Millennial Potash: Fast Tracking Potash in Gabon
With a track record like Farhad Abasov’s and his team from Millennial Lithium, it was an easy call for many people to invest in the group’s Black Mountain Gold project. But it was not a complete surprise when the group announced it was changing the company into Millennial Potash (MLP.V). I asked Abasov about the pivot.
“When we sold Millennial Lithium (for 490 million dollars to Lithium Americas) we were looking for a project. We were looking for a project in select commodities including potash. We did find an exciting gold project in Arizona though and decided to put it in our Black Mountain Gold,” said Abasov. “But then we found the right potash project: Banio in south-eastern Gabon. That allowed us to rebrand the company to Millennial Potash continuing our Millennial Lithium brand.”
Abasov and his group know potash very well. Previously, Abasov had been CEO of Allana Potash (sold to Israel Chemical for 170 million dollars) and he was a co-founder of Potash One (sold to K&S for 430 million). The group has brought Jason Wilkinson, the former in-country managing director of Allana in Ethiopia, on to be CEO of Millennial Potash.
Abasov is very pleased about Banio. “We found the right project at the right state of development, and in the right country,” said Abasov. “Banio is a massive project. People have understood and approved of our pivot. They ask, “What about the gold?”. We’re currently looking at various options.”
Because Abasov knows potash, he can quickly summarize Banio’s features. “Big technical potential. It was first drilled by a French oil and gas company in the 1970’s. They found no oil but intercepted thick horizons of potash. In 2017, an Australian junior exploration company drilled three holes on the property and found potash horizons, thick horizons at excellent grades, starting at a shallow depth of about 230 meters. And the recent drill holes are about 20 km away from the original hydrocarbon wells drilled in the 70s. This is indicative of a significant potential in the project.”
This is not a geological surprise. Banio appears to be an extension of the West Africa Potash Basin. Banio is located just to the north of the Republic of Congo border and 70 kilometers north of the world-class Sintoukoula potash mine. As Millennial puts it on its website, “The potassium bearing salt layers extend into Gabon, at similar depths and thicknesses.”
Banio is a huge project with 1200 square kilometres awaiting systematic exploration. However, the three holes drilled by the previous operator, on their own, suggest a massive potential as they issued a JORC-compliant resource estimate in 2018.
As well as having the right geology, Banio is in the right jurisdiction. “Gabon is very stable. Open for business,” said Abasov. “They have recently overhauled their mining laws. There are big Western oil and gas and mining companies operating in the country now, and there is a very positive mining environment.”
The supply/demand dynamic for potash is very positive. “The world population is growing inexorably. Agricultural soil depletion is a serious challenge as well.. Farmers need fertilizers,” said Abasov. “The Russian/Ukraine war and ensuing sanctions imposed on Russia and Belarus have hit supply hard as Russia and Belarus produce 35% of the world’s potash.”
The Banio project also has the good fortune to be potentially one of the potash producers nearest to Brazil. “Brazil imports about 12 million tons of potash every year,” said Abasov.
Millennial is proposing a very aggressive program for Banio.
“We want to start drilling in the next three months,” said Abasov. “The infrastructure, roads, a camp and even drill rigs are there. The previously drilled core is there and so is all the data. We want to bring people back to the project. While the drill campaign is on we will reinterpret historical data including seismic and drill core data.”
“We’d like to have a maiden 43-101 compliant resource estimate by summer this year,” said Abasov. “Then a preliminary economic analysis (PEA) by the end of the year. A PEA allows engagement with interested strategic partners. Then we will move on to the next phase of the drilling and a Feasibility Study in 2024.”
The key piece of the puzzle is solution mining. “We have always focused on projects with a low-cost structure in the past. Our previous potash projects as well as lithium and uranium projects were all amenable to solution mining/in-situ leaching. This project is no different. Solution mining will allow us to keep our Capex low while starting and operating in a modular fashion.,” said Abasov.
By using the previously drilled holes and the data they revealed and doing a proper, systematic exploration program, Millennial will jump start development at Banio. If solution mining proves feasible, there would be a minimal environmental foot print for the mining operations which will make permitting and environmental approvals easier.
Millennial Potash and its Chairman are also open to a modular approach to mining Banio. Starting in mid-2024 Millennial’s plan calls for a “pilot solution cavern”. That is several steps away from commercial production but it would go a long way to proving the feasibility of the Banio Potash project.
At a current price of $0.56 Millennial Potash has a market cap of just shy of 22 million dollars. If you go back to the beginning of this article you will see how much Abasov and his group have sold their previous projects for. Those numbers are what Millennial Potash investors hope will come from the Banio Potash project.