Minbos Resources looks to secure Cabinda funding

Minbos Resources (ASX:MNB) has received an indicative term sheet for a US$14 million (debt) loan facility to potentially help fund its Cabinda Fertilizer Project in Angola. 

The term sheet comes from the Industrial Development Corporation of South Africa (IDC) and, according to Minbos, proposes a ‘competitive’ interest rate and tenor. 

Minbos, which has a $76.74 million market capitalisation, says its engagement with the IDC may also provide opportunities for potential phosphate rock offtake arrangements with South African customers. 

The company has also engaged with several ‘complementary’ financing options for its Cabinda project, including coordination with existing stakeholders.

As Minbos seeks funding for its project, the company reports it has found ways to reduce capital and operating costs and accelerate the development of Cabinda. 

Through a simplified flowsheet, Minbos says it has identified capital savings of around US$10 million compared to a Definitive Feasibility Study (DFS) released in October 2022, with only around US$26 million still required to fund the commencement of production.

The capital expenditure (CAPEX) for a stage two expansion to double capacity on the revised flowsheet has been estimated at between US$1.7 million and US$3.3 million, and memorandums of understanding (MoUs) covering the majority of stage one production are expected to bolster early cashflow and project net present value (NPV). 

The company believes it can build its phosphate fertilizer project at a ‘significant’ discount to the budgeted CAPEX announced in the October 2022 DFS. 

Commenting on the project financing work, Minbos Resources Chief Executive Officer (CEO) Lindsay Reed says: “The submission of a term sheet for project finance from an established financial institution affirms Angola’s standing for foreign investment and demonstrates support with SADC for projects with a strong social impact.”

The submission of a term sheet for project finance from an established financial institution affirms Angola’s standing for foreign investment and demonstrates support with SADC for projects with a strong social impact”

Minbos Resources is working to build a nutrient supply and distribution business that stimulates agricultural production and promotes food security in Angola and the broader Congo basin. 

With a ‘diverse’ and ‘fertile’ ecology, Angola currently holds the potential to become an agricultural producer through its arable land, which is well-suited to host a variety of crops and livestock, including cassava, bananas, potatoes, corn, sweet potatoes, citrus, pineapples, and cattle. 

Minbos Resources had $12.139 million cash and cash equivalents with no debt as of 30 June 2023, according to its latest quarterly report.  

The IDC represents a South African development finance institution established in 1940 to promote economic growth and industrial development to grow South Africa’s industrial capabilities.

Write to Adam Drought at Mining.com.au

Images: Minbos Resources
Author Image
Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.