From the Stonegate Agricom prospectus:
Introduction
The Corporation is engaged in the business of acquiring, exploring and developing agricultural nutrient
projects and is currently focused on the exploration and development of the Mantaro Project and the Paris Hills
Project. Stonegate was formed upon the amalgamation of SML with a subsidiary of SRC, the previous owner of
the Mantaro Project, which now holds a 73% interest (prior to completion of the Offering) in the Corporation.
The Corporation owns, through its subsidiaries, a 100% interest in the Mantaro Project located in Peru. The
Mantaro Project is comprised of 29 mineral concessions covering a total of approximately 12,800 hectares
located approximately 250 kilometres east of Lima and approximately 30 kilometres west of the city of Huancayo
in the central Andes.
The Mantaro Project is an advanced exploration stage phosphate project containing what is potentially one
of the world’s largest undeveloped phosphate deposits. The Mantaro Project consists of a faulted syncline with
three significant outcropping phosphate mineralized zones referred to as the West, East and Far East zones.
Since the Corporation’s acquisition of the Mantaro Project in 2008, the Corporation has initiated a program of
detailed geological mapping, trenching, drilling, sampling, metallurgical and mineralogical test work, and
community studies in support of advancing the project to the pre-feasibility stage. The West zone has been the
primary focus of exploration efforts to date.
The Corporation also owns a 100% interest in a set of mineral concessions covering approximately 7,000
hectares located on the east bank of the Mantaro River and a 100% interest in seven mineral concessions (Alora
1, Alora 2, Alora 3, Alora 4, Alora 5, Alora 6 and Alora 7), such concessions known as the ‘‘Alora Concessions’’,
and also in eight other mineral concessions (Puerta de Piedras 9, Puerta de Piedras 10, Puerta de Piedras 11,
Puerta de Piedras 12, Puerta de Piedras 13, Puerta de Piedras 14, Puerta de Piedras 15 and Puerta de Piedras
16), such concessions known as the ‘‘PdP 9-16’’, located approximately 60 kilometres northwest of the Mantaro
Project. The Alora Concessions and the PdP 9-16 are not currently considered to be material to the
Corporation.
The Corporation owns, through a wholly-owned subsidiary, a 100% interest in the Paris Hills Project
located in Bear Lake County, Idaho. The Paris Hills Project is comprised of three patented lode mining claims
and 16 contiguous fee parcels covering a total of approximately 2,114 hectares in the phosphate fields of the
western United States approximately 72 kilometres south of Soda Springs where several phosphate mines are
operated, including Agrium Inc.’s Dry Valley mine, Monsanto Company’s South Rasmussen mine and
J.R. Simplot Company’s Smokey Canyon mine.
The Paris Hills Project is an advanced exploration stage phosphate project with a high-grade zone of
phosphate and vanadium mineralization that shows the potential to be economically exploitable. Significant
historical exploration has been conducted on the deposit, with the Corporation evaluating and confirming the
results and conclusions thereof. The Corporation expects to continue its efforts on the Paris Hills Project deposit
in due course. The larger project area still remains largely unexplored.
Business Objectives and Strategy
The Corporation’s objective is to become a leading low-cost producer of high quality phosphate concentrate
to supply regional and international markets with long-term supply deficits. In order to achieve this objective,
the Corporation is undertaking to explore and assess the potential for the development of its two principal
assets, the Mantaro Project and the Paris Hills Project.
The Corporation’s milestones with respect to both the Mantaro Project and the Paris Hills Project are set
out under ‘‘Use of Proceeds’’. In general terms, the Corporation plans to advance each project through, among
other things, drilling and sampling programs, to a pre-feasibility study and then a bankable feasibility study
leading to a production decision.
The deposit at the Mantaro Project indicates the potential for a commercially significant open pit
phosphate mining operation that is strategically located with respect to existing and emerging markets for
phosphate rock and phosphate related fertilizer derivatives. It is the Corporation’s view that the Mantaro Project
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deposit has the potential to generate phosphate concentrate grades that are competitive with current major
producers at competitive costs. The potential size of the deposit provides flexibility and scalability and is
comparatively large in relation to known phosphate deposits located throughout the world. The estimated
mineral resources at the West zone of the Mantaro Project consist of measured and indicated mineral resources
of 39.5 million tonnes grading 10.0% P2O5 and additional inferred mineral resources of 376.3 million tonnes
grading 9.0% P2O5. Additional potential mineral deposits in the East and Far East zones are estimated at
425 million to 435 million tonnes grading 9% to 9.5% P2O5 and 280 million to 290 million tonnes grading 9% to
9.5% P2O5, respectively. The potential quantity and grade of the East and Far East zones is conceptual in nature, there
has been insufficient exploration on these two zones to define a mineral resource and it is uncertain if further exploration
will result in the target being delineated as a mineral resource.
The Corporation’s near-term objective with respect to the Mantaro Project is to complete a pre-feasibility
study to evaluate potential development scenarios based upon the results of further exploration, metallurgical,
market research and social impact assessments. Upon closing of the Offering, the Corporation intends to
proceed with the conversion of its metallic concessions to non-metallic concessions. This process has been
initiated and, once the conversion is completed, the Corporation intends to commence a 6,000 metre drill
program at the West zone in order to upgrade the current inferred mineral resource into the measured and
indicated category and surface sampling and trenching to bring the potential (conceptual) mineral deposit at the
East and Far East zones into an inferred mineral resource category. The long-term objective of the Corporation
is to achieve commercial production of high quality phosphate rock for export to East and West Asia through
access to seaborne export channels at the port of Callao, located west of the city of Lima, Peru and, if
economical, to the large Brazilian agricultural sector located in western Brazil via the Amazon River.
The deposit at the Paris Hills Project is a prospective brownfield operation with a relatively large deposit of
high-grade phosphate mineralization (inferred mineral resource estimate of 109.5 million tonnes grading 23.6%
P2O5) located in a phosphate-producing region of Idaho. At the Paris Hills Project, the Corporation’s objective is
to complete an exploration program to better understand the geology and grade continuity of the phosphate
deposit for the purpose of determining the appropriate mining method and cut-off grade and improve the
geological model and resource classification. Upon completing a pre-feasibility study, the Corporation would
assess the potential to economically extract phosphate rock through underground mining and either
(i) beneficiating phosphate rock mined via crushing, grinding and cyclone washing to upgrade mined material
from an estimated grade of 25% P2O5 to a finished product of approximately 30% P2O5; or (ii) direct ship mined
phosphate rock (potentially from a near surface high-grade sub-set of the above-noted inferred mineral resource
estimate identified in the southeastern quadrant of the property containing an inferred mineral resource of
approximately 4.2 million tonnes grading 29% P2O5) for sale to regional processing facilities for upgrading to a
downstream fertilizer product. |
