An important question for investors here is whether or not...

An important question for investors here is whether or not current phosphate and MAP prices are a spike or a reversion to more normal future pricing. If prices remain around current levels, then MNB has tremendous upside to reach its NPV of somewhere around $630mill based on current MAP prices (on my estimates), from the current mc of $41mill. I.e. if prices remain at current levels, the sp could easily multiply more than ten fold when production starts next year.N.I. estimated the projects NPV to be US$550mill or A$750mill.
It's hard to believe the mc is still $41mill with the mining license in hand and long lead items already ordered. So will MAP prices fall back down to 15 year lows or hold?

The following charts are from Mosaic's latest market update released this month.

Phosphate demand dipped between 2017 and 2020 which led to 10-15 year lows in DAP and MAP prices but demand has been growing significantly over the last ten years and it rebounded strongly this year leading to a sharp recovery in prices. Exports next year are expected to jump strongly again and approach global capacity utilisation as shown in the chart below. Then demand is forecast to rise slower through to 2025 but will hit capacity utilisation. So the forecast is for rising demand and a very tight supply/demand. That should see prices rise further into next year and beyond.



The following chart shows lower phosphate inventories in India and China which would have contributed to the price rebound. Based on the numbers and forecasts in the chart above, inventories should remain relatively low over the next 5 years.



DAP prices derived from the World Bank pink sheet are a guide to the MAP price. MAP prices have been rising more rapidly than DAP prices because MAP contains more phosphate than DAP. The trend is up.



MAP price chart from Mosaic below. The strong surge in the MAP price is not even starting to be reflected in the sp of MNB with the price still below levels seen earlier this year before MNB was granted its mining license and before MNB ordered long lead items.


I don't see any reason why the sp won't soon break out to new highs to reflect the achievements by the company over the last 6 months and especially to reflect the MAP price rebound from decade long lows. It should go many multiples higher based on the fundamentals