necessary land acquisition continues, and we look forward to providing shareholders with an update regarding this in the near future as well as news of the LI granting which will allow us to move the project into the construction phase.”