Phosphate Australia, an Australian listed phosphate explorer, will require more than AUD 300m for its Highland Plains phosphate project in Northern Territory, managing director Andrew James said.
The company would consider selling up to a 49% stake in the project, and proceeds would be used to build the pipeline to transport phosphate, for the barging facility, and other expenditures. Considering the high capital requirements, the most likely route of fundraising would be an off-take agreement with some equity participation in the project, James said.
With the improvement in prices, there is a resurgence of interest in the fertilizer sector, James said. Ideal partners would be Asian companies with a presence in the fertilizer space. It is understood that the company has had talks with Korean, Pakistani and Chinese groups. Pankaj Oswal of Burrup Fertilisers, part of the India headquartered Oswal group, owns around 5m shares in Phosphate Australia.
Phosphate Australia is not working with external advisors to identify a potential partner, but could hire a marketing advisor in international markets if required. Fairweather & Lemonis is its legal advisor.
The inferred resource at Highland Plains stands at 56m tonnes, at 16% P2O5 with a lower cut off of 10% P2O5, according to its website. Phosphate Australia has a market cap of AUD 23.2m.
By Mansi Gandhi in Sydney.
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