Phosphate-mining Stocks to Watch

- August 8th, 2018

A look at phosphate-mining companies that are already producing or are working to advance projects focused on the fertilizer.

Demand for both phosphate and potash fertilizers is expected to continue growing as the world’s population increases and the amount of arable land decreases.

Indeed, the US Geological Survey predicts that world consumption of P2O5 (phosphorus pentoxide) fertilizers will increase from 45.7 million tons (Mt) in 2017 to 48.8 Mt in 2021. Asia and South America are expected to to lead the increase in demand.

Thankfully, phosphate-mining production around the globe is expected to increase, with the largest areas of growth being Africa and the Middle East. The expansion of phosphate rock mines and facilities in Morocco alone should double the world’s phosphate rock production by 2020. Project developments in Algeria, Brazil, Egypt, Jordan, Kazakhstan, Peru, Russia and Senegal are all expected to contribute to increased phosphate rock production as well.

With those numbers in mind, we’ve put together an overview of phosphate-mining companies that are already producing the material or are developing phosphate projects. Companies included are listed on the TSXV, TSX, ASX or NYSE, and all had market caps of over $15 million at the time of publication. Please let us know in the comments if we missed any phosphate-mining firms that meet those criteria.

Aguia Resources (TSXV:AGRL,ASX:AGR)

Market cap: C$25.42 million

Aguia Resources is advancing its Rio Grande deposits. Located in the state of Rio Grande do Sul in Southern Brazil, the property is made up of the the Tres Estradas, Joca Tavares and Porteira carbonatite-hosted phosphate deposits and the Cerro Preto sediment-hosted phosphate deposit.

Tres Estradas is the company’s flagship deposit, and in March 2018 Aguia released a bankable feasibility study for the asset. The report shows that Tres Estradas will be able to operate for 16 years, plus a further 20 years as aglime is produced from reclaimed tailings. Phosphate concentrate will grade 30.1 to 32.7 percent P2O5, while aglime concentrate will grade 40 percent CaO with superior reactivity with a TNP of 84.7 percent.

Arianne Phosphate (TSXV:DAN)

Market cap: C$58.19 million

Arianne Phosphate is moving forward at its Lac a Paul phosphate project in Quebec. It has received support from the province through the Plan Nord program. The company is still in the development stage, and has been focusing on establishing partnerships with supply chain partners, project management consultants and logistics. The $1.2-billion project is expected to create 2,200 construction jobs and 1,000 direct and indirect jobs in the province.

The company’s 2017 review covers its progress throughout the year, including the completion of an information memorandum on Lac a Paul. In January 2018, the company closed a private placement that secured $1.9 million in funding. In May 2018, Arianne released its Q1 2018 financial results. The report highlights a private placement of $1.407 million from the Quebec government.

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Avenira (ASX:AEV)

Market cap: AU$21.98 million

Avenira’s flagship project is its 80-percent-owned Baobab phosphate mine in Senegal. The company announced the first shipment of phosphate from the asset in March 2017, and is currently working towards increasing production at the site. In its June 2018 quarterly activities report, the company said a feasibility study on an expansion at Baobab is due for completion in Q4. 

The company also owns the Wonarah phosphate project. The site is considered one of the largest-known phosphate deposits in Australia, with a measured and indicated resource of 300 Mt at 18.2-percent P2O5 at a 10-percent cut off, and an inferred resource of 542 Mt at 18-percent P2O5.

Centrex Metals (ASX:CXM)

Market cap: AU$36.28 million

Centrex Metals holds the Ardmore phosphate rock project in Queensland, which it says is one of the world’s few remaining undeveloped high-grade phosphate rock deposits. According to a December 2017 resource upgrade and extension, Ardmore has a mineral resource of 14.2 million tonnes at 28.7 percent P2O5 at a 19-percent P2O5 cut off; that includes 12 million tonnes of indicated and measured mineral resources. A scoping study for the project was released in January 2018.

Fertoz (ASX:FTZ)

Market cap: AU$19.71 million

Fertoz markets and develops a range of organic fertilizer products in North American and Australia, and has two wholly owned rock phosphate projects in BC. Wapiti is its flagship asset, and the company is currently moving forward with a 75,000-tonne-per-year small mine permit application. The company previously extracted 2,700 tonnes from both Wapiti and Fernie, its other BC-based rock phosphate project, using its current 27,500-tonne bulk-sample permits.

In April 2018, the company announced that it had signed sales contracts totaling more than 10,000 tonnes for delivery for the year, exceeding budgeted sales.

GrowMax Resources (TSXV:GRO)

Market cap: C$29.95 million

GrowMax Resources is a Canadian exploration company whose main asset is its Bayovar property in Peru. The property is located in the Sechura desert in Northwestern Peru.

GrowMax has been focusing on building community relations, optimizing the project and finding growth opportunities. The company also has said that although the market is difficult for publicly traded fertilizer juniors, its large cash balance has allowed it to grow sustainably and differentiate itself from others in the space.

Itafos (TSXV:IFOS)

Market cap: C$291.24 million

Itafos is a vertically integrated phosphate-based fertilizer and specialty products company with projects in Brazil, Peru, the US and Guinea-Bissau. Its Conda operation produces about 540,000 tons per year of monoammonium phosphate, superphosphoric acid, merchant-grade phosphoric acid and specialty products, while its Arraias operation produces around 500,000 tons per year of single superphosphate. 

The company has five other phosphate-focused projects at various stages of exploration and development.

Mosaic (NYSE:MOS)

Market cap: US$11.7 billion

Mosaic is one of the world’s largest producers and marketers of concentrated phosphate and potash crop nutrients. It has various phosphate operations in Florida, Louisiana and South America.

At the beginning of 2018, the phosphate-mining company had a positive outlook. President and CEO Joc O’Rourke was quoted as saying “[a]fter a strong fourth quarter, we entered 2018 with positive market momentum and expect this year will be a transformational year for Mosaic.” The company reported net sales for the year of $7.4 billion, an increase from $7.2 billion the previous year.

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Nutrien (TSX:NTR,NYSE:NTR)

Market cap: C$34.85 billion

Nutrien is the product of the merger between phosphate-mining giants Agrium and Potash Corporation of Saskatchewan. The two companies announced the merger back in 2016, and went through a series of regulatory clearances in order to close the deal.  The merger officially closed on January 1, 2018 and the company launched as Nutrien on the TSX and NYSE the following day. 

The company’s net earnings from continuing operations came in at $741 million in Q2 2018, while EBITDA came to $1.5 billion. The phosphate-mining company said that the slower-than-expected ramp up of new capacity, along with plant closures and higher raw materials costs year-over-year “continue to support phosphate prices.” 

Verdant Minerals (ASX:VRM)

Market cap: AU$16.56 million

Verdant Minerals holds several phosphate and potash projects, including the Ammaroo phosphate project in Australia’s Northern Territory. The company completed a feasibility study for the project in May 2018; it lays out a plan for staged production at Ammaroo, with 1 million tonnes of phosphate rock concentrate per year anticipated in the first stage and 2 million tonnes of phosphate rock concentrate per year expected in the second stage. 

The company has signed a number of offtake memorandums of understanding for Ammaroo, and received environmental approval for the project from the Australian federal government in June 2018.

Have you invested in any of these phosphate-mining stocks? Which phosphate-mining companies do you see doing well this year? Tell us in the comments.

Don’t forget to follow us @INN_Resource for real-time updates!

This is an updated version of an article originally published by the Investing News Network in 2015.

Securities Disclosure: I, Amanda Kay, hold no direct investment interest in any company mentioned in this article.

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