Can Regulatory Delays Stall Aguia’s Tres Estrades Phosphate Production Ramp-Up?
Aguia Resources has updated its economic study for the Tres Estrades Rock Phosphate Project, reflecting a significant uplift in phosphate pricing and expanded production capacity that together enhance the project's financial outlook.
- Phosphate price revised up to AUD 200 per tonne from AUD 150
- EBITDA, pre-tax cash flow, and NPV estimates increase by over 70%
- Plant capacity audit suggests potential 50% production increase to 150,000 tpa initially
- Negotiations underway for offtake agreements and forward sales
- Project on track for first production in March/April 2026 with strong market interest
Pricing Revision Drives Economic Upside
Aguia Resources Limited has released an updated independent economic study for its Tres Estrades Rock Phosphate Project in Brazil, revising the phosphate price assumption from AUD 150 to AUD 200 per tonne. This adjustment, reflecting recent market conditions, has propelled key financial metrics such as EBITDA, pre-tax cash flow, and net present value (NPV) by more than 70%, underscoring the project's enhanced profitability potential.
Expanded Production Capacity and Operational Plans
An audit of the existing processing plant, leased from Dagoberto Barcelos S.A., indicates that the facility can handle up to 150,000 tonnes per annum (tpa) initially; 50% more than previously estimated; without significant additional capital expenditure. The company plans a phased ramp-up starting at 100,000 tpa, with ambitions to expand to 300,000 tpa by 2028 through the addition of a second drying kiln. This staged approach balances operational readiness with market demand.
Market Engagement and Sales Strategy
Aguia's presence at Expointer 2025, South America's largest fertilizer fair, has generated positive feedback from a diverse range of potential customers, including farming cooperatives, organic fertilizer producers, and large landholders. The company is actively negotiating bulk offtake agreements and exploring forward sales opportunities, aiming to secure contracts ahead of production commencement targeted for March or April 2026. The locally produced phosphate product, PAMPAFOS™, is positioned as an environmentally friendly fertilizer with a minimum 12% P2O5 content, suitable for direct soil application.
Cost Structure and Economic Sensitivities
Operating costs are forecasted between AUD 55 and 70 per tonne, inclusive of plant leasing expenses. Aguia evaluated multiple operational alternatives, with contractor-operated models delivering the highest NPV, though owner-operated scenarios remain competitive. Sensitivity analyses highlight product pricing as the most significant factor influencing project economics, with the project maintaining positive NPV even under a 30% price downturn scenario.
Regulatory and Development Milestones
The company is progressing with the submission of the final operating license application, a process expected to take 3-4 months for preparation, followed by government approval anticipated within one to three months. With construction and installation licenses already granted and the plant refurbishment completed, Aguia is poised to commence production in early 2026, subject to regulatory timelines.
Overall, the Tres Estrades project presents a technically straightforward, low-capital phosphate mining operation with robust economic fundamentals, supported by strong market interest and a clear path to production.
Bottom Line?
As Aguia advances towards production, market dynamics and regulatory approvals will be pivotal in realising the Tres Estrades project's promising economic potential.
Questions in the middle?
- How will fluctuations in phosphate prices impact the project's long-term profitability?
- What are the timelines and risks associated with obtaining the final operating license?
- How quickly can Aguia convert market interest into binding offtake agreements?
