Cash outflow of $481K. Significant growth in revenue with $7.5 million in phosphate sales during the quarter. Weather clearly the big random factor.

Estimate of $31M capex for completion of stage 1.5. Range of 26/40 mainly to be debt. Sales currently below current market price as from earlier contracts.

Both mining and crushing were impacted by major rainfall events outside the norm for the region.

Customer feedback to date has been positive. Long Term Offtake Agreements are currently being negotiated and are expected to be finalised early in 2023.

Legal dispute. Under the terms of the Settlement, the parties agreed to refer the question of if “Mining” commenced (and if so, when) under the Royalty Deed to a suitably qualified expert with the determination of the expert to be final and binding on the parties. Since the end of the Quarter, the parties have selected a suitable expert and will keep the market informed on further developments regarding the expert’s decision.

Subject to weather events, the Company is targeting to sell approximately 26,000 tonnes of product in the March 2023 Quarter, and 45,000 tonnes in the June Quarter.

The production schedule currently allows three weeks for product solar drying; however, actual solar drying time is heavily weather dependent.

• First three years of current production allocated to large clients including Incitec Pivot, Ameropa, Samsung and New Zealand farmer-owned cooperatives Ballance and Ravensdown

•The December monthly benchmark price for North African FOB (68-72% BPL) continues to be firm at US$300/t (compared to the DFS in August 2021 of US$125 per tonne, a 140% increase)

• Work continues on the 625,000 tonne Expansion Project (Stage 1.5) to meet immediate demand via low cost, high return capital investment

• Centrex’s total cash balance was A$5.664 million at 31 December 2022

Media coverage on Landline this week and 2 announcements. Decision to go for lower capital outlay seems sensible as they are aiming to fund through debt. Stage 1.5 to be completed CY23

CENTREX DELIVERS ON FIRST INTERNATIONAL EXPORT OF PHOSPHATE ROCK TO NEW ZEALAND 100% owned subsidiary Agriflex Pty Ltd has commenced its first international export with 5,000 tonnes currently on route to leading New Zealand agricultural cooperative Ravensdown Ltd. 

Ardmore Phosphate Rock Project Stage 1.5 Update

Highlights Production output of 625,000 tonnes per annum of beneficiated phosphate rock targeted Lower capital investment (80% of the Definitive Feasibility Study (‘DFS’) production planned using 40% (Including 20.6% Contingency) of the DFS capital spend

Lower risk approval pathway (brownfield development) 

The Stage 1.5 expansion is possible due to continuing favourable market demand for Ardmore Phosphate and the performance of the Ardmore Beneficiation Plant (‘Plant’) that has exceeded design throughput and metallurgical design performance criteria. For Stage 1.5, the Company is targeting 125 tph (wet) feed of run of mine (‘ROM’) ore. 

The Company will seek to fund Stage 1.5 via a combination of debt, equity and/or cashflow from sales. At this stage, the Company intends to fund the majority via debt, however, it will keep the market informed on any developments with regard to funding sources. 

Centrex’s Managing Director Robert Mencel said: “Stage 1.5 is a smart capital spend, achieving 80% of the DFS production target at 40% of the DFS capital cost. The resulting near term high production levels and its low capital cost will help maximise shareholder returns”.

Hopes Australia's first phosphate export could ease fertiliser supply crisis

ABC article

The project is one of the few remaining undeveloped high-grade phosphate rock deposits in the world.

High-grade phosphate rock has been domestically exported in an Australian first that could help to shore up critical supplies of fertiliser. Centrex chief executive Robert Mencel said it was a significant day for the industry because previously the mineral was 100 per cent imported. "Around 400,000 tonnes a year gets imported into Australia, about 600,000 tonnes into New Zealand"

Nice to see a bit of media attention and some cash starting to flow

BROKER REPORTS

Taylor Collison June (30c a share) Spot price $USD 255/mt

Strathmore May (28c a share) Spot price $USD 249/mt

Current Spot Price $USD 320/mt

Recent announcements from CXM suggest that it should begin generating revenue ($20M DFS - $40M highest price FY22/3) by Q2 with the price for phosphate rock about double used in their DFS at the moment due to the Ukraine war. All non-process infrastructure was completed on schedule and budget. Currently holding the price from $16M CR in April 22. 100% of the first three years of Available Production now reserved to quality customers. MC $88M

Centrex Limited is looking to enhance Australasia’s sustainable agriculture future through the exploration and development of its wholly-owned Ardmore Phosphate Project and Oxley Potash Project.

Centrex’s most advanced and flagship project is the 100% owned Ardmore Phosphate Rock Project (Ardmore Project) located south of Mt Isa in North West Queensland. The Ardmore deposit is one of the few remaining undeveloped high-grade phosphate rock deposits in the world. Centrex is currently developing Ardmore into a mining operation to produce approximately 800,000 tpa of phosphate rock concentrate per annum at an average grade of 34 to 35% P2O5 for domestic consumption and export throughout Asia-Pacific. 

The Definitive Feasibility Study is based upon the plant being built at Ardmore. The benefit of the Ardmore site is the reduced logistics costs as only final product is transported. Work has commenced on front end engineering and design (FEED) for an 800,000 tpa commercial plant. Three potential plant locations are being examined in detail. Possible locations include the Ardmore site, and potential sites near Mt Isa and Townsville. The benefit of a non-remote site is access to mains services (water, gas, electricity) and other established town services (workforce, accommodation, airport etc) and immediate access to the rail and port. A plant located in Townsville could potentially also be fed using ore sourced from overseas. The location of the commercial plant is envisioned to be decided by June 2022 and the Company will then progress to Final Investment Decision (FID) by the end of 2022. Post FID, the commencement of the construction of the full commercial plant is planned for early 2023 and full production commencing in 2024. BurnVoir Corporate Finance and Naust Capital will assist as joint financial advisers to arrange financing for the development of the commercial plant. 

The mining contractor mobilised to site in April 2022 to recommence stripping of overburden and ore mining. Mining is ongoing at the scheduled production rate of 27,000t of ore per month

The crushing circuit is producing a refined product for both the direct application phosphate rock market and feed for the Ardmore beneficiation plant). Actual crushing characteristics are in line with expectations. 

All previously-outstanding non-process infrastructure was completed on schedule and budget (Unaudited). This work included the installation of onsite power generation and distribution, mine site potable and nonpotable water supply, construction of offices and workshop, an initial tailings dam cell, construction of permanent service roads and additional accommodation in Dajarra. The beneficiation plant has been successfully completed commissioning undertaken and ongoing production is underway . The production rate is expected to progressively ramp-up over the next six months as crushing and beneficiation plant fine-tuning and optimisation is completed. Product drying is carried out utilising solar drying. The production schedule currently allows three weeks for product drying. Agriflex’s logistics contractor Aurizon is expected to commence transporting the product to Townsville in early August 2022 with the first export shipment planned for early September 2022. An initial transport rate of 10,000t per month is scheduled, progressively increasing up to 20,000t per month by the end of Jan 23.

The recent agreement covers the sale of a 5,000 wet tonnes beneficiated phosphate rock trial shipment to Ameropa and includes a first right of refusal to purchase 10% of the Ardmore mine’s annual production for the first three years (Available Production). The allocation of the remaining 10% of Available Production marks an important milestone for the Company with 100% of the first three years of Available Production now reserved to quality customers in Australia, New Zealand and Asia. 

The trial shipment is conditional upon upgrades to the processing plant being completed by Agriflex to its satisfaction to sufficiently produce the product. It is also conditional upon receiving all necessary approvals for the performance of the Company’s delivery obligations. 

The North Africa Phosphate Rock benchmark price has reached its highest levels since early 2013 and was reported as FOB North Africa (68-72% BPL) US$255.00 per tonne (Ref: World Bank Commodities). The Company’s updated Definitive Feasibility Study (DFS) in August 2021 used a benchmark phosphate price of US$125 per tonne (refer ASX Ann dated 12 Aug 21). The current US$255.00 per tonne benchmark phosphate price represents a 104% increase, compared to the US$125 benchmark price used in the August 2021 DFS.