Hello, and welcome to the Water Tower Research Fireside Chat. As a reminder, this live webcast will be available for replay and can be accessed along with previous episodes of Fireside Chats and all of our published research and reports by visiting our website, www.watertowerresearch.com. Joining me today is Matthew Simpson, Chief Executive Officer of Brazil Potash, which trades on the New York Stock Exchange under the ticker GRO. And I am your host, Dmitry Silversteyn, Chemicals and Materials Technology Analyst here at Water Tower Research. You can learn more about Brazil Potash by visiting the company website at www.brazilpotash.com. Welcome, Matt. Thank you for having me on, Dmitry. Absolutely. Matt, can you provide for our audience a little bit of an overview on yourself as well as Brazil Potash and the role that potash is playing in the fertilizer market, as well as your current project stage goals, as well as your accomplishments in 2025, which I think your fiscal year has ended, if I'm not mistaken? Yes, we follow the calendar year, so by background, I'm a chemical engineer with an MBA by education. I started my career with Hatch, which is a global engineering consulting firm, so I used to design metallurgical plants and then constructed them for a number of years, primarily in Australia, before joining Rio Tinto, which is one of the biggest mining companies in the world, and I used to run a fairly large operating iron ore mine, and fairly large means about 85 million tons a year. I had about 650 people that worked for me, about $300 million a year in budget that I was accountable for, and decided to be more entrepreneurial, so for the last 15 years, I've been designing, funding, and constructing my own mining projects. Speaking about Brazil Potash, and some people might not be familiar with what potash actually is, it's one of the three main nutrients that's used to grow food that doesn't have any substitute, and it's about a $22 billion a year market, and potash is actually formed by failed oceans, so it's really unique in that, just like it sounds, it was a large body of salt water that dried up and left salt behind, and it left both sodium chloride, which is the kind of salt that people might put on their food or put on the road to melt ice, and potassium chloride, which is what we're more interested in, and what that potassium chloride does is it strengthens the stem of a plant to make it more resilient to stress, and it also helps food stay riper and firmer longer. The problem with the potash market is it's very concentrated. We have three countries, being Canada, Russia, and Belarus, that supply about 80% of the world's market share, while Brazil is the world's largest importer at about 22% of the global market, growing at about four times the rate of the rest of the world. In terms of our project, our plan is to develop that massive potash basin in Brazil, it's potentially the second biggest basin in the world, and supply initially about 2.4 million tons a year, primarily domestically in Brazil, but we can actually supply all of Latin America and even the southern parts of the United States at a very, very competitive cost. The project itself is fully permitted for construction after having completed all of our normal engineering work, our environmental and social assessments, public hearings. For 2026, our goal is to seek funding for construction of the project. Wonderful. Thank you for that overview, Matt. Can you talk a little bit more about, or dive a little bit deeper into the business case and geopolitical rationale for developing a Brazilian potash resource? You talked about three countries dominating the market with about 80% share. So what's wrong with continuing to import potash into the Brazilian market as has been done for decades now? We're really exposed, Dmitry. I mean, with all these shifts that we've seen in trade, even with, I'll call it, pandemic events like COVID coming into place, it's really woken people up that if there is a critical mineral that you can produce domestically, then you should. What more important than having security over our food supply? In the case of the potash market, it's a little bit shocking to think that just Russia and Belarus alone supply 42% of the world's potash. Then again, you add Canada in, you're about 80%. There's really no alternative to those three suppliers. If Vladimir Putin one day decided to wake up and cut off the fertilizer supply, it would have dramatic impacts globally. Even more relevant, we just heard last night President Trump saying that he might sanction Canadian potash. Similarly, well, who do the American farmers turn to, given that America imports 95% of its potash, very similar to Brazil, that the only option would be Russia? So by having a domestic supply of potash in Brazil, not only does it prevent those geopolitical events, but it also helps mitigate against rail strikes, port strikes, which we've all seen impacting potash availability in recent years. And for Brazil, this is a country that's one of the largest exporters of agricultural goods, about $167 billion a year. They have the highest amount of fresh water in the world, massive amounts of arable land. And quite interestingly, Dmitry, they grow two and a half crops a year. Most of the rest of the world can only do one because of a cold winter. But their Achilles heel is, again, having access to this key nutrient. So by having potash in Brazil, given that the crops, again, absorb a tremendous amount with two and a half crops a year, coupled with having a high clay content, it's absolutely essential to replace these nutrients to efficiently grow food. Thank you. That is a good explanation and certainly sounds like a solid rationale for developing a non-Russian or Brazilian source of potash. You mentioned that you've got most of your permitting done or on the way. You've now got long-term take-or-pay commitments from a number of partners, including Keytrade, AMAGGI, and Kimia. That pushes your contract volumes, at least in the initial stages of the ramp-up, very high. Why is this an important prerequisite for banks and export credit agencies to fund the debt that you may need to raise to complete your infrastructure build-out? So the banks, the export credit agencies, and the development finance institutions that we're all speaking to right now regarding providing the debt for construction are all about risk mitigation. They're not like an equity investor where they're looking to maximize return. What they care most about is ensuring that they're going to be repaid. And these types of investors are not willing to take the risk of you being able to sell your product, which in our case is potash. Despite, again, this being essential to grow food, usually it's a prerequisite that you have some sort of long-term commitment with a credible counterparty. So in our case, having contracts in place with the groups you mentioned being the Keytrade, AMAGGI, and Kimia for durations of 10 to 17 years backed by letters of credit ensures that we have very strong commitments, which are binding take or pay for all of our product, or in this case, actually 91%, which is the highest that we want to go to highly credible counterparties. So it takes away that risk and provides a tremendous amount of comfort to the banks to be able to fund the construction debt. Understood. You recently also announced the Fictor BOOT- style deal on your power line. Can you explain the deal and even what that is? And what was the rationale for this transaction? Would you consider doing this type of transaction for other plant components as well? What BOOT stands for is Build, Own, Operate, and then Transfer. So just like it sounds, Fictor in this case will actually build the 102 mi power line, which will cost about $200 million. So they will initially own and operate this power line. And then over a 25-year period of time, they'll amortize, or they'll basically charge back to Brazil Potash the cost for them to build that power line, plus a reasonable rate of return. The reason it's so attractive for Brazil Potash is it takes that $200 million completely out of our cost to build, puts it onto Fictor's or third party's balance sheet, and has them put 100% leverage on that. So it's a great way for us to break down the total capital to fund our construction and gets us quite a bit closer to a funded solution. In terms of replicating this model, we already have very strong interest from a number of parties to follow a similar Build, Own, Operate, Transfer for our steam plant, for our river barge port, for the 20 MW of power that's used during construction, then becomes our backup power, and to provide the trucking service that would transport the potash from our processing plant to our river barge port, which is about eight miles long. If we're successful in getting all those different other components, third-party funded through a similar mechanism, it would take at least another $150 million out of our capital for construction. That's wonderful. That's a very novel approach. It sounds like you're not just working on commissioning a potash mine and processing plant, but you're also using other people's funds, which is a good thing. Also doing a lot with infrastructure, transportation, and power. A lot of things that companies typically would have to pay for themselves if they're setting up a resource that's far away from current infrastructure in a country. So that's quite a novel way of approaching it and very equity efficient for your shareholders, which is good to see. Given that the Fictor BOOT-style deal that you've just described and the emphasis on, I think it's in your presentation, you want to have north of 80% of your power be renewable power. Are you treating emissions and energy sources as a commercial differentiator for off-takers and financiers? Is that an important consideration for them, everything considered? It is for some groups, Dmitry, and especially when we're talking about the development finance institutes and the export credit agencies, which is largely government-backed money. They still do factor ESG quite heavily into their decision-making criteria for investment. And having the ability to tie into Brazil's national electricity grid, which is primarily hydroelectric energy, is a positive differentiator because it's going to reduce our emissions compared to the next best in Canada, as you mentioned, by about 80%. What it's also going to do, Dmitry, is provide a tremendous social benefit because between where our project is located, and there is a city there called Autazes with about 40,000 people, and Manaus, which is the international city that has about 2 billion people, sorry, 2 million people, there is about 200,000 people that use diesel-generated electricity. So by building this power line, which the government would not normally be able to justify just for those people by themselves, but to build it to supply the energy that's needed for Brazil Potash, we will take over 200,000 people off of diesel-generated power, which for them is going to be quite a big improvement because it's going to mean they're going to have much lower cost electricity, they're going to have way more reliable energy, and it's going to be quite a bit cleaner. That's wonderful. So you're not just developing your own resource, you're actually helping the surrounding community to improve their way of life and to lower their electricity costs as well as reduce emissions. That's a great way of going about it. You made solid progress on the fauna rescue vegetation permits and water licenses. I mean, Brazil is a, everybody thinks it's a rainforest country, so anytime you do any kind of digging or clearing the land for agricultural plantings or anything like that, people obviously are concerned about the biodiverse-dense areas. So what remains in terms of the most time-consuming parts of permitting and community engagement process? And can you also talk about all the sort of mitigation plans that you have in terms of fauna rescue and vegetation in and around your site? So I think it's important for viewers to know that our project is located on former cattle farming lands. This is not impacting any primary growth rainforest. It's an underground mine with dry-stacked tailings. So the footprint of our operation is going to be about the size of a large shopping mall in the United States. We do have, as I mentioned, a community of about 40,000 people that's very close to site. The level of education in that community, relatively speaking, is quite low. And this is an opportunity for people to have a much better life. But for them to realize that benefit, it's critical that we provide training. So we did announce earlier this year that we put in place a number of different programs with the local government to provide training into the local community. And this is going to be everything from training directly to work for us. So you might want to be a truck driver, you might want to be a welder or a mechanic. Also, it's training for people that want to start their own business. Maybe you're an indigenous person and you don't want to leave your reserve, but you love to fish. And there's an opportunity where we're going to have, in our case, about 1,300 direct employees, plus indirectly at least five times that number. So you're talking 6,000, 7,000 people that will need to be fed. And it would be great if we could have an indigenous person that wants to start a fish farm that we would help them on how do you commercialize that business. So we're going to provide a tremendous amount of training in the local community. It's really a win-win. It's not only great for the community to then have meaningful employment with us, but it's also good for the company because now you're hiring people that have deep roots in the community that want to stay involved and want to stay there, and that could be a multi-generational workforce, so that's been a tremendous amount of time from the social side for our company. That's a great overview, Matt. And it does sound like Brazil Potash, and you have given a lot of thought to community engagement and how your project will not just help the farmer in Brazil, but actually help the people that live around the project that you're developing. If you were speaking, I guess before we start taking questions, if I can ask you to maybe, if you were talking to a potential project financier today, what would you say are the three things that make your project fundable now and perhaps two or three things that are still keeping you up at night as you consider your path forward? So I think in terms of what makes us fundable for construction is that we are fully permitted. We have 21 different licenses for construction of everything from sinking the two shafts for the mine through to building the processing plant, upgrading the largely existing road, and building the river barge port. The only permit that's outstanding is for the power line, which will be arranged by Fictor as part of our construction. We also have very strong support at all three levels of government. Potash is a critical mineral in Brazil, in the United States, Canada, and several countries around the world, given that, again, it's one of the key nutrients to grow food. We also have very strong support at the community level and with the Mura indigenous who voted with over 90% in support of this company being built for construction. And we have a highly experienced team that has actually done a number of mega projects in Brazil and has operated large mines. In terms of what keeps me up at night, well, it is a $2.5 billion build, which is quite a bit of money for a junior company to raise, relative especially to our market cap. I think it's important that investors know that we're not looking to raise the bulk of the equity at the asset or at the traded level. The plan will be to raise the bulk of it at the asset level. And that allows us to really reduce dilution. We're also going to continue to look at some of these build, own, operate, transfer type structures to reduce the amount of funding that's direct. And we have a royalty option agreement with Franco-Nevada. So those are ways we'll try to cut into that amount. Construction is going to take a little over four years. And for some investors, that is a long time. But again, the counter to that is for the patient investor, once we're up and running, we're going to be producing a product that people have no choice but to buy because we all have to eat, with downside price protection because we're in the backyard of the world's largest market and everyone else is 12,000 mi away, such that our all-in cost is less than just the transportation cost for everyone else. But that does take some time. And I guess the third thing I'd say, Dmitry, is headline risk, where some people look at this company and they say, "Oh, wow, mining in the Amazon." And they might have this vision that you're going to have this massive open pit mine with wet tailings and power and destroying the rainforest. And as I mentioned earlier, that's nothing further from the truth. Again, this is an underground operation with a dry-stacked tailings pile. And those tailings only contain sodium chloride or table salt that we consume pretty much every day of our life. So the footprint's going to be quite small. And we've been very, very active in the local community despite just being a development project. Thank you, Matt. That's a very good overview. And thank you for sharing some of the concerns that Brazil Potash still has to overcome, at least in the minds of investors. Let's get into a couple of questions we have coming from our listeners or viewers. I think you mentioned this briefly before, but if you maybe provide a little bit more granularity, how much potash is there in Brazil Potash site in terms of how many years of production are projected to be available for in-country needs? We currently have 23 years of economic reserves. And what that means is we know that we have at least 23 years to produce 2.4 million tons of granular potash. But that's based on drilling less than 5% of the basin's potential, Dmitry. In addition to that 23 years, we know there's a further 11 years, which gives us to 34 years of ore that is located under indigenous-owned land. So we have not permitted the ore that's under indigenous land. But I believe that that will be viable. The plan is to get initially started in production and then continue our discussions with the indigenous people. But this basin has the potential for several hundred years of production. So we would look to start at that 2.4 million tons, and we could potentially double, triple, even quadruple our output over time. Wonderful. So that is quite an impressive reserve that you're developing there. And then just a quick question, I guess, what is the next milestone or next two or three milestones that investors can look forward to as they evaluate your progress over the course of 2026, let's say? 2026 is shaping up to be a really exciting year for investors in Brazil Potash. Just a few months ago, we announced a memorandum of understanding with Fictor to build that power line that we discussed earlier. We expect into the new year to announce a binding agreement with Fictor. As part of that binding agreement, it will come with an initial $2 million investment and then a subsequent another $18 million once the power line is permitted for construction. We also expect to announce in the new year that Brazil's government is going to exempt us from import duties on equipment. They'll take another at least $100 million off of our construction cost and just completely eliminates it. It's not even passing it to a third party. It's just completely gone, which is great. We have a number of companies right now already under non-disclosure agreements. Some have even been to site. They're looking at being part of the construction funding. So we do expect through the year that we'll see some announcements in that regard. And further potential BOOT arrangements, again, for the steam plant, for the port, for the trucking, the 20 MW of construction power. So there's all those items, and there's a few more up our sleeve that investors will just have to hold on for. Understood, Matt. That sounds like a very exciting year ahead of you after a very productive year in 2025, so congratulations on getting this project moved forward as well as you've done, and it sounds like you've given a lot of thought to both the financing portion of it and just as important for many people, the social and the ESG portion of it. That's really great to see you approach it from both angles. Thank you, Matt Simpson, Chief Executive Officer of Brazil Potash, for bringing this interesting story to our viewers. Again, the company's ticker is GRO, and it trades in the New York Stock Exchange. You can learn more about the company by visiting www.brazilpotash.com, and again, as a reminder, you can watch the replay of this webcast as well as our previous fireside chats and all of our published research by visiting www.watertowerresearch.com.