PhosCo’s phosphate production ambition backed by growing resource confidence
PhosCo’s confidence in its flagship Chaketma phosphate project’s ability to sustain higher production rates has been swelled by a massive increase in Indicated resources at the GK deposit.
Just how massive? Try a 90% conversion of its Inferred Resource into the higher confidence Indicated category, which has sufficient information on geology and grade to support mine planning.
This means that GK now has an Indicated Resource of 83.7Mt grading 20.2% phosphate out of the total Resource of 90.9Mt at 20.2% phosphate, which PhosCo (ASX:PHO) executive director Taz Aldaoud says could allow Chaketma to support a higher production rate about the original 1.5 million tonnes per annum to match market demand.
“We’re thrilled to see such a significant boost in confidence at the GK deposit. The Chaketma Phosphate Project truly is world-class, with 84 million tonnes now in the Indicated category, at this deposit alone,” he added.
“The conversion of 90% of the 2013 MRE from Inferred to Indicated with a slight loss of tonnes is a significant milestone in the advancement of the Chaketma project.
“The amount of work that was required to upgrade the resource at GK should not be underestimated, with our technical team having to apply rigorous effort to both resource work and Scoping Study activities simultaneously, the latter of which is now largely complete.”
With phosphate commanding prices well above US$300 per tonne due to Russian invasion of Ukraine impacting on the fertiliser market, the upgrade could not be better timed.
PhosCo’s upgrade to the GK resource is based on an additional 21 drill holes that have materially enhanced the resource confidence.
It contrasts with the original 2013 resource estimate that was based on just 10 holes and eight trenches.
While the upgrade in confidence also came with a 2Mt reduction in overall tonnage – from 93Mt at 20.2% phosphate, the additional drill holes and use of high-resolution LiDAR provides a more accurate constraint on the limit of the outcropping phosphate horizon.
The upgrade also means that higher confidence Measured and Indicated now represent 95% of the resources of 146.4Mt grading 20.6% phosphate at the broader Chaketma project.
This provides a strong foundation to underpin a revised Scoping Study which is due for release imminently.
Chaketma is a large, high confidence resource in Tunisia that features simple geology, which is exposed on all sides through its mesa-like topography.
Its location near Europe also positions it well to meet strong fertiliser demand.
There is also massive potential for further upgrades as just two of the six prospects at the project have been adequately drill-tested to date.
PhosCo is currently studying the potential of the resource to support higher production rates along with identifying nearby deposits such as the SAB prospect for lower mining costs.
Other optimisation opportunities being considered include mining optimisation for greater utilisation of strip mining, the potential to direct ship material in higher grade layer B early in project life, simplified processing via single stage flotation and/or washing, as well as economies of scale such as the extension of the rail connection to site.
The company is also progressing discussions with the Tunisian Government and development and commercial banks.
Once it receives the Chaketma Mining Concession, PhosCo plans to proceed to a Bankable Feasibility Study.
This article was developed in collaboration with PhosCo, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.