Verde AgriTech Limited (NPK) Earnings Call Transcript & Summary

Yes. You can see Slide #11, we have BRL 50 million revenue and expectation to sell 346,000 tonnes, which is a sales price average similar to 2020 -- Q3 2020 actually.

So that is on the presentation, [ Mark ].

Yes.

And the number is about 340,000 tonnes of product. What proportion of sales were repeat orders in 2020 so far versus 2019? So we will be compiling that when the year closes, and we'll be disclosing that next year. Can you comment on current global potash supply demand and its forecasted price for 2021-2023 and its impact on Verde's growth margin? I really have no idea on the forecasted price. And if there's one thing I learned, [ Eli ], is that no one really does. We've paid for some of those big-name consultancy companies to come up with forecasts when we're doing our prefeasibility studies, our PEAs, and it always comes wrong. It truly always comes wrong. So we -- when it comes to the price, we're always here planning for the worst and hoping for the best. If you look at the prefeasibility study we put out, the last one in 2017, I even refused to pay those big-name consultancy companies who come up with a forecast as some other companies do. What I learned that unfortunately happens a lot is that they tend to come up with prices really just on the margin to justify some of the big CapEx projects. Nowadays, I don't think they've even been able to do that unless they put like 2025 and trying to make 5, 6 years predictions. If you look at what we did at the time, we spoke to the most respected analysts in the space, and we asked for their lowest price in terms of expectation. We picked the lowest price, which is very close to the marginal cost of potash delivered in Brazil. So if you pick the price of how much it cost you to produce without any profit to ship it down to Brazil and transfer it to where we are, that's pretty much what we've based our assumptions and how we base our assumptions for our growth models. Needless to say that we're also undisputedly the cheapest supplier when you look at the cash cost curve of potash in Brazil, which shouldn't come as a surprise to anyone. Next question, could you produce and sell more than 346,000 tonnes next year given you have permits for 482,000 tonnes? Yes, we could. So the capacity for the plant is 2,000 tonnes per day. Of course, you need to realize that deliveries, fertilizer deliveries in Brazil are very seasonal for -- because when it starts raining, you're already supposed to have planted and you're already supposed to have applied our fertilizer. So as soon as it starts raining, it's not just that the production in the rain is challenging. It's also that farmers have no incentive or it's very niche applications where one would use our fertilizer when it is raining. It's a very important point. So if any of you missed what I just said and want me to repeat, just ask the question again. Because it's a very, very important point, especially as we go now in the raining season so you understand what happens with the market. The next question, are we going to have to wait until 31st of March 2021 for another operational update? The answer is no. In our monthly newsletters, we have been providing nonmaterial operational updates. If there's ever anything material, of course, we would need to press release it immediately straightaway. That is the answer to that question. Can you give us some guidance on expected gross margin for next year given flat currency? We can expect the gross margin to remain the same as we saw in each one of the different quarters this year. It shouldn't be going -- it shouldn't be changing dramatically from what it was between 50% and 60%. Do you have any projections on when you move to Phase 2? Would you raise funding for that phase or self-fund it? Phase 3, I guess, will require equity raise. So I think the projection when we move to Phase 2, being Phase 2 will presume from the feasibility study, Phase 2 is 5 million tonnes of production. We don't know when we will get to 5 million tonnes given the nature of the business, given the fact it's still a new product on its infancy. It's still a new operating company in terms of structuring its sales process and growing distribution, everything else. The fact we're competing against companies that's been around for 40-plus years and are all gigantic billion-dollar companies, it's so very hard to make any projection or any sort of precise projection. Would you need to raise funding for that phase or self-fund it? So the answer for both Phase 2 and Phase 3 is most definitely, I will do everything I can never ever to raise any new money to the company. I think a few press releases ago, we even declared our independence from -- independency from capital markets. I'm very proud to have made that declaration of independency from equity capital markets. And I hope I shall never see again Verde AgriTech having to issue -- having to raise on a private placement or a public raise more capital. And now the question here, could you please clarify what is currently the single critical element in Verde's path to increase sales volumes in 2021: increase customer demand, permits, production capacity, logistics, et cetera? No doubt, to increase customer demand. No doubt, it's market development. It's -- this is the real challenge for any company which is bringing a new product to the market. And for the reasons I went on certain detail earlier on, it's not easy. It's not easy. I speak from experience. I've sold and failed to sell K Forte several times, and it's never easy. Could you produce and sell more than 446,000 given you only have permit... Yes, I think this question is a duplicate. So we can sell more. Next question, Q1 has traditionally been a poor delivery quarter in the calendar year. Your investment of $400 (sic) [ $400,000 ] in infrastructure is to allow increased production during this quarter. What do you estimate sales volume will be in Q1 2021? Will this show good value on your investment in infrastructure? Will there be good stock levels at the end of Q4? It's a good question. Good question, yes, all the way from Manchester, the -- or perhaps [ the man ]. The answer to this question here is that we don't know. We don't know how much we're actually going to be able to deliver in Q1. The answer to the second part of the question, whether it's a good investment, $400,000 on infrastructure, it's a necessary investment. As a matter of fact, it's an investment that should have been made all the way earlier on when we built the plant. It only wasn't made that investment because we didn't really have the cash at that point and wasn't prioritized. But to give you an idea, any sort of rain out of season turns the plant into a mud bath. It's bad and makes it very hard to operate. When you're not during the raining season, when you're during the dry season, it creates a lot of dust. So a lot of dust in suspension, which is also far from ideal for employee well-being, for operational reasons. So that was and is a very essential investment. For Plant #2, for example, this having a paved ground which is the reason -- which is the normal, will be done from day 1. The next question, you answered my question by saying that only a little product remained unsold. You, therefore, could not have sold any more product. Were there any problems with production over the quarter? Or were you running at maximum capacity relative to your mining license? Okay. Let's start with the first question. Were there any problems with production over the quarter? Nothing material. So there was never any material issue. Were you running at maximum capacity relative to your mining license? We were, at most times, running close to the maximum capacity at mining license. But I think the real answer here, [ George ], is we -- the storage capacity of our plant when it comes to final product is limited. So we pretty much run a nearly just-in-time type of business when it comes to the final product. The cumulative production in the 2 sheds covered area we have, the cumulative capacity is about 8,000 tonnes. And when we store product outdoors, it can only be stored outdoors in big bags -- totes, 1-tonne totes. And we can store another 5,000 to 8,000 tonnes of product in those totes. So -- but that's another advantage of having the additional production capacity because it's far cheaper for you to produce more when you need and sit with idle production capacity than it is for you to invest a lot of CapEx on building storage facilities, which is rather expensive. We have done all of those business case simulations and everything else to be able to ascertain that. And because the product is a dust, it's not easy to be stored in storage facilities. It's not great. So if I still didn't answer it properly, please go back and add something else. [ Mussing ] is asking, why all permits taking so long, especially with government support? They have really started to be issued in a very timely manner in the last couple of years since the government implemented some reforms. Permits have never been a bottleneck to stop our production growth. So I don't think they're taking very long, to be honest. They're pretty much in line with any other mining jurisdiction in the world. And I would even go beyond and say that we're getting our license issued much faster than in most places in the world. So I'm very pleased with how it has progressed. [ Jeff ], thank you. If it's challenging to convince the wealthy farmers to switch, perhaps if they're motivated by money, could you undercut conventional potash enough to induce these farmers to switch and do so -- will do profitable or with profitability? That's a question, [ Jeff ], we ask ourselves every single day, morning, day and night. Would we be able to grow faster by offering a cheaper -- a much cheaper product to what they're paying? The answer -- the real answer is it's hard to say. What we've witnessed is that very rarely pricing is the real issue. Very rarely a farmer will not use our product because he isn't getting enough of a discount. Most often, it's to do with other reasons, some of those other reasons. And that's another important point here, which perhaps if anyone doesn't understand or requires better clarification, you can ask for more details later on. But the question here is -- the point here is when you are using, let's say, a conventional fertilizer, conventional fertilizers are granuley. So it's a little granule. It's much easier for you to apply in terms of equipment and equipment deficiency to apply a granulated fertilizer than it is to apply a dust -- a powder fertilizer like ours. The other very important point here is the fact Verde can only supply potash is a bit of a pain for farmers. A lot of them, they want to have this one dealer or they're used to have this one distribution company, be it Nutrien, be it Mosaic, be it Yara, whoever it is. And those companies can go and offer all the nutrients for them. So they can deal with only one company and get all the nutrients they need. And often, farmers will want those nutrients to be combined as well with micronutrients. So they will want to have boron, manganese, copper, zinc and other elements. So the fact we offer only potash is also a bit of a problem. So it's not just about offering a very cheap price and really allowing farmers to question, well, if it's as good as you tell me it is, why you sell it as cheap as you are? Why aren't more people buying it? Why do you need to sell it as cheap? So those have been the reasons behind our decisions so far. Another question. Any chance we'll see ThermoPotash again? Or is it dead? It really was the reason I invest. I know [ Mark ]. I know. I remember that. I truly remember that. It's never dead. At some point, we might see it coming up. As you remember, it has a bigger capital investment required. But we also might be able to look at replicating some of those benefits of ThermoPotash you liked so much in certain different ways. And that might be some of the technologies we're also working at the moment. What are your thoughts on building the company where lucrative takeover could be realized? We're all partners on this. I'm a shareholder as much as each and every one of you are shareholders, and I'm as big of a shareholders each one of you may or may not want to become. I don't know how many of you want to get a mortgage on your house, sell the house, buy all in, go and rent a place and come and join me as a big shareholder in the company. It all depends on the risk you want to have. It's no doubt I'm all in. And there's no doubt if there is a lucrative takeover bid, we will all use our -- respect our duties to the company and to the shareholders and assess it in the best way possible. Another question, how long before Greensand catch on globally? I don't know. I don't know. The thing about Greensand is, in Brazil, the product is registered as a fertilizer, as a source of potassium and other nutrients, with 10% K2O guaranteed analysis. The historical usage of Greensand has been -- well, right when it began a few centuries ago, it was widely used because of its potassium content. But after you had the cheapest sources of potassium coming up from -- especially from Canada, people started using Greensand much more because of its oligo elements or trace elements and soil conditioning benefits rather than its potassium content. So I don't know. Next question. Next question is, I wonder if you could clear up something for me. On your website, you state that K Forte contains 10% K2O, yet on the bag of Super Greensand potassium content is listed at only 0.2%. Why is there such a difference between the claimed K2O concentration on website and the potassium content listed on the bags of Super Greensand? Are they the same thing? Excellent question. If anyone doesn't understand all this and wants more clarification on this answer, please say so. The total content of potassium from the rock is 10%. It is registered in Brazil as a potassium fertilizer with a total potassium content of 10%. So when we sell it in Brazil, it's 10% K2O. That's the key number. When we sell it in the United States, the regulation in the United States is a bit different when it comes to potassium. So in the United States, they only recognize the amount of potassium in your product which is water soluble. And when it comes to the amount of potassium in our rock which is water soluble, it is 0.2%. So for that reason, when we sell it in the United States, it has to come up with the label stating a guaranteed analysis for 0.2% K2O in our micronized version. When it is in Brazil, it is the 10% K2O. Next question, if you assess general and administrative expenditures in the local Brazilian currency, you see a very different year-over-year change than those shown in Canadian dollars. For example, professional and consulting is up 105% in reals. What consultants have you used in Q3 to explain the 100% increase? This come across as a big number. I will let Felipe detail. And Felipe, you can name whatever the consultant or...

Yes. Yes, it's a good question. In Brazilian reals, we spent a bit more. This is a bit due to phasing of expenses. And also, we had -- we hired an additional consultancy, lawyers to support us in some questions here like some specific points that we need support. But most of it is due to phasing, expenses phasing that we had higher phased expense in Q3 this year instead of Q4 or Q2. If you take a look in the full year expenses, the amount is not that big. Let me get here the amount of...

While you look at the number, Felipe, let me just also make a comment. Is it fair to say that some of the engineering costs we had for Plant 2 like the infrastructure and some of those designs, road access, were those classified as consultancy and professional?

Yes. For example, the new road that we are implementing, the new access for Plant 2 is there. You are correct. Just the expenses, it was close to BRL 60,000. We had also the geometry project to provide to consultants the job. So this is around BRL 25,000. So just this was BRL 85,000 that we did not have before and we're having it now. So -- but if you take a look in full year, we can see that the total expenses year-to-date is 10% higher, but we do expect it to be lower in Q4.

Thank you, Felipe. It's a good question because usually -- and I have the same reaction. Whenever I see like consultancy things going up, I say, what the h*** is going on in this company. But in this case here, it's all to do with expansion. It's all to do with Phase 2 or the -- from what Felipe said, nearly 80% of it is to do with this work required for us to improve the access to the site where Plant 2 is going to be built. Next question by John Kaiser. Thank you for attending, John. Are there any nutrients not included in other fertilizer blends, phosphate, urea that potential K Forte users also apply to their fields that could be blended into K Forte to boost its attractiveness to farmers? Yes, John. Spot on, spot on. There are. There's some synergies that come out of it. There's some crazy cost reductions that can come up from that. So given a little bit of a spoiler, seeing John asked such a good question, for example, when farmers buy NPK blends, those of you who remember TK47 will remember a little bit of the story behind it. But when you're buying an NPK blend, let's say, 20-00-20, it's 20 nitrogen, 00 phosphate and 20 potash, very, very common blend. The cheapest way for the blender, for the distributor to sell this product to a farmer would be to sell urea, which is the cheapest source of nitrogen, mixed with potassium chloride, both granules, both the cheapest source of potassium. The problem is urea has 46% nitrogen. Potassium chloride has 60% K2O. So you can't build this formula so the combination gets to that precise number, 20-00-20, which is what the farmer wants. So in order to come up with 20-00-20, the farmer -- what the blender, what the distribution company will do is to replace some of that urea with another source of nitrogen, which is less concentrated the nitrogen and much more expensive point of nitrogen than urea is, which is, for example, ammonium sulfate. That way, they can make sure you close the gap with the 20-00-20. But the problem is the farmer ends up paying more for the fertilizer than if he was getting the same nutrients, for example, from us, which would have some more flexibility by adding that directly to our product. The other very interesting point behind your question here, John is, for example, Brazilian soils are extraordinarily poor in sulfur. Sulfur is an essential micronutrient alongside nitrogen, phosphate, potash, calcium, magnesium. And the other one is sulfur. Those are the 6 essential micronutrients. But to apply sulfur to soils is a bit tricky and potentially very expensive or currently very expensive for farmers in Brazil. So to get their fix of sulfur, they usually will buy a -- or ask to include in the NPK blends 2 fertilizers, which are sort of the micronutrient and a source of sulfur. They will ask to add super simple phosphate or they will ask to include ammonium sulfate. But the problem is when you look at the cost of doing so, it's huge. It's crazy, crazy. But this is the inefficiency of the current space. And we like to use technology to resolve inefficiencies and make things better for farmers. So next question -- and I hope to see all of you on the 15th of December. Next question from [ Ian ]. Devalued domestic currency should make your product cheaper for export. What are you doing to drive exports? Was the trial shipment to China successful? I'm aware that Sirius Minerals have memorandum of understandings and letter of intent with China of in excess of 10 million tonnes. We made the shift -- our focus in terms of exports is close to 0. The focus is Brazil. The -- when we look at exports, there are 2 different situations: One situation is the North American market, where it's really a niche product, where you're looking at soil conditioning, where we're looking at trace elements. When you're looking at the export we made to China, they weren't looking at niche. They were looking at the product to be a direct potassium product. There was a -- they received it. We understand they all tested it. We had a feedback. They had some problems with weather in China. And we understand there's some trials going on or some economic evaluations as well going on in terms of what's going on in China. You mentioned here a company very interesting here. Sirius Minerals is not very interesting, unfortunately, for shareholders given the catastrophe, which happened with the share price and dilution and everything else. But the -- when you think about the rationale for them to justify the pricing they had for Polyhalite you might remember that, Ian, anyone who followed the story closely and analysts understood how it was because of the sulfur content and because of the expectation of replacing all the sulfur-containing fertilizers, such as superphosphate and such as ammonium sulfate that Sirius Minerals was able to justify some very lofty pricing for their polyhalite-proposed product. So again, sulfur seems a name that seems to have become a big challenge for farmers across the globe to have reliable, cost-effective, efficient sources. And I stress the word efficiency because the common source of sulfur is sulfate. And sulfate is extremely water-soluble. Leaks very fast. And although this isn't necessarily a big problem in countries in the Northern Hemisphere, temperate climate agriculture, it is a major issue for tropical climate agriculture where you have some very rain -- very wetted soils where you end up losing a lot of nutrients. So that's sulfate. Next question, why is it so difficult to get mining permits? And what is the length of time it takes in years? It's very difficult because the regulatory process is very extensive. So first of all, you need to apply for the different exploration permits. Then you need to do and carry on several rounds of drilling. After you've done it, you need to come up with the resource and reserve calculations. You need to submit that to the government. The government will go on site, will see the work you did. We will tell the government you've done drilling. The government will go on the site where you told there was drilling. There should be a little bit of concrete slab there showing there was a hole that was drilled there. They will go to your -- where you store the drill, of course. They will have a look at them. They will analyze your assays. And then if they're satisfied, they will approve your exploration report. After they've approved your exploration report, you need to present a feasibility study, proving to the government that this is a feasible project. If you have a commodity, it's easier to do. If you have something like us, where it's a new product, it's a little bit harder. But you then present your feasibility study. The government will have to evaluate it, undertake all the type of business that's required and then make a judgment whether this feasibility study is favorable or not. Once it has been -- the feasibility study to be approved, you still need to present your environmental license, your final environmental license. And then after you present a final environmental license, the government will issue, finally, a mining permit. So that is the process, and it's hard in most jurisdictions in the world. It's even harder in other jurisdictions with -- especially countries with common law and/or the context. Okay. Next question. Our 2 glasses of water today wasn't like last time. "One of the risks I see will be around market adoption of a new product. I understand Greensand is 1/6 of the concentration of regular potash so I'm wondering how it impacts the farmers' workflow. Their machinery to spread the fertilizer now needs to output 6x throughput on their fields. Take more time, more fuel to move around with tractors." This is all correct. It's all one of the reasons -- objections we face on a regular basis. The way we address this objection, which is absolutely true, is, for example, when you're looking at coffee, because KCL is sold and it's very water-soluble, if you apply it all at once, all the amount of potassium a coffee tree needs all at once, 2 things might happen. If it doesn't rain and potassium, that salinity still stays there, very likely you're going to kill the plant. If you're lucky enough and if it rains, the water is going to take all of that potassium or pretty much all of that potassium away before the tree can uptake nutrients. So they have to split up to -- make up to 4 applications instead of -- in the case of our product, being able to make only one application. But as you wrote, some farmers would prefer to do that, other farmers won't. So it's a situation. For example, when you look at grains, you need to apply potassium when you're growing soybeans. And then when you harvest soybeans, when you go to grow corn, you need to apply potassium again. If you're using our product, you can apply it only once. But there's no doubt that by having a smarter and more customized mix of nutrients in the product, we can make it much faster, much easier for the farmers in terms of reducing objections. Next question, can you elaborate on the pricing and client charging of costs generated in delivery transportation? Excellent question here from Addie. The -- how it works is that we sell our product at the same cost as potassium chloride, adjusted for a lower potassium content on a delivered basis. So if the farmer buys the product from us on a CIF basis, cost and insurance, he will pay exactly potassium chloride divided by 6. That's their cost. If they prefer to buy FOB, they will pay potassium chloride divided by 6 minus the transportation costs from the farm to our plant site. So that is how it works. Can you elaborate on that? And on the current feedback you are getting from customers, excellent feedback in the vast majority of cases. Next question, can you provide color on the rate of repeat sales picking up demand by farmers who bought the first time? We will make a full disclosure at some point, next year, either on the newsletter or on the press release. The next question is, "I've had some experience with selling sustainability in another field and have learned that this argument will only work with a customer as an additional reason to support the key selling point, which many times is price. Wonder what feedback you're getting from your customers on that." Just farmers don't get paid for sustainability. They -- and it's a very high-risk business. Every year, where you -- and honestly, that from personal experience, you are really losing everything. So we make all investment on the fertilize, pesticide, land preparation, labor, seeds. But then if the weather isn't right or it brings too much out of time or it rains too little, you can lose everything you've invested. If you -- depending on the sort of leverage you have, you can go bankrupt. So no farmer will buy anything because it's sustainable. This doesn't exist. It will only exist when consumers start -- final consumers like us, like ourselves, start paying more for sustainably grown food versus conventional foods. One can argue that, that has started happening with the sort of certificates like UTZ Rainforest Alliance, but it's still niche in comparison to the overall market or even organics or biodynamics. Next question, what percentage of the latest quarter's tonnage was sold to repeat customers? Again, we will disclose that next year. We weren't thinking about it on a quarter per quarter basis. The idea was to do it on an annual basis. When we'll be positive cash flow? I hope very soon. Can you comment on Brazil's potash plans with specific reference to their planned fund raising in December and their target market value of over $500 million? So the question here from Mark is a -- there's a company called the Brazil Potash. It's a company that has been around for just near -- literally for as long as we have been around. At one point in Brazil, we even shared the same building, not the same floor, but the same building. They have a potash project, which is in the Amazon -- in the heart of the Amazon. Either in or next year, a very important Indian reserve -- Indian tribe reserve. And when you -- when we first started talking about the project, a bit on potassium chloride. So potassium chloride is a salt, and it occurs in nature associated with another salt, sodium chloride, which in those deposits come in a much higher concentration than potassium chloride itself. So in other countries where you extract potassium chloride, this residue of salt is either sold or given to be spread on roads for de-icing, like in Saskatchewan, like Germany, like in Russia or is put in massive pond. We have a bunch of those big ponds of salt in Saskatchewan, for instance, or even in Russia. You can even find on YouTube some dramatic scenes of some of those ponds collapsing in, to do with moving in -- from those deep underground mines in Russia, some very interesting documentaries on the Internet. So when we first started developing it, when people asked them about the salt, they said they were going to put that salt into the Amazon River. And you're talking about millions and millions and millions and millions of tonnes of salt. As you may expect, that didn't create many friends. There was a lot of pushback. And then they started saying that they will dig a hole and put that potash, that salt back into inside the hole or something like that, which also carries a lot of skepticism at the moment because nowhere else in the world, apparently, people do that. And most certainly, nowhere else in the world do the same sort of climate and water tables and amount of water as you have in the Amazon jungle. Every single potash mine you have operating in the world is operating in -- either operating in Arctic -- near Arctic conditions from the deep underground mine, so it's up in Saskatchewan. So people from Saskatchewan might agree. It feels a bit like Arctic conditions in the winter, Northern Russia or even when you have some other places, it is to do with -- just hang on. Just had a message about the time for the connection. So that is the main problem in terms of the feasibility -- the environmental feasibility. And the other point is, to the best of my knowledge, the latest feasibility study they had, had a priced study done by a local Brazilian company, which put an estimate on potassium chloride of around $300, which was required for generating a very small IRR. So the other question is how economic -- if environmentally sustainable, how economic the project is. And even if it gets -- so I mean, that's one. I'll tell you that's one question I've been answering since 2008 as well, nearly 12 years. The next question, "In your unaudited interim consolidated financial statement for Q3 released on 16th of November, Page 4 notes exchange difference on translating foreign operations for the 9 months to end September has been a loss of $5 million. Can you explain this number?" I believe, if Felipe will correct me from wrong, this is the money that we have invested from the plc from the U.K. parent company to the Brazilian company. And because of the exchange rate fluctuations, that number varies wildly. Is that correct, Felipe?

Yes. 100% correct. Exactly, yes. That's the money invested by plc in Brazil, Verde Fertilizantes. Since Brazilian real has devaluated, if we convert it back to Canadian dollars, it's a lot we would have lowered, $5 million.

"Given your answer to my question about undercutting on price, we only offer potash solution while it shoots off a complete package. Could you team up with a dealer that offers the other nutrients? This might eliminate the farmers having to complicate the supply chain by having multiple suppliers." That's certain a possibility. It's certainly a possibility. We're always talking and always exploring. We went as far as to think that we could help selling and get the commission from those other dealers when it comes to offering a full solution. What that doesn't resolve, though, Jeff, is the fact that in a lot of circumstances, the farmers would prefer having all nutrients in one same product. So for example, micronutrients, most of the farmers apply micronutrients nowadays. And they usually buy, let's say, an NPK blend which already comes with an added nutrient. Or for example, we don't need to go that far. If you look at 2 of our competitors -- I would encourage you guys to go in and have a look at our website. If you look at Nutrien, world's largest potash company, Nutrien launched a product, which is a combination of potassium chloride and boron. It's called Aspire. So that's a product they've been marketing very aggressively. It's very expensive, but comes from a need. Another company that has another product which is heavily marketed in Brazil is Mosaic. Mosaic has a product called MicroEssentials, which comes with sulfur and is, again, one of the key products, they working to develop the market in Brazil. So it's that sort of nutrient combination that a lot of the farmers are looking for and makes our life not necessarily very easy to selling our product. In some circumstances, it's a bit like you're not even resolving the real problem for your customer. You're resolving your own problem, which is to sell potash. But you're not really resolving the problem for your customer, which is to get the best crop nutrition technology possible, which will both reduce costs and increase profitability and increase production, productivity and sustainability. But because you lack the other nutrients in a number of ways, that ends up restricting or making our lives much harder when it comes to selling. Will this Q&A be available for replay? Yes. So this will be available on our YouTube channel. I hope all of you have already subscribed to our YouTube channel. And it will be there. What I will suggest, Isabella, for us to do is to have it posted both as just the Q&A bit and the full version of it. Okay. Ian, if the cash cost of reported potash has dropped by 27% but the Brazilian currency has also devalued against the Canadian dollars -- than the Canadian dollar, then surely, the imported cost has remained quite stable. It remained relatively stable in local currency. That's why when you look at our average pricing, local currency doesn't change a lot. But it has fluctuated a lot. When you then translate that back into Canadian dollars, which is the currency we report, that's where the big drop comes. Another question, "Once you have done all the work to finally get a mine permit, how long is the permit good for? I've heard it's only 3 years, which does not seem to make sense when the deposit has a project life of mine of 30 years or more. How do you mitigate the risk of having the mine permit taken over by another owner?" Starting from the last question, there has never been the case in Brazil where there has been expropriation of mining rights. The -- answering the first part of the question, there are 2 different types of mining permits. One is something called guia de utilização, which I think will translate as mining permit; and something else, which is a concessão de lavra, which will translate as mining concession. A guia de utilização is the one you have a shorter time frame up to 3 years, but you can carry on reapplying and asking for it to be renewed. The permanent one, which is, for example, the one we were issued a few months ago, that one is essentially good for life. It's a different type of title to the guia de utilização. It's a permanent one. And it's the one I described when I went through over in some detail on the process of applying or getting a mining concession. That was the one that was always describing for you to get to a full valid mining concession, to get your guia de utilização or mining permit. I don't know how each one is being translated in the glossary, which comes in the newsletter. It -- or on MD&A, it has the breakdown, but it's much easier. Next question, all your plants disposable in that when you get higher permits, we will end up with a new plant. They are not disposable, when we have new plants, we will carry on building additional lines on different sites. What is the dynamics of the global potash industry? And how this is likely to affect our business during the coming decades? The dynamics of the global potash industry are there's no shortage of potash in the world. There's lots and lots and lots of potash in Russia, lots of potash in Canada. There is at the moment, excess capacity -- sorry, yes, excess capacity for potash. There's a proposed project by BHP in Canada called Jansen, which would increase this added -- increase to this capacity. And essentially what seems to be the case is that the current players, they are making sure they keep potash prices low enough that they can make money, and they do make some very attractive profits even at the current level of around $200. So low enough so they have decent profits and never higher north that it would trigger a new wave of interest in this space, which is what happened back in 2008. Felipe, do you mind sharing the presentation and going down to that slide, which has a chart on the price of potassium chloride over the last 3 decades? I think it will be a good one to...

Yes. Just a second.

So if you see the graphic at the bottom, you can see the FOB potash price, FOB Vancouver over the last 30 years. So when you see that spike back in 2008, that's when guys like us show up. Before that, all I knew about potash was every time at which you buy fertilizer, what that pink granule was, that was potash. I didn't know anything other than that. As soon as it went up to near to $1,000, in Brazil, it went as high as $1,100, hey, that's when Verde started looking for potash deposits, not just Verde, but other companies around the world. That's when BHP tries to come and acquire a potash corporation in Saskatchewan in what was at the time the largest M&A deal in history. The second time ever, Canada blocked the foreign take over. So for this reason here, the industry has learned that what have happened, they ought never to allow the price to go up out of control. They're always going to keep it, as you see here, something within the range, $200, getting -- this is the CFR Brazil, perhaps in Brazil as high as $300. But that is, in my view, what will be the -- that what will be the price range for potash. The other interesting thing which happened here was our valuation. So if in 2008, there was the interest. We went and we took the asset. If you look at -- then, of course, there was the crisis, Lehman Brothers and everything else associated with that. There was a little bit of a crash, and then prices started recovering. Prices started recovering all the way up to $500, which was too like crazy high. We are doing feasibility study at that point with NPVs, and there were all sorts of huge valuations. And all the excitement, all the analysts only -- could only care about potash on Bay Street. We had 11 analysts covering us. People would be calling me all day long to talk about what -- to ask about what Verde was doing. Everyone wanted to invest in potash. And unfortunately, that's also when some of you invested at share prices which are significantly higher than where we are trading right now. Well, this is when I could personally have sold my stake in the company for about $20 million. It was crazy -- absolutely crazy time. I look at all this craziness about tech at the moment and stay-at-home tech cases, Zoom and the other companies. And I look back in 2010/2011, and that's exactly how we felt. That's exactly what was going on with Verde. Unfortunately, things have completely changed for this space. And at least as far as pricing is concerned for potash, I find it very difficult to believe that an increase in potash price would be the trigger to create another situation like this one. I sense there might be another spark that might trigger, another renewed interest in Verde AgriTech, but I don't think that spark will have anything to do with potash. I would risk to say that, that spark will be something much more to do with the way we've been evolving the company towards as an agritech company, sustainability focus. It's something that will be much more connected with that video we watched at the beginning of this presentation than a price spike like the one we saw here. Next question, Felipe, if you want to please stop sharing the -- this screen. [Christine] Hager, "Would you consider to allocate some of your company's cash to Bitcoin, like MicroStrategy Square? This is in order to avoid losses on the falling Brazilian reais and U.S. dollars?" Not at this point in time, we wouldn't. I don't understand anything about Bitcoin, and so it isn't the strategy at the moment. George [Shore] "Well, sales are seasonal. Why are they less seasonal this year versus last year?" They are still seasonal. I think the -- what you're referring to is perhaps the fact that we sold a little bit more in Q1, which we will. We will sell product in Q1 and Q2, but it's just only purely from a climate reason. When you get rains, it's always going to be peak demand between the end of Q2 and Q3. "So if you don't intend to issue equity to fund expansion, is the obvious answer a debt financing? If so, then would you expect it to come from the private or government sector?" The answer is both. Both. And we're working with both routes. And what you see a lot of times as well and pretty much, say, all but one of the lines of credit we accessed. For all those lines, the funds were provided by the government and were sold, let's put it this way, by private banks. So that's a lot how the government works in Brazil. It will make available -- the funds available for a specific purpose with specific or subsidized interest rates or reduced interest rates, and then it will use private sector banks to distribute those lines of credit. Another question, does this just-in-time production system hinder your ability to meet the demand of customers? No. It hasn't been the case yet. It's not a truly just-in-time production system. We do have some storage. We do store some product in big bags. We do store those about 6,000 tonnes. So up to this point, it hasn't been a reason for us not to fulfill any sales commitment. "Having this as a replayable video is excellent. Thank you for the level of transparency. This is very helpful. Will this be the model going forward, that future quarterly release presentations?" Yes, it will be. As a matter of fact, it has been exactly like that for the last 3 quarters. And we have the Q&A for the presentation done at Q1, Q2 available on our YouTube channel, the same way this one will be available. I believe -- and some of you followed our restructuring in terms of Investor Relations, but I think it's worth it taking this moment here to thank and congratulate Isabella, our recruited Investor Relations manager, who began working this year and has been doing a fantastic job. So some of you might remember how we had to completely focus on operations, construction, doing our homework for several years, at which point in time, we completely scrapped investor relation activities. We hired Isabella very earlier on this year. Our first step was to carry out a bunch of surveys with our investors, asked a bunch of questions, went deep to understand how we could best structure our communication. Based on all of that feedback, we came up with the monthly newsletter. We came up with the video, Zoom presentations and everything recorded, and we have a lot more planned for next year. So stay tuned that there should be a lot more coming up on next year in terms of how we're approaching Investor Relations communication. We have a new website. So when you go on the Internet and type in investor.verde.ag, you will see a brand-new website, which was launched today. And thanks to Isabella's hard work over the weekend and over the last few days. She made it possible to be launched on time for this presentation. There's still a few bits and bobs. We're going to be adjusting and bringing on more information to that website. But it's still, for those of you who remember our previous website, it will be -- it's far better. And for next year, we will also be doing some interesting stuff, as far as investor outreach is concerned. So everything we've been learning here in Brazil, all the platforms we've been using here in Brazil to do with marketing, to do with consumers' engagement, a lot of that we will also be applying towards Investor Relations, which I'm quite excited to see what the results will be. That's the final question, unless someone else wants to ask someone. So there it comes. There's this just-in-time production is your ability to -- oh, hang on. I had answered that one. But another one came up. "Any plan to develop additional products so that revenue would be less dependent on the dry season, for example, synergies between Verde and [ Must Grow? ] Not familiar with [ Must Grow. ] But Mark, you're absolutely correct. This is something which we've been working on. And we've been developing some stuff. And I would expect it to be definitely a source of revenue. As important as our mine, as important as the quality of our product, as valuable as our mine and as valuable as our product is, is the team and the culture we're creating when it comes to marketing and sales. We're still in its infancy, but I can assure you that it will bring as much happiness to us all as the actual product does. I truly believe we will have the best sales team in Brazil among any other agricultural company operating. And I go far beyond that, and to some of you have gone into a little bit more detail in terms of our strategies, some of the resources, some of the tools we're using to build the team and motivate and enfranchise them and to the detail of the procedures and the technologies. So I'm very confident that we're building here, not just in the agricultural space but in Brazil as a whole, one of the most effective sales team is one of the most effective sales and marketing platforms in the country. Any more questions? Okay. I look forward. I thank you all who participated. I think I should share that from when we begun this presentation about 2 hours ago until now, we've only lost about half of people who originally joined, which I think is pretty good. So congratulations to all of you who sat on with us for nearly 2 hours throughout this presentation. Thank you for the interest. Thank you for all the questions. And thank you for you who is watching this Q&A on YouTube. Please make sure you go on our website and subscribe to our newsletter so you'll keep up to date. Make sure you subscribe to our YouTube channel so you can see all the updates. Make sure you follow us on the other relevant social media. And stay safe. Stay safe in this -- what we hope will be the very end of this tragic pandemic. And I very much look forward to being again with all of you on the 15th of December for our first technology launch. We're all very excited, and I hope you all will be equally excited with this new technology we have developed and we will be presenting to you in a few weeks. Thanks a lot. Stay safe. Bye-bye.