Palisade Research - Tue, Mar 27, 2018

After Today's Amazon News, Is Verde Agritech Ready To Run?

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Back on November 3 2017, we published a brief report about the opportunity in Verde Agritech (TSE:NPK, OTC:AMHPF) - market cap: C$32 Mil.

My team and I believed it was trading at a substantial bargain.

There was an "enormous disconnect between the market cap and intrinsic value. . . [And] The market has been slow to recognize this. . . Now's the time to bet on [Verde Agritech]."

And it looks like we were on to something - because it's up 98% since publishing.

1-year C$ Verde Agritech line price chart

So, why the huge gains and what can we expect going from here?

On November 27th 2017, Verde Agritech released their finalized pre-feasibility study (PFS).

This showed in objective numbers that the Cerrado Verde project was better than the market ever expected. . .

The PFS showed the after-tax Net Present Value (NPV) - while using an 8% discount rate - gave their project a $2 billion value.

And a whopping 290% internal-rate of return (IRR).

Here are some highlights on why Verde Agritech has still much more upside from here:

  • They have a massive resource. . .

  • The Cerrado Verde Project is producing. . .

  • The Project has significant upside in terms of scalability. . .

  • They're producing Super Greensand - a superior fertilizer that is 100% natural. . .

  • A strengthening fertilizer market and prices. . .

The company has been setting themselves up for a big 2018.

Just a few days ago Verde received the environmental licenses which will allow them to mine up to 150,000 tons of Super Greensand per year.

That's up 750% from their previous 2017 license and permit which only allowed them to mine 20,000 tons per year. . .

They also announced this morning that their Super Greensand will now be listed on Amazon. . .

As an increasing number of Americans are growing fruits and vegetables at home and paying the premium for organic - we think Super Greensand use will jump.

Verde has a tight share structure - there are only 45 million shares fully diluted outstanding.

This is exceptional as they haven't diluted their investors out, as many fertilizer companies have done.

As an investor, when there is a tighter share structure - you know that it doesn't take much to get prices climbing.

Just some modest above-average buying volume can push it up - like we saw in November. . .

The CEO and founder - Cristiano Veloso - owns over 3 million shares.

Better yet, he's only paid in shares - not cash.

He actually has skin in the game - something I find very important in the resource space. This keeps management and shareholders interests aligned.

When they get rich, so do investors.

The fertilizier market suffered through a brutal bear market - but this is the best time to get involved.

Rick Rule has mentioned that he's looking to move into the potash sector because of how cheap and ignored it is - or in his words, "they're absolutely dead... I like that."

Rick gets it.

Because for investors - this is the best time to buy.

You want to look when no one else is.

I call this Grave Dancing - looking through a trench of dead stocks to find the ones that have a pulse.

Then once you find the best ones - you make a big position.

And for us that's Verde Agritech.

Expect us to write about this company more as things progress.

Palisade Global Investments Limited holds shares of Verde Agritech. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report is obtained from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence. publishes interesting contributor articles in addition to its own content. We have not verified any of the above details.

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