Potash for the Win

As I look over my list of precious metals shares, down 50-60% despite record gold and silver prices, one of my few winners has been Millennial Potash (MLP.V). And, to be honest, I bought my shares for less than $0.30 when it was Black Mountain Gold. I had no idea that the company would pivot to potash in Gabon. Frankly, I was buying the record of success of the management team led by Farhad Abasov.

That management team had taken Allana Potash from a penny stock with a promising potash project in Ethiopia up to a high of $2.30 before selling to Israel Chemicals for significantly less in the face of a hostile capital market in 2015.

Abasov and his management team then went on to a very successful foray into lithium in Argentina, Millennial Lithium, which was sold near the top of the lithium craze for a cool 491 million dollars in 2022.

The pivot away from gold to potash meant that Abasov was able to put the experience and, indeed, the personnel from Allana, to work on a highly prospective potash project in a safe African jurisdiction. I wrote about MLP on Talking my Book back in February 2023.

At the time, Abasov was looking to complete “43-101 Initial Resource Estimate out by mid 2023 with a Preliminary Economic Assessment to follow by years’ end”. It was a very ambitious timetable and Millennial very nearly hit the targets, publishing its Initial Resource Estimate January 16, 2024 and its Preliminary Economic Assessment with “with After-Tax NPV₍₁₀₎ of $1.07B and IRR of 32.6% for its Banio Potash Project” in April 2024. The market shrugged. MLP traded between $0.17 and $0.25 until the share price showed some signs of life in October 2024 touching $0.30 and finishing the year at $0.34.

Drilling at the Banio Project recommenced on April 1 2025. The shares were trading at $0.58 and have steadily risen. As I write, in the wake of a May 6, 2025 press release outlining the results of the continuation of a 2017 drill hole, the shares hit $1.00.

To my regret, I have been selling on the way up and the shares I have left are pure profit which raises the issue of just how far up MLP might go. I’m now playing with “house money”, so it costs me nothing to wait.

The most recent MLP press release is more than encouraging. In it, Abasov comments,

Millennial is very pleased to have intersected a robust section of interbedded carnallitite and halite with the completion of drillhole BA-001EXT. Numerous thick potash seams, in carnallitite form, have been intersected in the extension of BA-001 and in total the combined +250m of interbedded carnallitite and halite exceeded our expectations. We are looking forward to completion of the logging and sampling of the potash horizons and the analytical results. Extending drillhole BA-001 and drilling new hole BA-004 has the potential to significantly boost the project’s potash resources. Upon completion of the drilling an updated Mineral Resource Estimate is expected to be completed which would form the foundation of a Feasibility Study expected to begin in the coming months.

250 meters would allow the creation of huge caverns which, in turn, would drive down operating costs. It’s just one hole, but Abasov in an interview, called it “astonishing”.

Abasov and his team have a solid record of reaching their milestones on the schedule they lay out. A revised MRE will certainly increase the already substantial potash resource. A Bankable Feasibility Study will give Millennial the ammunition required to raise the money needed to mine the potash and build the processing facility. A new power station is in progress and the port at Mayumba is being upgraded.

Millennial is planning on solution mining the potash. This is a well-understood mining method and, compared with other methods, is relatively inexpensive. As Abasov commented in the April 23, 2024 PEA press release,

“We are extremely pleased with the results of the PEA on the Banio Potash Project and it has confirmed our belief that the project is very robust and has significant economic potential. The CAPEX for the 800,000 TPY optimal case is a very competitive $480M and the OPEX at approximately $61/tonne MOP reflects an expected overall low-cost structure which would make Millennial’s Banio Potash Project competitive with the lowest cost producers in the sector.

While the price of potash is down significantly from its 2022 record of $1200, worldwide demand for potash has been steadily increasing as more acres are cultivated more intensively. Critically, the Banio project and the port of Mayumba, are very close to Brazil, the world’s largest potash consumer.

For the moment, my own strategy will be to ride with Millennial through the Feasibility stage. At that point, Abasov will either be able to raise the money needed to construct the mine or sell the project. Even with the current share price run-up, Millennial’s market cap is a low 92 million dollars. An 800,000 ton per year potash mine with a 56 year (and growing) life of mine is likely worth several times that.

Millennial Potash is a bet on management performance and so far, Abasov and his team have surpassed expectations.

(Disclaimer: I hold shares in Millennial Potash which I may buy or sell at any time. This is not investment advice. Do your own due diligence. Call the CEO.)