Aguia Brazilian phosphate project ramps up as | Australian Markets

Phosphate costs are booming, and Aguia Resources seems to be using the wave straight into early money flows at its Tres Estradas phosphate project in Brazil.

Global phosphate costs have jumped as a lot as 70 per cent previously yr, with Aguia now forecasting a sale price of $200–$230 per tonne for its flagship product. That represents a huge leap from the $120–$140 per tonne it anticipated 12 months in the past.

The price additionally compares very favourably with the choice and largely imported monoammonium phosphate (MAP) fertiliser product, which is trading at $1138 per tonne.

The market tailwind delivered a main enhance to Aguia’s project economics, with impartial modelling now projecting a part one 14-year mine life EBITDA of between $253 million and $298 million, based mostly on conservative price assumptions of $153 per tonne.

However, with present costs nearly 30 per cent increased than the assumed price in modelling, it’s anybody’s guess how a lot additional these EBITDA numbers might improve when first gross sales kick in.

Production is set to start within the first quarter of 2026 at an initial price of 100,000 tonnes of phosphate every year, with the company focusing on a fast ramp-up to 300,000 tonnes. It has cleverly sidestepped the standard capital expenditure complications by securing a lease on an present processing plant operated by Brazilian firm Dagoberto Barcelos, shaving years and tens of millions off its development timelines and prices.

Instead of shelling out $26 million for a greenfield construct, Aguia’s revamped plan will see it spend $3.2 million to get into manufacturing, with a additional $4.2 million earmarked for capability growth. That equates to a complete capital outlay of $7.4 million, much less than a third of the company’s authentic estimate.

Operating prices are equally lean. Cash prices, together with plant leasing, are pegged at $55–$70 per tonne, leaving the company in pole place to generate juicy margins from the get-go.

While many shareholders are targeted on the Santa Barbara gold project, it must be reminded that the Tres Estrades phosphate project has been diligently advancing with a view to commencing manufacturing by early 2026. This is developing as a stand-alone business division in Brazil with its own sturdy growth curve. It represents a low technical risk business aiming to ship into sturdy product demand at a time of high phosphate costs.

On the advertising and marketing entrance, Aguia is already speaking bulk offtake offers and ahead gross sales to facilitate funding as it prepares to roll out two key merchandise – its higher-grade 12 per cent Pampafos phosphate oxide product and its sulphur-blended 6.5 per cent Lavratto oxide.

Independent area trials have proven each merchandise can go toe-to-toe with a lot higher-grade Moroccan and MAP phosphate, outperforming them in some purposes.

Transport-wise, Aguia has signed a mine providers settlement with native contractor Construsapper to haul ore from Tres Estradas to the leased plant close to Caçapava do Sul, which is strategically positioned 6km from city and related to 5 main regional hubs.

Notably, the long-term plan includes sourcing ore nearer to the plant and doubtlessly building a devoted processing facility down the road if demand continues to rise.

With demand on the rise, Brazil’s agricultural footprint is set to balloon from 300 million tonnes of grain in 2024 to 477Mt by 2035, pushing the nation’s urge for food for phosphate-based fertilisers on a strongly upward trajectory – and enjoying proper into Aguia’s hand.

Backed by impartial modelling and strong area knowledge, Aguia’s strategy now appears like a textbook case of how to pivot into a rising commodity cycle with out breaking the bank. If phosphate costs maintain – and so they’re exhibiting no indicators of retreating – Aguia is perhaps on the cusp of turning into one of the more profitable, low-risk fertiliser performs now on the ASX.

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