MNB - construction update from phosphate project in Angola
Our Portfolio company Minbos Resources (ASX: MNB) just posted an update on construction works at its phosphate fertiliser project in Angola.
Here were the pictures posted to MNB’s LinkedIn account:
(Source)
A solid start from MNB which is looking to bring a phosphate mine online that is forecast to deliver ~US$55M in EBITDA per year (base case, on average) mine, over a 20 year mine life.
(That was based on the company’s DFS in 2022. Assumptions in that study may have changed now, so that EBITDA number could also be different if current market prices were used).
MNB’s plan is to try and get it’s project into commercial production as quickly as possible.
So far, most of the funding to get the project built has been locked in too:
- ✅ MNB has completed the US$10M from the Angolan Sovereign Wealth Fund - so far ~US$8.63M of that has been received by MNB.
- ✅ MNB has a signed term sheet with Angola’s biggest bank (Banco BAI) for a US$12M credit facility.
- 🔄 The only one left to unlock is the US$14M loan from the International Development Corporation (IDC) of South Africa
The US$12M loan from Banco BAI together with the US$14M loan from IDC alone are enough to cover US$26M of the US$29M budgeted for phase 1 and 2 of MNB’s project build.
(Source)
All we need to see now is for MNB to unlock that US$14M from IDC.
How will MNB unlock the US$14M IDC loan?
MNB has already executed that loan with the IDC, the only conditions left before MNB can access the cash is a binding offtake agreement.
(MNB already has an MoU in place... it just needs to convert it into a binding deal).
That MoU is contingent on MNB proving its phosphate rock is suitable to be used as fertiliser.
(Source)
In an announcement a few weeks ago MNB included an update on it’s field trials which showed that on average, yields using MNB’s phosphate increased by 80%.
(Source)
We are hoping this is a signal to the market that MNB is getting close to securing that offtake and unlocking the US$14M IDC loan.
What’s next from MNB?
🔄 Construction and assembly of MNB’s Phosphate Fertiliser Plant
We want to see MNB complete construction works and get its plant operation ready.
We should see a fair bit of newsflow on this front between now and the end of this year.
🔄 Lock in remaining financing to get the project into production
At the same time, we want to see MNB lock in the remaining funding deals to cover Phase 1 and 2 construction costs.
We especially want to see MNB secure the US$14M IDC loan.
