Emerging phosphate producer Minbos Resources (ASX:MNB) has locked in a US$10 million ($15.2 million) capital injection from Fundo Soberano de Angola.
Fundo Soberano de Angola (FSDEA) is the country’s sovereign wealth fund, which has allocated US$250 million to the agricultural sector, with the aim of generating economic growth in the next three to five years.
Agriculture is viewed as one of the most promising commercial sectors in Angola and has been one of the main focuses of foreign direct investment in the region.
The investment will support the construction of Minbos’ Cabinda Phosphate Fertiliser (CPFP) Project.
The news pushed shares up over 20% to an intra-day peak of $0.077.
FSDEA has provided Minbos with written approval of the investment proposal, which will see the company issue shares at the greater of $0.08 each or the volume-weighted average price for shares for the 10 days immediately prior to execution of definitive transaction documents.
The fund completed its due diligence in cooperation with the Industrial Development Corporation of South Africa (IDC), with the investment to enable Minbos to meet IDC’s condition precedent of raising US$11 million for equity funding to support the development of the Cabinda Project.
Minbos Managing Director Lindsay Reed says Fundo Soberano de Angola and IDC share the same interest in developing the CPFP for domestic and export sales.
“This will strengthen CPFP’s financials and manage our customer risk profile,” he says.
FSDEA Chairman Armando Manuel says the fund’s board carefully reviewed Minbos’ proposal and agreed that the investment will strategically enhance Angola’s profitability prospects.
“This decision demonstrates our commitment to the development of Angola as a country specifically in key sectors that contribute to the diversification of the economy,” he says.
Formalities to finalise the strategic investment will begin immediately and are subject to all the normal regulatory and other approvals.
Minbos expects to finalise the balance of IDC’s conditions precedent for the US$14 million construction funding in the coming weeks.
The company, which has a $58 million market capitalisation, had $3.5 million in cash at the end of the June 2024 quarter.
Write to Angela East at Mining.com.au
Images: Minbos
