PhosCo (ASX: PHO) has received a key approval, commenced a $5 million capital raising and finalised global financing support to move its Gasaat phosphate project in Tunisia towards commercialisation.
The company’s receipt of an exploration permit enables it to immediately commence its planned major resource drilling program at Gasaat.
It follows the company signing a Memorandum of Understanding (MoU) last year with the government of Tunisia and the European Bank for Reconstruction and Development (EBRD) in a first-of-its-kind deal for Tunisia, smallcaps reports.
The new drilling will test the upside identified at Gasaat, which contains a significant JORC resource of 146.4 million tonnes at 20.6% phosphorus pentoxide.
PhosCo is targeting the valuable global fertiliser market, which analysts estimate will grow to more than $380 billion by 2030.
The same source said the increasing demand for food, the need to improve soil fertility, and the use of more sophisticated fertilisers will drive this growth.
PhosCo has launched a fully underwritten $5 million entitlement offer to help fund the drilling and other future developments.
The company’s directors and major shareholder Lion Selection (ASX: LSX) have committed to priority sub-underwriting totalling $3.25m.
Lion Selection and PhosCo managing director Taz Aldaoud have also agreed to advance a $1.5m loan to fast-track work at Gasaat.
In another major breakthrough, PhosCo has signed a mandate letter with the EBRD for a potential investment of approximately $8m (US$5m), which it will utilise to support a bankable feasibility study for Gasaat.
“Securing formal ownership of the Gasaat phosphate project is a pivotal event in PhosCo’s journey to becoming a global fertiliser producer,” Mr Aldaoud said.
“Expanding the Gasaat inventory underpins potential increases in the forecast production rate and free cash flow generation.”
“With the project now officially granted, Gasaat has a clear pathway to production and cash flow, ensuring it is very well positioned to capitalise on this opportunity,” Mr Aldaoud added.
PhosCo’s new field work program will focus on areas of upside identified in the 2022 scoping study, which nearly doubled the project tenement size.
Recognised phosphate expert Sam Lancuba, who has more than 45 years’ experience in the sector, has agreed to join the board as a non-executive director following completion of the entitlement offer.
TunisianMonitorOnline (NejiMed)
