Shares of First Phosphate Corp. (CSE:PHOS, OTCQX:FRSPF) surged more than 12% on Thursday after research firm Emerging Growth initiated coverage with a Buy rating and a 12-month price target of C$4.93, saying the Québec-based developer is positioned to anchor a Western supply chain for purified phosphoric acid (PPA) used in lithium iron phosphate (LFP) batteries.
In its note, Emerging Growth said that it believes the market is “underpricing the combination of ore quality, deep-water logistics at the Port of Saguenay, and a staged integration plan that generates cash from concentrate sales while the acid plant advances toward feasibility and FID.”
The analysts said LFP battery adoption continues to accelerate globally while Western supply of battery-grade PPA remains scarce, creating a favourable setup for strategically located projects. “(First Phosphate) stands out as one of the few projects with high-purity igneous feed, deep-water port access, and early proof-of-concept validation through fully North American LFP cells,” they wrote.
Emerging Growth models first production in 2029 from the company’s Bégin-Lamarche mine and concentrator, ramping to 900,000 tonnes per year of apatite concentrate. Of that, up to 400,000 tpa is allocated to a binding European offtake agreement, with the balance transferred to the planned Port Saguenay PPA complex, which the firm models at roughly 190,000 tpa (P₂O₅ basis) with a three-year ramp to above 90% utilization.
Across a 23-year operating life, the analysts estimate undiscounted free cash flow of about C$3.5 billion from the mine and C$2.5 billion from the PPA facility, before corporate and financing effects.
The report highlights First Phosphate’s ore quality as a core advantage, noting that igneous deposits account for only about 5% of global phosphate resources. Higher-purity feedstock is expected to improve PPA yields and enhance the recyclability of the gypsum byproduct stream.
Potential catalysts over the next one to two years include feasibility results, expanded offtake agreements, export credit agency packages, government grants and the possible conversion of the Port Saguenay land option.