How Will Aguia’s $1.7M Loan Accelerate Tres Estradas Phosphate Output?

Loan Agreement Unlocks Development

Aguia Resources Limited has taken a significant step forward in developing its Tres Estradas phosphate project in Brazil by securing a R$6 million (approximately A$1.7 million) bank loan from the Regional Development Bank of the Far South. This financing covers 85% of the estimated AUD$2 million capital expenditure needed to refurbish the processing plant and open the phosphate mine, effectively de-risking the initial phase of the project.

The loan terms include a 10-year maturity with a 24-month grace period and an interest rate tied to Brazil’s benchmark SELIC rate plus 4.91%. The loan is secured against Aguia-owned land at the mine site, underscoring the company’s commitment to advancing the project.

Progress on Site and Regulatory Front

Site works have already commenced, with environmental monitoring and preparatory activities underway in compliance with local regulatory requirements. Aguia plans to submit the operational license documentation to the environmental agency FEPAM by the end of December 2025, a critical milestone that will pave the way for production to begin in 2026.

The company has engaged consultants and contractors to prepare the site, including infrastructure such as access roads, fencing, and waste management areas, ensuring readiness for full-scale operations once approvals are granted.

Production and Market Outlook

Engineering studies have revealed that the processing plant’s capacity can handle 24 tonnes per hour, a 33% increase over previous estimates. This improvement translates to an expected annual production exceeding 160,000 tonnes of Pampafos phosphate product by 2027, up from earlier projections.

Initial production ramp-up is planned cautiously, starting at 4,000 tonnes per month in early 2026 and scaling to 14,000 tonnes per month by 2027. This approach reflects Aguia’s intent to secure market acceptance and validate product performance.

Market conditions are favorable, with phosphate prices recently exceeding A$200 per tonne. Given operating costs around A$65 per tonne, Aguia anticipates a gross profit margin potentially reaching A$21.6 million annually, highlighting the project’s attractive economics.

Sales Momentum and Future Expansion

In a promising commercial development, Aguia has signed Letters of Intent with three customers for 15,000 tonnes of Pampafos phosphate fertilizer for delivery in 2026. These customers include major agricultural cooperatives and distributors in Brazil and Uruguay, signaling strong regional demand.

Looking ahead, Aguia plans to double plant capacity within two to three years by installing a second processing circuit, which could require an additional investment of around A$4 million. This expansion would further enhance production scale and revenue potential.

Executive Chairman Warwick Grigor emphasized the significance of the bank loan as a non-dilutive funding milestone that substantially de-risks the project. He noted the modest market capitalization relative to the project’s earnings potential and long mine life, suggesting upside for investors as development progresses.