I posted the following recently. No need for me to re-write it so I'll just copy and paste, except for the sp chart which I updated and posted at the end.
TSP prices have been in an uptrend over the last two years since the correction from the Ukraine war highs in 2022.
Last month saw the TSP price up 9% month on month after input costs, especially acid costs increased recently. A few weeks before last month's 9% rise in TSP price was reported, I posted about the acid price rises and how they might push TSP prices. I don't know if these recent input cost rises are temporary or structural and here to stay but with or without those recent input cost rises, the TSP price trend had been up for two years anyway.
Now, following the initial Israeli attack on Iran on Friday morning our time, follow up attacks reported this morning have included Iranian oil and gas infrastructure.
https://www.abc.net.au/news/2025-06-15/naus_ncmideast9rpl_1506/105418452The oil price jumped heavily on Friday before oil and gas infrastructure was being targeted. I think this weekend's attacks on oil and gas infrastructure is likely to push oil and gas prices higher again on Monday and probably for longer than would have been the case if oil and gas infrastructure had not been targeted. That now seems likely to feed through to higher fertiliser prices again for next month. The price rises might accelerate from here and generate further investor interest in oil, gas and possibly in fertiliser stocks too as we saw in 2021, maybe not to the extent we saw in 2021 when the sp rose from 5c to 21c on higher fertiliser prices but maybe enough to make a significant difference to the sp. The trading volumes have been low recently so any increase in investor interest in fertiliser stocks could generate a significant move in the sp, especially with construction now underway - that's something we didn't have in 2021.
The probable imminent signing of the two loan agreements to allow the completion of construction of the plant is likely to have the biggest near term effect on the sp but the up-trending TSP price is likely to increase interest and should help lift any sp targets higher following the signing of the loan agreements. The project NPV rises by 28% for a 20% rise in TSP price above the base case assumption of $422. The TSP price was $541 last month which is 28% higher than the base case, probably now boosting project NPV by at least around 36% to US$276mill or A$425mill. MNB's share of that is 78% for A$331mill and that's not factoring for any possible increase in prices over May's TSP price that might arise from the attack on Iran's oil and gas.
A$331 compares to the current market cap of only $48mill. There is still a very large discount for risk priced in. Signing of the loan agreements should see a lot of that risk pricing eased off. Even a doubling in the mc to $100mill would still leave a very deep discount to NPV. A tripling of the sp would leave the mc at just 50% of NPV. That seems a reasonable near term minimum target with production likely to start within only 6 months of loan drawdown. BAI drawdown is expected within weeks and Bank BAI could be earlier.
TSP price 2009 - May 2025
The sp easily broke through 5c resistance two weeks ago with better volumes on the way up but it did stop and eventually fall back down from the next potential resistance line which was at 5.5c. After holding just on that resistance line for a few days, it then dropped on much lower volume and that drop was triggered by an announcement that was not further finance news that the market was waiting for, so some of those traders that bought on the way up, might have bailed. Back on a line of support now. There should be good support between 4c and 4.3c and stronger support at 3.8-4c while we wait on the big news. It's unfortunate we didn't get that news early, while the sp was at 5.5. I am surprised the sp has fallen back this far even if it was on lower volume.
Nothing has changed that should have pushed the sp lower. The TSP price is trending up and likely to continue higher now, especially with the Iran situation and financing news is only getting closer.
As for a sp prediction on production kicking off;
"MNB's share of that is 78% for A$331mill and that's not factoring for any possible increase in prices over May's TSP price that might arise from
the attack on Iran's oil and gas. A$331 compares to the current market cap of only $48mill."
That market cap has since pulled back down to $42mill. Upside to the spot price NPV is a factor of 6.9, which would be a sp of 30c. Adjust for potential dilution of whichever options are in the money at the time.
That doesn't allow for further growth over the DFS or capex savings since the DFS or the green ammonia project but it also relies on the accuracy of the DFS which is the guide we have until earnings start to roll in.
(20min delay)