3D Alliance®: Technology developed to transform the three-dimensional structure of the raw materials added to the fertilizer. The materials are subjected to a mechanical process, increasing their specific surfaces and forming microparticles that release nutrients progressively.​ The fertilizers resulting from the mixture are homogeneous and can be evenly distributed in the soil. The 3D Alliance® technology is used in the Low-Carbon Specialty Fertilizer Products production process.

Additionality: In the context of environmental sustainability and carbon offset projects, “additionality” refers to the extra or supplementary benefits that such initiatives bring beyond the existing or planned actions. Essentially, for a project to claim additionality, its positive outcomes—such as carbon reductions—must be above and beyond what would have occurred without the project. This concept ensures that credits and offsets purchased or credited to an organization genuinely represent new and extra reductions in greenhouse gas emissions, rather than funding pre-existing initiatives.

ANM: See “National Mining Agency”.

Bio Revolution: Verde’s technology that enables the incorporation of microorganisms to mineral fertilizers. K Forte® will be the first fertilizer in the world to use Bio Revolution technology. The Group has filed for patent protection of its Bio Revolution technology.

Carbon Credits: Quantifiable units representing verified emissions reductions achieved through carbon offsetting and removal activities. One carbon credit corresponds to the prevention or removal of one metric ton of CO₂ or its equivalent. Entities, including businesses and individuals, can acquire these credits by backing climate initiatives.

Carbon dioxide equivalent (“CO₂e”): Metric measure used to compare the emissions of the different greenhouse gases based upon their global warming potential (GWP), normalized to the equivalent amount of CO₂.

Carbon dioxide removal certificates (“CORCs”): Electronic document that records the Attributes of CO₂ Removal from registered Production Facilities. Each CORC represents a Net Carbon Dioxide Removal (CDR) volume of 1 ton of Long-Term CO₂ Removal, equivalent to 1 carbon credit.[1]

Carbon Footprint: The cumulative amount of greenhouse gases produced by activities of an entity, be it a business, nation, individual, or specific action.

Carbon Markets: Platforms for trading carbon credits, falling into two categories:

• Compliance Markets: stems from policy requirements across different levels, like the Kyoto Protocol’s inaugural market, where participants had to meet emissions reduction targets partially by purchasing carbon offsets.
• Voluntary Markets: enables entities to trade carbon credits voluntarily to achieve targets such as carbon neutrality. Unlike compliance markets, voluntary market transactions aren’t tied to legal emissions reduction mandates.

Carbon Sequestration: The long-term capture and stable storage of atmospheric carbon dioxide. This can be achieved by harnessing natural reservoirs such as plants, soils, geological formations, and oceans.

CDR (Carbon Dioxide Removal): The practice of extracting carbon dioxide from the atmosphere post-release and securely storing it for extended durations. Carbon removal methods vary, encompassing nature-based solutions (e.g., enhanced rock weathering) and mechanically intensive approaches. CDR solutions are recognized by the IPCC as crucial for maintaining global temperature increases below 1.5°C. 1 ton of Long-Term Net CO₂ Removal (CDR) is equivalent to 1 carbon credit.

Cerrado Verde Project (“the Project”): Located in Minas Gerais state, Brazil, it is a potassium-rich deposit 100% owned by Verde, from which the Group is producing solutions for crop nutrition, crop protection, soil improvement, and increased sustainability. The Project has an NI 43-101 Measured and Indicated Mineral Resource Estimate of 1.47 billion tons at a grade of 9.28% K₂O, which includes a Measured Mineral Resource of 1.85 billion tons with an average grade of 8.60% K₂O. The Pre-Feasibility Study of the Project evaluated the technical and financial aspects of producing 50 Mtpy of the Product divided in three scenarios: “Plant 3 Scenario1” (10 Mtpy); “23Mtpy Scenario” (23 Mtpy) and “50Mtpy Scenario” (50 Mtpy). The Cerrado Verde Project has been in production since 2017.

CIF (“Cost Insurance and Freight”): Shipment term used to indicate that the seller is responsible for the goods and costs of insurance and freight from the factory to the buyer’s destination.

Climate Change: A change of climate attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods.[2]

Co-benefits: Co-benefits refer to the positive, secondary outcomes derived from initiatives primarily designed to combat climate change. For example, opting to walk or cycle instead of driving not only reduces carbon emissions but also promotes a healthier way of living. Likewise, certain techniques such as enhanced rock weathering also yield other advantages including improved soil health and decreased ocean acidity. In addition to their capability for carbon capture, Verde’s Products also serve as a source of potash, a vital nutrient for plants.

Cradle-to-Grave: Assessment that considers CO₂e emission impacts at each stage of a product’s life cycle, from the time natural resources are extracted from the ground and processed through each subsequent stage of manufacturing, transportation, product use, and ultimately, disposal.

Deforestation: Deforestation refers to the widespread removal of trees and vegetation from areas traditionally characterized as forests. This phenomenon is not only observed when trees are directly exploited but also when the land is repurposed for other endeavors. Such activities pose significant ecological threats, leading to habitat loss, reduced biodiversity, and increased greenhouse gas emissions.

Dust Control: Technology that promotes a slight aggregation effect on the ultrafine particles of K Forte® and Low-Carbon Specialty Fertilizer Products, enabling the optimization of crop fertilization by reducing drift during application. The micro-particles are easily dispersed in the soil and their contact is maximized by the ultrafine particle size of Verde’s fertilizers, providing uniform application and efficient nutrition to crops.

Enhanced Rock Weathering (ERW): Enhanced Rock Weathering is a technique that accelerates the natural process of geological weathering to capture and store CO₂ more efficiently by using finely ground rock, significantly speeding up a process that would naturally take millennia. Recent analyses on Verde’s Products, conducted at Newcastle University under the supervision of ERW expert Prof. David Manning, PhD, have confirmed the potential to extract CO₂ from the atmosphere at a rate of 120kg per ton of product. However, the measurement and crediting of this CO₂ sequestration capability are still under evaluation, and the uncertainty surrounding test results may affect the project’s profitability, though it poses no direct risk to the Group. Management will continuously reassess the associated risks and opportunities as new data emerges and the project evolves.

Environmental License (“Licença Ambiental”): The environmental licensing process consists of a three-step system, each step is a separate license contingent upon the prior step.  In the state of Minas Gerais there is the possibility of licensing phases simultaneously, depending on the size of the project, according to the Normative Resolution 217/2017. The three phases are, as follows:

• Preliminary License (“Licença Prévia – LP”): Granted at the planning stage of the project, this license signals the approval of its location, concept and environmental feasibility. It establishes the basic requirements to be met during the subsequent implementation phases. The maximum term for LPs is five years.
• Installation License (“Licença de Instalação – LI”): This license authorizes the setup of the works and commencement of construction based on the specifications set forth in the previous license and the approved plans, programs and project designs, including environmental control measures. The maximum term for LIs is six years.
• Operating License (“Licença de Operação – LO”): This license authorizes the operation contingent upon compliance with the terms of the LO and the LI, including any environmental control measures and operating conditions. The maximum term for LOs is 10 years.

At the federal level, the environmental licenses are regulated by the Brazilian National Council for the Environment (“Conselho Nacional do Meio Ambiente – CONAMA)” Resolution No. 237/1997 and by Complementary Law No. 140/2011; at the state level, the environmental license are regulated by the State Environmental Policy Council (“Conselho Estadual de Política Ambiental – COPAM”).

Environmental, Social, and Governance (ESG): Criteria set to evaluate a Group’s sustainability and societal responsibility, encompassing three pillars. The Environmental pillar examines emissions, resource usage, and sustainability efforts. The Social pillar reviews labor practices, supply chain ethics, and employee growth. Governance focuses on shareholder rights, corporate accountability, and board-level diversity. The ESG is used by investors to gauge non-financial risks in a business’s operations.

Exploration Authorization (“Alvará de Pesquisa”): Once mineral exploration is completed, a final exploration report must be submitted for ANM’s review and approval. If approved, the next step is to file, within one year, all applications for a mining concession with the Ministry of Mines and Energy (MME). The Exploration Authorization guarantees to the owner, be it an individual or a legal entity, the power and duty to carry out mineral research work in the entitled area. It grants the rights to conduct exploration activities for a period from two to four years, which may be renewed for an additional period (and potentially additional renewals on a case-by-case basis).  An exploration authorization does not entitle the holder the right to extract mineral substances. During the research work, extraction will only be allowed in exceptional circumstances, with a specific title issued by the ANM (see Mining Permit – “Guia de Utilização”). At the end of the research stage, the holder of the mining right must present a Final Exploration Report with the results obtained from the work.

Exploration Authorization Application (“Requerimento de Pesquisa”): Claim for the geological exploration of an area. Interested parties must file an application for exploration authorization with the ANM and state a case for conducting mineral exploration activities. The Exploration Authorization Applications are analyzed in order of filing date. If the party requesting an exploration authorization meets the necessary legal requirements and an exploration authorization has not been previously issued for any part of the area in question, then the ANM will grant the exploration authorization.

Feasibility Study (“Plano de Aproveitamento Econômico – PAE”): report filed as part of the Mining Concession Application. It demonstrates quantitative geological and technological study of the mineral deposit and as well as demonstrating the technical-economic feasibility of a mine.

Final Exploration Report (“Relatório Final de Pesquisa”): At the end of the exploration stage, the holder of the mining right must present a Final Exploration Report with the results obtained from the work, containing a quantitative geological and technological study of the mineral deposit and demonstrate the technical-economic feasibility of a mine. The ANM analyses this report technically through a site visit. If the ANM approves the report based on the potential merits of a future mining operation, the titleholder has a one-year period to prepare and file the Mining Concession Application with the Federal Minister of Mines and Energy.

FOB (“Free on Board”): Shipment term used to indicate that the buyer is responsible for the goods and costs of insurance and freight from the seller’s product factory.

Gigaton: A gigaton, abbreviated as “Gt,” is a metric unit equal to one billion tons. Often used in carbon sequestration discussions, the IPCC emphasizes the need to sequester ten gigatons of CO₂ annually by 2050 to limit global warming to 1.5°C. For context, Verde’s 3.32 billion tons of mineral resources hold a total carbon removal potential of 0.40 gigatons of CO₂.

Glauconitic Siltstone: Derived from a naturally occurring potassium silicate rock, Glauconitic Siltstone has been valued as a natural potassium fertilizer for over 250 years. Notably, it stands out for its superior weathering properties in comparison to other materials. This rock is the foundational raw material for all Verde Agritech products. Its composition includes glauconite (40%-80%), K-feldspar (10%-15%), quartz (10%-60%), muscovite-sericite (5%), biotite (2%), titanium oxide (<1%), manganese oxide (<1%), goethite (<1%), and trace amounts of barium phosphate and rare-earth element phosphates.

Global Warming: This term describes the ongoing increase in Earth’s average surface temperature, primarily due to human activities since the onset of the Industrial Revolution. The primary cause is the release of greenhouse gases which trap heat in the atmosphere, leading to a rough average temperature rise of about 0.2°C per decade.

Group: Verde Agritech Ltd (Verde Agritech Plc to July 29, 2022) and its subsidiaries.

Hectare: One hectare is equal to 10,000 square meters and is equivalent to approximately 2.47 acres.

Intergovernmental Panel on Climate Change (IPCC): United Nations body for assessing the science related to climate change. The IPCC prepares comprehensive Assessment Reports about the state of scientific, technical and socio-economic knowledge on climate change, its impacts and future risks, and options for reducing the rate at which climate change is taking place. It also produces Special Reports on topics agreed to by its member governments, as well as Methodology Reports that provide guidelines for the preparation of greenhouse gas inventories.[3]

International Organization for Standardization (“ISO”): Independent, non-governmental international organization with a membership of 169 national standards bodies. The Organization is a global network of the world’s leading standardizers. Through its members, it brings together experts to share knowledge and develop voluntary, consensus-based, market relevant International Standards that support innovation and provide solutions to global challenges.[4]

ISO: See “International Organization for Standardization”

KCl: See “Potassium Chloride”.

K Forte® (“the Product”): Multinutrient potassium fertilizer brand marketed in Brazil by the Group.

K₂O: Chemical term used in the analysis and marketing of fertilizers that contain different potassium compounds, as a comparison of their relative potassium content when compared to equivalent potassium oxide (K₂O).

Kilometer: Metric unit of measurement approximately equal to 0.62 miles.

Life Cycle Analysis (“LCA”): Life-cycle assessment is a process of evaluating the effects that a product has on the environment over the entire period of its life thereby increasing resource-use efficiency and decreasing liabilities. The LCA is a standardized, scientific method that can be used to study the environmental impact of either a product or the function the product is designed to perform.[5] The terms “assessment” and “analysis” are used interchangeably by different companies, but with the same objective.

LCA: See “Life Cycle Analysis”.

Megaton: One megaton is equal to one million tons. The term “megaton” is often utilized to measure greenhouse gas emissions and address carbon removal objectives.

Measured Mineral Resource: That part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity. A measured mineral resource has a higher level of confidence than that applying to either an indicated mineral resource or an inferred mineral resource. It may be converted to a proven mineral reserve or to a probable mineral reserve.

Micro S Technology®​: The Group’s exclusive elemental sulfur micritization technology, that allows for a larger contact surface. This facilitates the work of microorganisms and oxidation rate increases and so nutrients become available to plants more efficiently.​ This increases the absorption of sulfur and, consequently, the development of the plant. Micro S Technology® allows micronized sulfur, one of the additional nutrients most required by farmers, to be added to Low-Carbon Specialty Fertilizer Products.

Mine Site: An economic unit comprised of an underground and/or open pit mine, a treatment plant and equipment and other facilities necessary to produce metals concentrates, in existence at a certain location.

Mineral Reserve: A mineral reserve is the economically mineable part of a measured and/or indicated mineral resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at pre-feasibility or feasibility level as appropriate that include application of modifying factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified. The reference point at which mineral reserves are defined, usually the point where the ore is delivered to the processing plant, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported. The public disclosure of a mineral reserve must be demonstrated by a pre-feasibility study or feasibility study.

• Probable Mineral Reserve: The economically mineable part of an indicated, and in some circumstances, a measured mineral resource. The confidence in the modifying factors applied to a probable mineral reserve is lower than that applied to a proven mineral reserve.
• Proven Mineral Reserve: The economically minable part of a measured mineral resource. A proven mineral reserve implies a high degree of confidence in the modifying factors.

Mineral Resource: A mineral resource is the concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a mineral resource are known, estimated, or interpreted from specific geological evidence and knowledge, including sampling.

• Indicated Mineral Resource:That part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed. An indicated mineral resource has a lower level of confidence than that applied to a measured mineral resource and may only be converted to a probable mineral reserve.
• Inferred Mineral Resource: That part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. An inferred mineral resource has a lower level of confidence than that applying to an indicated mineral resource and must not be converted to a mineral reserve. It is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated mineral resources with continued exploration.
• Mineral Right (“Direito Minerário”): Authorization to research and/or prospect a tenement. It is granted by the federal government through the ANM or the MME, depending on their respective competencies.

Mineralization: The natural process whereby organic matter is converted over time into mineral nutrients. In the carbon removal industry, ‘mineralization’ also refers to the act of injecting CO₂ into rock for permanent storage.

Mining Concession Application (“Requerimento de Lavra”): This application must satisfy certain requirements, including the presentation of the mining Group’s Feasibility Study (“Plano de Aproveitamento Econômico – PAE”). While the ANM reviews the application for a mining concession, the applicant retains the exclusive rights to this area. Mine construction and development activity can only begin after the publication of a mining concession issued by the MME and provided that the respective license is also granted pursuant to applicable Brazilian environmental laws.

Mining Concession (“Portaria de Concessão de Lavra”): guarantees to the owner the power and duty to explore the mineral deposit until it is exhausted, without a definite term. The title can only be obtained by mining companies and only after undertaking the authorized exploration through an exploration authorization and subsequent approval of the Final Exploration Report. One of the essential documents for requesting a mining concession is the Feasibility Study, which must demonstrate the technical and economic viability of the project and indicate, among other information, the mining method, the planned scale of production and the mine closure plan.

Mining Permit (“Guia de Utilização”): exceptional mining permit with predetermined expiration date. It is granted by the ANM and allows the mineral extraction in the area before the grant of a Mining Concession, according to the environmental legislation.

Ministry of Mines and Energy (“Ministério de Minas e Energia – MME”): federal government’s branch responsible for making public policy that covers the geological, mineral and energy resources, hydroelectric, mining, and metallurgic energy sectors.

MME: See “Ministry of Mines and Energy”.

Measurement, Reporting, and Verification (“MRV”): This is a systematic process designed to quantify the reductions in greenhouse gas emissions achieved through specific environmental initiatives. It involves the careful monitoring of emission reductions over a set timeframe, followed by the compilation and submission of this data to a certified third-party organization. The third-party’s role is to validate the accuracy of the reported data, which upon confirmation, can lead to the certification of the results and the issuance of carbon credits.

MRV: See “Measurement, Reporting, and Verification”.

Mtpy: Million tons per year.

N Keeper® Technology: proprietary processing technology for glauconitic siltstone that alters its physical-chemical properties to enable ammonia retention for use as a calibrated additive in Nitrogen fertilizers. N Keeper® leads to the reduction of Nitrogen volatilization loss, which increases the efficiency of crop fertilization and mitigates the impact on the environment and climate changes.

National Mining Agency (“Agência Nacional de Mineração – ANM”): federal agency subordinated to the Ministry of Mines and Energy. It is responsible for the management of mining activities and Brazilian mineral resources. Former National Department of Mineral Production (“Departamento Nacional de Produção Mineral – DNPM”).

NI 43-101: Refers to Canada’s National Instrument 43-101, which establishes the standards for disclosure of mineral projects. Verde Agritech, in compliance with these standards, reports a combined measured and indicated mineral resource of 1.47 billion tons at 9.28% K₂O and an inferred mineral resource of 1.85 billion tons at 8.60% K₂O (using a 7.5% K₂O cut-off grade).

Open Pit: Surface mining in which the ore is extracted from a pit. The geometry of the pit may vary with the characteristics of the ore body.

Ore: A mineral or aggregate of minerals from which metal can be economically mined or extracted.

Ore Grade: The average amount of K₂O expressed as a percentage.

PFS: See “Pre-Feasibility Study”.

Potassium chloride (“KCl”): The most commonly used source of potash. It is composed of approximately 52% of potassium (“K”) and 47% of Chloride (Cl⁻), representing 60% of K₂O. Potassium Chloride’s salinity index is 116. According to the article ‘Effects of Some Synthetic Fertilizers on the Soil Ecosystem’ (HEIDE HERMARY, 2007), applying 1 pound of potassium chloride to the soil is equivalent to applying 1 gallon of bleach. Verde’s Product eliminates the need for Potassium Chloride.​ KCl is also frequently referred to as muriate of potash (“MOP”).

Pre-Feasibility Study (“PFS”): A PFS is an in-depth analysis assessing the technical and economic viability of a mineral project. It evaluates various aspects of the project once it reaches a stage where key methods like underground mining or open pit configurations are defined, along with effective mineral processing techniques. The study also entails a financial review, grounded in reasonable assumptions regarding modifying factors and other pertinent elements. This allows a Qualified Person to ascertain if any portion of the mineral resource can transition to a mineral reserve. Notably, a PFS offers a lower level of confidence compared to a full feasibility study.

Product: Multinutrient potassium fertilizer marketed in Brazil under the brands K Forte® and Low-Carbon Specialty Fertilizer Products and internationally as Super Greensand®, the production and sale of which is the principal activity of the Group.

Qualified Person: As defined in NI 43-101, an individual who: (a) is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development or operation, or mineral project assessment, or any combination of these; (b) has experience relevant to the subject matter of the mineral project and the technical report; and (c) is a member or licensee in good standing of a professional association.

Reforestation: This term refers to the process of replenishing depleted or destroyed forest areas by planting new trees. This can be achieved naturally or artificially, and it is a vital strategy for mitigating the impacts of deforestation, such as loss of biodiversity and increased carbon dioxide levels in the atmosphere. Reforestation helps restore ecosystems, improve air quality, and combat climate change.

Renewable Energy: These are systems of energy generation that do not depend on the extraction and combustion of fossil fuels and can be sustainably replenished without contributing to an increase in carbon emissions. Verde’s production process relies on renewable zero-emission hydropower for 100% of its electricity needs.

Super Greensand® (“the Product”): Multinutrient potassium fertilizer brand marketed internationally by the Group.

Ton: A unit of weight. One metric ton equals 2,204.6 pounds or 1,000 kilograms.

tpy: Tons per year.

[1] Source: Puro Earth, Puro Standard General Rules, V3.1.

[2] Source: United Nations Framework Convention on Climate Change. Available at: https://unfccc.int/resource/ccsites/zimbab/conven/text/art01.htm#:~:text=2.,observed%20over%20comparable%20time%20periods

[3] Source: Intergovernmental Panel on Climate Change. Available at: https://www.ipcc.ch/

[4] Source: ISO. Available at: https://www.iso.org/what-we-do.html

[5] Source: European Environment Agency.