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KMW Blog November 21, 2019: Discovery Watch November 21, 2019 with Jim Goddard and John Kaiser

Posted: Nov 21, 2019JK: Discovery Watch November 21, 2019 with Jim Goddard and John Kaiser
Published: Nov 21, 2019HSC: Discovery Watch November 21, 2019: Why younger investors should care about resource juniors
Effective January 1, 2019 we have new Membership Fees and an expanded Spec Value Rating System. The new price in 2019 will be $450 annually or $200 for 90 days. The KRO Favorites List was published on January 1, 2019. Check out the catalog of Free Stuff at KRO.

Discovery Watch is a weekly 15-30 minute audio show produced by HoweStreet.com where Jim Goddard interviews John Kaiser about resource juniors with projects that have caught John's attention. The projects will not be limited to companies he has covered as Bottom-Fish and Spec Value Hunter picks and will include projects that may be of interest only because they are in the limelight. Jim and John will periodically circle back to review the projects and if necessary close them out as no longer worth watching. KRO will keep track of projects mentioned through Discovery Watch with HoweStreet.com. Discovery Watch is available via YouTube or Podcast.

Discovery Watch Audio Links
Nevada Exploration Inc (NGE-V)

South Grass Valley United States - Nevada 2-Target Drilling Au Nov 21, 2019 - 0:00:01

Scandium Intl Mining Corp (SCY-T)

Nyngan Australia - New South Wales 8-Construction Sc Nov 21, 2019 - 0:18:45

Verde Agritech Plc (NPK-T)

Cerrado Verde Brazil 6-Prefeasibility K Nov 21, 2019 - 0:28:58
The main focus of Discovery Watch is to highlight the potential for a new exploration discovery or spotlight an unfolding discovery, and in that sense Verde Agritech Inc should not be featured on DW. But NPK's story is different type of discovery, namely the discovery that the multi-billion tonne "verdete slate" resource in Brazil, a potassium silicate compared to the salt based evaporite beds in Saskatchewan and eastern Europe from which the fertilizer potassium chloride is recovered, could compete with conventional KCl in Brazil. The assumed problem with the verdete slate is that without heat treatment in a rotary kiln which alters the chemical bonds of the silicate, the potassium is not available for plant update. NPK spent much of the decade studying the ThermoPotash process for converting the verdete slate into a whole rock fertilizer running 9%-11% K2O compared to the 60% K2O of KCl, and even developed the Cambridge process for converting the green rock into conventional KCl which proved subeconomic below $300/tonne where KCl ended up. But in late 2015 the scientists running the agronomic studies to prove the efficacy of ThermoPotash compared to KCl (which proved successful), noticed that the control plots fertilized with ground up, untreated verdete slate did just as well. Closer investigation revealed that while the silicate was indeed inert when exposed to water, it was being broken down in the presence of the secretions formed through a complex interaction between soil micro-organisms and plant roots. CEO Cris Veloso "discovered" that the verdete slate only needed to be quarried, crushed and milled to produce a natural whole rock product that he decided to market as Super GreenSand, both in small lots via Amazon in western markets to organic gardeners, and in large truckloads to Brazilian farmers. A PFS with a small CapEx for a staged internally funded expansion scenario from 300,000 tpa to 25 million tpa was completed in 2017. It has a wild and crazy $2 billion plus NPV which the market has ignored because the additional discovery it is watching for is Brazilian farmer adoption of SGS as an alternative to KCl. Quarrying permits arrived in mid 2018, so NPK missed part of the July-November planting and fertilizing window in the Brazilian crop cycle but did get a good demand response. 2019, however, is the acid test; will NPK sell out and deliver the 170,000 tpa for which the phase I facility is currently permitted? Will its pricing model, which is linked to fixed costs and the price of farm delivered KCl, be acceptable to farmers so that the internal cash flow funded expansion scenario outlined by the PFS becomes plausible? Will the farmers observe that the SGS fertilizer is just as effective as KCl in the plots they risked for this experiment, and come back in 2020 with much bigger orders? If NPK succeeds with its Super GreenSand marketing strategy it will be transformational for Brazil's current 90% import dependency on potassium chloride. (Jul 11, 2019)
Disclosure: JK owns Nevada Expl Inc, Scandium Intl and Verde Agritech; Nevada Expl is a Fair Spec Value Favorite; Scandium Intl and Verde Agritech are Good Spec Value Favorites

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