MBAC Fertilizer Corp. announced it has exercised an option to purchase 100% of a phosphate project located in the Municipality of Araxa in the southern part of Minas Gerais State, Brazil. The option has been acquired from a private vendor and the exercise of the option to acquire the project is subject to certain conditions, including the completion of satisfactory due diligence by MBAC.
 
The phosphate project consists of four tenements covering 214 hectares of a carbonatite in close proximity to the Municipality of Araxa in Minas Gerais State, and contains Rare Earth Elements (REE) and Niobium mineralization.

For many years Vale and its predecessors as well as CBMM have been large scale producers of Niobium and phosphate from carbonatite mines located in the same region.

Antenor Silva, President and CEO, said the company believes this project presents a great opportunity for MBAC given its historical grades, size and, most importantly, the strategic location in the "fertilizer cluster" region of Brazil.

According to Silva, the company’s aim continues to become a leading fertilizer supplier in Brazil and the location and other attributes of this phosphate-Nb-REE deposit will continue to bring it closer to its vision.
 
Silva reiterated that it’s the company’s belief that the Nb-REE mineralization will provide a strong economic benefit for the overall project and it expects to be in a position to exercise the option in the near term.

The company is currently in discussions with third parties interested in the development of the Niobium and REE mineralization area of the project. The Nb-REE area has been drilled to a considerable extent and has the potential to generate a mineral resource in a short time frame.
 
Under the terms of the option, MBAC has agreed to pay to the vendor an initial fee of US $100,000, which will trigger a 90-day period for MBAC to complete due diligence on the project.
 
The final payment to acquire 100% of the project under the option is payable in installments after the receipt of the initial environmental license, the construction license and the operation license, respectively. In addition, the vendor will be entitled to a net smelter return royalty on revenue generated from the production of phosphate, Niobium and REE from the project.

MBAC is focused on becoming a significant integrated producer of phosphate and potash fertilizers in the Brazilian and Latin American markets.

30th June 2011