Mr. Cristiano Veloso reports

RAILWAY TO FREIGHT UP TO 50MTPY OF VERDE'S PRODUCT GRANTED CONSTRUCTION PERMIT

The National Land Transport Agency (ANTT (Agencia Nacional de Transportes Terrestres)) and the Brazilian Ministry of Infrastructure have authorized Verde Agritech Ltd. to build a railway branch line to transport up to 50 million tonnes per year (Mtpy) of Verde's multinutrient potassium products, Baks and K Forte, sold internationally as Super Greensand.

The railway will connect Verde's production facilities to a railway node, part of the Ferrovia Centro Atlantica (FCA), effectively linking the municipalities of Sao Gotardo and Ibia, both in the state of Minas Gerais. FCA is the largest railroad network in Brazil, interconnecting seven states and the federal district. The FCA railways are the main freight route between the southeast, northeast and midwest regions in Brazil.

"Verde's mining sites hold Brazil's largest identified potash deposit, boasting resources of 3.32 billion tonnes, compliant with the NI [National Instrument] 43-101 standard. By connecting our production facilities to the country's main potash consumption hubs, the railway will provide farmers with access to a more reliable and increased product supply. This represents another important milestone in Verde's dual objectives: reduce Brazil's dependence on imported potash and expand Verde's capability to every year capture up to six million tonnes of carbon dioxide (CO2) every year, thereby making a true contribution to mitigating climate change," commented Cristiano Veloso, Verde's founder and chief executive officer.

Verde's carbon capture potential

With Verde's carbon capture technology, the company's current installed production capacity of three million tonnes per year has the capability to capture and offset up to 360,000 tonnes of CO2 annually.

In the company's 50-million-tonne production scenario, it aims to emerge as one of the world's largest carbon capture projects, with a substantial total of six million tonnes of CO2 permanently removed from the atmosphere each year. Verde's 3.32 billion tonnes of mineral resources hold the total carbon removal potential of 0.40 gigatonnes of CO2.

Railway's next steps

With the authorization of ANTT and the Brazilian Ministry of Infrastructure granted, a contract between ANTT and Verde authorizing the exploration of the railway in a private regime shall be subsequently signed. After that, the company will start the environmental and engineering studies for this project.

Based on the studies for the prefeasibility study (PFS) filed by the company in 2022, Verde has determined the viability of using road haulage for distribution logistics of up to 23 Mtpy of product. A rail spur will only be necessary for logistics of production exceeding such amount.

Railway's capital expenditure

The PFS estimates a capex (capital expenditure) of $283.02-million (U.S.) for the construction of a railway from Sao Gotardo to Ibia, to transport up to 50 Mtpy of product. The total capex estimated in the PFS for the 50 Mtpy scenario is $553.99-million (U.S.), which includes the railway branch line, processing costs, road improvement, licensing, technical studies and projects, land purchase, equipment, personnel mobilization and demobilization, and a 15 per cent contingency amount.

The associated table shows the summary of the financial-economic analysis for the 50 Mtpy scenario.

As stated in the press release published by the company on May 16, 2022, FCA, the railway operator, is expected to assume the investment costs for the construction of the railway branch. Verde is studying the possibility of potential partnerships for technical support in the railway implementation and logistics operation.

About Verde Agritech Ltd.

Verde is an agricultural technology company that produces potash fertilizers. The company's purpose is to improve the health of all people and the planet. Rooting its solutions in nature, Verde makes agriculture healthier, more productive and profitable.

Verde is a fully integrated company; it mines and processes its main feedstock from its 100-per-cent-owned mineral properties and then sells and distributes the product.

Verde's focus on research and development has resulted in one patent and eight patents pending. Among its proprietary technologies are Cambridge Tech, 3D Alliance, MicroS Technology, N Keeper and Bio Revolution. Currently, the company is fully licensed to produce up to 2.8 million tonnes per year of its multinutrient potassium fertilizers K Forte and BAKS, sold internationally as Super Greensand. In 2022, it became Brazil's largest potash producer by capacity. Verde has a combined measured and indicated mineral resource of 1.47 billion tonnes at 9.28 per cent K2O (potassium oxide) and an inferred mineral resource of 1.85 billion tonnes at 8.60 per cent K2O (using a cut-off grade of 7.5 per cent K2O). This amounts to 295.7 million tonnes of potash in K2O. For context, in 2021, Brazil's total consumption of potash in K2O was 6.57 million tonnes.

Brazil ranks second in global potash demand and is its single largest importer, currently depending on external sources for over 97 per cent of its potash needs. In 2022, potash accounted for approximately 3 per cent of all Brazilian imports by dollar value.

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