Thanks for that. I'll correct or add to it as I understand it. Sorry it's a bit long but a lot has happened in the last four years and I won't go into all of it.
Minbos was an ASX listed entity with a smaller part ownership of the project and was not the manager of the project, for roughly six years before the government took it back.
You can't blame the government for taking it back because there was not enough progress being made for too many years. Even in Australia, you have to reach minimum expenditures with exploration leases otherwise you lose them. Any internal conflict with the prior manager would not have helped.
It's important to know that Minbos won the concession back as manager and with a larger 85% ownership in very quick time. The mining licence was also granted in much quicker than normal time so it was clear that the government was supportive of Minbos and backing Lindsay as manager. That became more clear still when Minbos was granted power for the green ammonia at a discount to an already very low price.
I've been in regular contact with Lindsay for most of the roughly four years since Minbos won the concession. He has worked very hard in all of that time and even spent most of one year living in Angola during covid. That's when he got the idea for the green ammonia.
In the first couple of years he worked closely with the IFDC to change the focus from export to local supply. The reasons were two fold.
During the prior 6 years, it would have been difficult for any manager to progress the project as an exporter because of a long period of historically very weak phosphate prices.
The second reason was that Lindsay wanted to help Angola. In his work with the IFDC, there were a lot of crop trials done to try and blend the phosphate with water soluble MAP to make a direct application product. After working through the delays of covid, developing something that worked very well, completing a scoping study and getting to the point of being confident enough in the product to order and pay for plant equipment, Russia invaded Ukraine.
That put a big spanner in the works and delayed the DFS by around a year because not only did the MAP component of the planned product see its price go through the roof, it also became almost impossible to import any into Africa. Changes had to be made but that delay and problem did turn into a positive. It was discovered that the MAP could be left out and the product still performed about as well in most of Angola’s soils thanks to high acidity in the soil and the high rainfall climate.
That completely removed the dependace on importing MAP fertiliser and reduced the cost of the finished product, improving margins and lowering the final cost to the farmers. It also reduced upfront capital cost and importantly, it created a lot of spare capacity in most of the plant which meant that by spending only another US$4mill on a small part of the plant, the full plant capacity could be doubled, saving US$24 million for expansion to stage 2 capacity. That was a big win. Covid delayed the project by at least a year but also led to a lower cost product with big cspital cost savings.
While overly optimistic timelines have been repeatedly missed, four years is not a long time to win a resource project, undertake extensive crop trials, environmental studies including through covid delays, complete a scoping study based on one product, be forced to change the product by circumstances created by a war in Ukraine, complete a DFS, work with potential offtake customers, secure two offtake MOU's, IDC funding and funding from the Angolan Sovereign Wealth Fund.
One HC member calls this a lifestyle company. That is a ridiculous claim by someone that has no idea how hard Lindsay has worked and how much of his time he has devoted to this project with his passion to create a product mined locally in Angola for the benefit of Angola. He shares the same ideal as the IFDC in growing Angola’s agricultural sector to its past impressive scale to both feed itself and to resume exports. All while creating shareholder wealth for all of us when he takes this into construction this year and production beginning next year.
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