Disclosure: Millennial Potash Corp. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
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*Subsequent to Q3-FY2025, MLP raised $9M through an equity financing.
Price and Volume (1-year)
Banio Potash Project, Gabon
The advanced stage Banio potash project, covering 1,238 km2, is located 450 km south of Libreville along the Atlantic coast of Gabon. MLP plans to transport the enriched brine extracted through solution mining via pipelines to a processing plant in Mayumba, located 50 km north of the Banio project. The processing plant will transform brine into granular fertilizer through evaporation, crystallization, drying, and compaction.
Located in the potash-rich Congo Evaporite basin in Gabon, which hosts several large potash deposits. Gabon hosts several majors such as Fortescue (ASX: FMG), Eramet (ENXTPA: ERA), Total (NYSE:TTE), and Shell (NYSE: SHEL)
The company plans to ship its products to target markets through the Mangali port. Gabon’s proximity to Brazil gives MLP a transportation cost advantage over other global suppliers
Banio Resource Estimate
Banio hosts a large-tonnage/low-grade potash deposit. The resource envelope measures 5 km (length) x 3 km (width) x 0.2 km (thickness)
A 2024 PEA study returned an AT-NPV10% of US$1.1B, and an after-tax IRR of 33%, using US$387/t gMOP vs the current spot price of US$363/t. We note that OPEX/CAPEX are relatively low as the deposit is amenable to solution mining
We believe there is resource expansion potential, as the deposit remains open in multiple directions, and the current resource represents only 1.5% of the project area
Earlier this year, MLP drilled two holes (981 m) as part of a phase two drill program to assess the presence of potash-rich horizons at depth, and lateral continuity of mineralization at the project’s North target. One hole intersected 297 m of interbedded potash and halite, while the other, 3.7 km east, returned over 100 m.
Phase Two Drilling
Drilling intersected thick potash seams, extending mineralization both along strike and depth; assay results pending. Mineralization has been identified at depths ranging between 230 m and 678 m below surface, and over 8 km along strike; we note that Banio’s potash beds are shallow compared to projects in Saskatchewan (800-1,500 m deep
Management aims to complete a resource update this year, followed by engineering studies for a feasibility study
Financials
Strong balance sheet. Subsequent to Q2-FY2025, MLP raised $5M through an equity financing
The company is currently pursuing a $6M equity financing. In-the-money options and warrants can bring in $12M
FRC Projections and Valuation
Following the DFC funding commitment and improved financing outlook, we are lowering our discount rate assumption from 14.6% to 13.1%
We are using a higher 15-year average potash price of US$323/t (previously US$302/t), and a shorter production timeline of four years (previously six)
As a result, our DCF valuation has increased from $1.38 to $2.47/share
Our valuation is highly sensitive to key inputs
We are reiterating our BUY rating, and adjusting our fair value estimate from $1.38 to $2.61/share. We believe MLP’s exceptional share performance reflects growing confidence in the Banio project, supported by strong drill results, infrastructure progress, and backing from the U.S. DFC. With robust potash fundamentals, improving project economics, and a well-capitalized position, MLP is advancing toward a feasibility study in 2026.
Risks
We believe the company is subject to the following risks:
