ProGreen US Inc (OTCMKTS:PGUS) shares were up 2.99% to $0.0138 on Monday and flat in after-hours trading. Share prices have been trading in a 52-week range of $0.00 to $0.03. The company has a market cap of $4.78 million at 349.89 million shares outstanding.
In a press release, ProGreen US Inc shared that its joint venture partner in Baja California, Mexico, Inmobiliaria Contel signed an agreement with a major exporter of produce to the US. Under this agreement, Contel will be growing red chilies on a 40 hectares portion of the of the farmable 60 hectares of the first tract of land under the JV.
Under this agreement, the farming s estimated to yield 3,000-3,600 tons of produce with a value of $1.1 – 1.3 million and an estimated net margin of 55-60%. The joint venture sets a 50-50 split of profits between ProGreen US Inc and Contel, but the former will first recover all of its investment in the operation prior to profits being distributed.
“This is a big first step for Contel and Progreen under the JV partnership, as it solidifies an agreement with a major player as a first buyer. It also shows, in real terms, the enormous financial advantage, growing produce has to leasing the land, which would have resulted in an income of some $120,000/year for the whole land,” says Jan Telander, President and CEO.
The produce will be harvested in two to three cutswith the first expected for late June. The delivery will be to the buyer’s packing plant in Ensenada. Contel has set the limit to diversify production but the buyer has announced serious interest in increasing the scope of future agreements for production of chilies to 100 hectares in order to meet demand.
ProGreen US Inc is formerly ProGreen Properties Inc. It owns and manages residential real estate rental property in the Oakland County, Michigan area and is engaged in acquiring, refurbishing and upgrading residential real estate. In particular, the company purchases residential real estate apartment homes, condominiums and houses in the State of Michigan.
In addition, the company is focusing its investments and interest in agricultural land in Baja California, Mexico. Its investment properties are marketed by ProGreen Realty LLC, a subsidiary of ProGreen and managed by its subsidiary, Progreen Properties Management LLC. In addition, the Company’s subsidiary, ProGreen Construction LLC, performs various construction and development services for properties, which are held and under development.