ITAFOS PROVIDES UPDATE ON ITAFOS ARRAIAS
18 March 2020 - 10:30AM
Itafos (TSX-V: IFOS) (the “
Company”) provided
today an update on Itafos Arraias and announced the completion of
the Company’s plan to idle Itafos Arraias considering the continued
downward pressure on global fertilizer prices. In addition, the
Company announced that it completed third party reports on Itafos
Arraias’ mine and beneficiation plant and secured important
long-term income tax incentives for Itafos Arraias.
“We have safely completed the idling of Itafos
Arraias to manage the current fertilizer downcycle and preserve the
value of the assets while we evaluate strategic alternatives for
the business. We have also further validated the long-term
viability of the assets by completing independent third party
reviews of the mine and beneficiation plant that confirmed that
restarting Itafos Arraias’ mine and beneficiation plant is viable,”
said Dr. Wynand van Dyk, VP Engineering, R&D and Development at
Itafos.
On November 21, 2019, the Company announced its
decision to idle Itafos Arraias as part of a disciplined approach
to capital allocation considering the continued downward pressure
on global fertilizer prices. The Company has followed best
practices in implementing its plan to idle Itafos Arraias to
protect and preserve the value of the underlying assets. As of
March 6, 2020, the Company has completed the employee layoffs and
contractor terminations associated with the idling plan. In
addition, the Company has successfully monetized its remaining
inventory and raw materials to partially offset costs associated
with the implementation of the idling plan. Notwithstanding the
idling of Itafos Arraias, the Company will continue to employ
personnel that are necessary for the care and maintenance of the
assets and will continue to maintain all licenses and permits in
good standing and compliance with existing regulations.
In parallel with its decision to idle Itafos
Arraias, the Company engaged the services of Golder Associates Inc.
and Jesa Technologies LLC to conduct third party reports on Itafos
Arraias’ mine and beneficiation plant, respectively. The third
party reports, which were completed in January 2020, confirm that
restarting Itafos Arraias’ mine and beneficiation plant is feasible
and outline the respective timing and capex requirements.
Itafos Arraias is domiciled in Brazil and is
subject to a federal tax rate of 34%, composed of a federal
corporate income tax of 25% and other taxes of 9%. The location of
Itafos Arraias’ assets makes it eligible to participate in a
regional development program administered by the Superintendência
do Desenvolvimento da Amazônia (“SUDAM”). Created
in 1966 to promote development of the Amazon region in Brazil,
SUDAM offers tax incentives that allow eligible companies to reduce
the federal tax rate of 34% to 15.25% by means of a 75% discount to
the federal corporate income tax of 25%. In February 2020, SUDAM
accepted Itafos Arraias’ application, granting Itafos Arraias the
tax incentives for a period of ten years with an opportunity to
extend thereafter.
About Itafos
The Company is a vertically integrated phosphate
fertilizers and specialty products company with an attractive
portfolio of long-term strategic businesses and projects located in
key fertilizer markets worldwide.
The Company owns, operates and is developing the
following businesses and projects:
- Itafos Conda – a vertically
integrated phosphate mine and fertilizer business with production
and sales capacity of approximately 550kt per year of monoammonium
phosphate (“MAP”), MAP with micronutrients
(“MAP+”), superphosphoric acid
(“SPA”), merchant grade phosphoric acid
(“MGA”) and specialty products including ammonium
polyphosphate (“APP”) located in Idaho, US;
- Itafos Arraias – a phosphate
fertilizer business with production and sales capacity of
approximately 500kt per year of single superphosphate
(“SSP”), SSP with micronutrients
(“SSP+”), premium PK compounds and approximately
40kt per year of excess sulfuric acid located in Tocantins,
Brazil;
- Itafos Farim – a high-grade
phosphate mine project located in Farim, Guinea-Bissau;
- Itafos Paris Hills – a high-grade
phosphate mine project located in Idaho, US;
- Itafos Santana – a vertically
integrated high-grade phosphate mine and fertilizer plant project
located in Pará, Brazil;
- Itafos Mantaro – a large phosphate
mine project located in Junin, Peru; and
- Itafos Araxá – a vertically
integrated rare earth elements and niobium mine and extraction
plant project located in Minas Gerais, Brazil.
For more information, or to join the Company’s
mailing list to receive notification of future news releases,
please visit the Company’s website, www.itafos.com.
Forward Looking Information
Certain information contained in this news
release constitutes forward looking information. All information
other than information of historical fact is forward looking
information. The use of any of the words “intend”, “anticipate”,
“plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”,
“should”, “would”, “believe”, “predict” and “potential” and similar
expressions are intended to identify forward looking information.
This information involves known and unknown risks, uncertainties
and other factors that may cause actual results or events to differ
materially from those anticipated in such forward looking
information. No assurance can be given that this information will
prove to be correct and such forward looking information included
in this news release should not be unduly relied upon.
Forward looking information is subject to a
number of risks and other factors that could cause actual results
and events to vary materially from that anticipated by such forward
looking information. Although the Company has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking statements,
there may be other factors that cause results not to be as
anticipated, estimated or intended. Factors that may cause actual
results to differ materially from expected results described in
forward-looking statements include, but are not limited to, those
risk factors set out in the Company’s Management Discussion and
Analysis and other disclosure documents available under the
Company’s profile at www.sedar.com. Readers are cautioned that
the foregoing list of risks, uncertainties and assumptions are not
exhaustive. The forward-looking information included in this news
release is expressly qualified by this cautionary statement and is
made as of the date of this news release. The Company undertakes no
obligation to publicly update or revise any forward-looking
information except as required by applicable securities laws.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS
REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE
POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR
THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.
For further information, please
contact:
Itafos Investor
Relationsinvestor@itafos.comwww.itafos.com
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