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SV Rating: Good Spec Value - Favorite - as of December 31, 2020: Verde Agritech Inc is a Good Spec Value rated Favorite because the junior controls a multi-billion tonne resource of a potassium silicate in Brazil which it is turning into an alternative to conventional potassium chloride for the Brazilian agricultural sector under the brand name Super GreenSand. The greenish rock, called "verdete slate" in Brazil and glauconite in technical circles, runs 9%-11% K2O compared to the 20%-30% K2O that the sylvite from evaporite beds in Saskatchewan runs. Sylvite is a combination of potassium chloride and ordinary salt which gets chemically upgraded to potassium chloride (KCl - 60%-65% K2O), the main fertilizer form applied to crops around the world. Its disadvantage is that crops to which it is applied do not qualify as organic and its salt nature makes it unusable for some crops. Its solubility poses an extra problem in Brazil where a good part of applied KCl disappears as runoff due to torrential rains during the main growing season which runs from November through May. Gluaconite's problem is that as a silicate the potassium is mineralogically locked up and not soluble. The verdete slate formation, which is up to 500 m thick and has a 120 km trend whose blue-green trace is visible from Google Earth, was recognized during the seventies when a process called ThermoPotash was developed to heat treat the material in a rotary kiln which made K2O available for crop uptake. ThermoPotash was a whole rock product that could be supplemented with other fertilizer ingredients such as limestone, but the physical volume that needed to be applied was 5-6 times the weight of KCl. ThermoPotash was never commercialized because its treatment cost could not compete against $100/t KCl, so the verdete slate was abandoned. But in 2008 when a supply squeeze pushed KCl to $1,000/t Cris Veloso, the Brazilian head of a junior that had just gone public to explore for gold in Brazil, staked the entire formation on behalf of the junior and proceeded to revive ThermoPotash as a possible solution to Brazil's 90% potash import dependency. NPK focused on a ThermoPotash PEA in 2009-2010, but in late 2010 shifted its focus to a breakthrough process developed at Cambridge that could convert the verdete slate into conventional KCl. The KCl PEA delivered in Q1 of 2012 showed promise and NPK worked on a feasibility study delivered in H1 of 2013 which proved not to be bankable because the equipment scale required200 tpd pilot plant studies. By then potash prices had dropped below $300/t at which price the Cambridge Process was no longer viable and the stock price crashed. NPK returned to the ThermoPotash plan to market the fertilizer for organic crops and those that could not handle KCl. Throughout this period NPK had run agronomic studies on different crops which demonstrated that ThermoPotash worked as well as KCl as a potassium source, but, it turned out, the control plots to which ground up but untreated verdete slate had been applied fared equally well. Closer investigation revealed that the interaction between micro-organisms and plant roots generated secretions which were somehow liberating the potassium tied up in the silicate. Veloso realized that the expensive effort to demonstrate the feasibility of treating the verdete slate with the ThermoPotash and Cambridge processes had been an unnecessary detour. Out of the realization that the verdete slate simply needs to be quarried, crushed, ground up and applied as a whole rock fertilizer was born the concept of Super GreenSand in 2016. In late 2017 NPK delivered a PFS which envisioned a 36 year mining plan which would start with 600,000 tpa and eventually scale up to 25 million tpa where Super GreenSand (SGS) would displace a large part of conventional KCl usage in Brazil. The financial model assumed an initial CapEx of USD $3 million with expansion costs funded by internal cash flow, which implied an after-tax NPV of USD $2 billion at an 8% discount rate and 290% IRR. The base case price was USD $250/t KCl cfr (landed in a Brazilian port), the lowest it has been since the 2008 runup. The simple flow-sheet made the cost readily identifiable but the key was a pricing model where the SGS would be sold at a price competitive with farmers buying KCl from regional warehouses. The market, however, has ignored the $50 plus price implied by this DCF analysis and the 48 million fully diluted NPK shares because this is not a story about developing a mine and selling the output into a deep market with a stable price, but rather one of developing an offtake market for a product that has never been commercially used by the agricultural sector. NPK built the 45 tph production facility in 2018 but did not get the 170,000 tpa quarrying permit until July which is the start of the planting season in Brazil which runs until November when the rainy season starts and crops are simply left to grow. NPK managed to secure orders for 50,000 tonnes but because of the usual commissioning problems was able to deliver only 29,000 tonnes in 2018. At the start of H2 2019 Verde Agritech is geared up to produce as much as 170,000 tonnes and is awaiting an increase in the mining permit to 400,000 tpa to install a second production line at the current facility. The speculative question is how big will NPK's order book get this summer? While the effectiveness of Super GreenSand is backed by agronomic studies, there is nothing like a farmer applying this alternative to KCl to a portion of the crop and observing first-hand how well it performs and how the costs compare. Some of the 2018 SGS was applied to soybean crops which have a 3-4 month growing cycle and those farmers will be in a knowledge position to make repeat orders. Other crops such as sugar cane and coffee have 12 month plus crop cycles, so it may be 2020 before those farmers are ready for more. The key will be expanded repeat business and new orders generated by word of mouth, with the government providing background support because reducing potash import dependency is a strategic goal for Brazil. Assuming NPK is able to achieve capacity production while maintaining a healthy profit margin, the next stage would be a permit for 1 million tpa and construction of a new facility at the mine site. That milestone will take a few years to reach, but by then the market will no longer be pricing NPK as a longshot market development story. The critical window will be H2 of 2019; will NPK fill its 170,000 tpa capacity with orders, will it deliver the product within the planting window, and will it show a profit in H1 of 2020 demonstrating that the model of cash flow funded internal growth is plausible? In March 2019 NPK completed a $1.7 million private placement consisting of 2,820,114 units at $0.60 of which the CEO Cris Veloso bought 912,416 units while other insiders participated on a smaller scale. The unit came with a half warrant exercisable at $1 for 2 years which no doubt some placees will clip and flip the stock when it comes free trading in July 2019 just as showtime begins for Verde Agritech Inc.
Corporate Change History
#Old for New
Last Price
Prior Name
Subsequent Name
Details
Apr 1, 2011
Name Change
1:1
$8.39
Amazon Mining Holding plc (AMZ-V)
Verde Potash PLC (NPK-T)
Apr 11, 2012
New Exchange Listing
1:1
$5.51
Verde Potash PLC (NPK-V)
Verde Potash PLC (NPK-T)
Jul 28, 2016
Name Change
1:1
$0.39
Verde Potash plc (NPK-T)
Verde Agritech Plc (NPK-T)
Recommendation History
Edition
Date
Price
Recommendation
Gain
BF2009
12/24/2008
$0.15
New BF MP Buy $0.10-$0.19
-21%
BF2009
7/31/2009
$0.80
New BF Spec Cycle Hold 100%
321%
SV2009
12/18/2009
$1.63
Good Absolute Spec Value Buy
0%
SV2009
1/29/2010
$2.03
Confirm Good Absolute Spec Value Buy
24%
SV2009
4/14/2010
$1.94
Confirm Good Absolute Spec Value Buy
19%
SV2009
8/11/2010
$2.08
Confirm Good Absolute Spec Value Buy max $2.00
28%
SV2009
12/21/2010
$4.81
Confirm Good Absolute Spec Value Buy
195%
SV2009
11/30/2011
$7.00
Confirm Good Absolute Spec Value Buy
329%
BF2009
12/30/2011
$7.00
BF Technical Closeout Hold 0%
3,584%
SV2009
12/30/2011
$7.00
SV Technical Closeout Hold 0%
329%
SV2012
12/30/2011
$7.00
Good Relative Spec Value Buy
0%
SV2012
1/31/2012
$6.90
Good Absolute Spec Value Buy @ $6.90
-1%
SV2012
6/27/2012
$3.99
Confirm Good Absolute Spec Value Buy @ $3.99
-43%
SV2012
5/14/2013
$1.30
Fair Absolute Spec Value Hold @ $1.30
-81%
SV2012
12/3/2013
$0.21
Good Relative Spec Value Buy @ $0.21
-97%
SV2012
12/31/2013
$0.44
SV Edition Rollover Closeout
-94%
SV2014
1/3/2014
$0.44
Good Relative Spec Value Buy @ $0.44
0%
SV2014
3/21/2014
$1.55
Confirm Good Relative Spec Value Buy $1.55
252%
SV2014
1/2/2015
$0.55
SV Edition Rollover Closeout @ $0.55
25%
SV2015
1/2/2015
$0.55
Good Absolute Spec Value Buy @ $0.55
6%
SV2015
3/26/2015
$0.45
Confirm Good Absolute Spec Value Buy @ $0.445
-19%
SV2015
12/31/2015
$0.19
SV Edition Rollover Closeout
-66%
SV2016
12/31/2015
$0.19
Good Absolute Spec Value Buy
0%
SV2016
12/30/2016
$0.26
SV Edition Rollover Closeout
38%
SV2017
12/30/2016
$0.26
Good Relative Spec Value Buy @ $0.255
0%
SV2017
2/13/2017
$0.88
Confirm Good Relative Spec Value Buy @ $0.88
245%
SV2017
12/11/2018
$0.79
SV Technical Closeout 100%
210%
SVF2019
12/31/2018
$0.71
Good Spec Value Favorite
0%
SVF2019
6/28/2019
$0.57
Good Spec Value Favorite Confirmed
-20%
SVF2019
12/31/2019
$0.41
Good Spec Value Favorite
-42%
SVF2020
12/31/2019
$0.41
Good Spec Value Favorite
0%
SVF2020
12/31/2020
$0.83
Good Spec Value Favorite
102%
SVF2021
12/31/2020
$0.83
Good Spec Value Favorite
0%
SVF2021
12/31/2021
$2.80
SV Technical Closeout 100%
237%
SVF2022
12/31/2021
$2.80
Good Spec Value Favorite
0%
Ranking within Company's Price Range based Group
All TSX-TSXV KRO as of Jun 24, 2022
Group Median
Company
Percentile
Score
Price Range:
$5.00-$10.00
Issued:
153,971,145
50,581,619
84.6%
51.3%
Price Group Total:
39
Working Cap:
$123,764,003
$11,125,000
17.9%
Group figures exclude delisted and suspended companies. The higher the company percentile the better, based on the assumptions that the lowest issued shares and highest working capital are best. The score is the average of the percentiles. A percentile is that percentage of a group that a member ranks higher than. Note that issued and WC reflect latest financials.
Ranking Color Code:
Lower than 25%
25% to 50%
50% to 75%
Higher than 75%
Charts & Financing Activity
Most recent 43-101 resource estimate Prior resource estimate PEA PFS FS/BFS/DFS
Private Placement Key
less than $500,000
$1,000,000 - $2,000,000
$5,000,000 - $10,000,000
$20,000,000 - $50,000,000
$500,000 - $1,000,000
$2,000,000 - $5,000,000
$10,000,000 - $20,000,000
over $50,000,000
Private placement financing dates and value ranges are based on transactions reported by the TSXV Monthly Review.
Past Insiders and Reported Shareholders - Current Ownership Status unknown - positions may be pre-rollback
Related Party
Occupation
Related Since
Insider Ended
Director Ended
Capacity
Ownership
Jaret Anderson
Analyst
10/9/2012
5/14/2014
5/14/2014
Director
0
Henrique B. Cavalcanti
Engineer
6/24/2009
9/23/2013
9/23/2013
Director
0
Manoel Cerqueria
Accountant
8/1/2007
Insider
0
Jose Coura
Engineer
6/5/2013
6/25/2015
6/25/2015
Director
0
Richard H. T. Garnett
Geologist
5/4/2011
1/14/2014
1/14/2014
Director
0
Peter Gundy
Mining Executive
6/25/2009
5/13/2013
5/13/2013
Director
80,000
Pedro Ladeira
Engineer
10/14/2010
7/15/2013
Insider
0
Simon J. Lawrence
Engineer
6/1/2007
6/24/2009
Director
1,752,203
Leonardo Moretzsohn
5/24/2013
12/27/2014
12/27/2014
Director
0
Milson Mundim
8/22/2012
Insider
0
Renmark Financial Communications Inc
Investor Relations
4/8/2011
5/19/2020
IR
0
Jeddiah K. Richardson
Engineer
6/19/2008
5/13/2013
5/13/2013
Director
719,175
Mauricio Sampaio
6/9/2010
12/23/2011
Insider
0
Antonio Schettino
7/15/2013
6/29/2017
6/29/2017
COO
0
Tim Slater
Accountant
11/19/2008
3/5/2019
CFO
0
Joao Batista G. Teixera
Geologist
8/1/2007
6/20/2008
Director
160,000
Richard Topham
Accountant
6/1/2007
6/24/2009
Director
0
Kevin van Niekerk
6/1/2007
6/24/2009
Director
1,498,329
Share positions of current insiders based on last AGM circular, ownership % based on current Issued. Share positions of past insiders and shareholders have not been adjusted for rollbacks or splits.
Active Index Memberships
Membership Start Date:
December 31, 2019
Start Price:
$0.41
KRO Favorites 2020: Features companies with Bottom-Fish, Fair or Good Spec value ratings that were designated Favorites in 2020, effective December 31, 2019.
Membership Start Date:
December 31, 2020
Start Price:
$0.83
KRO Favorites 2021: Features companies with Bottom-Fish, Fair or Good Spec value ratings that are designated 2021 Favorites, effective December 31, 2020.
Membership Start Date:
December 31, 2021
Start Price:
$2.80
KRO Favorites 2022: Features companies designated 2022 KRO Favorites, based on closing price December 31, 2021.
A Spec Value Hunter table allows speculators to identify which projects offer poor, fair or good speculative value according to the rational speculation model. The speculative value depends on the project stage, the project's implied value as calculated by the company's fully diluted, stock price and net project interest, and the dream target deemed appropriate for the project. A dream target is what a project would be worth in discounted cash flow terms once in production.
Poor Speculative Value -
Fair Speculative Value -
Good Speculative Value -
Note: narrow arrows indicate IPV is outside the fair value channel but within 25% of the fair value limits
Color Key for Target Outcome Achievability Ranges in millions ranked from most to least achievable
below $25
Should be Private: Artisanal, Placer, Mom & Pop Shop
$25-$50
Tiny Scale: underground mine or quarry - not worth the bother
$50-$100
Small Scale: junior needs to self-develop
$100-$250
Buyout Target: by Lower Tier Producers
$250-$500
Buyout Target: by Mid-Tier Producers
$500-$1,000
Ideal Target for Junior: Buckhorn, Sleeper
$1,000-$2,000
Almost World Class: Ekati, Red Chris, Brucejack, Juanicipio, Stibnite
$2,000-$5,000
World Class: Eskay Creek, Hemlo, Hermosa-Taylor, Oyu Tolgoi, LaRonde, McArthur
$5,000-$10,000
Giants: Escondida, Sullivan, Carlin Trend, Kidd Creek, Orapa, Kamoa-Kakula
above $10,000
Off the Scale District: Wits 1.0, Araxa, Sudbury Basin, Bayan Obo
The target outcome range required for the current implied project value to represent fair speculative value is based on the upper and lower certainty limits associated with the project stage. The color coding is based on the target outcome using the mid-point of the certainty range.
Net Interest: 100% WI Vested: Yes Uncapped NSR/GOR: 0.00%
Ownership Terms: Staked in collaboration with Ysao Munemassa who will receive US $400,000 upon apporval of a bankable feasibility study and a 3% royalty which can be bought back for USD $1 million per 1%.
Preliminary economic assessment (PEA) that establishes the cost structure of the pyro-metallurgical process used to convert glauconite into Thermo-Potash.
Delineation
2010 Q4
2010 Q4
Identification of other high grade zones within Cerrado Verde land package similar to Funchal Norte with locations ideal for processing infrastructure and transportation.
Delineation
2011 Q1 Mid February
2011 Q1 Mid February
Wide-spaced 15,000 m drilling program begins, aimed at producing an NI 43-101-compliant resource estimate for the entire 100km strike length of the deposit. An infill drill program is also underway to upgrade inferred resources to measured and indicated.
Other
2011 Q1
2011 Q1
Passing of legislation which creates tax breaks for certain input costs related to ThermoPotash production.
Metallurgical Study
2011 Q2
2011 Q2
Initiate independent engineering study of process developed by Cambridge's Dr Fray for converting glauconite into conventional salt based potash products.
Metallurgical Study
2011 Q2
2011 Q2
Decision to construct and fund a pilot plant to establish the feasibility of commercial scale ThermoPotash production from glauconite, if required.
Metallurgical Study
2011 Q2
2011 Q2
Results of agronomic studies initiated in September 2010 by third parties applying ThermoPotash to crops with short growth cycles (max 180 days) such as carrots. (Carrot study inconclusive, coffee and cotton due Q3).
Initial Resource Estimate
2011 Q3 July
2011 Q3 July
Anticipated completion of a 43-101-compliant resource estimate for the central and southern zones of Cerrado Verde.
Updated Resource Estimate
2011 Q4
2011 Q4
Updated resource calculation expected, incorporating the entire 26,000 meters of 2011 drilling that were the basis of an updated resource calculation reported in August 2011.
Economic Study - PEA
2012 Q1 January
2012 Q1 January
PEA expected for the production of potassium chloride (KCl). If positive, doing a PFS for the Cambridge process will take priority over the PFS for ThermoPotash.
Economic Study - PFS
2012 Q3
2012 Q3
Anticipated completion of a pre-feasiblity study for the production of ThermoPotash at Cerrado Verde.
Economic Study - FS
2012 Q4
2012 Q4
Potential date for the expected completion of a feasibility study for the production of conventional KCl, dependant in part upon conclusions from PEA expected in Q1 2012. In May 2012 expected completion date was pushed back to H1 2013.
Construction
2013 H1
2013 H1
Original potential start date for construction of conventional KCl plant, pending completion of PFS in late 2012. No longer applicable.
Economic Study - PEA
2013 Q3 Mid August
2013 Q3 Mid August
Revised project development plan announced. Company intends a two stage development, with a 1,000 TPD Thermopotash plant also allowing tests on KCL production and informing stage II efforts to develop a 12,000 TPD KCL plant subsequently.
Economic Study - PFS
2014 Q1 Late March
2014 Q1 Late March
Revised date for PFS on two-stage development plan announced in August 2013.
Environmental Study
2014 H2
2016 H1
Environmental license for ThermoPotash operation with 30 ha footprint, feasibility study as required by Inova.
Project Financing
2016 Q3
2016 Q4
Confirmation of development bank loans and raising of equity portion.
Construction
2017
2017
Base Case Resource Estimates
Project Resource Estimate - Cerrado Verde
Mar 20, 2014
NI 43-101
Bradley Ackroyd (MAIG(CP)), Andes Mining Services Ltd, SRK Consulting
Net Interest: 100% WI Vested: Yes Uncapped NSR/GOR: 0.00%
Ownership Terms:
Target Metals: Limestone
Model: Sediment Hosted
Stage: 5-PEA
Notes on Calcario Project
The Calcario limestone project is located within the Bambui metasedimentary group of rocks which host the company's Cerrado Verde potash project located approximately 100 kilometres away by road. The limestone is characterized by a dolomitic limestone overlaying a darker calcitic limestone unit; it is over 50 metres thick and has been defined by drilling over a four-kilometre strike. The fine-grained limestone is characterized by a low silica content.
Milestone Timeline
Program
Start
End
Milestone
Economic Study - PEA
2011 Q3 August
2011 Q3 August
Pending completion of a resource calculation, a PEA is expected to be completed during the third quarter.
Initial Resource Estimate
2011 Q3
2011 Q3
Initial 43-101 compliant resource calculation expected for limestone resource where intial drilling of 20 RC holes have been completed on approximately 200 to 570 metre spacing over an 8km2 strike length.
Economic Study - FS
2012 Q2
2012 Q2
BFS expected to be completed for limestone production scenarios at Calcario during the first half of 2012.
Most recent 43-101 resource estimate 
Prior resource estimate 
PEA 
PFS 
FS/BFS/DFS
Flagship Play
Secondary Plays
Other Plays
