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An independent study conducted by Agroconsult Consultoria & Marketing determined a potential sales price for ThermoPotash in Minas Gerais state of US$182.31 per tonne, and a potential weighted average price of US$152.49 per tonne for the targeted markets in the surrounding states detailed in the table below. The potential market in the area analyzed is estimated to be 4.4 million tonnes per year. After adjusting for delivery costs, net sales price for Verde is estimated to be US$160.04 per tonne for Minas Gerais State and US$100.61 per tonne for the targeted markets in the surrounding states.
|
State |
Market Potential (tonnes) |
Blenders Breakeven Price |
Potential Sales Price |
Delivery Adjusted Sales Price |
| Minas Gerais |
896,051 |
$190.22 |
$182.31 |
$160.04 |
| Mato Grosso |
895,043 |
$196.61 |
$189.85 |
$130.13 |
| Goias |
495,687 |
$156.68 |
$142.64 |
$112.98 |
| Parana |
778,171 |
$132.45 |
$131.01 |
$63.68 |
| Mato Grosso do Sul |
246,621 |
$181.45 |
$179.47 |
$122.20 |
| Bahia |
325,181 |
$155.58 |
$141.61 |
$93.98 |
| Sao Paulo |
722,513 |
$134.02 |
$131.77 |
$90.92 |
| Total Market Potential |
4,359,267 |
|
|
|
| Weighted Average |
|
$165.01 |
$158.62 |
$112.82 |
Verde announced the receipt of a positive Preliminary Economic Assessment from SRK Consulting and ECM S/A Projectos Industriais on the Cerrado Verde Potash Project in October, 2010. Net Present Value for the project is estimated at US$455.4 million with a 1.1 million tonne annual production rate and total operating costs of US$41.80 per tonne of product at a discount rate of 10%. ECM estimates that with a production rate of 1.1 Mt per year and the inferred resource base of 105 million tonnes at 10.3% K2O determined by Coffey Mining, the project has a projected life of around 100 years, 40 years was assumed for the analysis. Verde also evaluated a second scenario with a production rate of 2.2 Mt per year.