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GROWMAX COMPLETES POTASH PRE-FEASIBILITY STUDY FOR ITS BAYOVAR, PERU PROJECT IN THE SECHURA DESERT

September 28, 2010

CALGARY, Sept. 23 /PRNewswire/ – GrowMax Agri Corp. and its subsidiary, Americas Potash Peru S.A., (collectively, “GrowMax”) is pleased to announce that it has completed the Pre-Feasibility Study for its potash project at Bayovar, Peru in the Sechura desert.

Highlights of the Pre-Feasibility Study are (all dollar amounts are in U.S. dollars):

    1.  Use of low-cost Solar Evaporation Technology similar to Israel
        Chemicals Ltd. and Arab Potash Company in the Dead Sea, and Compass
        Minerals International Inc. and Intrepid Potash, Inc. in Great Salt
        Lake, Utah, USA.

    2.  Annual Potash Production: 250,000 metric tonnes of potash fertilizer

    3.  Total estimated project Capital Cost: $125 million

    4.  Unit Operating Costs: $29.62 per metric tonne (excluding
        transportation to port)

Transportation to port is expected to be $3.26 per metric tonne and production bonus royalties of $33.00 per metric tonne are payable to each of the Peru government and the local Community. Accordingly, the total cash cost per metric tonne, delivered to port, is expected to be $98.88.

Salt will be produced as a co-product and is expected to be a source of additional cash flow.

Barclay Hambrook, President and CEO stated, “The completion of this Pre-Feasibility Study is a major milestone for GrowMax’s Bayovar project and we anticipate moving swiftly towards completion of a full Feasibility Study.” Mr. Hambrook went on to say, “Based on the capex and opex cost structure in the Pre-Feasibility Study, the project net present values are very exciting at even the most modest of selling price assumptions – and this doesn’t include other possible products such as phosphates, bromine and calcium sulphate.”

The Pre-Feasibility Study was completed by the Lac Business Group, led by Luis Coronel. Mr. Coronel is a Chemical Engineer with over 40 years experience worldwide (including Australia, Brazil, China, Mexico, Peru, India, Venezuela, and the USA) in all aspects of analysis, planning, design, engineering, project management and implementation of solar evaporation technology for processing of brines for producing potash, salt and chemical by-products.

    About GrowMax
    -------------

GrowMax is a subsidiary of Americas Petrogas Inc. (TSXV:BOE) (www.americaspetrogas.com). Indian Farmers Fertiliser Co-operative (www.iffco.nic.in), the world’s largest manufacturer and marketer of fertilizer in the cooperative sector with over 50 million farmers associated with it and five fertilizer plants producing a total of approximately 8.2 million tonnes of phosphate and nitrogen fertilizers, is a 20% shareholder.

Highlights of GrowMax’s Bayovar potash (and other minerals) brine project:

    -   Experienced Team -- GrowMax has assembled a seasoned team of
        professionals with experience in environmental impact assessment,
        reserves evaluation, mine building, mining infrastructure
        construction, mineral recovery including recovery of potash applying
        solar evaporation processing of brines, chemical analysis of brines,
        and engineering and construction of solar processing facilities.

    -   Solar Evaporation Processing -- GrowMax's Bayovar potash brine
        project will utilize solar evaporation processing of mineral rich
        brines, given its unique location 6 degrees south of the equator in
        the Sechura Desert on the Pacific Ocean. This location provides the
        ideal amount of sun and wind for solar evaporation processing.

    -   Large Concession Area - GrowMax has rights to four concessions with a
        total area of 202,000 acres (82,000 hectares or 820 square
        kilometers).

    -   Secure Surface Rights -- The mineral and surface rights within the
        202,000 acre concession have already been secured.

    -   Transportation Infrastructure Advantages - GrowMax's project has a
        nearby container and bulk terminal for export to offshore markets in
        the Pacific, the Atlantic and the Gulf. Also, a main highway runs
        nearby GrowMax's project.

    -   Accessible Markets -- GrowMax's potash plant will serve fertilizer
        market demand within Peru and in surrounding countries such as
        Ecuador, Colombia, and Brazil.

    -   Low Capex and Low Opex -- Relative to other potash projects,
        GrowMax's surface brine potash project will involve low operating
        costs and low capital investment, given that it will apply solar
        evaporation processing and given its proximity to infrastructure
        including paved roads, fresh water, power, gas and port facilities.

    -   New Pilot Plants - GrowMax has constructed three new pilot plants
        (one pilot plant for laboratory simulation and the other two pilot
        plants located on the concession). These pilot plants have produced
        potash using solar evaporation under laboratory conditions and under
        the ambient conditions of the Sechura desert.

    -   Research Lab -- GrowMax has established an office and research lab in
        Piura, Peru, which is 20 km from its potash concession.

    -   Historical Data -- Historical work on the concession included
        substantial drilling and coring of wells, sampling, geological
        mapping and construction of a pilot plant utilizing solar evaporation
        processing which resulted in the production of high quality potassium
        chloride (i.e. potash fertilizer). GrowMax is continuing to perform
        appraisal drilling and production testing of production wells to
        re-confirm historical data and to provide information for the
        National Instrument 43-101 report.

    -   Engaged to prepare 43-101 report -- Ercosplan, a German-based
        consultant, has been engaged to complete a reserve report that is
        compliant with National Instrument 43-101.

    -   Low Carbon Footprint -- The solar evaporation process involves a low
        carbon footprint.

    -   Additional Potential -- Additional mineral potential such as
        Phosphate, Calcium Sulphate, Bromine, Lithium, Magnesium Chloride and
        other potential minerals.

    About Americas Petrogas Inc.
    ----------------------------

Americas Petrogas Inc. is a Canadian company whose shares trade on the TSX Venture Exchange under the symbol “BOE”. Americas Petrogas has oil and gas exploration, development and production activities, and has interests in close to 1,800,000 acres of land in Argentina’s most prolific Neuquen Basin. In Peru, through GrowMax Agri Corp., Americas Petrogas is developing a surface potash (and other minerals) brine reservoir and evaporite deposit at Bayovar in the Sechura Desert of Northwest Peru. GrowMax will use solar evaporation processing, allowing GrowMax to be among the lowest cost, lowest capex of potash producers. Management, along with its strategic partner investor IFFCO (Indian Farmers Fertiliser Co-operative), intends to build GrowMax into a potash and specialty fertilizers company. Americas Petrogas owns 80% of GrowMax and IFFCO owns 20%.

Certain statements in this Press Release constitute forward-looking statements under applicable securities legislation. These statements include references to expected capital expenditure costs, operating costs, transportation costs, methods of production, salt production and related cash flow, construction and development activities, timeline, methods of processing, anticipated levels of risk and cost associated with the Bayovar project, accessibility of markets, security of surface rights, expectations regarding completion of a report compliant with National Instrument 43-101, potential for additional minerals, and intention to build a potash and specialty fertilizers company. Such forward-looking statements involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. In particular, there is no assurance that construction and/or development will occur or even begin, that risks and costs will not increase substantially, that demand for potash will not decline, that a National Instrument 43-101 report can be completed and that additional economically viable minerals will be found. This forward-looking information is subject to known and unknown risks and uncertainties and other factors, which may cause actual results, levels and timing of activity and achievements to differ materially from those expressed or implied by such information.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.

SOURCE Americas Petrogas Inc.


Source: newswire



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