• Taylor Collison slaps Centrex with “Speculative Buy”
  • Centrex is exploring the Ardmore Phosphate Project in Queensland
  • Centrex secured funding for Stage 1.5 Expansion, aiming to increase production and offtake deals 


Taylor Collison has slapped a “Speculative Buy” recommendation on Centrex (ASX:CXM), with no specific price target.

Centrex is a $40m market-capped company exploring its Ardmore Phosphate Project in North West Queensland, and Oxley Potash Project in midwest of Western Australia. The products from both of these projects are used in sustainable agriculture and food production.

Taylor believes that Centrex is on the cusp of transitioning Ardmore to a more cost-efficient operation that will benefit from economies-of-scale, with only modest capital expenditure required.

Funding for the Stage 1.5 expansion of Ardmore (total Capex $17.6m) has been secured from the share placement in Q1, and the $10 million from National Australia Bank’s financing package.

The project’s expansion forms part of the company’s strategy to invest and focus on increasing production rates at Ardmore in anticipation of larger and more frequent shipments.

Taylor said that currently the mine was producing >34.5 per cent P205 (phosphorus pentoxide) concentrate,  considered a premium concentrate by international standards, with a low level of harmful elements being generated by the mine.

“This has been validated by the customer base established by Centrex,” said the note out of Taylor Collison.

Total resources for Ardmore currently stand at 16.2Mt @ 27.8% P2O5, which support a healthy mine life at the proposed production rates.

“Ardmore has a low Life-Of-Mine (LOM) strip ratio of 5.6, with progressive backfilling into the pits limiting rehabilitation liabilities and environmental footprint,” said Taylor.

The LOM strip ratio is a metric used to describe the ratio of the volume of waste material that must be removed to the volume of ore extracted over the life of a mining project.

A lower strip ratio indicates that less waste needs to be removed per unit of ore, which typically suggests a more economically favourable mining operation.

“The company has a simple process flowsheet with well-understood commercial techniques, and the plant has exceeded metallurgical design parameters, consistently achieving above nameplate throughput capacity,” added Taylor.


Recent developments

Meanwhile, the production at Ardmore continues to grow, and as of 25 March, Centrex reported that more than 16,000 tonnes(t) of phosphate product is stored at the Townsville port.

Just yesterday, the company announced that 7,199t of beneficiated phosphate concentrate was successfully loaded aboard in preparation for shipping to an existing customer.

The product was loaded on 18-19 May, and was scheduled to depart Townsville Port during the morning of 20 May.

The company’s next anticipated shipment is scheduled for early June, which is expected to be approximately 15,000t.

Centrex also reported the successful installation of the wet concentrate overflow storage pad and the northern drying pads.

Thi will boost the company’s drying capacity and make the whole process more efficient. When that’s done, Centrex can handle more phosphate concentrate, dry it out, and get it ready to sell in bigger batches.

And on 17 May, additional cyclone banks arrived at Mt Isa – which are to be installed as part of the Ardmore processing plant.

This is expected to enhance plant separation and efficiency, which will enable higher hourly throughput rates.

Increased production will in turn lift revenues and reduce operating costs on a per tonne, FOB Townsville basis, said the company.


Ardmore’s Stage 1.5 expansion to unlock offtake deals

In February, Centrex received credit approval from National Australia Bank for a ~$10m secured financing package designated for the Ardmore Mine.

The loan now fully funds Ardmore’s planned production upgrade, and will increase output from the current ~240,000tpa rate to 625,000tpa by December 2024.

“This substantial increase in production capacity is set to lift revenues whilst also reducing operating costs on a per-tonne basis,” said Taylor Collison.

“Furthermore, the expansion will cement the Centrex’s position as a major and dependable supplier of rock phosphate in the key Asia-Pacific market, thereby underpinning food security throughout the region.”

Upon completion of the Stage 1.5 expansion, Centrex estimates All-In Sustaining Costs (AISC) will be in the range of $160 – $180 per tonne of phosphate concentrate.

Several offtake agreements are already in place with industry-leading names including Incitec Pivot, Samsung C&T, Ameropa AG, Ballance Agri-Nutrients and Ravensdown.

These contracts essentially cover the majority of the projected production from Ardmore over the next three years.

“Capital remains allocated in a prudent manner, ensuring the expansion remains on budget and on schedule as previously outlined,” said Centrex’s CEO, Robert Mencel.

Mencel adds that we’ll really start seeing the benefits of the Stage 1.5 expansion as it ramps up production in the latter half of 2024.

“During December 2024, upon the conclusion of the Stage 1.5 Expansion, Ardmore will unlock a production run-rate of 625ktpa, transforming it into a highly cashflow positive asset for the company,” Mencel said.

Mencel adds that he sees Centrex eventually becoming a major supplier of beneficiated phosphate concentrate.

Centrex share price today:




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