Verde Potash may obtain financing from Cerrado Verdo

2014-02-18 14:02 ET - News Release

Mr. Cristiano Veloso reports

VERDE POTASH IS SELECTED TO OBTAIN FINANCING FROM INOVA AGRO

Inova Agro, a special financing program of the Brazilian government, has selected Verde Potash PLC to obtain financing for its Cerrado Verde potash project. The company will issue a subsequent press release with additional details.

"Inova Agro's decision is immensely important not only for Brazil but for the world's population, ever so reliant on Brazil's food production. Thanks to a groundbreaking funding program in the agriculture sector, Brazil takes a step towards reducing its economy's debilitating dependency on imported potash," commented Cristiano Veloso, president and chief executive officer.

Inova Agro is a Brazilian government program intended to finance innovative projects in the agriculture sector, including those focused on fertilizers. Selected projects will be considered for subsidized interest rates, equity investment and non-reimbursable project investment grants from the Brazilian Development Bank (BNDES) and/or the Financing Agency for Studies and Projects (FINEP), both of which are arms of the Brazilian government with a mandate to support domestic projects.

Inova Agro

Inova Agro is an initiative of the Brazilian government aimed at co-ordinating the resources of BNDES and FINEP to provide financial support to innovative projects in the agriculture sector. The Inova Agro support program involves a specific set of criteria and a schedule for the distribution of funds. Verde submitted its application and support documentation to the Inova Agro program in August, 2013, and in September, 2013, was notified of its selection to advance to the program's next round of evaluation. Companies and projects that are successful in securing financial support from Inova Agro will have financing plans set starting in March, 2014.

The Inova Agro program targets three business sectors for funding: agribusiness inputs, food industry processing and agribusiness equipment. The company's Cerrado Verde project expects to significantly contribute to Brazil's production of potash fertilizers and therefore fits into the inputs for agribusiness (fertilizers) portion of the program.

Inova Agro is part of the larger Inova Empresa program, which spans a number of sectors. The total budget for Inova Empresa is 32.9 billion reals (approximately $15.0-billion (Canadian)). While the budget for Inova Agro provides for one billion reals in funding, this figure could increase at the discretion of the funding institutions (BNDES and FINEP).

Any participant of the program can file an appeal regarding this preliminary result. The appeal must be made within ten calendar days and final results will be confirmed on March 18, 2014.

About BNDES

The Brazilian Development Bank (BNDES), a state-owned company, is the main financing institution for development in Brazil. Since its foundation in 1952, the BNDES has played a fundamental role in stimulating the expansion of industry and infrastructure in the country. Over the course of the bank's history, its operations have evolved in accordance with the Brazilian socio-economic challenges; today they include support for exports, technological innovation, sustainable socio-environmental development and the modernization of public administration.

The bank offers several financial support mechanisms to Brazilian companies of all sizes as well as public administration entities, enabling investments in all economic sectors. In any supported undertaking, from the analysis phase up to the monitoring, the BNDES emphasizes three factors it considers strategic: innovation, local development and socio-environmental development.

About FINEP

The Financing Agency for Studies and Projects (FINEP) is a state-owned company under the Brazilian Ministry of Science and Technology that promotes economic and social development by fostering innovation in public and private companies, universities, technological institutes, and other public and private institutions in the country.

Founded in 1967, the organization has funded thousands of successful initiatives, including the development of Embrapa, Brazilian agribusiness projects, oil exploration and development of the aircraft Embraer Tucano.

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