Ann: Cabinda Phosphate Finance and Sales Update, page-11

A number of questions have been answered with this update.

The following explains the holdup with Banco BAI which will no doubt now be resolved.

"As one of the conditions precedent to drawdown, the Company has agreed to convert its Angolan subsidiary, Soul Rock Lda, (the Borrower of the Banco BAI Term Loan) from a Limited Liability Company (Sociedade por Quotas, Lda) to a Public Limited Company (Sociedade Anónima, SA). Under the SA company structure, the company is legally required to establish three separate governance bodies for management, board of directors and auditors, which is the structure preferred by Banco BAI."

The revised term sheet with Banco BAI indicates that the Bank does intend to proceed with the loan.

"A revised term sheet has been signed with Banco BAI for a Term Loan (“Banco BAI Facility”) recognising the updated sales strategy and removing certain conditions in respect to securities."

The question of what is happening with the loan guarantee has also been answered;

"Fundo de Garantia de Crédito (“FGC”), has indicated it will provide Banco BAI with a credit guarantee for the facility at additional cost to the borrower of 2% interest. Banco BAI will now invite FGC to participate in the loan facility negotiations that are currently underway, as both will be signing parties to the loan agreement."

The following is great news regarding the offtake PC with the IDC;

"The offtake Condition Precedent is currently being updated by the IDC in line with the Company’s sales and marketing strategy to diversify away from a single customer strategy to a broad base of export and domestic sales, with the 120,000ktpa expected to be satisfied from a mix of export markets and domestic distributors and food aggregators."

It appears that they have a starting point of at least 120,000tpa which is significantly higher than the DFS assumptions for 98,000tpa for the first two full years and 110,000 for year three. Demand could grow significantly beyond what is currently in the pipeline.

"Targeting first drawdown by July 2025, subject to final Conditions Precedent being completed, further updates include:• Angolan Sovereign Wealth Fund US$10 million equity subscription has satisfied the Condition Precedent for an equity investment.• Once signed, the Banco BAI Facility will satisfy the term loan facility Condition Precedent.• The offtake Condition Precedent is currently being updated by the IDC in line with the Company’s sales and marketing strategy to diversify away from a single customer strategy to a broad base of export and domestic sales, with the 120,000ktpa expected to be satisfied from a mix of export markets and domestic distributors and food aggregators."

Apart from answering those questions, there is some good insight on all the groundwork done to get to this point.

"Extensive local agronomy trials conducted by the Company have provided valuable insights regarding PRIMEIRO and its ability to improve crop yields and quality attributes. With thirty-two replicated trials conducted over the past 5 years, the Company now understands precisely where PRIMEIRO performs best, the specific soil types, regions and crops it will benefit, optimal application rates and methods to be used, implications of product form, and its interaction with different forms of other macro nutrients, Nitrogen, Potassium and Sulphur. PRIMEIRO is now recognised as important foundation for nutrient plans for all farming sectors based on the five years of trials carried out in conjunction with IFDC, IIA and NPCT, and in product awareness programs instituted by the Company’s Chief Strategy and Marketing Officer Mr Rob Newbold. Mr Newbold and Dr Prochnow, the Company’s Chief Agronomist, have positioned PRIMEIRO to benefit the smallholder sector and also the larger scale first till commercial sector. In addition, they have developed PRIMEIRO+ blends which are gaining acceptance in segments previously considered unsuitable for PRIMEIRO. The Company expects different formulations of PRIMEIRO to evolve as the market develops and matures, including specific blends of Phosphate, Nitrogen, Potassium, and Sulphur [N:K:S] for the Angolan market."

The following sounds positive too as it suggests exports may be at a price better than the standard phosphate rock price.

"export interest is from niche Atlantic markets where MNB Phosphate Rock has specific advantages rather than a simple commodity input for phosphoric acid feedstock"

The company also has clear plans for future growth which will likely include nitrogen from the green ammonia project;

"The Company expects different formulations of PRIMEIRO to evolve as the market develops and matures, including specific blends of Phosphate, Nitrogen, Potassium, and Sulphur [N:K:S] for the Angolan market."

"The Company seeks to re-establish Angola as a major agricultural exporter, whereby within ten years Angolan Agriculture may be more valuable and durable than the Angolan Oil industry. Exports from larger scale mechanised farms are the path to this goal.