PhosCo’s Gasaat Project Hosts 146Mt Resource; $5M Entitlement Offer Underway

PhosCo’s Strategic Consolidation of Gasaat

PhosCo Ltd (ASX: PHO) has taken a decisive step towards becoming a globally significant fertiliser supplier by formally securing 100% ownership of its flagship Gasaat Phosphate Project in Tunisia. This acquisition consolidates control over a substantial JORC-compliant mineral resource of 146.4 million tonnes at 20.6% P2O5, positioning PhosCo to accelerate exploration and development activities without joint venture constraints.

The Gasaat permit, recently granted by the Tunisian government, nearly doubles the size of the original Chaketma project and benefits from strong governmental and community backing. The project aligns closely with Tunisia’s social agenda, including plans for 10% community participation, reflecting a progressive approach to local stakeholder engagement.

Exploration and Development Momentum

PhosCo is advancing exploration with new targets at both Gasaat and the Sekarna Phosphate Project, also 100% owned. Preparations for a major drilling campaign are underway, with a diamond rig mobilising to site. The company anticipates an updated resource estimate in the September quarter, which will feed into a forthcoming Bankable Feasibility Study (BFS).

Metallurgical test work is planned to optimise processing flowsheets, including evaluating single-stage flotation and assessing mineralogy variability. These efforts aim to enhance project economics and scalability, with a view to producing high-quality phosphate concentrate exceeding 30% P2O5.

Capital Raising and Strategic Partnerships

To fund this accelerated development, PhosCo has launched a fully underwritten entitlement offer to raise approximately A$5 million. The offer is strongly supported by company directors and major shareholder Lion Selection Group Ltd, who have committed to priority sub-underwriting totalling $3.25 million. Additionally, a $1.5 million loan facility from these stakeholders has been drawn to fast-track early works.

Complementing this equity raise, PhosCo has signed a Mandate Letter with the European Bank for Reconstruction & Development (EBRD) for a potential US$5 million strategic investment. Subject to due diligence and approvals, this funding would significantly contribute to the BFS and signal international institutional confidence in the project’s prospects.

Governance and Expertise Bolstered

Recognising the importance of technical and market expertise, PhosCo has appointed Sam Lancuba, a phosphate industry veteran with over 45 years of global experience, as a Non-Executive Director. His appointment follows his role as Technical Board Advisor and is expected to strengthen PhosCo’s strategic direction and operational execution.

Navigating Legal and Operational Challenges

PhosCo’s consolidation of Gasaat follows the unsuccessful permit application by its former joint venture partner Tunisian Mining Services SARL (TMS) and the winding down of the Chaketma Phosphates SA joint venture. The company is prepared to vigorously defend against TMS’s arbitration claims, which it regards as without merit, while also seeking enforcement of a prior arbitral award for damages owed by TMS.

Meanwhile, PhosCo continues to pursue additional permits, including a revised application for the Amoud Phosphate Permit, which could further expand its footprint in Tunisia’s Northern Phosphate Basin.

Financial Position and Outlook

At the end of the March 2025 quarter, PhosCo held approximately A$1.7 million in cash following the loan drawdown, with ongoing expenditures focused on exploration, metallurgical testing, and study updates. The company’s financial strategy, combining equity, debt, and potential strategic investment, aims to ensure sufficient funding through critical development milestones.

PhosCo’s next key milestones include the resource update in the September quarter, commencement of the BFS, and progress on the EBRD investment. These developments will be closely watched by investors seeking clarity on project economics and capital structure evolution.