Millennial Potash: Positive Drilling Results Indicate Larger Resource

Key Concepts

• Potash: A mineral essential for global food supply, used primarily as fertilizer.
• Lake Brine Mines: A significant source of potash production, particularly in China.
• Critical Minerals List (US): A designation by the US Department of the Interior that identifies minerals crucial for economic and national security.
• International Development Finance Corporation (DFC): A US government agency that finances projects in developing countries.
• Exploration Results: Findings from geological surveys and drilling that indicate the presence and quality of mineral deposits.
• KCL (Potassium Chloride): The primary chemical compound in potash.
• Cut-off Grade: The minimum concentration of a mineral required for a deposit to be considered economically viable.
• Evaporite Cycles: Layers of salt and other minerals formed by the evaporation of water, often associated with potash deposits.
• Resource Estimate: A calculation of the quantity and grade of a mineral deposit.
• M&A (Mergers and Acquisitions): The process of companies combining or one company taking over another.

Company Update: Millennial Potash

This update focuses on Millennial Potash, highlighting its strategic importance, recent developments, and future outlook.

Global Potash Market Dynamics

• Declining Chinese Production: Potash production in China experienced a significant decline of nearly 15% in the first half of the current year. This reduction is primarily attributed to the Lake Brine mines in King Hai provinces, which are major production hubs.
• Reasons for Decline: The exact causes are unclear, but potential factors include:
  • Depletion: Mines may be more depleted than previously assessed.
  • Economic Viability: Older and smaller mines are becoming less economically feasible due to dwindling recoverable resources.
  • Increased Costs: Higher freight and mining costs are impacting profitability.
  • Weather: Unusually high rainfall has also contributed to production challenges.
• Impact on Prices: These supply constraints are expected to contribute to further rising potash prices, particularly by 2026.

Strategic Importance and US Recognition

• US Critical Minerals List: The US Department of the Interior has included potash on its 2025 list of critical minerals, alongside silver. This designation underscores its strategic importance for the United States.
• DFC Funding: The US International Development Finance Corporation (DFC) has committed $3 million USD in project development funding for Millennial Potash's project in Gabon. This investment signifies recognition of the project's role in strengthening US food security and supply chain resilience.
• Government Support: Millennial Potash receives full support from the government of Gabon.

Exploration and Resource Potential

• Gabon Project (Bango): Exploration results for the Bango project in Gabon are consistently positive.
  • Drill Hole BA1: Extended to approximately 112.5 cumulative meters of core, averaging 15.9% KCL using a 13% cut-off grade within the overall 220 meters of potash mineralization. These seams are located within evaporite cycles 2 to 7 of the salt sequence.
  • Comparison with Previous Holes: The 112.5 meters of cumulative canolite seams in BA1 compares favorably with the over 70 meters found in counter drill holes O2 and O3.
  • Drill Hole Number Four: Intersected an impressive 101 cumulative meters of canolite seams, averaging 16.8% KCL with a 13% cut-off rate. These seams are within evaporite cycles 2 to 8.
  • Comparison with Previous Holes (Continued): This 101-meter cumulative thickness favorably compares with the 112.5 meters in O1 and significantly exceeds the over 70 meters in O2 and O3.
• Upcoming Resource Estimate: The company anticipates a new resource estimate this year, which is projected to be potentially 50% higher than the previous one. This increase is expected to significantly enhance the stock's valuation.

Financial Outlook and Investment Perspective

• Bright Future: With DFC backing and strong government support, the future for Millennial Potash is considered very promising.
• Stock Performance: The stock's recent "breather" is seen as a precursor to higher prices.
• Price Targets:
  • Current Price Target: $5.80 Canadian.
  • Potential M&A Target: If mergers or acquisitions occur, the price could potentially reach $7 to $8 Canadian.
• Investment Disclosure: The discussed share is part of the SRC Mining Special Situation Certificate. The presenter and their team are shareholders or intend to become shareholders in Millennial Potash.

Conclusion

Millennial Potash is positioned as a strategically important company in the global potash market, benefiting from declining supply elsewhere and significant recognition from the US government. Positive exploration results in Gabon, coupled with strong governmental and financial backing, suggest a robust future with potential for substantial stock appreciation and attractive M&A prospects.