Next Investors logo grey

MNB: Licence Granted, Placement Digested


Published 25-MAR-2021 13:19 P.M.


2 minute read

Minbos Resources (ASX:MNB) is developing a large phosphate resource in Angola that has the potential to dramatically transform the country’s food security and crop yields.

MNB announced this week that the Angolan government has approved its long-term mining title - renewable for up to 35 years.

We are long term holders in MNB and topped up in the last placement at 8c in February.

As usual, the share price came down a bit after the placement and hovered around the 7c to 8c mark. However, in the last few weeks it has been in a mini uptrend. After the license granting news was released this week, it touched above 9.5c and now looks like it might be ready to make a move.

Next Investors Image

It usually takes 3-5 years to get a long term mining title licence, but it has taken MNB less than two months - this shows the strong support by Angola for MNB’s phosphate project.

This news comes shortly after MNB sealed the deal with the Angolan government on its Mineral Investment Contract, which effectively greenlit its Definitive Feasibility Study (DFS) - expected to be delivered in November.

We expect MNB will now accelerate the development of this project, as it looks to manufacture fertiliser for sale in one of the most prospective growing regions globally.

We first took a long-term position in MNB in August at 3 cents and last month we doubled down after MNB completed an oversubscribed $7.3M cap raise at 8c.

Here’s a recap of why we are invested for the long term:

  • Low Capex required of between US$22-28M
  • High After Tax NPV of US$159-260M
  • Near term share price catalysts on the horizon
  • It’s current low market cap

We originally invested in MNB because at the time, we thought it was the most undervalued stock in our portfolio when it was under $20M market cap.

MNB has progressed since then and is now capped at $41.2M after it:

  • Released a Scoping Study
  • Announced a MoU with the International Fertiliser Development Centre (IFDC)
  • Strengthened its Board of directors
  • Adopted global ESG standards
  • Consolidated its shareholding
  • Gained full support from the Angolan government
  • Phosphate prices are surging

With the Angolan government in its corner and plenty of news to come, we are waiting with interest as MNB prepares to release its DFS.

Next Investors Image

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.