PhosCo (ASX:PHO) confirms a new discovery at its DOH prospect and its a doozy!

A third low-strip starter zone is emerging at Gasaat just as the KM flowsheet got simpler and cheaper

PhosCo (ASX:PHO) has confirmed what was previously a promising scout result at its DOH prospect is now a genuine phosphate discovery. The latest assays from the Gasaat Phosphate Project in Tunisia show a 13m thick phosphate horizon extending over 1.3km of strike and more than 600m of width. The grades are consistent with the rest of Gasaat, sitting around 20% P2O5 with higher-grade intervals pushing above 24%.

The key point is that DOH is not a one-off intercept. Seven holes have now hit phosphate across the prospect, with mineralisation remaining open in several directions. For a project that already hosts 166.6Mt at 20.6% P2O5 across KEL, GK, KM and SAB, adding another district-scale starter zone changes what the early years of the mine plan could look like.

For investors, the question is no longer whether Gasaat has enough phosphate. It is whether PhosCo can now sequence these low-strip, near-surface zones into a starter operation that hits cash flow quickly. Today’s results push that conversation forward.

Why DOH matters more than another tonnage number

Gasaat already had a 46-year mine life on the existing resource. Adding more tonnes for the sake of it would not move the valuation needle. What matters about DOH is the geometry.

The phosphate sits between 25m and roughly 100m down on a 25-degree easterly dip, with thicknesses of 12 to 15m and high-grade cores running above 24% P2O5. That is the same profile that made KM such a standout, where the strip ratio came in at just 0.4 to 1. If DOH delivers a similar strip ratio at resource definition, PhosCo gains a second low-cost starter zone to feed early mine life alongside KM.

Importantly, mineralisation remains open. Infill and extension drilling is the next step before DOH can be brought into a Mineral Resource Estimate.

The KM holes that quietly extend the high-grade story

While DOH is the headline, the three new KM holes are arguably the more economically meaningful result. Hole GADD-2025-29 returned 40.4m at 21.2% P2O5 from surface, including 19.7m at 24.5% P2O5. That is a high-grade slab starting at zero depth.

Combined with the simplified single-stage flotation flowsheet PhosCo flagged in late May, this points to a starter operation where the metallurgy gets cheaper and the ore gets easier to access at the same time. We think this is the part of the story that institutions will eventually focus on, because it directly affects opex and initial capex in any future updated study.

Worth noting that the GS prospect, drilled at 165m depth, was deliberately paused. Management has chosen to prioritise low-strip ore over deeper material for the early mine years.

Tunisia’s strategic position is finally getting its moment

Managing Director Taz Aldaoud framed Gasaat as a supply diversification story, and the context behind that comment is worth unpacking. Global phosphate supply is concentrated in Morocco, China, and the US, and fertiliser markets have been under sustained pressure since the Russia sanctions reshaped trade flows.

Tunisia sits on the Mediterranean Sea with direct shipping access to European fertiliser buyers who are actively looking to reduce single-source exposure. A district-scale, low-strip phosphate project in that location is a different conversation today than it was three years ago.

The skeptical read is that strategic value only matters once a project moves to development and offtake. PhosCo is not there yet.

The Investors Takeaway for PhosCo

PhosCo now has four defined deposits and a fifth coming through the pipeline at DOH. The challenge from here is conversion. Infill drilling, resource estimation, and an updated study that captures both DOH and the simplified flotation flowsheet are the catalysts the market should be watching over the next 12 months.

We think the rerating case rests on PhosCo demonstrating that the low-strip ore at KM and DOH can underpin a smaller, faster, cheaper starter operation than the 2022 Scoping Study assumed. The drill rig now heads to King’s Eye at Simitu, which adds a second narrative thread in copper and base metals that investors can read about in our previous coverage at stocksdownunder.

The next set of assays from ongoing Gasaat drilling will tell us whether DOH keeps growing.