AGR: Deeply Undervalued Dual Thesis Growth Play - What's the Potential?

Have been doing homework on these guys and they look really exciting! Ticking lots of boxes. I have also heard Warwick Grigor is top brass and has a good reputation. I don't know who's who in the zoo but something that stood out straight away was that he answers his mobile and has that number listed as the contact number for Far East Capital! Because “why pay someone else to answer calls when I could do it myself?” he says. So that was a good impression straight out of the blocks. Anyway I have been crunching some numbers so please review and any feedback is most welcome.

Project 1: Rock Phosphate – A Scalable Agricultural Input Play (Food Security)

First - quick refresh on the Phosphate project 2023 BFS numbers:

Following some research and a phone call with Warwick, I’ve updated these numbers as follows (to ‘back of envelope’ accounting standards):

Key Inputs:

Production Plan

Year 1: 100,000 tpa

Year 2-3: 300,000 tpa

Year 4+: 500,000 tpa

Revenue per tonne: $120-$125

Opex per tonne: $60-$65

Capex: $5M (initial)

Discount rate: 8%

Life of Mine: 18 years

Existing plant lease option

Annual EBITDA Calculation

Total EBITDA: $496,000,000
Total Revenue: $1.0045bn

Final Results

NPV @ 8%:$196M

IRR:75%

Payback Period: <1 year

Strategic Advantages Worth Noting:

✅ Immediate Market Demand – Located near 2Mt of annual demand.
✅ Minimal Capex, Rapid Scaling – Initial expansion is just $5M, reducing risk.
✅ Consistent Cash Flow Potential – Fertilizer demand remains resilient.

Project 2: High-Grade Gold – A Low-Cost, Ultra-Profitable Operation

Exploration upside here is much more speculative but offers huge potential! There’s the fact they can’t call it a mine due to ASX technicalities, BUT the market can still see what’s right in front of them, which is they are producing gold at bonanza grades… Anyway, this mornings announcements referred to 2-4m tonnes of ore at 20-30gm per tonne as an EXPLORATION TARGET (there are fairly sound indicators and circumstantial evidence to warrant giving more weight than usual to this type of wording despite the ASX gag on what they can and can’t say, but yes it is still highly speculative at this stage). This means there is a small element of de-risking and plenty of reason for speculators to get excited about this. So any sniff of drilling success that suggests they have found more of the same could create lots of excitement and rerate potential.

As for putting numbers on it, it’s low reliability stage. For the exercise, let’s assume the conservative end of the blue sky scenario and say they happen to drill out a 2m tonne body @ 20gm/tonne grading.

Project Economics – Conservative Case (Pilot Plant Only, 2Mt @ 20 g/t)

Key Financial Metrics:

Mine Life: ~110 years (at 50 tpd, limited by processing rate)

Annual Gold Production: ~10,560 oz

Annual Revenue:$29.57M USD

Annual Opex:$4.22M USD

Annual EBITDA:$25.35M USD

NPV (8% Discount Rate):$316.77M USD

IRR:Undefined (No Capex required, as the plant is already operational)

Analysis & Takeaways:

✅ Very high EBITDA margins (~85%) due to ultra-low $400/oz production costs.
✅ Significant NPV of $316M, even at this small scale.
✅ IRR is undefined since no new capital investment is needed.
⚠️ Mine life at 50 tpd is over 100 years, so expansion would be required to maximize value.

Even at pilot-scale production, the project is already highly profitable. However, to unlock its full potential, increasing processing capacity (e.g., to 300 tpd or higher) would significantly boost annual production and shorten the payback period (built-in optionality).

Strategic Advantages Worth Noting:

✅ Already Producing Gold – Pilot plant is operational, generating cash flow.
✅ World-Class Grades – 20-30 g/t is exceptionally high, supporting low-cost mining.
✅ Low-Cost Production – $400/oz AISC vs. $2,800/oz gold price = huge margins.
Note: cost assumption was provided by Warwick Grigor himself.

So all going to plan and with some wins on the drilling, generating free cash flow to progress phosphate operations as well, you could end up with significant upside from exploration success. BUT we’re also skipping the boring part of the Lassonde Curve and well they’re already producing gold and generating cash, and then you bring Brazil online and all of a sudden BOOM this thing is a cash cow!

Valuation Potential: What Could AGR Be Worth?

With both projects in full-scale steady-state production, AGR could generate:

Rock Phosphate EBITDA:$30M USD/year

Gold EBITDA:$50M - $120M USD/year

Total EBITDA:$80M - $150M USD/year

Applying a 5-10x EBITDA multiple (common for mining/agriculture producers):

Low Case:$400M USD (5x multiple on $80M EBITDA)

High Case:$1.5B USD (10x multiple on $150M EBITDA)

Current Market Cap of around $50m and from what I hear the people behind the wheel are fantastic operators, so execution risk should be minimised. TA looks good too.

Final thought regarding cap raise this morning: It's small, it's at a 5% discount, it'll fund the drilling and then some ($500k will get it done). This is a good sign and shows management is aligned with shareholder interests. Check out their webinar on Youtube, I like the way Warwick speaks and talks about these projects. And he makes no secret of the fact that he is all about getting the share price up for shareholders. They have openly stated as well dividends could be paid by end 2026 if all goes to plan.