Americas Petrogas Inc.
TSX VENTURE : BOE

Americas Petrogas Inc.
GrowMax Agri Corp.

GrowMax Agri Corp.

September 23, 2010 09:20 ET

GrowMax Completes Potash Pre-Feasibility Study for Its Bayovar, Peru Project in the Sechura Desert

CALGARY, ALBERTA--(Marketwire - Sept. 23, 2010) -

GrowMax Agri Corp. and its subsidiary, Americas Potash Peru S.A., (collectively, "GrowMax") is pleased to announce that it has completed the Pre-Feasibility Study for its potash project at Bayovar, Peru in the Sechura desert.

Highlights of the Pre-Feasibility Study are (all dollar amounts are in U.S. dollars):

  1. Use of low-cost Solar Evaporation Technology similar to Israel Chemicals Ltd. and Arab Potash Company in the Dead Sea, and Compass Minerals International Inc. and Intrepid Potash, Inc. in Great Salt Lake, Utah, USA.
  1. Annual Potash Production: 250,000 metric tonnes of potash fertilizer
  1. Total estimated project Capital Cost: $125 million
  1. Unit Operating Costs: $29.62 per metric tonne (excluding transportation to port)

Transportation to port is expected to be $3.26 per metric tonne and production bonus royalties of $33.00 per metric tonne are payable to each of the Peru government and the local Community. Accordingly, the total cash cost per metric tonne, delivered to port, is expected to be $98.88.

Salt will be produced as a co-product and is expected to be a source of additional cash flow.

Barclay Hambrook, President and CEO stated, "The completion of this Pre-Feasibility Study is a major milestone for GrowMax's Bayovar project and we anticipate moving swiftly towards completion of a full Feasibility Study." Mr. Hambrook went on to say, "Based on the capex and opex cost structure in the Pre-Feasibility Study, the project net present values are very exciting at even the most modest of selling price assumptions – and this doesn't include other possible products such as phosphates, bromine and calcium sulphate."

The Pre-Feasibility Study was completed by the Lac Business Group, led by Luis Coronel. Mr. Coronel is a Chemical Engineer with over 40 years experience worldwide (including Australia, Brazil, China, Mexico, Peru, India, Venezuela, and the USA) in all aspects of analysis, planning, design, engineering, project management and implementation of solar evaporation technology for processing of brines for producing potash, salt and chemical by-products.

About GrowMax

GrowMax is a subsidiary of Americas Petrogas Inc. (TSX VENTURE:BOE) (www.americaspetrogas.com). Indian Farmers Fertiliser Co-operative (www.iffco.nic.in), the world's largest manufacturer and marketer of fertilizer in the cooperative sector with over 50 million farmers associated with it and five fertilizer plants producing a total of approximately 8.2 million tonnes of phosphate and nitrogen fertilizers, is a 20% shareholder.

Highlights of GrowMax's Bayovar potash (and other minerals) brine project:

  • Experienced Team -- GrowMax has assembled a seasoned team of professionals with experience in environmental impact assessment, reserves evaluation, mine building, mining infrastructure construction, mineral recovery including recovery of potash applying solar evaporation processing of brines, chemical analysis of brines, and engineering and construction of solar processing facilities.
  • Solar Evaporation Processing -- GrowMax's Bayovar potash brine project will utilize solar evaporation processing of mineral rich brines, given its unique location 6 degrees south of the equator in the Sechura Desert on the Pacific Ocean. This location provides the ideal amount of sun and wind for solar evaporation processing.
  • Large Concession Area – GrowMax has rights to four concessions with a total area of 202,000 acres (82,000 hectares or 820 square kilometers).
  • Secure Surface Rights -- The mineral and surface rights within the 202,000 acre concession have already been secured.
  • Transportation Infrastructure Advantages – GrowMax's project has a nearby container and bulk terminal for export to offshore markets in the Pacific, the Atlantic and the Gulf. Also, a main highway runs nearby GrowMax's project.
  • Accessible Markets -- GrowMax's potash plant will serve fertilizer market demand within Peru and in surrounding countries such as Ecuador, Colombia, and Brazil.
  • Low Capex and Low Opex -- Relative to other potash projects, GrowMax's surface brine potash project will involve low operating costs and low capital investment, given that it will apply solar evaporation processing and given its proximity to infrastructure including paved roads, fresh water, power, gas and port facilities.
  • New Pilot Plants – GrowMax has constructed three new pilot plants (one pilot plant for laboratory simulation and the other two pilot plants located on the concession). These pilot plants have produced potash using solar evaporation under laboratory conditions and under the ambient conditions of the Sechura desert.
  • Research Lab -- GrowMax has established an office and research lab in Piura, Peru, which is 20 km from its potash concession.
  • Historical Data -- Historical work on the concession included substantial drilling and coring of wells, sampling, geological mapping and construction of a pilot plant utilizing solar evaporation processing which resulted in the production of high quality potassium chloride (i.e. potash fertilizer). GrowMax is continuing to perform appraisal drilling and production testing of production wells to re-confirm historical data and to provide information for the National Instrument 43-101 report.
  • Engaged to prepare 43-101 report -- Ercosplan, a German-based consultant, has been engaged to complete a reserve report that is compliant with National Instrument 43-101.
  • Low Carbon Footprint -- The solar evaporation process involves a low carbon footprint.
  • Additional Potential -- Additional mineral potential such as Phosphate, Calcium Sulphate, Bromine, Lithium, Magnesium Chloride and other potential minerals.

About Americas Petrogas Inc.

Americas Petrogas Inc. is a Canadian company whose shares trade on the TSX Venture Exchange under the symbol "BOE". Americas Petrogas has oil and gas exploration, development and production activities, and has interests in close to 1,800,000 acres of land in Argentina's most prolific Neuquen Basin. In Peru, through GrowMax Agri Corp., Americas Petrogas is developing a surface potash (and other minerals) brine reservoir and evaporite deposit at Bayovar in the Sechura Desert of Northwest Peru. GrowMax will use solar evaporation processing, allowing GrowMax to be among the lowest cost, lowest capex of potash producers. Management, along with its strategic partner investor IFFCO (Indian Farmers Fertiliser Co-operative), intends to build GrowMax into a potash and specialty fertilizers company. Americas Petrogas owns 80% of GrowMax and IFFCO owns 20%.

Certain statements in this Press Release constitute forward-looking statements under applicable securities legislation. These statements include references to expected capital expenditure costs, operating costs, transportation costs, methods of production, salt production and related cash flow, construction and development activities, timeline, methods of processing, anticipated levels of risk and cost associated with the Bayovar project, accessibility of markets, security of surface rights, expectations regarding completion of a report compliant with National Instrument 43-101, potential for additional minerals, and intention to build a potash and specialty fertilizers company. Such forward-looking statements involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. In particular, there is no assurance that construction and/or development will occur or even begin, that risks and costs will not increase substantially, that demand for potash will not decline, that a National Instrument 43-101 report can be completed and that additional economically viable minerals will be found. This forward-looking information is subject to known and unknown risks and uncertainties and other factors, which may cause actual results, levels and timing of activity and achievements to differ materially from those expressed or implied by such information.

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