PhosCo Faces Arbitration Amid Gasaat Drilling Breakthroughs

PhosCo’s Gasaat Project, A Fertiliser Giant in the Making

PhosCo Ltd (ASX, PHO) is steadily advancing its wholly owned Gasaat Phosphate Project in Tunisia, aiming to become a globally significant, low-cost fertiliser producer. The project boasts a substantial JORC-compliant resource of 146.4 million tonnes grading 20.6% P2O5, underpinning a long mine life and robust economic potential.

Recent drilling activities have focused on the KM and SAB prospects, identified through internal optimisation as key low-strip targets near the proposed processing plant. Early visual assessments from KM drilling reveal thick, shallow phosphate mineralisation, with intersections exceeding 30 metres in multiple holes. These promising results have shifted drilling priority to KM, with assays pending in the September quarter. Meanwhile, the SAB prospect is on track for its maiden resource estimate in August 2025, further expanding the project’s resource base.

Enhancing Project Economics and Resource Quality

PhosCo has completed a comprehensive geochemical study leveraging machine learning to differentiate economic phosphate mineralisation from waste rock and to identify internal variations within the deposit. This refined understanding allows selective mining to avoid lower-grade, impurity-rich layers, potentially improving concentrate quality and reducing processing costs. Such advances are critical to maintaining the project’s competitive edge in the fertiliser market.

The 2022 Scoping Study highlighted the Gasaat Project’s strong fundamentals, including a 46-year mine life, a post-tax net present value of US$657 million, and an internal rate of return of 54%. Operating costs are projected at a competitive US$79 per tonne of phosphate concentrate, with a rapid payback period of 1.5 years. PhosCo is now progressing workstreams to update this study, incorporating new drilling results, metallurgical reassessments, and infrastructure planning.

Strategic Funding and Governance Strengthening

To support the forthcoming Bankable Feasibility Study (BFS), PhosCo has entered a Mandate Letter with the European Bank for Reconstruction and Development (EBRD), which expresses interest in a US$5 million equity investment. This potential funding, subject to due diligence and approvals, would cover a significant portion of the BFS costs and bring valuable expertise to the project’s development phase.

Complementing this strategic move, PhosCo appointed Sam Lancuba, a seasoned phosphate industry expert with over 45 years of global experience, as a Non-Executive Director. His technical and market insights are expected to enhance PhosCo’s operational and commercial capabilities as it advances Gasaat towards production.

Navigating Legal Challenges and Community Engagement

PhosCo is also managing a legal dispute initiated by Tunisian Mining Services SARL concerning overlapping permits and joint venture agreements related to the Chaketma project. PhosCo has categorically rejected these claims and is prepared to defend its interests vigorously. The company remains focused on progressing Gasaat with strong government and community support, including a commitment to provide 10% project participation to local communities, aligning with Tunisia’s social development goals.

With a cash position of approximately A$3.4 million at quarter-end and a fully underwritten entitlement offer raising around A$5 million, PhosCo is well-positioned financially to continue its exploration, feasibility, and development activities.