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Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<div><ul><li>Path to construction. At the WTR Insights Conference, CEO Matt Simpson discussed the company’s Autazes Project in Brazil, including recent legal and government developments, engineering progress, and the remaining financing milestones.</li><li>The discussion focused on what has changed around the project and the milestones that could define its next stage.</li><li>The risk profile is changing. Regulatory uncertainty that historically dominated the Autazes discussion has diminished following favorable legal developments and more tangible Brazilian government support for domestic fertilizer production. </li></ul></div>

Path to construction. At the WTR Insights Conference, CEO Matt Simpson discussed the company’s Autazes Project in Brazil, including recent legal and government developments, engineering progress, and the remaining financing milestones.The discussion focused on what has changed around the project and the milestones that could define its next stage.The risk profile is changing. Regulatory uncertainty that historically dominated the Autazes discussion has diminished following favorable legal developments and more tangible Brazilian government support for domestic fertilizer production. 

GRO: A Strategic Potash Project Moves Closer to the Starting Line

<ul><li>PROFERT decision a positive for economics and funding. </li><li>Simpson highlighted Brazil’s recently approved PROFERT legislation as the first major policy action supporting the country’s 2022 National Fertilizer Plan, with potential benefits including tax and duty exemptions on imported construction equipment and materials and preferential financing for fertilizer projects.</li><li>Combined with incentives available through the Amazonas free trade zone, management estimates potential construction cost savings of ~$190 million, while government-backed financing could further reduce the cost of capital.</li></ul>

PROFERT decision a positive for economics and funding. Simpson highlighted Brazil’s recently approved PROFERT legislation as the first major policy action supporting the country’s 2022 National Fertilizer Plan, with potential benefits including tax and duty exemptions on imported construction equipment and materials and preferential financing for fertilizer projects.Combined with incentives available through the Amazonas free trade zone, management estimates potential construction cost savings of ~$190 million, while government-backed financing could further reduce the cost of capital.

GRO: Key Risks Recede as Autazes Moves Toward Construction Financing

<div><ul><li>Emerging macro catalysts continue to strengthen the Autazes investment case. </li><li>The upcoming CUSMA review, increasing concern over a potential Super El Niño, and continued emphasis on supply-chain resilience are likely to keep fertilizer security in focus over the coming year.</li><li>These developments reinforce Brazil's need for a domestic potash industry and further strengthen the strategic rationale for Autazes as development milestones continue to advance.</li></ul></div>

Emerging macro catalysts continue to strengthen the Autazes investment case. The upcoming CUSMA review, increasing concern over a potential Super El Niño, and continued emphasis on supply-chain resilience are likely to keep fertilizer security in focus over the coming year.These developments reinforce Brazil's need for a domestic potash industry and further strengthen the strategic rationale for Autazes as development milestones continue to advance.

GRO: Geopolitics Strengthen Autazes' Strategic Relevance as Key Execution Milestones Advance

<div><ul><li>Site visit reinforces de-risking across key stakeholder measures. </li><li>Following our on-the-ground diligence in Autazes, Brazil, we came away incrementally more confident that two of the largest gating risks for greenfield mining—government alignment and Indigenous support – are materially de-risked.</li><li>Engagement with Mura communities and federal/state officials suggests broad-based backing, supporting our view that the project is transitioning from a conceptual development toward a financeable construction-stage asset.</li></ul></div>

Site visit reinforces de-risking across key stakeholder measures. Following our on-the-ground diligence in Autazes, Brazil, we came away incrementally more confident that two of the largest gating risks for greenfield mining—government alignment and Indigenous support – are materially de-risked.Engagement with Mura communities and federal/state officials suggests broad-based backing, supporting our view that the project is transitioning from a conceptual development toward a financeable construction-stage asset.

GRO: Field Trip Highlights Strategic Nature of the Autazes Project

<ul><li>Strategic positioning in global food security. Brazil Potash is uniquely positioned to address Brazil’s acute reliance on imported potash, with the country currently importing 98% of its needs despite being a global agricultural powerhouse.</li><li>Brazil accounts for 22% of global potash demand while producing less than 1% of supply, creating a structural imbalance.</li><li>This dynamic is further exacerbated by geopolitical concentration of supply in regions facing sanctions or conflict. </li></ul>

Strategic positioning in global food security. Brazil Potash is uniquely positioned to address Brazil’s acute reliance on imported potash, with the country currently importing 98% of its needs despite being a global agricultural powerhouse.Brazil accounts for 22% of global potash demand while producing less than 1% of supply, creating a structural imbalance.This dynamic is further exacerbated by geopolitical concentration of supply in regions facing sanctions or conflict. 

GRO: Leveraging Location to Redefine the Potash Cost Curve in Brazil

United States

Brazil Potash Corp. operates as a mineral exploration and development company. The Company develops and explores potash properties in the state of Amazonas, Brazil. Brazil Potash serves customers worldwide.

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Brazil Potash (GRO US)

GRO: A Strategic Potash Project Moves Closer to the Starting Line

Investor attention can increasingly shift toward GRO’s ability to execute rather than whether the project can clear its regulatory and permitting...

Water Tower Research

GRO: Key Risks Recede as Autazes Moves Toward Construction Financing

Simpson highlighted Brazil’s recently approved PROFERT legislation as the first major policy action supporting the country’s 2022 National...

Water Tower Research

GRO: Geopolitics Strengthen Autazes' Strategic Relevance as Key Execution Milestones Advance

The upcoming CUSMA review, increasing concern over a potential Super El Niño, and continued emphasis on supply-chain resilience are likely to keep...

Water Tower Research

GRO: Field Trip Highlights Strategic Nature of the Autazes Project

Engagement with Mura communities and federal/state officials suggests broad-based backing, supporting our view that the project is transitioning...

Water Tower Research

GRO: Leveraging Location to Redefine the Potash Cost Curve in Brazil

As a result, the company’s in-country resource represents a strategically important solution to both national and global food security challenges.

Water Tower Research

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