The long awaited DFS has been released and appears promising...

The long awaited DFS has been released and appears promising with a fair NPV likely sitting somewhere between the base-price case ($325.5m) and the spot price case ($639.8m). Importantly, both scenarios have an internal rate of return (IRR) greater than 39% which doubles the industry's standard of "good" (that being 20%).

A total of $77.6m in funding will be needed to get the project running, which includes capital expenditure and working capital. After using existing cash and drawing down on MNB's non-binding debt sheet, only a further $24.1m further will be needed.

The recent $25.0m placement and debt sheet has placed MNB in a strong position where it can progress its phosphate and green ammonia project simultaneously with no capital needed in the near term. The debt sheet's terms may allow further dilution of the registry but will provides a needed back stop for MNB's first project.

The further $24.1m will likely be raised at a higher share price than today with near term catalysts such as the green ammonia scoping study due in early 2023, arrival of long-lead item in Cabinda and ongoing capital works. Foundations aren't just exciting for first home buyers!

MNB's current market capitalisation of $71.8m still appears attractive with a healthy NPV for the phosphate project and a likely bigger second project concerning green ammonia. With Angola's enormous agricultural potential, MNB is well placed to capitalise on both company growth sectorial growth driven by increased agricultural yields.

In 1972, Sable Chemicals commissioned its ammonia plant in Zimbabwe which produced a nameplate capacity of 240,000 tonnes of ammonia per annum. With Sable Chemicals, Zimbabwe increased its wheat production from 85MT in 1972 to 213MT in 1982, a compound annual growth rate of 10.0 per cent, thereby becoming the breadbasket of Africa.

Congratulations to Lindsey and the team. I look forward to the green ammonia scoping study and phosphate production slated for Q4 2023.

*USD/AUD = $1.60
**Not financial advice, do your own research