FULL DISCLOSURE: First Phosphate is a sponsor of theDeepDive.ca.
First Phosphate (CSE: PHOS) is already being paid for their phosphate – even though it’s still in the ground. The company this morning indicated it has received an initial payment following an amendment being made to an existing long-term phosphate concentrate offtake agreement that is currently classified as a letter of intent.
Under the revised agreement, the undisclosed buyer has agreed to pay US$530,000 via a lump sum pre-payment. The pre-payment will see the funds placed towards advancing the Begin-Lamarche phosphate project towards a feasibility study and ultimately a production decision.
On site, a 30,000 metre drill program is currently underway and expected to be wrapped up by April. Data from that program will be utilized to finalize geological modeling, following which a decision will be made in regards to proceeding to a feasibility study. If First Phosphate decides against advancing the project, the lump sum payment is to be refunded to the purchaser.
A preliminary economic assessment conducted on the Begin-Lamarche project in 2024 outlined an after-tax net present value (8%) of $1.59 billion alongside an internal rate of return of 33% and a payback period of 2.6 years. That estimate is based on a 23 year mine life that would produce 900,000 tonnes of phosphate concentrate and 380,000 tonnes of magnetite annually.
First Phosphate last traded at $1.06 on the CSE.
FULL DISCLOSURE: First Phosphate is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of First Phosphate. The author has been compensated to cover First Phosphate on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.
