Geolsec Phosphate Operations Pty Ltd (GEOLSEC) is the operator of the GeolSec project. Australian government agency, Bureau of Mineral Economics estimated that Geolsec project, which is located 65 km from Darwin, contains approximately 1.3 million tons of rock phosphate grading up to 39% P2O5 and with an average grade of 12% P2O5.

GEOLSEC’S mission is to become a preferred supplier of environmentally-friendly organic products to the agricultural sector in the Northern Territory and beyond and thus support further expansion of sustainable agriculture. Geolsec products such as organic phosphate rock and rock dust supplements have many environmental benefits (see more details below).

This has a potential to provide substantial ongoing benefits to the environment and the community as well as to generate an early income for Korab and Korab’s shareholders. Because of the deposit’s location, its structure and its characteristics, the development of the GeolSec project should have a negligible environmental impact.

GEOLSEC is planning to commence production of organic rock phosphate fertiliser within months from receiving all regulatory approvals. It estimates that the mining and processing costs for this operation would be under $50 for direct shipping product and under A$100 per tone of bagged product. Bagged ground-up rock phosphate retails for between A$1,000 and A$1,200 per tone and wholesales for between $450 and $750 per tone. Direct application phosphate wholesales for between $300 and $400 per tone. The CAPEX and start-up costs are estimated at between A$200,000 and A$300,000.

Company has commenced the marketing of GEOLSEC organic fertiliser with the initial focus on pastoralists and organic farmers in the Northern Territory and selected niche markets in Western Australia. The company is also in discussions with a number of parties regarding off-take agreements for between 50,000 and 100,000 tones per annum each.

In addition to the above off-take agreements, Geolsec is targeting a 1st year sales of approximately 15,000-25,000 tones to pastoralist and farmers around Darwin to generate a potential 1st year gross profit of around $5-$6 million (before tax and royalties), or between 7.3 and 8.8 cents a share. Sales of bagged ground up rock will be targeting 2nd year potential profit of $9 million, and $12 million in the 3rd year of operation.

GEOLSEC's benefits

Organic fertilisers based on ground-up rock phosphate such as GEOLSEC  offer several advantages over chemically processed soluble fertilisers such as DAP, MAP or superphosphate:

• Organic fertilisers slowly release nutrients into the soil matching the speed at which the nutrients are being absorbed by the plants.
• Phosphate rocks are natural minerals requiring minimum metallurgical processing. Their direct application avoids the production of polluting wastes such as phospho-gypsum and greenhouse gases, thus resulting in energy conservation and protection of environment from industrial pollution.
• Phosphate rocks for direct application can be more efficient than artificial fertilizers in terms of phosphorus (P) recovery by plants under certain conditions. Based on the unit cost of P, natural phosphate rock is usually the cheapest.
  
• Use of organic phosphate rock reduces the risk of harmful accumulation of nutrients in the soil and reduces soil salinity problems
• Use of organic phosphate instead of chemically processed phosphate avoids the serious environmental degradation caused by increased concentrations of fertilisers in the ground water, the rivers and the coastal waters.
  
• Phosphate rock has the ability to restore microelemental and microbial soil balance which in turn leads to less reliance on artificial fertilisers and better crop yields.
  
• Plants grown on organic phosphate rock fertiliser have a better nutritional quality.
• Because of phosphate rock's unique chemical composition, incorporation of phosphate rock into the soil enhances its biological activity and increases soil carbon (C) accumulation, leading to improved soil fertility and restoration of its physical and chemical properties.
• Organic phosphate rock is a source of several nutrients other than P. Rock phosphates are usually applied to replenish soil P status, but phosphate rock also provides other nutrients present in our rock. Application of organic phosphate has a potential trigger effect on plant growth and crop yields as a result not only of P release but also of phosphate rock's effect on increasing exchangeable calcium (Ca) and reducing Al saturation.

GEOLSEC and organic farming in Australia

The diagram on the right shows the top 10 countries globally with the largest area of land dedicated to organic farming. In 2007, Australia had 12 million hectares of land being used for organic farming This constituted 38% of the total world organic farmland. The Australian organic farming sector offers Korab a very substantial marketing opportunity and a potential for strong sustainable growth.