Ann: Cabinda Phosphate Fertilizer Plant Enroute to Angola, page-131

I recently thought the current rally with its first correction (circled in green on the far RHS) resembled the start of the 2021 rally that saw MNB come up from a deeply corrected low of 5c to rally to 21c. It had two similar corrections along the way (also circled in green on the LHS of the chart).
So far, it is looking like Friday's dip was just a short term correction for MNB, within a strong up trend which began from another deep correction that bottomed with last year's bear market. This week's rally following that correction (see below) has seen MNB go up strongly over the last four days and importantly, it has recovered to the top of its recent range while the US has been correcting further over the same period.




The 2021 rally saw the sp quadruple in four months. This one has been going for just over two months but I think this one will take longer than four months and I also think that there is good reason for it to more than quadruple this time. Why?
If it were to quadruple again off its low as it did in 2021, that would take it to 28c this time. What sp is justified by year end fundamentally?
Taking the most conservative view, I assume that all of the 15c options are exercised (unlikely for close to 100% to be exercised unless the sp is closer to 20c) and that all unlisted options are also exercised, plus allowing for the performance rights, then total shares on issue would increase to 918mill. At 28c, that would give a fully diluted mc of $257mill. It would also raise $16 million in cash from the exercise off all options giving a good cash buffer above what is needed (assuming the US$25 mill debt facility is finalised and drawn).
The phosphate BASE case, after tax NPV is US$203mill or A$298mill for MNB's 85% share. That alone could see the sp reaching 28c for a mc of $257mill on a FULLY diluted basis, for a significant discount to base case NPV.
However the NPV is significantly higher than A$298mill at current fertiliser prices. TSP was at $569/t in January.
https://www.worldbank.org/en/research/commodity-markets
Page 45 of the DFS stated that the DFS base case TSP price was just $422. If the current TSP price falls from $569 to $506 it will still be 20% above base case.
The sensitivity table on pg 46 gives an after tax NPV of US203 at base case and around US$261mill with a 20% increase in TSP price (which is still well below January's actual price).
So even if we allow for the TSP price to fall from the January price of $569 down to $506 (20% above base case), the after tax NPV would be A$385mill.
It would take a sp of 42c on a fully diluted basis to reach this reasonably conservative, after tax NPV of A$385mill.
While it seems a long way off from 13c, 42c looks like a realistic target to me by the end of this year after production has begun.
The biggest problem with that target is that ignores any value at all for the larger green ammonia project. When does the market begin to place some value on that green ammonia project? Some time this year seems likely and that could bump up the 42c target by quite a bit.
Also, if the TSP price bottoms above the $506 value that I used above and starts to rise again by year end, the market might start to price that higher fertiliser price in to the mc and sp. So there are catalysts that could push the sp well beyond 42c by year end. 50-60c to start to price in the green ammonia?
Maybe the biggest threat to those targets would be further project delays but there are no hints of that at this stage. We had our fair share of delays during covid. Hopefully there are no more ahead and the sp continues to rally right through this year, into first production in November.

The DJIA is still above its 200DMA while the S&P500 just bounced off its 200DMA and the Nasdaq closed on its 200DMA after dipping below.
These 200DMA are not critical. US markets often cross them briefly and then cross back to the other side again soon after. You can see that below. MNB (chart at bottom) rallied strongly before and after news while the US was still correcting. Plenty more news to come.