VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 10, 2013) - Focus Ventures Ltd. (News - Market indicators) is pleased to announce that its Peruvian subsidiary Agrifos Peru S.A.C. has signed a binding Letter of Intent (LOI) with Juan Paulo Quay S.A.C. for the exploration and acquisition of the Bayovar 12 phosphate mining concession, located 70 km south of the city of Piura in northern Peru, close to Vale's operating Bayovar phosphate mine.
Focus believes the Bayovar 12 property shows potential to host a large sedimentary phosphate deposit and is planning a systematic grid-based drill program which will commence as soon as exploration permits are received from the authorities.
Logistics for the 12,575 hectare concession are excellent. It is connected by sealed road to tidewater and marine port facilities 40km to the west, owned by the property owner, Juan Paulo Quay, which used the facility for the export of gypsum mined from the Bayovar 12 concession and phosrock from the Bayovar deposit, prior to its acquisition by Vale. Juan Paulo Quay is a marine transport and service provider owned by subsidiaries of Grupo Romero (Peru) and Mamut Andino C.A. (Ecuador).
The Pan-American Highway crosses the claim at its eastern end and power transmission lines for the Bayovar Mine, located 15km to the southwest, transect the property at its northern end.
"Establishing a foothold in the world-class Bayovar District is another major milestone in our strategy of acquiring quality phosphate assets in South America," said David Cass, the President of Focus. "Bayovar is one of the world's premier phosphate producing regions and benefits from excellent logistics and infrastructure, with two world-class deposits found there to date including a producing mine. We regard Bayovar 12 as a key asset that we can advance quickly to resource stage, and with our other recently acquired projects, firmly establishes Focus as a major name in Latin American phosphates."
Five historical exploration holes drilled within the former gypsum operations and spaced approximately 1.5 km apart all intersected multiple flat-lying phosphate beds from 36.5m depth which assayed between 10 - 22% P205. The phosphate intervals were broadly correlated from hole to hole into at least 6 main units within a sequence of diatomite some 30 - 40m in thickness. The geology and mineralization are similar to the Bayovar Mine and adjacent Fosfatos del Pacifico deposit (Hochschild / Mitsubishi / Zuari).
Under the terms of the LOI, Focus can earn a 70% interest in the claim by investing up to $15 million in exploration and making a series of cash payments up to the completion of a positive Pre-feasibility study, after which Focus will have the first right of refusal to purchase the remaining 30% from the property owners.
More information is available on the Focus website: www.focusventuresltd.com.
The Agreement
Under the terms of the LOI, Focus will have 30 days to complete legal and technical due diligence, after which it will have the right to acquire a 70% interest in the property by investing up to $15 million in exploration and drilling, including spending $1 million within 12 months from the date that it receives its exploration permit from the Peruvian authorities. Focus must complete a positive Pre-feasibility study by the fourth anniversary and pay the owners a sum of US$4 million in the following instalments:
- $50,000 on signing of the LOI (paid)
- $200,000 on signing of the formal Option Agreement
- $750,000 6 months after receiving the exploration permits
- $3,000,000 on the first anniversary of receiving the permits
Focus must also pay the owners US$1,000,000 on the second anniversary of receiving the permits and on each subsequent anniversary until it completes the Pre-feasibility study. Should the owners decide to sell their 30% interest, Focus will have the first right of refusal to purchase.
Background - Geology & Phosphates in the Sechura Desert
The Bayovar District is situated in the Sechura Desert, a north-trending basin approximately 22,000 km2 in area comprising Miocene-aged rocks covered by recent sand deposits. Phosphate was discovered in the 1950s during drilling for petroleum in the Zapallal Formation as beds and horizons of pelletal phosphate within a sequence of diatomites and sandstones some 200m thick (diatomite is a sedimentary rock composed of fossilized algal shells and is mined locally for cement manufacture). The phosphate layers are remarkably regular in P205 content over long distances, a typical characteristic of marine phosphate deposits. The soft and friable nature of the phosphate rock and diatomite permits mining by conventional truck and shovel without the use of explosives.
Vale's Bayovar Mine is a low cost operation and one of the biggest phosphate deposits in South America, with a 27 year mine life. Operations began in 2010 with 239.2 million tonnes of Proven and Probable Reserves* grading 17.2% P205 and a mine life of 27 years. In 2012, the mine produced 3.21 Mt of phosphate concentrate grading a minimum of 29% P205 and production is expected to reach 3.9 Mt per annum in 2014**. Processing of ore has minimum environmental impact and involves a series of washing and gravimetric separations using seawater, followed by rinsing and drying before being loaded on ships and exported to the Americas, Asia and Oceania. Use of sea water ensures that local water sources are preserved and chemical reagents are not used in any stage of the processing. Vale sold minority stakes in the project to Mosaic (35%) and Mitsui (25%) for $660 million in 2010.
Fosfatos del Pacifico (Cementos Pacasmayo / Mitusibishi / Zuari is developing a phosphate deposit on its Bayovar 9 concession, located 15km west of Bayovar 12. Resources are quoted as 541 MT of 18.5% P205*** (wet density).
| * |
Vale 2010 Annual Report |
| ** |
Vale 2012 Annual Report |
| *** |
Wet Density. Source: Pacasmayo IPO Prospectus Feb 2012 |
Qualified Person
The scientific and technical information in this release was prepared under the supervision of Mr. David Cass, Focus's President, who is a member of the Association of Professional Engineers and Geoscientists of British Columbia, and a "Qualified Person" in accordance with NI 43-101.
About Focus Ventures
Phosphate rock is a raw material for fertilizers and vital to world food production. Focus, through its subsidiary, Agrifos, is acquiring and developing quality phosphate projects in Latin America where the discovery and development of new deposits is becoming increasingly important given the expanding agricultural industry and limited local supply of phosphate for fertilizer production.
Further information is available at www.focusventuresltd.com.
ON BEHALF OF THE BOARD
David Cass, President
Symbol: TSXV-FCV
Shares Issued: 40.1-million
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statement
Some of the statements in this news release contain forward-looking information that involves inherent risk and uncertainty affecting the business of Focus Ventures Ltd. Actual results may differ materially from those currently anticipated in such statement.
