In addition to a potential 40% sp increase from 12c to 17c on...

In addition to a potential 40% sp increase from 12c to 17c on debt funding within 2-3 months, we could then see another 100% upside from 17c to 34c over the following 6-9 months if the mc increases to reach the after tax, base case NPV of only the phosphate project as production ramps up. That would still leave zero value for both the green ammonia and P4 project Any valuation given to either of those other projects makes 34c all the more achievable. The project delays to date haven't changed the sp target, they have just delayed it.

We don't need to wait for a potential P4 plant to be funded and built to see value from that project. The company could begin by selling phosphate for use in the manufacture of P4 by a third party (most likely the cornerstone investor), at a much earlier stage. Potentially from early next year. The company said they committed to 100,000tpa of phosphate for this purpose. The project NPV does not include that upside which again makes the 34c more achieveable. 34c is based on the diluted shares assuming all current unlisted options are exercised.

Together with the delays to the phosphate project, most of which were probably outside of the control of the company (especially during covid travel restrictions), the company has at the same time given us the two other projects that didn't exist three years ago. The company has also avoided considerable further delays by pre-paying and pre-ordering key large plant components. Had they not been ordered until after the completion of the DFS, we could be waiting at least another year again. From memory, those were paid for and ordered around two years ago and were only delivered to site several months ago. Some posters are critical for the delays while not giving credit for what has been achieved.

Both of the two new projects could individually be worth much more than the phosphate fertiliser project. The tech study for the green ammonia produced results that point to a much larger project with a likely NPV multiples higher than the phosphate fertiliser NPV. Even if that project was JV'd to bring in expertise, help fund and get it into production more quickly, even a 50% share is likely to be worth considerably more than the phosphate project which itself has a base case after tax NPV (for MNB's 85% share) equivalent to 34c per share (A$300mill).
The company also avoided heavier dilution and likely a much worse sp performance by raising a significant amount of cash when most of us thought they should have waited. That cr brought in cornerstone investors which will likely play a role in funding one or more of the three projects. The largest cornerstone investor is also likely to purchase phosphate for use in LFP battery components - that is on top of anything allowed for in the DFS so will add to the NPV of the project derived in the DFS.

Regarding the project NPV, the drop in the TSP price might also be playing a part in holding the sp back at the moment. At around $390/t last month, the price is around 7% below the DFS base case assumption which was based on the 15 year average. The TSP price is volatile, especially seasonally between periods of high and low demand around planting periods. The one month TSP price isn't nearly as important as the yearly average which for this year is well above the base case at well over $500/t. What is most important right now is what the TSP price is likely to do next year when it counts.

I posted the following table a few weeks ago from data from the World bank. It shows that over the last 62 years, the TSP price has averaged a price around 3.8 times the price of phosphate rock. That price most likely reflects to a large extent, the cost of production of TSP. The data shows that a ratio below 3 is unsustainable and a ratio approaching one sees a fast and very large snap back up. The price is currently at a ratio of just 1.1 on last month's TSP and phosphate price. It won't be that low a ratio based on the yearly average but from last month's price we can expect either a very large recovery in the TSP price or a very large drop in the phosphate price. Some combination of the two seems more likely to me. To revert back to the 62 year, 3.8 average ratio, even if the phosphate price were to halve from here, the TSP price would still need to rise to $653/t to bring the ratio back up to its 62 year average. $653/t TSP = 3.8 x $172/t Phosphate. The $172/t is half the current $344 phosphate price. If the phosphate price does not drop significantly, then the TSP price is likely to rise by a larger amount. Considering the TSP price is likely to rise significantly from here even if the phosphate price were to halve, anyone using lat month's short term TSP price to value this project is not thinking it through. In any case the NPV would still be A$215mill at 20% below base case TSP assumption. That still puts MNB's share at a valuation more than double the current mc at a TSP price well below last month's price.
$653/t is 55% above the base case assumption which gave us the A$300mill after tax NPV.
The sensitivity table in the DFS shows the after tax NPV would climb to US$261mill or A$383mill, eqivalent to 44c per share fully diluted. That's for a 20% higher TSP price. At 55% above base case, the NPV would be over A$500mill (58c/share) and leave a 34c target looking very conservative. Let's see what happens to the TSP price next year. My pick is at least 20% up on the $422 base case although 30-40% higher seems more likely even if the phosphate price drops 50%.