Vancouver, B.C., September 17, 2013 - Pan American Fertilizer Corp. (TSX.V: PFE) (the "Company" or "Pan American") is pleased to announce that it has entered into a non-binding letter of intent (the "LOI") with Agro Industrial Campos Nuevos S.A. ("Agro Industrial"). Under the terms of the LOI, Pan American would sell Agro Industrial 70,000 tonnes per annum (tpa) of Industrial Grade Calcium Sulphate.
"This new product order, from our existing client, is an extremely important milestone for Pan American. It not only represents our second international sales agreement, but also demonstrates interest in other grades of calcium sulphate, of which we have access to through our current land leases, that can be sold as a different product and used for varying purposes in different market sectors. This enables us to develop another important international market for any extracted material that does not meet the high quality standards that Pan American has for its Agricultural Gypsum. Based on this new demand we expect to establish many more strategic sales arrangements with international partners" reported Randy Wright, CEO of Pan American.
Mr. Nivaldo Ouriques Kestring, President of Agro Industrial, is pleased to submit the LOI and has stated, "As your representatives currently for your Agricultural Gypsum product, which we have been successfully distributing since January this year in the Paraguayan market, and having consolidated our relationship positively, we take this opportunity to express our intention to close an annual purchase agreement for approximately 70,000 tpa. This volume would be required in addition to current contract we have in place."
Outlook for the remainder of 2013
The Company can fulfill this new order with no impact to current production. With this new product order it is anticipated that the minimum monthly amount shipped will be 4,000 tonnes, and this is in addition to the Fertilizer grade product.
In August 2013, the Company had one of the best months in the Company's history and is anticipated to have consistent growth throughout the remainder of 2013, and into the coming year. The Company is of the position that production and contracted sales can be sustained for the foreseeable future. On the basis of the foregoing, and the fact that all of 2013 production and the majority of 2014 production has been sold into off-take contracts with its customers, the Company expects to consistently generate free cash flow for the remainder of 2013 and 2014.
Our product PAF90+ is high quality di-hydrated Calcium Sulphate, no sodium and no metal with purity level higher than 90% as Calcium Sulphate. PAF90+ has more Sulfur (+17%) and more Calcium (+21%). Our product is registered under SENASA and meets IRAM 22452 (Agricultural Gypsum Quality Standard). Our products are consistently sampled and tested to ensure that the products meet the highest quality standards available.
PAF90+(G) - Granular as fertilizer
PAF90+(G) is a mineral fertilizer. Agricultural land that does not needs a structural correction can also benefit with an annual application that contributes elementary Sulfur and Calcium in balanced manner. PAF90+(G) contributes in the land farm erosion control and the irrigation water saving. Pan American Fertilizer Corp recommends consulting with an Agronomist to establish the doses to apply according to the characteristics of the crops and land farm in the area. PAF90+(G) is directly applied with the sowing machine, avoiding additional labour requirements, and it can be mixed with other granular fertilizers.
PAF90+(P) - Powder as soil conditioner
As a fast effect amender, PAF90+(P) is applied when it is necessary to correct physical or chemical soil deficiencies such as: compaction, expansiveness, saltiness, low permeability, low humidity retention, excess of Boron. Once applied, PAF90+(P) is able to correct all these deficiencies as calcium sulphate produces an improvement in the structure. It molecularly combines with salts that need to be eliminated in the soil and helps to drain them vertically. In compacted soils with difficult drainage and with problems of salinity, fast results will be observed by eliminating the visible saline areas and balancing performance of planted areas.
Industrial Grade Calcium Sulphate
Calcium Sulphate that does not meet the high quality standards required for the Agricultural Business Sector is diverted into the Industrial Gypsum market.
About Pan American Fertilizer Corp.
Pan American is a Canadian company dedicated to providing fertilizer to growing global markets specifically in South and Central America. The company is focused on the extraction of a specific type of fertilizer called calcium sulphate (also referred to as "Agricultural Gypsum") currently in Argentina. To ensure long term development and increase shareholder value, Pan American currently plans to significantly expand its current operational objectives while expanding its asset base by acquiring additional calcium sulphate and other fertilizer related assets and by expanding its markets to countries neighbouring Argentina.
The Calcium Sulphate project is a unique project, for the following reasons:
1) Its high grade calcium sulphate (CaSO4) rock outcrops and is fully permitted and in operations via conventional extraction methods with secured mining rights for 20 years with right to extend for another 20 years, allowing for scalable operations;
2) It is strategically located in close proximity to the well-known "Nucleus Agricultural Zones" of South America where the majority of the continents important and dynamic agribusiness activity is located;
3) It connects to Paraguay and Brazil's largest fertilizer distribution districts via existing and high quality infrastructure;
4) It has the potential to supply CaSO4 to South America's agriculture market from its large calcium sulphate-rich deposit.
When used as a fertilizer and as a soil remediator, calcium sulphate is a soft sulphate mineral composed of calcium sulphate dihydrate (CaSO4o2H2O) which is extremely rich in sulphur and calcium. When dissolved in water, the mineral becomes calcium and sulphate sulphur ions, both of which are required nutrients for plants. Calcium Sulphate plays a vital role in establishing and maintaining good chemical balance in soil, water and plants, specifically with healthy root development. Ultimately, calcium sulphate increases overall crop quality and yields. For more information please look at our website http://www.pafertilzer.com/
On behalf of the Board of Directors of Pan American Fertilizer Corp.
Chief Executive Officer
Forward Looking Statements
Some statements in this news release contain forward-looking information (within the meaning of Canadian securities legislation), including Statements contained in this news release that are not historical facts constitute "forward-looking statements" or "forward-looking information" within the meaning of applicable securities laws and are based on expectations, estimates and projections as of the date of this release. The words "is expected" or "estimates" or variations of such words and phrases or statements that certain actions, events or results "may" or "could" occur and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Pan American as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Many of these factors can affect Pan American's actual results and could cause actual results to differ materially from those expressed or implied in any forward looking statements made by, or on behalf of, Pan American. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management's expectations and plans relating to the future.
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