For investors hungry for a new way to play rising food prices through potash juniors, a new avenue with experienced management should soon be arriving in Toronto.
Rio Verde Minerals, currently a privately held company, plans to list on the venture some time this spring.
When and if it does, it will offer investors a chance to hold a stake in a key potash play in north-eastern Brazil.
That play is known as the Sergipe project, which appropriately sits in the Sergipe Basin.
The basin has seen 30-years of potash exploration and development, mainly at the hands of Petromisa – as subsidiary of Brazils mammoth oil conglomerate Petrobras.
Currently the basin is home to the country’s only producing potash mine, Vale’s (VALE-N) Taquari-Vassouras, which has been in operation since the 1970’s.
Rio Verde announced that it has launched a drill program at the 1,079 sq. km project that will target similar sylvinite horizons to those found at Taquari-Vassouras, while also testing for caranallite horizons.
The company has thus far identified seven potash drill-ready targets at the project.
The targets were developed after Rio Verde, along with Ercosplan – a geological consulting group that specializes in potash deposits – re-modeled the geology of the basin.
The initial program calls for 4,050 metres of drilling split between three holes.
From there, the company says it will fast-track exploration towards establishing a National Instrument 43-101 resource estimate some time this year 2011.
As for financing such ambitions drilling, the company just completed a private placement that raised $10 million for company coffers. The money was raised by issuing 20 million shares at 50¢ per share.
Rio Verde acquired Sergipe in a transaction with Talon Metals (TLO-T) that was closed in December of last year.
Talon handed over its rights to the project in return for 27 million common shares of Rio Verde which gave it 50.5% stake in Rio Verde.
The deal also allowed Talon to nominate a majority of members to Rio Verde’s board. Those members included Warren Newfield, Chairman of Talon, Stuart Comline, president and chief executive of Talon and Luis M. F. De Azevedo, Talon’s chief operating officer.
The rest of the board is made up of Rio Novo Gold’s (RN-T) chief executive David Beatty, Julio Carvalho, who serves as president of Rio Novo.
I’m interested why investors would choose this play in Brazil when Amazon Mining could conceivably eliminate Brazil’s need for imported Potash.