| | | Verde Announces Pre-Feasibility study
Plant 3's 2023 construction to be fully funded from accumulated cashflow
Plant 3's NPV of US$2.91 billion considering US$368.65 Brazil CFR long term potash prices
BELO HORIZONTE, Brazil, May 16, 2022 (GLOBE NEWSWIRE) -- Verde AgriTech Plc (TSX: "NPK") (OTCQB: "AMHPF") ("Verde" or the "Company") is pleased to disclose the conclusions of the Pre-Feasibility Study announced by the Company on March 01, 2021 (the "PFS") for the Cerrado Verde Project (the "Project"), which supplants the Pre-Feasibility Study completed in December 2017 ("2017 PFS").
Verde operates Plant 1 with a capacity of 0.6 million tonnes per year ("Mtpy"), Plant 2 is on track for commissioning in Q3 2022 with an additional capacity of 2.4Mtpy, and Plant 3 is expected to add 10Mtpy with construction planned for 2023.
Plant 3's capex is estimated by the PFS at US$52.77 million. Plant 3's post-tax net present value ("NPV") is projected at US$2.91 billion (8% discount rate) with an internal rate of return ("IRR") of 427.17%, assuming a potash price at less than a third of current Potassium Chloride ("KCl") prices and those adopted by Verde. The capex for Plant 3 is expected to be covered by accumulated cashflow generated by sales up to Q2 2023, without need for equity or debt financing.
The Company's Special Committee of the Board of Directors is concluding work on the Paid for Growth strategy, as announced in the press releases dated January 24, 2022, and February 22, 2022, respectively. The Committee's findings and recommendations will soon be made publicly available, with the expectation that financing Plant 3 entirely from cashflow will not impact the return of gains to shareholders via dividends, buyback or a combination of both.
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