ASX-listed phosphate junior PhosCo, which has touted a billion-dollar price tag for its Tunisian project, is understood to have failed to get the licence to actually mine the site in a blow to its investors.
On Monday evening, drums were beating that PhosCo was sitting on the Tunisian government’s decision to reject its Chaketma mining concession application and expected to announce it as early as Tuesday. The stock hasn’t traded since December 21.
PhosCo is all of $36 million market capitalisation but has put some tantalising numbers to investors for Chaketma. According to its scoping study, the project has a $US657 million post-tax net present value and would produce 68 million tons phosphate concentrate over 46 years. No doubt, investors will be asking some hard questions of PhosCo’s management and board in the coming days around how the licence came to be rejected, when it was touting “positive early engagement” with the Tunisian government and banks as recently as December 14 or just seven days before the trading halt.
Street Talk understands PhosCo’s licence rejection came on the back of financing arrangements. It previously applied for the licence, via its then joint venture partner Tunisian Mining Services, in 2018 and the duo have been in court about the ownership of Chaktema.PhosCo’s other investors are also likely to want some clarity on its shareholder, Lion Selection Group, a mining focused listed investment company whose director Robin Widdup chairs PhosCo.
Lion’s chief executive officer Craig Smyth is also PhosCo’s chief financial officer, and the LIC’s entity Lion Manager Pty Ltd bills PhosCo for services including Widdup and Smyth’s work at the explorer.co-edits Street Talk, specialising in private equity, investment banking, M&A and equity capital markets. He has 10 years' experience as a business journalist and worked at PwC, auditing and advising financial services companies.
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