Key Highlights

  • The study outlines an open pit operation producing 1.4 million tonnes per annum of phosphate concentrate.
  • The post-tax NPV is US$732 million at a 10 per cent discount rate, with an internal rate of return of 52 per cent.
  • Development Capital is estimated at US$199 million, with total funding of about US$220 million.
  • The company plans to move to a pre-feasibility study next.

PhosCo (ASX:PHO) has released an updated scoping study for its Gasaat phosphate project in Tunisia, replacing an earlier study completed in 2022. The update, announced on 9 November, outlines an open pit operation producing 1.4 million tonnes per annum of phosphate concentrate over a 49-year mine life, and the company now plans to move to a pre-feasibility study.

According to the company, the study returns a post-tax net present value of US$732 million, using a 10% discount rate, and an internal rate of return of 52%. Payback is estimated at 20 months from the start of commercial production, and total Revenue over the life of the operation is put at about US$10 billion. Development capital is estimated at US$199 million, while the total funding requirement, which the company expects to meet through a mix of Debt and equity, is about US$220 million.

Production target and processing

The study is built on a production target of 134 million tonnes grading 19.9% phosphorus pentoxide (P2O5). PhosCo said the operation would make two products: a premium concentrate grading about 33% P2O5 and a standard concentrate at about 30% P2O5. Processing would use a single-stage flotation flowsheet, which the company expects to deliver both of these concentrate grades. The update also comes after maiden resource estimates at the KM and SAB prospects.

Tunisia has a long history of phosphate mining, and the project's location within that established industry is a central part of PhosCo's case for developing Gasaat.

Funding and partners

Alongside the study, PhosCo pointed to several sources of outside backing. The European Bank for Reconstruction and Development (EBRD) holds an option to invest a further A$7.5 million in equity. The company also has a Partnership with STUDI that includes an Investment of A$1.4 million, and a US$1.5 million US Government programme was also cited in support of the project. Together these amounts are small next to the estimated US$220 million funding requirement, but they show institutional interest at an early stage.

Limitations and uncertainties

A scoping study is a low-accuracy assessment of whether a project could be technically and economically viable. It is not a pre-feasibility or definitive study and is not enough on its own to support a decision to mine or to raise development finance. The headline Economics rest on assumptions about phosphate prices, product premiums, operating costs, exchange rates and the fiscal regime, any of which may change as studies advance.

Securing roughly US$220 million for a single project would be a large task for a junior developer.

Next steps

PhosCo said it plans to complete a pre-feasibility study, followed by a bankable feasibility study. These stages are expected to refine the mine plan, flowsheet, capital costs and product specifications, and they would usually form the basis for funding and offtake talks.