Arianne Phosphate provides 2024 recap and discusses plans for 2025

Phosphate macro and the LFP

The phosphate macro for 2024 was strong as battery demand continued to grow rapidly in combination with the traditional growth of fertilizer demand. This past year saw the lithium-iron-phosphate (LFP) battery begin to surpass the NMC battery in many markets as, aside from the battery’s dominance in the Chinese EV market, many Western automakers have now also started to adopt the battery technology. Further, the rapid growth in energy storage systems (ESS) has advanced well beyond original expectations and is adding significant demands on an already tightly supplied phosphoric acid market. These events have come at a time when there is a growing understanding in the West that there is a competitive disadvantage relative to China when it comes to access to the necessary critical materials, production facilities and technological capability. This has resulted in the procurement and production of these batteries becoming a national priority among many Western countries.

The recognition of the growth and importance of the LFP coupled with the fact that today, well over 90% of all LFP batteries are produced in China, led both the Canadian and Quebec governments to add phosphate to their respective critical mineral lists in 2024. This has been a very positive development for Arianne as its Quebec based Lac à Paul project is globally understood to be the preeminent phosphate development in the West. Phosphate’s addition to the critical minerals lists has added to the importance and awareness of the project and will allow access to various government programs that provide funding for critical mineral projects. 

Phosphoric acid facility

Given the growing importance of phosphate, including its use as a battery material, in 2024 Arianne began its formal pursuit of the construction of an operation centred on the production of purified phosphoric acid (PPA). To this end, the company embarked on a prefeasibility study that was completed in the second quarter of 2024. The facility will take advantage of the igneous nature of phosphate in the region; Lac à Paul having the largest known greenfield deposit. Using igneous-based phosphate will allow for the easy conversion of concentrate to PPA at a preferred ratio relative to other operations that use traditional sedimentary based phosphate. 

The study affirmed the positive economics surrounding the construction of a PPA plant in the Saguenay region of Quebec, with access to the output from Arianne’s Lac à Paul deposit, as well as other early-stage deposits, should they materialise. The facility would have a maximum production capacity of 350 000 t of battery/food grade PPA, as well as 220 000 t of a second-tiered acid used for animal feeds and specialty fertilizers. The facility would be the largest PPA producer outside of China and have an extremely competitive cash-cost profile. As the West looks to access critical materials outside of China, it is believed that this facility would tie into a more secure supply chain. 

Strategic investment

The improving macro for phosphate along with Arianne’s corporate achievements throughout the year culminated in the company receiving a strategic investment from a large, global mining company. This investment continues to recognise the growing interest in phosphate by miners as well as those directly involved in the battery technology, EV and fertilizer industries.

The year ahead

Going into 2025, Arianne is looking to build on its successes of 2024 and move its projects, upstream and downstream, forward. As the company believes that strong partners will be necessary to develop the opportunities, Arianne will continue to work with its strategic investor as well as the numerous other companies that have entered into confidentiality agreements and are pursuing their due diligence. The company is also continuing its dialogue with both the Quebec and Canadian governments to unlock these opportunities that will allow for development. Arianne has been able to leverage high-level introductions that have been made to ‘would-be’ participants in the project. 

Operationally, Arianne will be advancing its work on its proposed downstream facility. The company has commenced further studies to optimise the ratio of PPA to second-tiered acid. Already recognised as an extremely high ratio (approximately 2:1), Arianne sees the possibility of squeezing additional gains in its production of PPA using its high-quality phosphate concentrate. Any incremental improvements would continue to enhance the profitability profile of the facility and generate additional capacity for companies that require the material for their needs. The company also believes that there are additional enhancements that can result in lower costs and continues to work with various groups on this. 

Investor awareness

Lastly, given the improvement in the global macro for phosphate and the company’s achievements over the last year, Arianne will look to build a greater awareness of the company within the investment community and enhance its investor and public relations’ programs. Arianne’s Lac à Paul deposit currently has the world’s largest greenfield resource, has easy access to needed infrastructure, enjoys strong social acceptability and is fully permitted. Additionally, the plan of building a downstream operation has added to the attractiveness of the opportunity and its economic profile. A greater awareness and understanding of the company and, achieving the milestones set forth, should help to close the significant gap that exists between market value and net present value (NPV).

Other matters?

In addition, Arianne has announced the granting of 570 000 stock options to its senior management and directors. The stock options entitle its holder to purchase one common share of the company until January 8, 2035 at a price of US$0.165; this being the closing price of the company’s shares on the trading day preceding the date of the grant. These options are all subject to respective vesting periods and subject to regulatory approval.

Read the article online at: https://www.worldfertilizer.com/phosphates/09012025/arianne-phosphate-provides-2024-recap-and-discusses-plans-for-2025/