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Focus Releases Update on Activities at Peru Bayovar 12 Phosphate Project

Focus Ventures Ltd. is pleased to provide an update on activities at its 70% owned Bayovar 12 phosphate project located in the Sechura District of Northern Peru, 80km south of the city of Piura and 40km from a maritime port of Bayovar.

Pre-Feasibility Study

The pre-feasibility (PFS) study lead by M3 Engineering and Golder Associates is approximately 50% complete. The PFS considers a minimum annual production of 300,000 tonnes of Reactive Phosphate Rock (RPR) for sale as direct application fertilizer for the Latin American markets. The target date for the completion of the study is December 2015.

Drilling and engineering testwork for pit slope and waste dump stability were completed in April, and geotechnical drilling for the tailings storage facility is currently underway. Pit design is ongoing and will incorporate opportunities to backfill as mining progresses and to minimize haulage distances.

Process engineering is 80% complete and plant design is 60% complete. Two cases are being considered for the early years of production:

  • a base-case producing a 24-26% P2O5 RPR product by a four stage process of drum scrubbing, screening, primary and secondary desliming;
  • an alternative scenario producing a 28% P2O5 concentrate by incorporation of attrition cells and a hydro-sizer into the design.

The PFS will also consider throughput expansion options including the production of both RPR and phosphate rock for acidulation and phosphoric acid production.

The mine plan will be based on the updated resource estimate received from Golders Associates (see press release August 19, 2015). The mine planning will incorporate the phosphate yield and recovery data derived from beneficiation studies of 13 individual phosphorite beds to estimate capital and operating production costs.

Marketing Studies

Focus is investigating local markets in Latin America for the sale of RPR product from the Bayovar 12 concession. Preliminary visits have been undertaken to Brazil and Argentina to talk to fertilizer consumers and market intelligence groups.

Extensive testwork has been completed on the effectiveness of Sechura RPR as a direct application fertilizer on different crops and soil types. Both the International Fertilizer Development Center (IFDC) in the US and the New Zealand Ministry of Agriculture and Fisheries have carried out research into its use on a variety of soil types and crop species. One of the key findings from the New Zealand work was that the ongoing use of RPR produces a reservoir of residual phosphorus in the soil, due to the build-up of reserves of slow dissolving RPR over the first few years, after which the release-rate of phosphorus comes into equilibrium with the application rate. This 'residual effect' provides a major income benefit to farmers during periods when lower farm incomes restrict fertilizer inputs. Sales of RPR in New Zealand reached 150,000 tonnes per year in 2005, some of which was Sechura rock phosphate from Peru. In 2015, exports of unground 22-24% P2O5 RPR from the Sechura district to Latin America and New Zealand have yielded prices from US$124 to $163/t FOB. Focus is actively investigating exporting its potential product to New Zealand in addition to South and North American markets.

Management also believe that there is considerable scope to capture higher prices for its potential RPR organic product through blending with other fertilizer inputs (sulphur, gypsum, urea, DAP etc.) to produce a multi-nutrient product, which under soil conditions that are widespread in South America can perform as effectively as SSP and liquid fertilizers in providing soluble phosphate for crops. To that end, preliminary discussions have been held with potential Peruvian consumers to begin crop tests of Sechura RPR blends initially on oil palms. The specific blends will be formulated in discussion with the consumers regarding crop and soil types, and with input from Focus's soil science advisor, Dr. Bert Quin.

Qualified Person

The scientific and technical information in this release were prepared under the supervision of David Cass, Focus's President, who is a member of the Association of Professional Engineers and Geoscientists of British Columbia, and a Qualified Person in accordance with National Instrument 43-101.

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