PhosCo’s Gasaat study points to a US$732 million phosphate opportunity

Gasaat economics clear the first hurdle

PhosCo Ltd (ASX:PHO) has put a striking set of numbers around its Tunisian phosphate ambition: a post-tax NPV10 of US$732 million, a 52% internal rate of return and capital payback of 1.66 years from commercial production. The updated scoping study describes a 49-year open-pit mine and processing operation producing about 1.4 million tonnes a year of phosphate concentrate, with average revenue of US$152 a tonne.

That is a meaningful upgrade in project definition from the former Chaketma concept. Gasaat is now a 100%-owned, 112-square-kilometre project with a 166.6Mt Mineral Resource grading 20.6% P2O5, compared with the smaller project and different ownership structure assessed in 2022. The company’s earlier Gasaat project expansion had already highlighted the larger resource and premium-grade processing route; the study now turns those technical developments into a preliminary development case.

Low-strip starter pits underpin early cash flow

The proposed mine plan begins with the KM prospect, where a low strip ratio is expected to support the first four production years before operations move through SAB, KEL and GK. The study schedules 134Mt of diluted and recovered mill feed at 19.9% P2O5, producing about 67.7Mt of concentrate over the project life. In the first decade, operating costs are estimated at US$69 per tonne of concentrate, rising to US$80 per tonne over the full mine life as the operation moves into higher-strip areas.

PhosCo also plans two products from a single-stage reverse-flotation circuit: a standard concentrate grading about 30% P2O5 and priced at US$140/t, and a premium 33% product priced at US$180/t. The model assumes the premium material will account for 30% of sales. Recent testwork produced concentrate grades of up to 34% P2O5 in selected tests, but the study’s commercial assumptions are lower and remain subject to further variability work and customer qualification.

A large valuation rests on preliminary assumptions

The headline economics come with the standard scoping-study warning, but it is unusually important here. The assessment carries an accuracy range of plus or minus 35% and is not sufficient to support an Ore Reserve. The production target includes Measured, Indicated and Inferred material, with Inferred Resources representing 12% of the first 10 years and 6% across the mine life. PhosCo says the Inferred component is not a determining factor in project viability, while also acknowledging that further drilling is required to improve confidence.

The capital estimate is US$198.8 million, yet the company says approximately US$220 million of funding will likely be required to deliver the broader project outcomes. Potential sources include debt, equity, development finance, offtake-linked funding, a joint venture or an asset transaction. The distinction matters: the study has produced a project model, not a financing package, and no funding has been secured.

Partners are appearing, but commitments remain conditional

PhosCo says the study activates a possible A$7.5 million EBRD equity investment through 150 million options exercisable at 5 cents, subject to the bank’s due diligence and approvals. It also has a strategic relationship with Tunisian engineering group STUDI, including a proposed A$1.4 million investment and support for the PFS and BFS. The earlier STUDI engineering partnership gave the project a local development partner, but the funding and collaboration remain subject to formalisation.

A separate US Government-backed programme is intended to mobilise private investment, technical expertise and commercial partnerships, potentially targeting up to US$100 million. The programme is being administered through CrossBoundary rather than paid directly to PhosCo, a distinction also made in the company’s US investment mobilisation grant. No offtake agreement is in place, and the study remains based on assumed long-term prices rather than contracted sales.

Mining rights and water supply remain critical gates

Gasaat is still held under an exploration licence, and no mining exploitation rights have been granted. The project also lacks a confirmed water source. PhosCo is assessing deep aquifers, including potentially saline water, alongside treated wastewater and recycling options; initial design work estimates demand at about 5,500 cubic metres a day. Road haulage to Gabès is the starting logistics case, while a rail connection is being considered to reduce the cost and impact of moving concentrate roughly 300 kilometres to port.

PhosCo intends to move into a PFS and BFS, with commercial production targeted in the investor presentation for the middle of 2030. That timeline is explicitly conditional on technical studies, environmental approvals, the mining concession, financing, offtake and a final investment decision. The next test is therefore less about whether Gasaat can produce an attractive spreadsheet than whether the company can convert that spreadsheet into permits, contracts and construction capital.