Itafos Updates
Trading at half the valuation of peers, mine life expanded to 2037, deleveraged.
Itafos continues to perform well, since I wrote about it on April 14th the stock is +40%, YTD the stock is +62%.
Much of this has to do with the increased performance and extended mine life from their flagship and key asset, Conda, the sale of non-core Araxa Project to St. George Mining Limited, and positive market conditions for MAP/DAP. For those unfamiliar with some of these terms, the below is the initial post on Itafos.
Highlights
Despite improved fundamentals, Itafos trades at ~2.4x 2025E EBITDA, a steep discount to fertilizer peers (avg ~7.3x). At ~$2.4x, Itafos’ multiple is less than half that of Mosaic (~5.5x) and Nutrien (~6.9x) and far below smaller peer Intrepid Potash (~9.6x). The company’s balance sheet (net leverage turned slightly negative in Q1) and cash flows position it to potentially narrow this gap.