MBAC provides production and sales guidance for Itafós

TSX: MBC

OTCQX: MBCFF

Shares Outstanding: 152,029,492

Fully Diluted: 170,325,330

TORONTO, Feb. 24, 2014 /CNW/ - MBAC Fertilizer Corp. ("MBAC" or the "Company") (TSX: MBC) (OTCQX: MBCFF) provides guidance on expected production and sales at its Itafόs Arraias Single Super Phosphate ("SSP") operations ("Itafόs Operations") for the years 2014 to 2016.

The Company anticipates the following production and sales at the Itafόs Operations:

The Company has started to witness strength in both demand and price in the local markets for SSP since the beginning of 2014 which is consistent with developments in markets outside Brazil. Volumes are expected to increase over the next three years as the Company continues to increase market share. With recent modifications and improvements late last year and early this year, all plants have been able to perform at or close to their design capacity.

Global phosphate fertilizer prices have started to rise after a three year decline. DAP prices (fob Morocco) have increased by approximately 20% since bottoming in November 2013. Triple Super Phosphate ("TSP") prices have also seen a strong increase (approximately 32%) since hitting five year lows in late 2013. The impact of the rising price environment is starting to impact SSP prices in Brazil as 2013 inventories are depleting. The Company believes that SSP prices should fully benefit from the rising global prices as the sales season starts to gain momentum.

Average selling prices for SSP are expected to be consistent with last year's average selling price and are expected to rise driven primarily by an expected general recovery for international phosphate prices. We anticipate that the cost of production for SSP will be consistent with previously disclosed guidance and is expected to fall over the next couple of years as the plant reaches nominal capacity.

Since the beginning of January through mid-February the Company has received firm commitments for approximately 25% of its expected sales for 2014. This level of sales would be in excess of previously budgeted expectations. The Company has received advanced payments on a portion of these sales. The Company is pleased with this progress made to date as it has demonstrated acceptance of the product quality by the marketplace. The Company continues to produce and build inventories for future deliveries.

The Company has signed a strategic sales agreement with a regional distributor for an intention to purchase 70,000 tonnes of which the Company has received firm orders for 30,000 tonnes to date. The agreement contemplates deliveries starting by the end of February 2014. The Company continues to work closely with other customers in order to finalize similar agreements.

The Company remains successful in managing its working capital position through working capital facilities, advanced payments on sales and through the monetization of receivables. The Company is currently in negotiations regarding a working capital facility. In addition, the Company is also in discussions regarding the re-profiling of its overall debt structure.

Mr. Melcher, President and CEO stated "We are pleased by the acceptance of our product by customers given that the selling season is just underway. The market tone seems much more positive than experienced in the last half of 2013 and this is consistent with the developments that we are seeing in the global markets. I believe the Company is well positioned to take advantage of the fastest growing agricultural regions in Brazil. I am particularly excited about the potential for unlocking value at both the Itafόs operations as well as the high grade Santana Phosphate Project."

Addition to Management Team

As part of an ongoing review of management needs, the Company has appointed Nelson Canato Jr. to the position of Vice President, Operations and will report to the CEO. Mr. Canato will be responsible for the Company's operations with an initial focus of accelerating the ramp up of Itafόs. Mr. Canato has been involved in fertilizer operations for over 25 years in increasing roles of responsibility in maintenance and operations and was most recently Head of Operations in Anglo American Phosphate Brazil Ltda. Mr. Canato graduated with a degree in Mechanical Engineering, Universidade Estadual Paulista UNESP, São Paulo and has an Executive MBA from IBMEC, São Paulo. Mr. Canato will be joining the Company in March upon concluding his current responsibilities.

Strategic Initiatives

The Company continues to advance its Santana Phosphate Project. The Company is starting detailed engineering for the Santana Phosphate Project and continues to advance its financing discussions with various parties.

As part of the financing alternatives, the Company is currently pursuing a process in order to find a strategic partner for a minority interest in the Santana Project as an alternative to financing its portion of the project. The Company continues to advance the process for the Santana Phosphate Project with interested parties.

About MBAC
MBAC is focused on becoming a significant integrated producer of phosphate fertilizers and related products in the Brazilian and Latin American markets. MBAC has an experienced team with significant experience in the business of fertilizer operations, management, marketing and finance within Brazil. MBAC owns and operates the Itafós Operations which consists of an integrated fertilizer producing facility comprised of a phosphate mine, a mill, a beneficiation plant, a sulphuric acid plant, an SSP plant and a granulation plant and related infrastructure located in central Brazil. The Itafós Operations are estimated to have production capacity of approximately 500,000 tonnes of SSP per annum. MBAC's exploration portfolio includes a number of additional exciting phosphate projects, which are also located in Brazil. The Santana Phosphate Project is a high grade phosphate deposit located in close proximity to the largest fertilizer market of Mato Grosso State and animal feed market of Pará State. The Company continues to search for additional fertilizer opportunities in the Brazilian and other Latin-American markets, where strong agricultural fundamentals and unique opportunities are expected to provide attractive growth opportunities in the near future. Further information on MBAC can be found on the Company's website at www.mbacfert.com and on SEDAR at www.sedar.com.

FORWARD LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements related to activities, events or developments that the Company expects or anticipates will or may occur in the future, including, without limitation, expectations related to production and sales at the Itafós Operations, an increase in SSP volumes over the next three years as the Company continues to increase its market share, the positive impact of rising global prices on SSP prices as the sales season starts to gain momentum, the average SSP selling price remaining consistent with last year's average and then rising due to general recovery for international phosphate prices, sulphuric acid prices rising over the next two years as demand in the region continues to increase, cost of production for SSP will remain consistent with the Company's previously disclosed guidance and will fall over the next couple of years as the plant reaches nominal capacity, the level of SSP sales being in excess of previously budgeted expectations, the Company continuing to be successful in managing its working capital position, the securing of a new working capital facility and successfully re-profiling the Company's overall debt structure, the Company being well positioned to take advantage of the fastest growing agricultural regions in Brazil, the Company being successful in accelerating the ramp up of the Itafós Operations, obtaining satisfactory detailed engineering results for the Santana Project, successfully advancing financing for or finding a strategic partner for a minority interest in the Santana Project as an alternative.

Forward-looking statements are often identified by the use of words such as "plans", "planning", "planned", "expects" or "looking forward", "does not expect", "continues", "scheduled", "estimates", "forecasts", "intends", "potential", "anticipates", "does not anticipate", or "belief", or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements are based on a number of factors and assumptions made by management and considered reasonable at the time such statements are made, and forward-looking statements involve known and unknown risks, uncertainties and other factors may cause the actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Such factors include, among others, not meeting the various expected production and sales estimates, not increasing SSP volumes, seeing a lower than expected rise in SSP selling price, not achieving expected SSP sales volumes, not successfully managing the Company's working capital position or obtaining funding or being able to re-profile the outstanding debt, not being successful in accelerating ramping up at the Itafós Operations, not obtaining positive detailed engineering results at the Santana Project and not being successful at securing financing or an alternative strategic partner for the Santana Project, as well as those factors disclosed in the Company's current Annual Information Form and Management's Discussion and Analysis, as well as other public disclosure documents, available on SEDAR at www.sedar.com. Although MBAC has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate. The forward-looking statements contained herein are presented for the purposes of assisting investors in understanding the Company's plans, objectives, expectations and goals and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking statements. The company does not undertake any obligation to update forward-looking statements except in accordance with applicable securities laws.

SOURCE MBAC Fertilizer Corp.