Pan American Fertilizer (TSX.V: PFE, Frankfurt: 6GF) Provides Clarification on Previous Third Quarter 2013 Disclosuresadmin
Vancouver, B.C., Canada. February 7th, 2014 – Pan American Fertilizer Corp. (TSX.V: PFE, Frankfurt: 6GF) (the "Company" or "Pan American") announces that as a result of a review by the British Columbia Securities Commission ("BCSC"), the Company has amended its Third Quarter 2013 MD&A and is issuing this news release to clarify its previous disclosures.
Regarding the Company’s condensed consolidated interim financial statement (September 30, 2013), the Company would like to clarify that short-term investments decreased because they were liquated in order to pay down debt and to invest in newly acquired operations. The net loss reported during the nine month period of the previous year (2012) included the impairment loss upon the termination of the option agreement on the Algun Dia Project in Guanajuato, Mexico. The Company would like to add clarity to the change in the number of Common Shares (issued and outstanding); this change resulted from the consolidation of existing shares and the issuance of new shares for the business combination (completed August, 2013) with Golden Fame Resources.
The Company would also like to clarify that the increased loss for the current quarter ending September 30, 2013 compared to the quarter ending June 30, 2013 was a result of the newly acquired calcium sulphate operation in Argentina. There was a gross loss from calcium sulphate sales as the production level at the operation had not reached optimum levels resulting in a higher cost of goods sold. As the operation develops and is refined, the cost of goods sold is expected to drop on a per unit basis. Additional general and administrative costs associated with the new operation also contributed to the loss.
As the Company currently has no established credit lines with any chartered banks or other financial institutions, the company expects to rely upon equity financing as its primary source of funding. The inability to raise money could impact the rate of growth of the business. Expansion of current operations would also be delayed.
Because of the plan of association between Golden Fame Resources and the Company and the Company’s focus on fertilizers in South America, there have been several changes to its management team and board of directors. The new team, with its collective depth and experience, has decided to pursue the opportunity with the Argentine agricultural gypsum (calcium sulphate)) project because it believes it may develop into a commercial operation.
The Company would like to clarify that Consultants are utilized on an as needed basis for the various properties and business needs which change from quarter to quarter. The number of management changes over the past two years has caused the quarterly variances in management fees. Advertising and promotion expenditures are for corporate marketing services which have been used in varying amounts as the business required.
Since the initial Third Quarter 2013 filing, the Company has acquired a new gypsum property in Argentina
Manto Blanco: On January 20, 2014, the Company entered into a mining lease agreement for the Manto Blanco property with the Ministry of Mining, Geology and Soils of the Province of Santiago del Estero, Argentina. This project is located in the Guasayan province of Santiago del Estero, in the western sector of the province. The entrance to the property is approximately 70 kms southwest of Santiago del Estero along National Route N ? 64. The new site has little overburden, and is adjacent to both a major highway and the electrical grid, all of which will set the stage for a low cost and simple mining operation and ready access to markets. Unlike the El Tabeleado and Estella Ceclia properties, there are also no royalty payment required.
El Tableado: The Company’s expectation is that a mining permit will be obtainable. In the event that a permit for this El Tableado is not approved, the company would further pursue other properties in the region.
Estella Cecilia: The Company is in the process of moving its mining and crushing equipment from this site to the Manto Blanco site.
Management confirms that demand for gypsum both as a fertilizer source of sulphur and as a general soil amendment is increasing. Customers have told the Company that their key needs are security of supply and quality of product both of with managements believes it will be in a position to deliver in early 2014 Discussions with current Paraguayan and Argentine who have signed LOI’s and potential new Argentina customers leads management to believe that there is sufficient demand for the product to increase sales substantially in the coming years.
The Company has amended the September 30, 2013 MD&A, and has re-filed.
About Pan American Fertilizer Corp.
Pan American is a Canadian company dedicated to providing fertilizer to growing global markets specifically in South and Central America. The company is focused on the extraction of a specific type of fertilizer called calcium sulphate (also referred to as "Agricultural Gypsum") currently in Argentina. To ensure long term development and increase shareholder value, Pan American currently plans to significantly expand its current operational objectives while expanding its asset base by acquiring additional calcium sulphate and other fertilizer related assets and by expanding its markets to countries neighbouring Argentina.
The Calcium Sulphate project is a unique project, for the following reasons:
1)Its high grade calcium sulphate (CaSO4) rock outcrops and is fully permitted and in operations via conventional extraction methods with secured mining rights for 20 years with right to extend for another 20 years, allowing for scalable operations;
2)It is strategically located in close proximity to the well-known "Nucleus Agricultural Zones" of South America where the majority of the continents important and dynamic agribusiness activity is located;
3)It connects to Paraguay and Brazil’s largest fertilizer distribution districts via existing and high quality infrastructure;
4)It has the potential to supply CaSO4 to South America’s agriculture market from its large calcium sulphate-rich deposit.
When used as a fertilizer and as a soil remediator, calcium sulphate is a soft sulphate mineral composed of calcium sulphate dihydrate (CaSO4o2H2O) which is extremely rich in sulphur and calcium. When dissolved in water, the mineral becomes calcium and sulphate sulphur ions, both of which are required nutrients for plants. Calcium Sulphate plays a vital role in establishing and maintaining good chemical balance in soil, water and plants, specifically with healthy root development. Ultimately, calcium sulphate increases overall crop quality and yields. For more information please look at our website www.PAFertilzer.com
On behalf of the Board of Directors of Pan American Fertilizer Corp.
Vice-Chairman and Chief Executive Officer
Forward Looking Statements
Some statements in this news release contain forward-looking information (within the meaning of Canadian securities legislation), including Statements contained in this news release that are not historical facts constitute "forward-looking statements" or "forward-looking information" within the meaning of applicable securities laws and are based on expectations, estimates and projections as of the date of this release. The words "is expected" or "estimates" or variations of such words and phrases or statements that certain actions, events or results "may" or "could" occur and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Pan American as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Many of these factors can affect Pan American’s actual results and could cause actual results to differ materially from those expressed or implied in any forward looking statements made by, or on behalf of, Pan American. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future.
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Posted: February 8th, 2014 under ACCESSWIRE.