Fertoz Limited Forms Joint Venture to Sell Specialty Phosphate Products in Australia

Perth, Australia (ABN Newswire) - Phosphate developer Fertoz Ltd. (ASX:FTZ) is pleased to announce it has formed Fertoz Agriculture Pty Ltd ("Fert-Ag"), a joint venture ("JV") between Fertoz Ltd. (51%) and Vast Resources Pty Ltd ("Vast Resources", 49%) to import from Asia and market a proven fertiliser in Australia.

Fert-Ag is in the process of finalising Australian/New Zealand distribution rights for a fused calcium magnesium phosphate, a specialty high phosphate product that can be used by organic and non-organic farmers. It also provides trace elements as well as calcium, magnesium (which correct soil acidity) and silica. The price is competitive with standard phosphate fertilizers. The additional components mean that it is of high value to farmers across Australia and New Zealand, especially where fertilizer must not be allowed to leach into waterways. The brand name chosen by the JV is "Fert-Ag 0-7-0" which uses the typical N-P-K nomenclature of standard fertilisers.

Stuart Richardson, director of Blackwood Capital, has been appointed non-executive Chairman of Fert-Ag. Prem Akhil (Owner of Vast Resources) has been appointed an Executive Director while Fertoz Managing Director Les Szonyi is the Managing Director. The Management team will consist of Les Szonyi, Prem Akhil (Product Specialist), Paul Moorhouse (Agronomist) and Dr John Wightman (Agricultural Scientist).

Dr Szonyi said: "The opportunity to form the joint venture came after experiencing the huge potential in organic fertilisers in North America."

"The Fertoz - Vast Resources JV requires no capital investment and fits Fertoz's business strategy to grow the Company through the development of cash generating fertilizer projects. "

"Fert-Ag 0-7-0 is an exciting opportunity for Fertoz in Australia and New Zealand. It is an environmentally safe phosphate fertilizer which does not leach into waterways, has high phosphate and silicon availability, and contains numerous essential trace minerals, making it a superior alternative to superphosphate. Fert-Ag 0-7-0 is also suitable for use in organic agriculture. "

"Vast Resources brings a strong technical team to the JV to grow the business in Australia and New Zealand, enabling Fertoz to continue to focus on the growth of North American sales of phosphate rock from its Wapiti and Fernie projects in British Columbia, Canada, whilst generating cash from the sale of a fertiliser product in Australia to organic and non-organic farmers."

Fert-Ag 0-7-0 is an established low soluble specialty phosphate product in Australia. It is an effective alternative for superphosphate of which approximately 710,000 tonnes are sold in Australia each year (Australian Bureau of Statistics 2012 data). Agricultural areas in Australia where Fert-Ag 0-7-0 would be effective are shown in Figure 1 below. Fert-Ag expects to generate a small profit at the end of its first 12 months of operation, with sales of approximately 4,000 tonnes. Profits should grow significantly in subsequent years as Fert-Ag gains an increasing share of the superphosphate market.

Fert-Ag profit distribution will be weighted towards Fertoz until profits exceeds $1 million per annum. Then profit distribution will favour Vast Resources until cumulative profits are equal for both Fertoz and Vast Resources. Subsequent profits will be shared equally between Fertoz and Vast Resources.

Fused Calcium Magnesium Phosphate (Fert-Ag 0-7-0) properties are:

- Gray/black sand with grain size approx. <2 mm;

- Alkaline with pH of 8.0 - 8.5;

- Specific gravity of 1.41 meaning it is heavy so does not blow around on application and surface deposits are not subject to wind erosion;

- Not soluble in water so is not leached by rain or water flow - the nutrients stay in the soil and do not find their way into rivers and streams, as is the case with conventional (water soluble) phosphate fertilizers, so no algal blooms are created;

- Broken down by the secretions of plant roots and, in moist soils, by naturally occurring soil acids;

- Contains the following primary nutrients and 65 essential trace nutrients including boron, zinc, copper, sulphur, cobalt, manganese and molybdenum:

Mineral (as oxide) % range
Phosphorus         >= 17
Calcium            28-34
Magnesium          14-18
Silicon            20-25

- Will not harm wildlife (mammals, birds, worms etc.) on land, and because it is not soluble in water, does not harm aquatic organisms;

- Efficient source of plant available silica;

- Unique as it is less likely to be tied up into the soil chemistry that typically occurs in acidic soils. Acidic soils such as red and sandy loam soils are relatively high in Iron and Aluminum. These two elements are very effective in reducing the availability of phosphate ions. The nutrients in Fused Calcium Magnesium Phosphate resists the effects of chemical "lock up" in two ways: by reducing acidity in the application zone and using silicate chemistry to remove the Iron and Aluminum by converting them into Iron and Aluminum silicates;

- Limes the soil adding Calcium and Magnesium to the soil profile and thus, reduces acidity. This activity reduces Iron and Aluminum from highly reactive forms to lower active materials. Application of Fused Calcium Magnesium Phosphate in acidic soils readily releases its silicates and other nutrients.


Commercial Terms

Fertoz will provide funding for the joint venture to an agreed budget. Fertoz Agriculture Pty Ltd is trustee for the Fertoz Agriculture Trust. Fertoz Agriculture Pty Ltd (as trustee of the Trust) will distribute profits for each Financial Year to Fertoz and Vast Resources (respectively) in accordance with the percentages set out in the table below, which apply in relation to the amount of profit applicable for the relevant Financial Year.

Profit per Financial Year   Fertoz    Vast Resources
Not more than $100,000      100%        0%
More than $100,000          90%         10%
More than $300,000          80%         20%
More than $500,000          70%         30%
More than $750,000          60%         40%
More than $1,000,000        50%         50%
More than $1,200,000        40%         60%
More than $2,400,000        50%         50%

Equal share of Profit
Once both Fertoz and Vast Resources have, in aggregate received, the same amount of profit under this Agreement, then the table above will cease to apply and Fertoz Agriculture Pty Ltd (as trustee of the Trust) will distribute any corresponding profit for each subsequent Financial Year to Fertoz and Vast Resources in equal proportions.

To view figures, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-FTZ-827627.pdf


About Fertoz Limited:

Fertoz (ASX:FTZ) is an Australian-based phosphate exploration and development company with a range of projects in British Columbia, Canada as well as Queensland and the Northern Territory.

The Company is focused on becoming a fertiliser producer as quickly as possible, initially focusing on the Canadian/USA markets.

Fertoz plans to develop its exploration assets in Canada in order to identify any potential Direct Shipping Ore (DSO) projects. It intends to seek joint venture partners to assist in funding the exploration projects in Australia.

Phosphate is a commodity necessary for feeding the world, and Fertoz is ready to capitalise on this growing demand.



Contact:

Fertoz Ltd.
T: +61-7-3396-0024
F: +61-7-3396-0024
www.fertoz.com