Aguia phosphate outshines imports in Brazilian crop trials

Aguia Resources has struck fertiliser gold in southern Brazil, after new field trials showed its homegrown organic phosphate products rival the performance of top-shelf imported fertilisers, at a fraction of the price. 

Since 2019, the company has been running tests with remarkable success on its 12 per cent high-grade phosphorus pentoxide product - dubbed Pampafos - at its Rio Grande do Sul-based operation. 

The ASX-listed junior has now released the results of a two-year independent field trial on its standard 6 per cent grade Lavratto product. The company says the findings are a game-changer for Brazil’s phosphate-hungry agricultural heartland.

Conducted by renowned agronomist Dr Felipe de Campos Carmona at the Integrar/Agrinova Technological Centre, the trial spanned both winter and summer crop cycles. Phosphate was applied to ryegrass and oats in winter, followed by soybeans and corn in the summer.

Aguia’s locally produced phosphorus compared toe-to-toe with the likes of imported 32 per cent grade Moroccan phosphate, triple superphosphate and uber-high-grade 48 per cent monoammonium phosphate (MAP). 

The trials proved the company’s products match or outperform the yield outcomes of the established fertilisers.

In soybean crops, Aguia’s Lavratto topped the yield tables when applied at 200 kilograms per hectare (kg/ha), outstripping even expensive MAP fertilisers. The same trend appeared across successive ryegrass-soy and oat-corn crops. For corn, the highest yields came from a clever sequence of applying Aguia’s Lavratto in winter, followed by MAP in summer.

Ryegrass responded particularly well to Pampafos at a higher 200kg/ha application, punching in dry yields above 8 tonnes per hectare. This is comparable to Morocco’s phosphate and MAP, despite being a significantly lower-grade product.

The real kicker, however, appears to be the cost to farmers.

Aguia says Pampafos will be marketed locally for a retail price of just $200–230 per tonne compared to more than $1000 for MAP - a fivefold price advantage, even before factoring in freight costs. 

Adding another edge to Aguia’s product, the company’s mine-to-market supply chain is 2 kilometres from its processing plant, whereas foreign products are shipped 300km inland from the Port of Rio Grande.

With phosphate production set to launch later this year, Aguia doesn’t want to let the glint of gold in Colombia overshadow its rising Brazilian star. 

Aguia’s recent spotlight has been fixed on fast-tracking production at its Santa Barbara gold project, however the company says its upcoming phosphate operation in Rio Grande do Sul could soon become a second powerhouse, offering low operational risk and serious cashflow potential.

Aguia has pulled off a savvy move to fast-track its phosphate production without breaking the bank. Four months ago, the company secured a 10-year lease on the fully operational Dagoberto Barcelos processing plant, locking it in with a modest $43,000 monthly fee and a one-off payment of just $1.36 million.

Aguia Resources executive chairman Warwick Grigor said: “The decision to lease a phosphate processing facility rather than spend much more capital on a new plant will work well for shareholders. Aguia is making steady progress on becoming operational and the quality of the phosphate products has been confirmed by this recent test work.”

The leased plant is rated to churn out 100,000 tonnes per annum, and is already lined up for a series of strategic upgrades that could triple capacity to a hefty 300,000tpa. The clever workaround will allow Aguia to dodge a significant $26 million price tag for a standalone facility, which the company scoped in its 2023 bankable feasibility study.

The study painted a rosy picture, tipping an annual EBITDA at $22M over an 18-year mine life, with a lightning-fast payback of 2.9 years.

Phosphate feedstock will initially come from Aguia’s flagship Pampafos deposit, which is part of the Três Estradas project, about 100km from the plant. However, drilling is already in full swing at its Mato Grande and Passo Feio prospects, which are both much closer to the facility. This should slash haulage costs and pump up profit margins even further.

With Brazil’s southern soils notoriously phosphate-deficient and 62 per cent of farmlands needing phosphate fertilisation to sustain commercial yields, Aguia may be sowing the seeds for a profitable harvest for farmers - and punters too.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au