great announcement

24 March 2014
SUBSTANTIAL INDIAN FERTILIZER COMPANY JOINS TOGO PHOSPHATE PROJECT CONSORTIUM
MOU signed with Gujarat State Fertilizers & Chemicals encompassing provision of services including in-country acid and fertilizer production, project financing and off-take
Balamara Resources Limited (“Balamara” or the “Company”) (ASX: BMB) is pleased to advise that it has signed a Memorandum of Understanding (MOU) with one of the largest producers of phosphoric acid and fertilizer products in India, Gujarat State Fertilizers & Chemicals Limited (“GSFC”), to join its consortium bidding for the world-class Togo Phosphate Project in West Africa.
This follows the MOU’s signed in 2013 with Singapore-based Aries Fertilizers Group and another Indian fertilizer manufacturing giant, Nagarjuna Fertilizers and Chemicals Limited, bringing the combined weight of several of the largest phosphate product operators and off-takers in the world together within Balamara’s Togo Phosphate Project consortium.
GSFC is listed on the Mumbai Stock Exchange and is ~38%-owned by the Gujarat State Government. According to its latest published financial statements, the Company had total assets in excess of $1 billion and turnover of approximately $950 million per annum.
GSFC is one of the most successful quasi-state commercial organizations in India, having achieved substantial growth in its +50-year history; it now offers a wide portfolio of products ranging from phosphoric acid and fertilizer products to chemicals, petrochemicals and, more recently, green power.
It is the largest Di-Ammonium Phosphate (DAP) manufacturer in India and its experience and diversity within the phosphate and fertilizer market will be of significant value to Balamara in Togo.
In addition, GSFC has won a number of awards in India for top health and safety standards as well as training, education and social programmes. Its environmental work in reducing pollution and rehabilitation of sites is considered to be of the highest standard.
These attributes are particularly important to Balamara as it shares these values and has indicated to the Government of Togo that it will provide the highest environmental, health and safety standards for Togo should it be successful in securing and developing the Togo Phosphate Project.
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GSFC already has experience operating in Africa, having been involved in a joint venture in Tunisia relating to the production of phosphoric acid. Again, this experience may be directly beneficial to Balamara and the Togo Phosphate Project.
GSFC will work closely with Balamara as a key partner, providing assistance at all levels in order to add value wherever possible within the overall tender process.
In particular, the MOU brings GSFC into the Balamara consortium to provide support in several key areas, all of which are considered critical in terms of winning the Togo Phosphate tender as well as successfully delivering the Project.
These areas include:
1. Providing a local acid and fertilizer production facility in Togo, which would acquire upgraded phosphate product from Balamara’s Togo mining operation;
2. Participating as an investor or financier at either the Project level or within Balamara itself, and/or assisting Balamara to secure development funding as required for the Togo Phosphate Project. To the extent required, GSFC will also facilitate third party financing through its established banking and other relationships; and
3. Establishing long-term off-take arrangements across the product suite to be developed within the Togo Phosphate Project, including sale of upgraded DSO phosphate product that is not sold into local acid production facilities.
GSFC’s participation in these areas remains subject to Balamara winning the Togo Phosphate tender and both Balamara and GSFC successfully completing due diligence and ultimately feasibility studies; however, GSFC will also assist in all possible ways to help achieve these objectives.
Balamara’s Managing Director Mike Ralston said: “This is another major coup for Balamara in our bidding process for the Togo Phosphate Project. We are delighted to include GSFC as a further experienced partner to assist us moving forward with the Togo Phosphate tender process. Balamara has brought in several new partners of substance and value into its Togo consortium over the past six months and we are comfortable with the roles and the value each offers in their respective space.”
-ENDS-
For further information contact:
Mike Ralston Nicholas Read/Paul Armstrong