First Phosphate (NASDAQ:PHOS) outlined progress on its Quebec phosphate development plans, including government support, resource-growth results, proposed financing arrangements and a targeted path to initial production by the end of 2029 or early 2030.
During a presentation, CEO and Director John Passalacqua said the company’s Bégin-Lamarche phosphate project and proposed phosphoric acid plant have received endorsement through the G7 Critical Minerals Resilience and Production Alliance. He also said the project has received fast-track status from Quebec, with First Phosphate among three companies in the province to receive that designation.
Focus on Battery-Grade Phosphate
First Phosphate is focused on producing phosphate from igneous rock for use in lithium iron phosphate, or LFP, batteries rather than fertilizer markets. Passalacqua said phosphate represents roughly 60% of an LFP battery cathode, compared with about 4% lithium.
He argued that the industry will need additional supplies of purified phosphoric acid as LFP batteries are deployed in electric vehicles, energy storage, data centers, robotics, defense and other applications. According to Passalacqua, China currently accounts for more than 97% of the LFP supply chain, while the G7 has stated that no single country should control more than 60% of a supply chain identified as strategic.
Passalacqua said First Phosphate’s Quebec igneous anorthosite resource is particularly suited to battery applications because the company estimates it can convert to purified phosphoric acid at a 91.1% rate. He contrasted this material with sedimentary phosphate rock, which is generally used for fertilizer and may contain impurities that limit the portion suitable for high-purity phosphoric acid production.
Resource and Project Economics
The company recently updated its mineral resource estimate, reporting a 378% increase in indicated resources, according to Passalacqua. He said drilling demonstrated continuity and homogeneity across a near-surface deposit that is planned as an open-pit operation.
Passalacqua described the deposit as approximately 2.7 kilometers long, 500 meters wide and extending 400 meters deep, while remaining open at depth and on some sides. He said the company is targeting completion of a fully funded feasibility study in the first quarter of 2027.
Based on the company’s previous resource estimate, Passalacqua cited a CAD $2.1 billion net present value, a 37% internal rate of return, a 2.9-year payback period and a 23-year mine life. He noted that additional drilling could potentially extend the mine life.
The project is located in Quebec’s Saguenay–Lac-Saint-Jean region, approximately 70 kilometers from the Port of Saguenay. The company plans to transport phosphate concentrate to the port, where it could be shipped by rail into North America or exported by sea to Europe and other markets.
Offtakes and Export-Credit Support
Passalacqua said First Phosphate has definitive, bankable offtake agreements for phosphate concentrate and phosphoric acid. He said the company signed a strategic offtake agreement with a Western ally for 200,000 metric tons of phosphate concentrate and 60,000 tons of phosphoric acid.
The company has also worked with partners to produce and test 150 LFP battery cells using North American critical-mineral inputs, Passalacqua said. The supply chain included phosphoric acid producer Prayon, GKN Hoeganaes for iron phosphate precursor, Century Lithium for lithium, Nouveau Monde Graphite for graphite and Ultion for battery-cell technology. He said the cells were cycled 2,000 times and performed comparably to other batteries.
On financing, Passalacqua said Denmark has offered a CAD $190 million credit guarantee and Swiss Export Risk Insurance, or SERV, has provided a $212 million letter of guarantee. He said the export-credit support is intended to facilitate purchases of Danish and Swiss equipment for mine construction, including concentrator, electrical and earth-moving equipment.
Combined, the company estimates the arrangements represent roughly CAD $400 million toward an anticipated CAD $475 million in mine capital expenditures. Passalacqua also said Italian entities and an engineering group are involved in plans for the downstream phosphoric acid plant.
Addressing recent insider sales, Passalacqua said approximately 197,000 shares sold by an insider were associated with a cashless exercise of options that were nearing expiration. He said management and the board collectively hold about 20% of the company, have invested approximately CAD $4 million, and in some cases receive stock as part of compensation.
About First Phosphate (NASDAQ:PHOS)
First Phosphate Corp. is a Canadian mineral development company focused on building an integrated supply chain for lithium iron phosphate (LFP) batteries. The company’s activities include the exploration and development of phosphate mineral properties, the production of purified phosphoric acid and phosphoric salts, and the eventual manufacture of LFP cathode active material for use in lithium-ion batteries.
First Phosphate’s mineral projects are located in Quebec’s Saguenay–Lac-Saint-Jean region, an area with established hydroelectric power, transportation infrastructure and industrial resources.
