Sirius Minerals Plc announces the signing of a take-or-pay supply agreement between its wholly-owned subsidiary York Potash Ltd, OFD Supply Inc. and Cibrafertil Companhia Brasileira de Fertilizantes (together the Cibra Group Companies) for the supply and resale of POLY4 into Brazil and certain other countries in South America.
Linked to the supply agreement, Sirius has also agreed to acquire through one of its wholly-owned subsidiaries a 30 per cent equity interest in each of the Cibra Group Companies for a total of 95 million fully paid ordinary shares of Sirius.
“The supply agreement provides Cibra with access to a unique multi-nutrient product that will play an important and valuable role in one of the fastest growing fertilizer markets in the world,” says Santiago Franco, CEO of Cibra. “POLY4 will change the shape of the fertilizer market in South America and Cibra will be at the heart of driving the growth and adoption of this innovative sustainable product across the region.”
The supply agreement provides for resale of POLY4 on an exclusive basis into Brazil, Bolivia, French Guaiana, Guyana, Paraguay, Surinam, Uruguay and Venezuela, and on a non-exclusive basis into Argentina, Chile, Colombia, Ecuador and Peru. The initial contract term of seven years may be extended for two additional five-year periods.
“Cibra is a perfect partner for distributing POLY4 into this key market, where trials have demonstrated how it can significantly enhance farming economics,” says Chris Fraser, managing director and CEO of Sirius. “The Cibra offtake agreement takes us beyond our targeted 7 Mtpa and is a major step forward as we look to complete Stage 2 financing and building our global fertilizer business.”