Tunisia phosphate push: PhosCo (ASX:PHO) holds A$3.84 million as Gasaat drilling and metallurgy advance

Aditi Sarkar

28 October 2026 04:35 PM AEDT

Tunisia phosphate push: PhosCo (ASX:PHO) holds A$3.84 million as Gasaat drilling and metallurgy advance

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Highlights

PhosCo held A$3.838 million of cash at 30 September 2026, down from A$5.862 million, raising no equity.
A proposed A$1.4 million placement at A$0.15 per share, with attaching options, targets funds in November 2026 for Gasaat work.
KM flotation tests delivered concentrate grades of 31.4 to 34 per cent P2O5, the highest achieved at Gasaat.
Gasaat carries a JORC 2012 Mineral Resource of 166.6 million tonnes at 20.6 per cent P2O5.

November 2026 is the month PhosCo (ASX:PHO) is aiming to receive the proceeds of a A$1.4 million placement. The timing matters, because cash fell from A$5.862 million to A$3.838 million in the September quarter while the company pushes its wholly owned Gasaat phosphate project in Tunisia towards its next studies. An Updated Scoping Study is expected imminently.

Cash position and funding

PhosCo held A$3.838 million of cash at 30 September 2026, down from A$5.862 million at the start of the quarter. Operating outflows were A$989,000 and investing outflows were A$1.005 million, of which exploration and evaluation was A$696,000. The company raised no equity and drew no borrowings.

Counting a further A$0.593 million of unused European Bank for Reconstruction and Development (EBRD) grant funding, PhosCo put available funding at A$4.431 million. On relevant outgoings of A$1.685 million a quarter, it estimated a runway of 2.63 quarters. The first A$1.05 million instalment of a EUR 1 million EBRD grant was received on 19 June 2026, with the remainder due during the rest of 2026, subject to milestones.

Once the Updated Scoping Study is released, the EBRD may exercise options for a further A$7.5 million equity investment towards feasibility studies. That is an option held by the bank, not a commitment.

Placement and engineering partner

After the quarter ended, PhosCo announced a placement of 9,523,810 shares at A$0.15 each to raise A$1.4 million before costs. Each share carries one attaching option exercisable at A$0.20 and expiring on 29 June 2029. The placement is subject to legal documentation expected within 30 days, with funds targeted for November 2026. Proceeds are intended for Gasaat exploration and studies, permitting and working capital.

PhosCo also signed a non-binding memorandum of understanding with Tunis-based engineering group STUDI International, which would become its preferred engineering partner for the pre-feasibility and bankable feasibility studies. Services would be on arm's-length terms, and the memorandum does not transfer or encumber the company's assets.

Resource, metallurgy and drilling

Gasaat carries a JORC 2012 Mineral Resource of 166.6 million tonnes at 20.6 per cent P2O5, including maiden resources at the KM and SAB prospects released in May 2026. At KM, flotation produced concentrate grades of 31.4 to 34 per cent P2O5 with recoveries of 73.5 to 77.8 per cent. Magnesium oxide came in as low as 0.96 per cent against a target of below 1 per cent. The company said these were the highest concentrate grades achieved at Gasaat.

Maiden drilling at the KH prospect, about 3.5 kilometres from the proposed plant site, produced five holes with wide intercepts. The best, GADD-2026-35, returned 19.4 metres at 20.66 per cent P2O5 from 81.6 metres. After the quarter, two new holes at the DOH prospect and two scout holes at the Sekarna permit intersected phosphate, with assays pending. Intersections reported at that stage are visual and not yet grades.

Community, permitting and other items

PhosCo expects to release the Updated Scoping Study imminently, led by newly appointed Project Director Cem Yuceer, with pre-feasibility and bankable feasibility studies to follow. It has signed a non-binding memorandum with a parliamentary representative of the Jedelienne Delegation in Kasserine Governorate to seek a 10 per cent project participation for affected communities, though a binding agreement remains to be negotiated.

Discussions are under way with Tunisian authorities over a proposed nature reserve overlay on the southern section of the tenement, which the company said does not affect the northern drilling area. A United States Department of State funding opportunity of up to US$1.54 million was published for third-party applicants, and PhosCo said it is not an applicant and will not receive funds directly.

Related-party payments in the quarter were A$278,000, mainly directors' fees and accrued chief financial officer fees. Maiden diamond drilling for copper and base metals at the Simitu permit is complete, with assays awaited.

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