Australian phosphate producer Minbos Resources (ASX:MNB) secures a significant capital boost of US$10 million ($15.2 million) from Angola’s sovereign wealth fund, Fundo Soberano de Angola (FSDEA).
With a focus on bolstering the agricultural sector, FSDEA has earmarked US$250 million to drive economic growth over the next three to five years. Angola sees agriculture as a prime area for commercial development and foreign investment. This infusion will aid in advancing Minbos’ Cabinda Phosphate Fertiliser (CPFP) Project. Subsequently, Minbos’ stocks experienced a surge of over 20%, reaching a high of $0.077. The investment proposal, approved by FSDEA, includes the issuance of shares at a price of $0.08 each or at the volume-weighted average price for the 10 days leading up to the finalization of the transaction. The fund collaborated with the Industrial Development Corporation of South Africa (IDC) during the due diligence process. This investment is expected to help Minbos fulfill IDC’s condition, requiring the company to raise US$11 million for equity funding to bolster the Cabinda Project’s development.
Minbos Resources’ Managing Director, Lindsay Reed, highlights the shared interest between Fundo Soberano de Angola and IDC in advancing the Cabinda Phosphate Fertiliser (CPFP) project for both domestic and international sales, foreseeing enhanced financial stability and customer risk management for CPFP.
Commitment to Angola’s Economic Diversification
FSDEA Chairman Armando Manuel emphasizes the strategic value of the investment, stating that the fund’s board thoroughly assessed Minbos’ proposal and recognized its potential to fortify Angola’s economic prospects, showing dedication to the country’s economic diversification across key sectors.
Steady Progress and Future Funding
Formal procedures for finalizing the substantial investment will commence promptly, subject to the standard regulatory and other approvals. Minbos anticipates fulfilling the remaining conditions precedent for IDC’s US$14 million construction funding in the near future. With a market capitalization of $58 million and $3.5 million in cash reserves as of the end of the June 2024 quarter, the company continues to make steady progress towards its strategic objectives.