Lion Selection Group Limited (ASX:LSX) has announced a $1 million commitment to underwrite PhosCo Ltd’s (ASX:PHO) $5 million rights issue. This investment, considered an exception to Lion’s focus on Australian ventures, underscores the significant potential of PhosCo’s Gasaat Phosphate Project in Tunisia. Lion will also advance a $0.5 million loan to PhosCo, offset by the underwriting commitment, to expedite drilling activities at both the Gasaat and Sekarna prospects. PhosCo’s fundraising, priced at 5 cents per share, triggered the conversion of Lion’s $250,000 convertible note into 6.6 million shares and options.
PhosCo has secured 100% ownership of the Gasaat Phosphate Project, boasting a Mineral Resource Estimate of 146.4Mt at 20.6% P2O5. The company also holds the Sekarna project, showing similar potential. Parallel to Lion’s investment, PhosCo has signed a mandate letter with the European Bank for Reconstruction & Development (EBRD) for a potential US$5.0 million strategic investment, earmarked for a Gasaat Bankable Feasibility Study.
Hedley Widdup, Lion’s Managing Director, highlighted the funding and formal granting of Gasaat as a transformative moment for PhosCo. This follows the recovery of the Chaketma project interest through international legal action. The funds will facilitate exploration of the project’s upside, while PhosCo collaborates with the EBRD for a larger funding package. Lion’s continued support is driven by Gasaat’s potential as a large-scale project attractive to phosphate fertilizer industry players, particularly given the increasing strategic importance of the commodity.
