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than any other commodity in Brazil. This
will contribute to even stronger project
economics over the life of the mine.
The current business plan calls for
establishing the high-grade production
scenario and then redirecting internally
generated cash flow towards additional
exploration work. The company hopes to
prove up further resources as it continues
drilling some of the other targets identified
on the property. Thereafter, DuSolo plans
to expand on its foothold by defining a
lower grade bulk tonnage resource that
will support a much larger production plan
for the next phase of development.
The secondary expansion plan will
require the construction of a plant to
enrich the raw phosphate produced from
run-of-mine extraction. Depending on the
finished product, this will require at least
a flotation process. It has been estimated
that at least $90 million will be required
to fund this phase, with additional capi-
tal depending on the results of a scoping
study aimed towards determining the com-
pany's next fertilizer product currently
underway.
DuSolo is debt free, and there is about
$1.5 million cash in the treasury, enough to
fund the first phase of mine development.
The company is awaiting approval of certain
permits in order to begin mining. The oper-
ations should become cash flow positive
very early in the production cycle, and then
carry the bulk of funding requirements as
the company works towards a decision on a
much larger scale scenario.
The bottom line for investors looks
encouraging. DuSolo is positioned for the
launch of a very sustainable long term min-
ing operation with a relatively low overall
risk profile. The early phase of the project
amounts to a low cost development plan,
with simple extraction, high margins, and
the prospect to generate significant cash
flow. The current market capitalization,
with about 104 million shares outstanding,
amounts to roughly $21 million. The com-
pany could be generating revenues in the
range of $25 million per year by 2016. For
an emerging mining company, the outlook
is extremely promising.
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