PhosCo Ltd Phosphate Discovery Delivers Outstanding KM Results

PhosCo's KM Discovery Delivers Outstanding Results as Phosphate Gains Critical Mineral Status

PhosCo Limited (ASX: PHO) has delivered exceptional drilling results from its KM prospect at the wholly-owned Gasaat Phosphate Project in Tunisia, coinciding with phosphate's addition to the US Critical Minerals List. The latest drill holes have returned up to 39 metres of thick phosphate intersections, reinforcing KM's potential to become a game-changing starter deposit for the broader Gasaat project.

The timing couldn't be better, with phosphate officially added to the 2025 US Critical Minerals List on November 6, highlighting its strategic importance for food security and economic stability. Furthermore, the US Department of Agriculture specifically recommended phosphate's inclusion, recognising that there is no substitute for phosphate in agriculture.

Latest Drilling Results Extend KM Discovery

The four latest drill holes have delivered consistently impressive results, with portable XRF measurements suggesting grades comparable to previous confirmed high-grade intercepts. These results demonstrate the expanding scale and consistency of the PhosCo Ltd phosphate discovery at KM.

Recent KM Drill Results

These results build on earlier laboratory-confirmed high-grade intercepts that established KM as the standout prospect at Gasaat. However, the consistent thickness and grade continuity across multiple drill holes reinforces the discovery's potential significance.

Previous High-Grade Laboratory Results

Nine individual samples from KM have assayed above 28% P₂O₅, ranking among the highest grades reported from Tunisia. In addition, these laboratory-confirmed results validate the portable XRF readings being used for rapid assessment of the latest drilling.

Understanding Phosphate Grades: What Makes KM Special

P₂O₅ (phosphorus pentoxide) is the standard measure of phosphate content in rock. Higher P₂O₅ percentages indicate better-quality ore that requires less processing to produce saleable concentrate.

Phosphate grades represent the percentage of phosphorus pentoxide in the rock, which determines the ore's commercial value. For instance, higher grades mean less waste material needs to be processed to extract the valuable phosphate concentrate used in fertiliser production.

KM's grades of 20-22% P₂O₅ significantly exceed the existing Gasaat JORC Resource average of 20.6% P₂O₅. Moreover, the thickness averages double the historic resource thickness.

This combination of higher grade and greater thickness, combined with lower overburden ratios, positions KM as an ideal starter deposit. Consequently, it could generate early cashflow for the broader Gasaat development.

The presence of coarse yellow apatite beginning at just 26 metres depth in some holes highlights KM's potential for low-strip, low-cost mining scenarios that could support early-stage development.

SAB Prospect Adds Further Near-Term Value

Concurrent drilling at the SAB prospect continues to validate another potential early-production source. Hole GADD-10 intersected 21 metres of phosphate from 53 metres, with preliminary pXRF measurements suggesting grades comparable to previous results.

Previous SAB drilling has returned encouraging results:

• CHDD008: 21.6m @ 23.4% P₂O₅ from 8.6m
• CHDD048: 22.5m @ 20.8% P₂O₅ from 31m

SAB's shallow mineralisation makes it another candidate for prioritisation in the mine plan. Furthermore, the maiden SAB Resource is expected by year-end, which could significantly expand the project's near-term production options.

Critical Minerals Status Validates Strategic Position

Phosphate's addition to the US Critical Minerals List recognises its essential role in global food security. Additionally, the US government has identified supply chain vulnerabilities in phosphate production and distribution.

This designation reinforces the strategic value of projects like Gasaat in a world increasingly focused on supply chain diversification. However, it also highlights the growing recognition of phosphate's irreplaceable role in agriculture.

"The continued exploration success at KM coincides with phosphate officially being added to the US Critical Minerals list. This designation confirms the importance of supply chains of this critical commodity, which underpins global food security," said Taz Aldaoud, Managing Director.

Project Economics Positioned for Major Upgrade

The 2022 Scoping Study established robust economics for Gasaat, but specifically identified that higher-grade, lower-strip prospects near the plant site could dramatically improve early-year economics. The PhosCo Ltd phosphate discovery at KM perfectly fits this profile.

What Makes the Current Economics Attractive?

The existing study demonstrated strong fundamentals across multiple key metrics:

• 1.5Mtpa high-quality concentrate production (>30% P₂O₅, <1% MgO)
• 46-year mine life from 128Mt @ 19.9% P₂O₅ production target
• First 18 years sourced from Measured (88%) and Indicated (12%) KEL Resource
• Strip ratio of 3.6:1 for initial KEL mining

KM's superior characteristics—higher grades, thicker intercepts, and lower overburden—position it to potentially replace KEL as the starter deposit. As a result, this could deliver improved strip ratios and enhanced early-year cash flows.

Near-Term Catalysts Building Momentum

PhosCo has established a clear pathway to unlock KM's value through multiple work streams. Nevertheless, the company maintains focus on systematic resource definition and economic optimisation.

Immediate Priorities

The company has outlined several near-term objectives:

• Trenching program along KM's eastern flank to test exposed mineralisation
• Laboratory assays for latest KM holes expected in 3-4 weeks
• Maiden KM Resource targeted for early 2025
• SAB Resource completion by year-end

Strategic Work Streams

In addition to resource definition, PhosCo is advancing technical studies:

• Metallurgical optimisation assessing single-stage flotation potential
• Processing flowsheet updates incorporating latest reagent technologies
• Infrastructure and logistics optimisation studies
• Marketing collaboration with fertiliser industry players for downstream processing

Results from these work streams will feed into an updated Scoping Study ahead of a bankable feasibility study. Importantly, KM is positioned as the potential starter resource that could accelerate project development timelines.

Investment Thesis: Critical Minerals Play with Exceptional Discovery

The PhosCo Ltd phosphate discovery has systematically de-risked the Gasaat project whilst making a significant discovery at KM that could transform the project's economics. Moreover, the combination of phosphate's critical mineral status, Tunisia's established phosphate mining jurisdiction, and KM's exceptional grades creates a compelling investment proposition.

Key Differentiators Include:

• World-class phosphate grades up to 28% P₂O₅ in individual samples
• Exceptional thickness averaging double the existing resource
• Strategic location near proposed processing infrastructure
• Low-cost mining potential with reduced overburden
• Established JORC Resource base of 146Mt @ 20.6% P₂O₅ for project foundation

Why Should Investors Follow PhosCo's Progress?

PhosCo has positioned itself at the intersection of global food security and critical minerals supply. Furthermore, the KM discovery potentially accelerates the timeline to production at Gasaat.

The company's systematic approach to resource expansion, combined with its strategic location in a proven phosphate province, creates multiple pathways to value creation. However, investors should monitor upcoming milestones carefully.

With upcoming resource estimates for both KM and SAB, followed by an updated Scoping Study incorporating these high-grade starter deposits, investors should closely monitor PhosCo's progress. Indeed, the company is advancing toward becoming Tunisia's next significant phosphate producer.

The PhosCo Ltd phosphate discovery at KM has delivered consistently thick, high-grade phosphate intercepts that could serve as an optimal starter deposit for the Gasaat project. Combined with phosphate's critical mineral status and the company's systematic approach to resource expansion, PhosCo represents a compelling opportunity in the strategic minerals space.

Looking to Capitalise on Critical Mineral Discoveries Like PhosCo's KM Find?

Discovery Alert's proprietary Discovery IQ model instantly identifies significant ASX mineral discoveries, including critical minerals breakthroughs that could transform project economics like PhosCo's exceptional phosphate results. Begin your 30-day free trial today and position yourself ahead of the market by visiting Discovery Alert's discoveries page to see how major mineral discoveries have delivered substantial returns for early investors.