Vancouver, BC / March 17, 2014 / In India, mobs have taken to the streets to protest skyrocketing onion prices.
In China, farmers armed with shovels have been involved in bloody clashes to protect their land and crops from being taken over by industrial development. In Africa, citizens in Maputo, Mozambique, rioted over a government decision to raise the price of bread.
These are not isolated incidents.
Over the past few years outbreaks of civil unrest in more than 40 countries have been triggered by food shortages and sudden price increases. And this is expected to continue say experts who predict that low crop yields will result in ‘H-anger’, where the hungry become angry and take to the streets.
The dire predictions are supported by the international group FarmingFirst which says that by 2030, average prices for major crops will increase dramatically. The price of maize is expected to jump by 90 percent, wheat by 79 percent and rice by 89 percent.
In this context the United Nations states Food Security is an immediate and future priority for all countries worldwide. One solution to alleviate this global challenge is being dug up in the sedimentary rocks of Peru and Colombia.
Here the Vancouver-based Focus Ventures Ltd (FCV-TSX) is planning to mine for Phosphate – a simple nutrient that could reap a harvest of peace. Phosphate is the vital engine that powers modern agriculture. It’s the key ingredient in fertilzers, which are vital to world food production. Focus Ventures is a Canadian-listed exploration company developing several quality phosphate resources in Peru and Colombia.
The company has four phosphate projects currently underway, either wholly owned or optioned, with three in Peru and one in Colombia. Executives say the region is well-positioned to help meet increasing demand for phosphate.
“Peru, for example, is a mining friendly country with a strong resource based economy,” said David Cass, president of Focus Ventures. “There is a transparent cadastral system for applying for and holding mining concessions. The country also has highly prospective geology and a well trained work force within the resource sector.”
Peru already ranks third in the world for zinc and copper production. Gold production also places it sixth in the world.
Focus Ventures is earning in to 70 per cent of the Bayovar 12 phosphate asset, which is potentially very significant. The Bayovar district is situated in the Sechura Desert, a north-trending basin approximately 22,000 square kilometres in area comprising Miocene-aged rocks covered by recent coastal sand deposits.
Phosphate was first discovered in the Bayovar District during 1950’s by companies drilling for petroleum. “It’s a major phosphate basin with potential to host multiple mines,” Cass said. “Logistically it’s very close to tidewater, with roads and power nearby.” The concession has potential to host up to hundreds of millions of tonnes of phosphate-bearing rock at fairly shallow depths, he explained.
“Obviously more work is needed to demonstrate specific tonnages, but five historic holes into the concession all cut phosphate so we know the main phosphate bearing horizons are there,” added Cass. “We believe that the overall Sechura Basin, that hosts our concession, will prove to be one of the most important phosphate producing regions in South and North America.”
According to The Hague Centre for Strategic Studies, the European Union (EU) is almost completely reliant on phosphate rock imports from around the globe. Asia, with 60 percent of the world’s population, has the highest demand for industrial and food phosphate. Even with heightened global demand, Focus Ventures has faced a few challenges with exploration in Peru.
“The bureaucracy there means it can take time to get permissions,” said Cass. “Social and community issues have delayed several mining projects over the years. This has required companies invest time and effort from the earliest stages of projects to manage community expectations and issues.”
Focus Ventures has been able to weather the investment market downturn of the last two to three years after selling two projects.
“We sold some claims to Fresnillo Peru S.A.C., for US$1,100,000 in cash in 2012, and we signed a binding Letter of Intent with Buenaventura by which they bought our interest and royalty in the Minas Chanca project for US$4 million,” Cass stated.
The deals provided sufficient cash to allow Focus Ventures to get through the worst of the downturn, and to initiate a strategic shift to phosphate exploration. The company recently received its exploration permit from the authorities, and now has two drill diamond drill rigs on the property.
“Our goals for this year include completing our first stages of drilling and from that arrive at an initial resource calculation,” outlined Cass. “We will also secure the funding we need to maintain our option payments and work program for Bayovar 12. Initiating metallurgical test work will follow, along with potentially attracting a strategic investor from the fertiliser industry.”
JPQ, a marine transport and service provider and owner of the Bayovar 12 claim, is already partnering with Focus Ventures. Under the terms of their agreement, Focus Ventures can earn 70 per cent of the project by investing up to US$14 million in exploration and cash payments until the completion of a positive pre-feasibility study, after which Focus will have the first right of refusal to purchase the remaining 30 per cent .
Global mining company Vale, owns nearby Bayovar Mine which is a low cost operation and one of the biggest phosphate deposits in South America, with a 27 year mine life. Production there is expected to reach 3.9 million tonnes per annum in 2014.
Vale’s Bayovar phosphate concentrate is already sold internationally, reinforcing the importance of Focus Ventures’ prized asset.