Millennial Potash Corp (TSX-V:MLP, OTCQB:MLPNF)'s latest drill results from its Banio project in Gabon indicate strong potential to expand the project’s resource base, according to analysts at Fundamental Research Corp (FRC), who view the development as a key step toward derisking the asset ahead of a planned feasibility study.
Drillhole BA-004 intersected over 100 metres of potash mineralization in multiple thick seams of carnallitite, with mineralization extending the known strike length of the deposit to about eight kilometers.
The hole was completed to a depth of 667 metres and encountered seven distinct evaporite cycles, with potash present in each.
“The recently completed drill program intersected over 100 metres of potash seams, indicating significant resource expansion potential,” FRC analysts wrote in a research note, adding that the results are likely to positively impact the upcoming mineral resource update and feasibility study.
FRC expects that the new data could allow Millennial to upgrade parts of its resource from inferred to indicated, and from indicated to measured, increasing overall confidence in the deposit. The current resource estimate includes 657 million tonnes of indicated resources grading 15.9% KCl and 1.16 billion tonnes of inferred resources at 16% KCl, covering just 1.5% of the project area.
FRC highlighted that Millennial shares have gained 605% over the past year, making it one of the best-performing junior resource stocks in that period.
The rally has coincided with a 17% year-over-year rise in potash prices, supported by global trade tensions, geopolitical instability in key producing regions like Russia and Belarus, and hurricane-related disruptions in the US.
A preliminary economic assessment published earlier this year valued the Banio project at an after-tax net present value of US$1.1 billion with an internal rate of return of 33%, based on a long-term potash price of US$387 per tonne. FRC noted that Millennial is currently trading at just 9% of its projected after-tax NPV.