ITAFOS RECEIVES ADVANCES TOTALLING US$10,000,000
TORONTO, ON – August 14, 2017 – Itafos (TSX VENTURE: IFOS) (“Itafos”) announced today that it has received advances (the “Advances”) in the amounts of US$5,000,000 from Pala Investments Limited (“Pala”) and US$5,000,000 from Zaff LLC (“Zaff”). The Advances are evidenced by unsecured promissory notes that are pre-payable, in whole or in part, at any time, bear interest at a rate of 15% per year and mature on January 31, 2018. It is expected that the proceeds of the Advances, together with available cash, will be used primarily for the ramp-up of the Itafos Arraias SSP Operations, the continued implementation of business development initiatives including the development of the Farim project owned by GB Minerals Ltd. and general corporate purposes.
Each of Zaff and GB Minerals is a “related party” to the Company under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Zaff is a “related party” to the Company by virtue of its shareholding being in excess of 10% of the Company’s issued and outstanding share capital and GB Minerals is a “related party” to the Company as Itafos owns an approximate 31.3% interest in GB Minerals. Accordingly, the Advance from Zaff and any investments concerning the development of the Farim project are “related party transactions” under MI 61-101. The transactions are exempt from (i) the formal valuation requirements under Section 5.4 of MI 61-101 pursuant to Subsection 5.5(a) of MI 61-101; and (ii) the minority approval requirements under Section 5.6 of MI 61-101 pursuant to Subsection 5.7(1)(a) of MI 61-101 because the subject matter of the transactions does not exceed 25% of the Company’s market capitalization.
Itafos is focused on becoming a significant integrated producer of phosphate based fertilizers and related products. Itafos has an experienced team with significant experience in the business of fertilizer operations, management, marketing and finance. Itafos owns and operates the Itafos Arraias SSP Operations, which consists of an integrated fertilizer producing facility comprised of a phosphate mine, a mill, a beneficiation plant, a sulphuric acid plant, an SSP plant and a granulation plant and related infrastructure located in central Brazil. Itafos’ exploration portfolio includes a number of additional projects in Brazil, including the Santana Project, a high-grade phosphate deposit located in close proximity to the largest fertilizer market of Mato Grosso State and animal feed market of Pará State, and the Araxá Project, a high-grade rare earth elements, niobium and phosphate deposit located in close proximity to two operating mines, therefore benefiting from existing local infrastructure. In addition, Itafos owns an approximate 31.3% interest in GB Minerals which owns the Farim Project, a high-grade phosphate deposit located in Guinea Bissau and a 100% interest in Stonegate Agricom Ltd. which owns the Paris Hills Project, a high-grade phosphate deposit located in Idaho, United States and the Mantaro Project, a high-grade phosphate deposit located in Peru.
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