Lion Selection Group (ASX:LSX) has committed to sub-underwrite $1 million as part of a $5 million rights issue fund raising by phosphate and fertiliser company PhosCo (ASX:PHO).
With large scale phosphate projects in Tunisia, PhosCo is a legacy investment for Lion, which is focused on continuing to build its Australian investment portfolio.
PhosCo’s capital raising was conducted at $0.050 per share, triggering conversion of a $250,000 converting note investment held by Lion into 6.6 million shares at $0.040 per share, with 6.6 million options exercisable at $0.050.
Concurrently, PhosCo has signed a mandate letter with the European Bank for Reconstruction & Development (EBRD) for a potential US$5 million strategic investment.
These funds will contribute towards a Gasaat Bankable Feasibility Study (BFS).
Lion Managing Director Hedley Widdup says the funding and formal granting of Gasaat completes a “remarkable transformation” for PhosCo over recent months.
“The funds will be used to drill the evident exploration upside, and PhosCo is working with EBRD for a larger funding package for a Bankable Feasibility Study. We have been waiting for this moment a long time. Lion’s commitment and persistence with PhosCo is premised on the immense potential of Gasaat as an advanced, large-scale project that we believe will be attractive to phosphate fertilizer industry players in this increasingly strategic commodity,” Widdup says.
“PhosCo’s operations are in Tunisia and Lion’s firm focus is Australia, so this follow-on investment in PhosCo is made by exception reflecting PhosCo’s compelling value.”
PhosCo has formally secured 100% ownership of its flagship Gasaat Phosphate Project in Tunisia with an established mineral resource estimate of 146.4 million tonnes at 20.6% P2O5. These resources are based on two of the nine prospects that feature outcropping mesas with surface phosphate exposures and were the focus of a Scoping Study completed in 2022.
PhosCo also holds the nearby Sekarna project, which has demonstrated similar scale prospectivity for phosphate. Lion has agreed to advance a loan to PhosCo for $500,000, which is to be offset by the sub-underwriting commitment to fast track drilling including extensional drilling at Gasaat and scout drilling at Sekarna prospect.
Write to Adam Orlando at Mining.com.au
Images: PhosCo
