Could you give us some background into the rebranded GrowMax Resources Corp?

GrowMax was known as Americas Petrogas before. Over the last years it had a difficult time getting traction in the market. On top of the fertilizer assets in Peru, the company had oil and gas assets in Argentina, so there was a bit of confusion there. Last year, the company sold off the Argentine assets, which brought a nice amount of cash and it decided to focus solely on the fertilizer assets in Peru. We renamed as GrowMax Resources and a new management team came on board. Today, we are very well positioned, with a working capital of $50 million and a focus on fertilizers.

What is your focus right now?

Moving forward, we have two streams of development on the same asset package: potash and phosphate. The potash is what originally brought our largest shareholder into the company –IFFCO (Indian Farm Fertilizer Coop), who own almost 15%. We have a potash resource in brine. We worked with WorleyParsons to develop a basic design for a pilot facility that will produce 5,000 metric tons (mt) of sulphate of potash (SOP) annually. We are working on the permits and final design with a view to start construction this year and be in production in late 2018. The purpose of this demonstration facility is two-fold: firstly, the project will generate some cash and will pay for itself. Secondly, it will help us perfect the design for a much larger SOP project.

We also have the phosphate asset, which is a very large deposit of around 500 million mt of phosphate across the measured, indicated and inferred categories. Last year we published our PEA for annual production of 1 million mt/y of phosphate rock at 30% P2O5, that can be exported to virtually every market. The results of the study were positive but, in our opinion, not good enough; we believe there is plenty of room for optimization. We are very confident that we can significantly reduce the capex, and opex.  Additionally, we want to look at other saleable products such as direct application phosphate rock products that we can sell as an organic fertilizer, SSP etc.  We are also looking at a small starter mine with much lower startup costs that can target the local market.

How important is the marketing side of a fertilizers project and how is the market doing?

The global phosphate and potash markets have not done well over the last years, but the supply and demand equation of fertilizers is such that the population is increasing, and the availability of arable land is decreasing, so productivity will be a key factor moving forward. I am confident that the markets will come back, but until then, we can also focus on the Peruvian market. Peru imports almost all their fertilizers right now, even though they have the Bayovar mine –most of that rock is leaving the country. In northern Peru alone, the demand will grow. We see a lot more farming coming to the region. Grapes could use our SOP product and there are organic farms being set up by international companies just north of us in Peru. The strategy for us, with the pilot plant, is start small to grow big.

I think the biggest mistake by juniors in this segment is that we tend to focus on the mining side of things, but that is just one piece of the puzzle. The real skill is to be able to sell the product. If this was a gold mine, you would be basically mining a bank account: you sell it right away and you know exactly how much it is worth. In phosphates, it is completely different. Pricings and clients vary all over the place.   That is why our near term focus is on adding to our sales and marketing capabilities.

From your perspective, what are GrowMax’ strategic advantages?

As a junior in the fertilizer business, you need to prove to the market that you are a risk worth taking and part of this is your ability to deliver. In this respect, one of our strategic advantages is that we have a significant cash balance with $50 million working capital. I actually believe that we could reach a cash-flow generating stage with the cash we have on hand. Also, we have IFFCO as our largest shareholder, which is our other big strategic advantage.  Finally, our assets themselves and their location – in Peru, near ports, on infrastructure, in a known phosphate producing region.

How does the Sechura rock compare to other areas with phosphate resource?

This is the least understood part of our story in the Sechura area. There is an exceptional quality phosphate rock with respects to reactivity and availability, and that is going to become more strategically important moving forward. Organic farming is growing worldwide, and If you have a highly-reactive rock that does not need to be processed with chemicals, you can sell it as an organic direct application fertilizer. I think this is what is going to make the world look at this area; the fact that this rock has many more applications than the rock you find elsewhere.   Some of the other companies in this basin have done some very good work proving up the quality of this rock.  Here we have size, grade and quality – beside known producers and known product characteristics.  Those are big advantages.