TORONTO - Junior miner Verde Potash Plc (TSXV:NPK) says a preliminary economic assessment report concludes its planned potash project in Brazil will cost US$654 million to build.

The company, which trades on the TSX Venture Exchange, said Tuesday the project is estimated to initially produce up to 600,000 tonnes of the widely used fertilizer chemical a year.

It could also be expanded to about three million tonnes a year down the road — at a total capital cost of nearly US$2.4 billion, Verde said before stock markets opened.

The operating cost would be about US$ 263.23 per tonne for the initial production rate.

The study, or PEA, was done by SRK Consulting on Verde's wholly owned Cerrado Verde project in Brazil's Minas Gerais state.

"We believe that the estimated operating expenses ) presented in the PEA are competitive with the world's lowest cost potash producers for buyers in Brazil when importation and distribution costs are included," said Cristiano Veloso, Verde's president and CEO.

"According to the PEA, estimated capital expenditures and expected time to production are lower and shorter than most (potash) greenfield projects and many brownfield expansions in the pipeline.

"The proprietary production process we have developed relies entirely on existing proven commercial processes applied successfully to our potash rock, which we believe provides greater certainty in the capital costs and equipment efficiencies."

Verde was founded in Brazil as Amazon Mining and is developing the Cerrado Verde project into a possible strip mine and fertilizer processing operation.

Potash fertilizer is in great demand around the world as farmers seeks to produce higher crop yields from their fields to feed growing demand for grain and other foods.

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