Fertoz (ASX:FTZ) upgraded the JORC resource and released scoping study results for its Wapiti phosphate project in British Columbia last week, reiterating to investors that it's quite a find. Specifically, the company upgraded 806 kilotonnes of the 1.54-million-tonne inferred resource to a 22.3 percent P2O5 indicated JORC resource — that "represents a conversion of 52% of the previous Inferred JORC Resource," according to the company. The combined inferred and indicated resource now sits at 1.54 million tonnes at 21.6 percent P2O5; it was calculated to a depth of 30 meters along a strike length of 12.5 kilometers and at a 7-percent cut off. Meanwhile, the scoping study for Wapiti reveals a post-tax, unlevered IRR of 82.4 percent and a post-tax, unlevered NPV of C$20.1 million. The company's pre-tax cash flows are set at $69.8 million over the life of the project, which should be greater than 20 years based on the indicated and inferred resources. The study also points to low capital costs of C$2.7 million, with most capital costs expected to be funded through phosphate sales. The $2.7 million will be spent over three years as follows: $200,000 in 2015, $1.5 million in 2016 and $1 million in 2017. "The Scoping Study has been specifically designed to minimize upfront capital expenditure and achieve near term positive cash flow with a shallow, 7m deep open pit design for the initial 7 years of the project. With fertiliser sales well underway through our FertAg JV in Australia and the likelihood of near term commercial production in North America, Fertoz continues to establish its credentials as an emerging agribusiness," Les Szonyi, Fertoz's managing director, said in last week's press release.
Scoping study metrics. Courtesy of Fertoz.
Project background Fertoz began drilling at Wapiti at the end of August 2013. It's since completed 2,098 meters of diamond drilling, with preliminary assays revealing low impurity levels and high phosphate grades. Testing of a 2-tonne bulk sample collected during the drilling confirmed in March 2014 that there is "high availability" of 10 percent phosphate, which is likely to be particularly attractive to the organic fertilizer market as a direct-application natural fertilizer. Those results prompted the company to increase the project's Wapiti East zone by 44 percent, bringing the total area up to 110 square kilometers.