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 “We are very pleased to be able to announce this important transaction for GrowMax and its shareholders." 

"We are very pleased to be able to announce this important transaction for GrowMax and its shareholders. Since we announced our revised strategy in December 2017, the PrimaSea opportunity was one of a significant number of opportunities evaluated by management and our directors. In April 2018, after several weeks of discussions, we and the vendors worked on a high-level term sheet for this transaction. Since then, management and our Board have been focused on due diligence, structuring, and negotiating an accretive deal for shareholders. Not only does this transaction add a significant asset with a multi-generational lithothamnion supply, but also brings existing revenue, near-term cash flow, exceptional additional management with significant sales capabilities, and will strengthen our Board.

“Additionally, this transaction allows GrowMax to conserve most of its cash and will allow us to continue to seek other opportunities for growth or consolidation. PrimaSea operates in a high-growth, high-value sector with significant barriers to entry and has multiple revenue streams feeding into two compelling markets: animal feed and plant nutrients. We will also have access to the greater margins available as a certified organic, non-GMO producer. This is a truly transformative transaction that we believe will increase value for our shareholders.”

- Stephen Keith, President and CEO of GrowMax Resources

Anticipated Benefits to GrowMax

The Board and management believe that the Proposed Acquisition of PrimaSea — the holder of all of the issued and outstanding shares of Fertimar Mineração e Navegação Ltda. (“Fertimar”) — brings a number of anticipated benefits to GrowMax, including, among others, the following:

  1. Access to a Significant Lithothamnion Source - Fertimar is already economically extracting lithothamnion and commercially producing and selling its products. Based on an analysis of evaluation activities at the extraction concessions (and applying only current costs and product prices currently being received), GrowMax believes that there is significant extractable lithothamnion which would allow for a significant life of project.
  2. A Portfolio of High-Margin Products – Fertimar brings a portfolio of high-margin organic certified product lines for crop nutrient and animal feed, which have been commercialized by Fertimar since 2014.
  3. Established & Growing Markets – Fertimar is a company with established markets and sells to over two hundred distributors and end customers in Brazil. Growing environmental regulations in Europe have resulted in a significant decrease in local production capability. Fertimar has initiated marketing initiatives to fill the emerging gap in the European supply. Global demand for organic products has been growing significantly, achieving double digit annual growth rates in the last ten years.
  4. Scalable Production Capacity – Fertimar has a fully permitted lithothamnion deposit and operational plant licensed to harvest and produce 120,000 tonnes of lithothamnion products per year. Production is highly-scalable and will require modest amounts of additional capital expenditures spread out over the next several years.
  5. Existing Assets – The Proposed Acquisition brings an operational set of assets, including one suction dredge vessel and an industrial plant operating since 2014. The plant has a simple flowsheet including milling, granulation, packaging and shipping. Fertimar’s shareholders have invested approximately $20 million into the company over the past seven years.
  6. An Experienced Team – GrowMax, after completion of the Proposed Acquisition, will be led by a management team and board of directors with exceptional local and international experience, including new members who have held key executive roles in major mining and fertilizer companies, such as Vale Fertilizers, Agrium, and Mosaic.

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