Hydrogen Peroxide Tailgas scrubber
Power Generation = 10 MW
Acid Plant Estimated Cost = US$47.46 Million (incl. taxes and contingency)
Total Project Cost = US$ 175.31 million

Itafos is located in the municipality of Arraias Tocantins, in the southeast of Tocantins state, just a few kilometers away from Campos Belos, a town in the Goias state in central Brazil. The existing small-scale phosphate mining operation is based on high grade (+18% P2O5) mineralization. However, MBAC is currently focused on the development of a higher volume and much larger mining operation which is expected to be in place by second quarter of 2012. At full capacity, the proposed beneficiation plant is expected to generate 330 ktpa of phosphate rock concentrate at 28% P2O5. This phosphate concentrate will be used to produce 500 ktpa of SSP.

The Itafós Arraias SSP Project

MBAC is now focused on the development of a higher volume and much larger mining operation, which is expected to be in place by mid 2012. The Itafós Arraias SSP Project will include a new mine and mill facility, a sulphuric acid plant, an SSP plant and a granulation plant. At full capacity, the proposed beneficiation plant is expected to generate 330 ktpa of phosphate rock concentrate at 28% P₂O₅. This phosphate concentrate will be used to produce 500 ktpa of SSP. Beyond this proposed first phase of development, the Company is also actively investigating the potential for a second phase of development which could double production and potentially be in place as early as 2015.

January 31, 2011 - MBAC Fertilizer Corp. is pleased to announce that it has received approval from Banco Itaú BBA S.A. ("Itaú BBA") for a US$110 million project financing facility in connection with the development of its large-scale single superphosphate (“SSP”) fertilizer project (the “Itafós Project” or the “Project”) located in the State of Tocantins, Brazil. The facility is expected to be provided through the on-lending program of the Brazilian development bank (Banco Nacional de Desenvolvimento Econômico e Social (BNDES)), which is the Brazilian development bank. Subject to BNDES approval and certain conditions Itaú BBA has indicated that they will underwrite US$110M of project financing facility. The actual disbursement is subject to certain terms and conditions, including those provided in the indicative term sheet received in September 2010 (see September 7, 2010 news release).
In addition, further to a mandate letter received in October 2010, the International Finance Corporation (“IFC”), a member of the World Bank Group, has provided indications to the Company that it would be willing to provide US$25 million of project financing and US$20 million of equity financing in connection with the Project. The IFC has recently completed a site visit whereby it conducted technical, environmental, social and financial and market due diligence. The Company expects to receive a definitive term sheet from the IFC upon completion of their due diligence, expected in March 2011.
The proceeds from these financings, along with the cash on hand, will be sufficient to fully fund the expected future capital expenditures for the Itafós Project through to the commencement of commercial production in mid-2012.
Antenor Silva, President and CEO of MBAC stated “We are extremely pleased to see the enthusiasm demonstrated for the Project by Itaú BBA. The support from both of our financial partners gives us great confidence that we will be in a position to proceed with the development of the Project once we receive the construction licence which is expected soon”.
MBAC continues to advance the development of the Itafós Project and has commenced detailed engineering as well as the procurement of long lead items, including the sulphuric acid plant.