Dom (interviewer) "And the project itself, what sort of development timeline are we looking for to see it up and running, and product coming out of the ground?"
Lindsay "First half of next year. We're running a few months behind, but we're doing a few things along the side to try and structure the project so that we end up with a really good result for shareholders. We've started clearing the land, almost ready to push on on the civils and drainage, next year we'll be doing the mechanical and electrical. It's a very small project, equipment's already there, parts of the structural steel. Tiny project."
Dom "And what about Financing?"
Lindsay "we're getting strong interest from lenders on the African continent, which is very helpful. We can tap the Australian market for balance of equity, but we're really trying hard with strategic investors from China in regard to the ability to double the capacity of the phosphate mine, send half to the fertiliser and half to a yellow phosphorus project that they would start up and run. We think that there's a lot of advantages for them, but a lot of advantages for us, because we drive economies of scale in this strategic partnership".
To me, it seems like debt finance from strategic investors is starting to appear to be tied to the Yellow Phosphorus(P4) project (previously announced desktop study for P4 to take 10 weeks, due in Mid November). These Chinese investors after all want phosphate to make batteries, so that makes a bit of sense. Not at all a bad thing if we lock in both finance and a doubling of production out of the deal. As Lindsay says "we're doing a few things along the side to try and structure the project so that we end up with a really good result for shareholders".
This is a really crucial few months for the company. Secure funding + P4 partnership + increasing mine output straight to stage 2. I can't help but notice Lindsay's growing enthusiasm. The economics of the stage 1 phosphate project regarding fertiliser alone already looked good (as long as it gets the funding and gets built before the Angolan growing season starts in October 2024), and now we have these hints being dropped on where the P4 side of things might be heading. it was only 5 months ago in April MNB announced that they were pursuing the P4 project.
Will we still get a funding announcement in August/September timeframe? I'm not sure now. But I'd take a debt funding deal with 5-10% CR to strategic investors in Oct-Nov as opposed to a maximum 25% dilution event (cap raise) in September. Lindsay and the board appear to working hard behind the scenes. While there have been delays, the company is really a long long way forward from where it was 12-18 months ago.
MNB Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
