Great Quest Secures Off-Take for Direct Application Production
September 22, 2014 (Source: Marketwired) — A Great Quest Fertilizer Ltd (“the Company”) (TSX VENTURE: GQ) (FRANKFURT: GQM) is pleased to announce a binding commercial off-take agreement (“the Agreement”) with Mali-based Société Africaine Développement Agricole S.A (SADA Group) for most of the production from the Company’s planned Malian phosphate manufacturing facility. Under the terms of the Agreement, SADA Group has agreed to purchase 95% of the projected annual production of 35,000 tonnes of direct application granulated phosphate, which will comprise of 25,000 tonnes of high grade 35% P2O5 and 10,000 tonnes of medium grade 27% P2O5, targeting the Malian market. The terms of the Agreement fix the sale prices of the direct application phosphate based on the price of imported diammonium phosphate (DAP). Future prices are to be indexed to international rock phosphate concentrate prices and adjusted annually.
As part of the Agreement, the planned Great Quest production facility will manufacture complex granules, blending direct application phosphate with urea (nitrogen) and potash provided by the SADA group of distributors. The Great Quest facility will be compensated for the complex granulation services on a per-tonne of blended product basis. This will be an additional revenue stream above and beyond that derived from the concentration of direct application phosphate.
Jed Richardson, President and CEO, commented, “This is a dramatic step towards production in Mali and is the first of its kind in regard to direct application products. Great Quest will work closely with the SADA Group to finance the production facility and to manage the commercial and socio-political risks in Mali.”
The complex granule is an ideal delivery method for fertilizer, with a strong market demand having been demonstrated during discussions with leading agronomists, fertilizer purchasing agencies and farmers following our 2013 field test (see news release dated June 13, 2014). These products ensure an even distribution of nutrients, irrespective of the application method used in the fields. The solubility of the direct application phosphate is increased by its inclusion in a complex granule. The association with SADA Group enables Great Quest to produce and sell these products at prices that will be very competitive within the region.
About SADA Group
The SADA Group is the combination of two of Mali’s largest fertilizer distribution groups with a Mali based investment bank, and was specifically formed to enable the distribution and delivery of Great Quest’s product to the Malian market. The group boasts a proven sales network throughout Mali, financial strength and international connections in the area of fertilizer and finance.
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About Great Quest
Great Quest Fertilizer Ltd. is a Canadian mineral exploration company focused on the development of African agricultural mineral projects for local production of farm ready fertilizers. The Company’s flagship asset is the Tilemsi Phosphate Project, encompassing 1,206 km² in northeastern Mali, containing high quality phosphate resources amenable to use as direct application fertilizer. Great Quest is listed on the TSX Venture Exchange under the symbol GQ, and the Frankfurt Stock Exchange under the symbol GQM.
ON BEHALF OF THE BOARD OF DIRECTORS OF GREAT QUEST FERTILIZER LTD.
President, Chief Executive Officer and Director
Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release. The statements that are not historical facts and are forward-looking statements involving known and unknown risks and uncertainties could cause actual results to vary materially from the targeted results. We seek safe harbor.
Raj Shah has professional experience working for over a half a dozen years at financial firms such as Merrill Lynch and First Allied Securities Inc., ... <Read more about Raj Shah>