Site Visit Video: DuSolo Fertilizers Inc. (TSX.V:DSF) Bomfim Project, Brazil

Midas Letter
Midas Letter
Site Visit Video: DuSolo Fertilizers Inc. (TSX.V:DSF) Bomfim Project, Brazil

We visited DuSolo Fertilizers Inc. (TSX.V:DSF) (OTCMKTS:ELGSF)Bomfim project near Campos Belos in Goias State, Brazil in October, where the company has just begun producing Direct Application Natural Fertilizer in the form of 15% P2O5 (Phosphorus Pentoxide). Before the onset of the rainy season in November, DuSolo produced just over 10,000 metric tonnes.


James West:    Hi. My name is James West, and this is Midas Letter Money. Today we’re travelling to Campos Bellos in Goias State, Brazil, to visit the Bomfin Phosphate Project that the DuSolo Fertilizers Inc. has just put into production.

Brazil is famous for many things: beaches, night life, wild life, the jungle, and the Amazon River. But its primary importance to the rest of the world is in its ability to generate a tremendous amount of food. With over 65 million hectares of land under cultivation, Brazil is the third largest agricultural product exporting country in the world.

Brazil is the world’s largest exporter of coffee, soybeans, beef, sugar cane, ethanol, and frozen chickens. There are two things that make Brazil a leading agricultural exporter: lots of sun, being close to the Equator, and lots of rain.The problem with having so much rain, however, is that nutrients are washed off the farmers’ fields continuously, so when it comes to fertilizers, Brazil is one of the world’s biggest importers. Brazil imported a record 21.6 million metric tonnes in 2013, driven principally by demand for use on soybeans and second-crop corn.

Imports accounted for 70 percent of Brazilian fertilizer demand and considerably outpaced growth in domestic production. Despite a government-led drive to reduce Brazil’s dependence on imports, domestic output of nitrogen, potassium and phosphates has only grown incrementally over the last few years. In 2013, production actually fell 4 percent to 9.3 million metric tonnes, due principally to lower phosphate and potash output.

And that is DuSolo Fertilizer’s opportunity.

Eran Friedlander:    DuSolo is a public company traded on the TSX Venture Exchange. It is focused on Brazil and fertilizers. Our flagship project, Bomfim is located in the midst of the Cerrado region, which is one of the largest agricultural regions in the world, and our strategy is to take projects into production in an easy and cost-effective way so that we can supply fertilizers to the local farming community around project areas.

James West:    DuSolo began processing the high-grade, direct application natural fertilizer in October, 2014, on a Phase 1 basis, and produced over 10,000 tonnes of product grading better than 15 percent P205. The company plans to resume operations with easing of the rainy season in spring of 2015.

The company’s product is extremely simple to process, as it’s literally laying right on the surface. All that production requires is that the raw material be scooped up, crushed, and screened into uniform size for easy loading and unloading by farmers directly onto trucks.

Eran Friedlander:    What we have in Bomfim in terms of familiarization is at-surface, high grade mineralization of phosphate that we can easily extract and process into material that is sold locally as direct application natural fertilizer.

James West:    DuSolo is currently completing upgrades to its facilities during the rainy season that will enable it to increase production from the current level of 80,000 tonnes per year up to 160,000 tonnes per year by mid-Q1, 2015.

Eran Friedlander:    If we just stay close to financing, we raised $6.8 million. The purpose of the money that we raised is twofold: first, to invest in development of our production capabilities. We are going into production effective immediately at a certain rate, which we plan to expand in the next few years. So we are going to use some of these proceeds and invest in expanding the production capacity by way of acquiring more equipment.

The second reason why we raised funds at the moment is to allow us to expand the resource report that we have in place at the moment. We expect to drill quite substantially in the next year or so, by using several rigs at the same time. That would allow us to unveil the potential we believe exists in Bomfim.

James West

Editor and Publisher

James West founded Midas Letter in 2008 and has since been covering the best of Canadian and US small cap companies. He covers global economics, monetary policy, geopolitical evolution, political corruption, commodities, cannabis and cryptocurrencies. As an active market participant, James is not a journalist and is invariably discussing markets...
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