Finding a floor ? - Aguia Resources => An update (Aug 26)...

AGR has been a difficult stock to hold.

While it has since secured its operating license and is now a producer of phosphate, the stock price remains under pressure.

There are two reasons: i) folks are waiting for proof that the operation is ramping up as planned and customers are buying, and ii) it has done so many placements that one can't help but think there is another raising round the corner.

Here is the latest update from the CEO:

https://www.youtube.com/watch?v=MZncRrvYJlw

Here are my take aways:

1. Phosphate demand surrounding its plant is 3M tons. In addition, AGR is selling its phosphate at a decent discount (20-25%) to imports. Its capacity is only 160K (or 200K in the upside scenario). It is not unreasonable to think it can sell out its existing capacity.

2. Also note Tim is talking selling price of around A$200. Pricewise, it is on target.

3. Tim talked about the time line for the new plant. The new plant will take capacity from 150-200K to over 500K tons. The new plant will come online in late 27/28... So say it will commence operation in 1H 28.

Now look at the recent government initiative to support the build out of domestic fertilizer capacity..... See Pic 1.

It is a big deal for AGR as it can now seek funding assistance for its new plant (say A$20-30M capX in total).

Plus longer term, AGR harbors ambition to build another plant for "simple phosphate" to bring capacity to 1M tons.... Remember this plant is going to cost a lot more (over $100M would be my guess). The government program will certainly come in handy.

2H 26 would be critical. If AGR can sell out its 70-80K tons target, it would have generated EBTIDA of$8-10M. Plus it would also show that it is gaining traction with farmers for its natural phosphate product.

Accordingly, with the government funding program as well, don't think AGR will need to do another placement unless it decides to go crazy on Colombia. No to mention it has over 500M options outstanding. These options can potentially bring in another >$10M in cash as these options get exercised when the stock price picks up.

Upside is clearly there..... Each ton of phosphate can bring in EBITDA of $130 or so... Within 2 years, it can be producing and selling 500-600K tons of phosphate. We are looking at EBITDA of >$60M. Vs. MV of $40-50M (including the options).

What we need to look for ? 1) Commercial traction and pricing in 2H 2026 (can it find enough farmers interested in its product and pry them away from whatever they have been using), ii) exploration success in Mato Grande and Passo Feio- it needs to find more phosphate mines to feed its new plant(s).

The last placement was done at $0.017. Suspect this should be the floor price.

Upside is substantial if/when the management delivers on its promises and plans.