MBAC Fertilizer Reports FY2014 Results

TORONTO, ON--(Marketwired - April 24, 2015) - MBAC Fertilizer Corp. ("MBAC" or the "Company") (TSX: MBC) announced today its results for the financial year ended December 31, 2014,  and provided a general operational update on its Itafós Arraias Single Super Phosphate ("SSP") Operations ("Itafós" or the "Itafós Operations"). All amounts, unless noted, are in U.S. currency.

The Financial Statements and Management Discussion and Analysis ("MD&A") for the year ended December 31, 2014 are available under the Company's profile at www.sedar.com and from the Company's website, www.mbacfert.com.

2014 HIGHLIGHTS:

• Executed debt extension agreements with its senior lenders permitting deferral of principal and interest payments on project finance and certain working capital loans by up to two years;
• In consultation with its senior lenders, engaged Deutsche Bank AG to act as its financial advisor in connection with the Company's strategic review process with the mandate to help find a definitive solution to the Company's working capital constraints and liquidity requirements;
• Executed and received disbursements from new working capital loans totalling approximately $16.0 million;
• Performance throughout 2014 was impacted by significant working capital constraints, which placed limitation on the Company's ability to purchase consumables and maintain a more adequate spare parts inventory and thereby limited operational efforts;
• Produced 98,533 tonnes of SSP, including approximately 22,000 tonnes in September 2014;
• Generated pre-commercial net revenue of $16.4 million from the sale of SSP;
• Established a daily production record of approximately 1,700 tonnes of SSP, exceeding the expected daily production volume that the Itafós Operations was originally designed for;
• In April 2014, completed a bought deal public equity offering, which included significant management and insider participation, for net proceeds of $17.4 million (C$19.2 million);
• Sold the CELTINS note receivable receiving total net cash proceeds of $6.7 million (R$14.8 million); and
• Implemented a number of initiatives aimed at optimizing performance and reducing annual costs by approximately $4.0 million.

HIGHLIGHTS SUBSEQUENT TO YEAR END:

• Executed and received disbursements on new working capital loans totaling approximately $7.8 million (R$20.7 million), the proceeds of which were used to refinance bank indebtedness balances and to cover debt service requirements on other loan agreements;
• Received a number of non-binding indicative offers from third parties related to the Company's strategic review process.  These third parties are completing their due diligence on MBAC's assets, and are expected to submit binding proposals in the second quarter of 2015.
• Suspended production at its Itafós Operations, and placed the operations on care and maintenance, largely in response to market conditions and as a means to preserve working capital pending and during the strategic review process.

ITAFÓS OPERATIONS  

The table below summarizes the operational performance for the Itafós Operations during the quarter and year ended December 31, 2014:

MBAC's performance throughout 2014 was impacted by significant working capital constraints, which placed limitation on the Company's ability to purchase consumables and maintain a more adequate spare parts inventory. Subsequent to year-end, MBAC suspended production at its Itafós Operations largely in response to market conditions and as a means to preserve working capital and complete its strategic review process. The Itafós Operations are currently on care and maintenance, and the Company expects to resume production if and when its strategic review process is successfully completed and its liquidity constraints are resolved. Given that the strategic review process is ongoing and that the Company has no certainty of when, or if, the strategic review process will be successfully completed, MBAC's previously disclosed production and sales guidance for 2015 and 2016 are no longer valid.

Q4 2014 AND FY2014 FINANCIAL RESULTS
Prior to reaching commercial production, MBAC capitalizes all costs related to Itafós to property, plant and equipment. Proceeds from sales during this period are offset against capitalized costs. MBAC was a pre-commercial stage company in Q4 2014.

MBAC continues to expect that over the longer-term its future sales growth will be supported by strong market fundamentals and demand trends in Brazil. Fertilizer consumption has continued to be strong, driven by increased intensity of fertilizer application and increased planting area.  In the first nine months of 2014, fertilizer consumption was up 7.2% compared to the same period last year according to ANDA (the National Fertilizer Association of Brazil). For FY2014, ANDA stated a record total fertilizer consumption of 32.2 million tonnes and a decrease in fertilizer imports from approximately 870,000 tonnes in 2013 to approximately 470,000 tonnes for 2014 in Brazil.

MBAC incurred a net loss of $8.8 million or $0.06 basic and diluted loss per share in Q4 2014.  This compares to a net loss of $11.0 million or $0.08 basic and diluted loss per share for Q4 2013.

For the year ended December 31, 2014, MBAC incurred a net loss of $28.5 million or $0.16 net loss per share, down from a net loss of $32.2 million or $0.22 net loss per share for 2013. The decrease in net loss was primarily due to lower selling, general and administrative expenses and lower unrealized foreign exchange loss. Excluding unrealized foreign exchange loss of $10.4 million as well as other non-cash or non-recurring items totaling an income $0.7 million, MBAC incurred an adjusted net loss of $18.9 million or $0.11 adjusted net loss per share per share for 2014.  This compares to an adjusted net loss of $17.0 million or $0.12 adjusted net loss per share for 2013.

Further to the issuance by the Ontario Securities Commission (the "OSC") on April 8, 2015 of the temporary management cease trade order against the Company's Chief Executive Officer and Chief Financial Officer, in connection with the Company's delay in filing its audited annual financial statements, related management's discussion and analysis, annual information form, and accompanying CEO and CFO certifications for the financial year ended December 31, 2014 (collectively, the "Annual Filings"), the Company announces that the OSC issued on April 20, 2015 a permanent management cease trade order prohibiting the direct or indirect trading in the securities of the Company by the Chief Executive Officer and the Chief Financial Officer until the Annual Filings are completed.  Such permanent management cease trade order is expected to be revoked within 2 business days following the date hereof as a result of the completion of the Annual Filings.

About MBAC
MBAC is focused on becoming a significant integrated producer of phosphate fertilizers and related products in the Brazilian market. 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 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. 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, statements related to the Company being able to take the  Itafós Operations  off care and maintenance after re-evaluation in the coming months and resume production, the Company's expectation that it will be successful in its strategic process, the Company's business strategy, objectives and goals; the expectation that the management cease trade order will be revoked within two business days of the date of the Annual Filings; the expectation of MBAC becoming a significant integrated producer of phosphate fertilizers and related products in the Brazilian markets; MBAC continuing to explore and implement initiatives to address its liquidity and capital restructuring requirements and improve cash flow generation. 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 risk factors include, among others, the Company not becoming a significant integrated producer of phosphate fertilizers and related products in the Brazilian markets; MBAC not being successful in continuing to explore and implement initiatives to address its liquidity and capital restructuring requirements; not being able to obtain additional funds and not being successful in its strategic process; not being able to improve cash flow generation 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 and goals and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking statements.

Shares Outstanding: 181,607,492  
Fully Diluted: 221,826,672

Contact

For further information:
Joe Racanelli
TMX Equicom
416-815-0700 ext. 243  
investor@mbacfert.com
or visit our website at www.mbacfert.com