Phosphate Mining Rights in Miriri (PB/PE)

active

The Miriri Phosphate Project (PE-PB), represented by seven mining processes, is located in a total area of 6,112.18 hectares, south of the city of João Pessoa (PB), covering the municipalities of Alhandra and Pedra do Fogo , in Paraíba, and Goiana, in Pernambuco. The mineral research, carried out by CPRM in the 1970s and 1980s, comprised 247 drillings, totaling 10,763.97 meters of rotary drilling. However, only 176 boreholes (6,890.54 meters of drilling) were considered in the resource estimate. The drillings are vertical, with depths between 5 and 102.55 meters and an average of 45.44 meters. CPRM hired specialized external consultancy (Ceres Financial Intelligence) which, in its economic assessment report for the asset, validated the geological data presented by the company. A total of 102.9 million tons of ore was then obtained, with an average grade of 3.91% and a waste-ore ratio (REM) of 8.22 m³/t. The high average value of the REM corresponds to the great challenge for the economic viability of the project, so the contracting modeling considers an alternative scenario to increase the attractiveness of the asset. Thus, if results from complementary research demonstrate, with sufficient technical elements, that the project is not economically viable for the purpose of producing phosphate concentrate, but is feasible in a simplified format (production of agrominerals, such as simple fertilizers, remineralizers or soil improvers ), the private partner will be exempt from paying the value related to the discovery bonus and will be able to move forward with the project according to the alternative model. Phosphate is one of the main inputs for the production of mineral fertilizers, widely used by the agribusiness industry. Currently, Brazil largely depends on imports of this mineral product. The limited Brazilian phosphate production is concentrated in the center-south region. The Miriri Phosphate project has the potential to deconcentrate this production and meet the projected consumption needs of phosphate fertilizers in the Northeast Region for several years. This project was qualified in the PPI by Decree No. 8,893, of November 1, 2016. The notice, its annexes and more information are available on the CPRM website. The company BF Mineração LTDA won the exploration rights for the project, by offering the value of R$51 thousand in signature bonus in the in-person auction held on June 10, 2020, which represents a premium of 70% of the minimum bid. On 09/28/2021, the Promise Contract for the Assignment of Mining Rights for the Miriri Phosphate Project was signed. The ceremony took place in João Pessoa – PB, with the presence of the President Director of CPRM, Esteves Conlago, the Deputy Secretary of Geology and Mineral Transformation, Lilia Mascarenhas, and the Minister of Mines and Energy, Bento Albuquerque, in addition to the legal representative of the winner of the event, BF Mineração Ltda, Mr. Luiz Maurício Azevedo. After a preliminary audit stage, BF Mineração decided not to proceed with the project. Therefore, on September 21, 2022, CPRM published a new notice for bidding on the asset. The auction was held on 12/07/2022 at the CPRM headquarters, in Brasília -DF. There were no interested parties in the mining asset in the second offer. The CPRM Presidency published Auction Notice No. 004/2023 on September 18, 2023. According to the Postponement Notice published in Section 3 of the Official Federal Gazette of 10/16/2023, the bidding was postponed. The new date for holding the public auction session (10/23/2023, at 10 am) was announced in the Bidding Notice published in Section 3 of the DOU of 10/18/2023. The auction documents are available at the following link: https://www.cprm.gov.br/publique/-7142.html On November 21, 2023, CPRM published the Auction Suspension Notice No. 4/2023 in Section 3 of the DOU.