Verde AgriTech Enters Exclusive Carbon Credit Partnership with UNDO
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On November 17, 2025, Verde AgriTech announced an exclusive partnership with UNDO Carbon Ltd. to explore the creation and sale of carbon removal credits derived from Enhanced Rock Weathering (ERW) activities in Brazil. This collaboration aims to leverage Verde's glauconitic siltstone products and operational footprint with UNDO's expertise in measurement, reporting, and verification (MRV) for carbon credits.
As part of the agreement, Verde will grant UNDO up to 1.7 million common share purchase warrants. The issuance of these warrants is entirely conditional on achieving specific revenue milestones from the sale of carbon credits, structured as follows: - Initial Warrants (100,000): Vest upon generating US$1 million in revenue from carbon credits sold at a minimum of US$350 per tonne of CO2. - Additional Warrants (1,000,000): Vest upon generating US$39 million in revenue at a minimum of US$300/tCO2. - Incremental Warrants (600,000): Vest upon generating US$60 million in revenue at a minimum of US$250/tCO2.
The warrants will have a 3-year term, with an exercise price set at 120% of the 5-day volume-weighted average price (VWAP) on the TSX preceding the grant date.
The partnership with UNDO is a positive, albeit early-stage, development. The structure of the agreement is favorable to Verde, as it requires no upfront cash expenditure and ties compensation directly to tangible revenue generation. This creates a low-risk opportunity for Verde to develop a potentially high-margin revenue stream in the carbon credit market.
However, the impact is not material at this stage for several reasons: 1. Exploratory Nature: The release clearly states this is a "framework to explore a commercial partnership." There is no guarantee of revenue, and the milestones set for warrant vesting are substantial and distant. 2. ERW Market Immaturity: As stated by CEO Cristiano Veloso in the November 2024 earnings call, "not a single company has been able to issue carbon credits from ERW." While standards are evolving, successfully verifying and monetizing these credits remains a significant hurdle for the entire industry. 3. Financial Immediacy: The deal does not address Verde's immediate financial challenges. The Q3 2025 results show a company with only C$3.6 million in cash, C$52.5 million in liabilities, and an ongoing net loss from its core fertilizer operations. This carbon initiative will not provide near-term capital. 4. Distraction from Core Stories: The company's primary value driver is the recent district-scale REE discovery. Its primary challenge is the money-losing fertilizer business. This carbon credit initiative is a third, speculative venture that could dilute management focus.
In conclusion, this is a well-structured, low-cost lottery ticket on the future of the carbon credit market. It validates the potential of Verde's mineral resources for ERW, but investors should view it as a long-term option rather than a near-term catalyst. The rating is "Routine - Positive" because it's a sensible, incremental step that adds potential value without immediate cost or risk, but it does not fundamentally change the company's current financial position or the risks associated with its main projects.
Verde AgriTech is a Brazilian company focused on agriculture and mining. For years, its core business has been the production and sale of specialty potash fertilizers, branded as K Forte® and Super Greensand®, from its glauconitic siltstone deposits in Minas Gerais, Brazil. The company has struggled recently due to a severe crisis in the Brazilian agricultural sector, characterized by tight credit and farmer insolvency.
In October 2025, the company's focus pivoted dramatically with the announcement of a district-scale, high-grade magnetic rare earth element (REE) discovery on its existing mineral claims, named the Minas Americas Global Alliance project. This project is now the company's flagship initiative, with an accelerated plan to define a mineral resource in Q1 2026 and complete a PEA by mid-2026. This followed the divestment of a different REE project, Man of War, earlier in 2025.