TORONTO, ON – January 24, 2020 – Itafos (TSX VENTURE: IFOS) (the “Company”) today provided an update on the engineering and construction of Itafos Farim and announced the termination of the engineering, procurement and construction management (“EPCM”) agreement with Lycopodium Minerals Canada Limited (Toronto, Canada) (“Lycopodium”).
In July 2019, the Company announced an EPCM agreement with Lycopodium for services related to the development of Itafos Farim’s mine, which is expected to produce 1.3Mt per year of phosphate rock, and services related to the on land portion of Itafos Farim’s port, which is expected to load Itafos Farim’s mine production for global export. The EPCM agreement with Lycopodium contemplated two phases; phase one considered preparation of a definitive cost estimate and schedule and phase two considered additional detailed engineering, equipment procurement and construction. Given the revised project financing timeline of expected lender approval during the first half of 2020, Itafos Farim suspended the EPCM agreement following completion of phase one and did not provide notice to proceed for phase two. As a result, the EPCM agreement was terminated on January 17, 2020.
“The EPCM agreement with Lycopodium was structured in two phases to provide flexibility with respect to timing and not commit the Company ahead of project financing. We will look to enter into a new agreement to cover the expected phase two activities of detailed engineering, equipment procurement and construction that aligns the timing of and capital expenditures associated with such activities with the project financing timeline of Itafos Farim,” said Dr. Mhamed Ibnabdeljalil, CEO of the Company.
Also in July 2019, the Company provided an update on the engineering, procurement and construction administration agreement with W.F Baird and Associates Ltd. (Madison, USA) (“Baird”) for services related to the development of the marine portion of Itafos Farim’s port. To date, Baird has completed approximately 90% of its detailed design work. Following an extensive process, the Company has selected Stefanutti Stocks Coastal (Cape Town, South Africa), a division of Stefanutti Stocks (Pty) Ltd (“Stefanutti”), as contractor for the marine portion of Itafos Farim’s port. Baird is expected to manage Stefanutti for construction of the marine portion of Itafos Farim’s port with mobilization and construction expected to commence following completion of project financing.