MNB US$10M investment from Sovereign Wealth Fund
Our phosphate fertiliser Investment Minbos Resources (ASX: MNB) just received written approval for a US$10m investment from the Angolan Sovereign Wealth Fund.
The Angolan Sovereign Wealth Fund has set aside US$250M for the agricultural sector so it's promising to see a commitment toward MNB’s project.
The US$10M deal into MNB would be at 8c OR the 10-day volume-weighted average price (VWAP) prior to the definitive documents being signed.
So the deal is likely to get done at a premium to MNB’s share price from its last close price.
The market clearly likes the news too - MNB’s share price is up 17% on the day at the time that we are writing this.
Why is today’s news so important?
MNB is currently developing its phosphate fertiliser project in Angola.
Once built MNB expects the project to earn US$55M in EBITDA per year on average over a 20 year mine life.
MNB currently forecasts the mine build completion and first production by May 2025.
To get the project built MNB has been working on securing the final US$24M needed to get the project into production.
MNB’s plan was to fund this via:
- US$14M loan from the IDC (Industrial Development Corporation of South Africa)
- US$11M equity investment
- US$10M working capital facility
MNB now has a big portion of the equity investment committed to… which is important because an equity investment was also one of the key conditions for the US$14M loan from IDC.
The four key conditions to that loan were:
- Project security - MNB said the securitisation process is expected to be completed in the coming weeks.
- Evidence of US$11M funding - Todays news ✅
- Evidence of a US$10M term loan facility - MNB “well advanced” in a loan application process with Banco BAI (“BAI”), one of Angola’s largest banks. MNB expects to hear back from the bank “shortly”.
- Binding offtake agreement - MNB previously announced an MOU for offtake with Grupo Carrinho (we covered that news here). To unlock the IDC loan this needs to be converted to binding.
Project security should be more of a formality, a legal exercise between MNB and the IDC.
AND after today’s news we think the two key remaining conditions for the US$14M loan to be unlocked are:
- Complete offtake agreement with Grupo Carrinho
- Secure US$10M working capital facility
In today’s announcement MNB said that it expects the remaining conditions to be delivered over the coming weeks.
What’s next for MNB?
🔲 Complete Funding US$24M
- 🔄 Completed equity investment from Angolan Sovereign Wealth Fund
- 🔄 Secure a US$10M term loan with Angolan Bank
- 🔄 Convert Grupo Carrinho MoU into a signed offtake agreement
- 🔄 Finalise US$14M loan with the IDC
🔲 Commence Construction
