Minbos secures multi-million dollar debt facility approval

Minbos Resources (ASX:MNB) has received credit committee approval for a $21.5 million debt facility from the Industrial Development Corporation (IDC) of South Africa to fund construction of  its Cabinda Phosphate Project in Angola. 

The facility will cover the majority of the US$24 million ($37.1 million) construction costs, subject to the final pricing of phase-two construction. 

Minbos says the remaining US$10 million required to complete construction and commissioning is expected to come from Angola’s agriculture-focused banking and lending sector, as well as development-focused investors. Discussions are already underway with investors and the sector. 

The Cabinda project supplies a seasonal industry, and Minbos has begun discussions for a working capital facility with competing local banks charged with deploying concession funds from the government to the agricultural value chain. 

The Angolan government has committed US$500,000,000 in funding to provide loans to producers primarily in and assisting in the development of the agricultural sector.

While Minbos intends to maximise its use of the funding, which considers factoring finance that is being explored with possible third-party warehouse operators, the company is also evaluating multiple unsolicited partnership opportunities for Cabinda and its Capanda Green Ammonia Project. 

However, Minbos says these opportunities may not eventuate and the company will keep shareholders updated on the progress. 

With the IDC facility approval, Minbos can now access financing opportunities that were previously unavailable. As a result, Minbos is also conducting a two-tranche private placement to raise $6.1 million via the issue of 87.5 million shares at $0.07 per share, representing a 23% discount to the last traded share price. 

The placement funds combined with the debt funding will ensure Minbos remains funded for phase-one construction activities at Cabinda. 

Placement participants will be entitled to a one-for-one free attaching option at the same price with a 24-month term. 

CPS Securities and PAC Partners acted as joint lead managers to the placement and will receive fees on normal commercial terms. 

As previously reported, the company is expecting to complete the project in late August this year. Construction work has been split into two stages, with stage one comprising earthworks, civils, and drainage, while stage two comprises design optimisations. 

Phase one will cost around US$5.5 million, while phase two will cost US$18.5 million. 

Minbos says phase three — which is the commissioning — is expected to take around one month to complete, while phase four consists of the project team investigating expansion opportunities which may be incorporated into phase two of construction. 

This will depend on progress at Porto de Caio deepwater port, negotiations, and testwork with potential offtake customers in South Africa and the delivery timing for a ‘larger’ crusher. 

Minbos is planning all project activities to ensure the major phosphate customer has the majority of its fertiliser requirements for the 2025-26 growing season and in its warehouse by the end of December 2025. 

To achieve this, construction must start by July 2024 to facilitate first production in Q2 2025.

The Cabinda project is a phosphate-focused project in Angola. A previously conducted Definitive Feasibility Study demonstrates that the project has robust economics, with relatively low capex requirements, putting Minbos on a pathway towards near-term production. 

Minbos Resources is focused on building a nutrient supply and distribution business that stimulates agricultural production and promotes food security in Angola and the broader Congo Basin. 

Write to Aaliyah Rogan at Mining.com.au   

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Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.