Budding fertilizer producer announces $80 million private placement

Vancouver – Atacama Minerals (AAM-V), a major iodine producer in Chile, has announced an $80 million brokered private placement on a best efforts basis to raise money for its move into fertilizers.

GMP and Cormack will lead the private placement of up to 80 million shares at $1 per share.

The announcement comes on the heels of two recent developments that expand Atacama’s operation from one purely as an iodine producer churning out 7% of Chile’s iodine, a country that makes over 50% of the world’s iodine to one that will also make fertilizers.

In early June Atacama released $60 million plans to upgrade its Aguas Blancas iodine mine in the Atacama Salt Desert of northern Chile to process nitrate from its iodine, nitrogen and sulphur bearing caliphe deposit at the 26,500 hectare property.

The new processing plant will annually produce 70,000 tonnes of nitrate fertilizer from salt brine produced at its iodine production facility. This is similar to what Chile’s top iodine producer Sociedad Quimica y Minera de Chile (SQM-N) already does at its numerous mines in the Atacama Salt Desert.

Then a month and a half after news of its move into nitrates, with potash hot on the market, Atacama acquired the Salvash property, 1,400-sq. km of land in northeastern Brazil 30 km west of the port of Salvador, where it hopes to find potash in a drilling program this fall.The property is located in the Reconcavo Basin where Atacama says development of oil, gas and halite salt deposits has revealed potash beds.

While no drilling has been completed on Atacama’s property, the company notes that in 1972 Mineracao e Quimica do Nordeste’s petrographic drilling encountered 9 metres of sylvite and sylvinite interbedded with halite salts at about 1,100 metres below surface on the island of Matarandiba in the Reconcavo Basin.

In a statement Edward Posey says the acquisition is part of Atacama’s strategy to become a fertilizer supplier, as demand grows for it worldwide. Whether the potash play pays off and blooms into a full fledged potash production depends on results from its planned drilling.

Once the nitrogen processing upgrades at Aguas Blancas are complete, Atacama will produce three kinds of fertilizers, potassium nitrate, sodium potassium nitrate and sodium nitrate. These are primarily destined for use with fruit and vegetable crops.

At Aguas Blancas the caliche deposit is about 1 m thick over a 14 by 3 km area. Atacama produces about 100 tonnes of iodine a month, which goes for about $23,000 per tonne, and it has 37.7 million proven and probable tonnes grading 605 grams per tonne iodine, 20.4% sulphate and 3.12% nitrate.

Iodine has a wide variety of applications. Among others, Atacama reports that 20% of iodine is used for X-ray contrast media, 18% in idophors and biocides, 13% for pharmaceuticals and 12% for human and animal nutrition.

On news of the private placement Atacama’s share price dropped 2 to close at $1.05.