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Arianne Phosphate Update (TSX-V: DAN & OTCBB: DRRSF) - Phosphate Shipment from Western Sahara Seized Over Illegal Mining Claims

May 9, 2017

Morocco produces about 75 percent of the world's phosphate, much of it mined in the Western Sahara.

Last week's seizure of 54,000 tonnes of phosphate originating from Western Sahara in Northern Africa bound for New Zealand highlights one of many geopolitical concerns that cloud the global supply of phosphate, and bolster the intrinsic value proposition of Arianne Phosphate's Lac a' Paul phosphate property located in the geopolitically sound region of central Quebec. Phosphate mined from Western Sahara has been disputed for many years as to the actual ownership of these resources and this latest news highlights the fact that many of the regions that supply the phosphate market such as Syria, Morocco, Western Sahara and Tunisia are mired in geopolitical challenges that can threaten secure and timely sourcing. It was reported recently that both Potash Corp. and Agrium were sourcing just under 1 million tonnes combined of phosphate from Western Sahara in 2015 and this amount accounted for roughly 64.5% of all Western Sahara phosphate purchases that year.

Here is an  article on the sourcing of phosphate from Western Sahara by Agrium and Potash Corp:

As geopolical tensions continue to escalate across the Middle East, the secure sourcing of phoshate starts to get more problematic for the many large integrated fertilizer groups that comprise much of the demand  for this much needed agrimineral - and we would not be at all surprised to see groups that have traditionally sourced phosphate in Western Sahara (and surrounding MENA regions) to look to more secure future supply channels such as Arianne's fully permitted Lac a' Paul project in Quebec.

Here is an article on the recent phospate seizure that occurred on May 4, 2017 (to date we have seen no resolution to this matter being reported):

If goes without saying that if additional shipments from Western Sahara come into question, we could see a material effect on phosphate pricing as commercial users scramble to replace those resources in the open market, which would also benefit Arianne's Lac a' Paul project.

Arianne management has worked diligently over the last few quarters to move Lac a' Paul from the fully permitted stage to construction of a large phosphate producing mine and have made several key announcements of their progress over the last 2-3 months in moving this project forward as evidenced by the signing of MOU's with many of the key vendors/contractors.  A number of these "signed-up" vendors are even looking to provide financing for their services in the way of Export Credit Agency Agreements. Our sense is that Arianne has many of the big pieces in place at this time and are now moving towards compiling the neccesary off-take and/or forward sales agreements for a percentage of Lac a' Paul's projected 3 million tonnes per year of 39% phosphate production.  We have no way of knowing for sure but we would expect that this recent seizure of a large tonnage shipment of phosphate rock has racheted up the interest level of Lac a' Paul among the many groups/commodity traders that source and use phosphate rock.

If you missed the recent interview with Brian Ostroff on Jay Taylor's "Turning Hard Times Into Good Times" we have included the link below:

Audio interview with Jay Taylor "Turning Hard Times Into Good Times"

Link to Arianne's current PPT presentation:

We will continue to keep you up to date on Arianne Phosphate's development.


Clay Chase

SD Torrey Hills Capital

858 456-7300

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