First Phosphate Corp.
Building a Vertically Integrated LFP Battery Supply Chain
Published: Jul 17, 2025
Author: FRC Analysts
*First Phosphate Corp. has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions.
Sector: Basic Materials | Industry: Other Industrial Metals & Mining
Ticker Symbols: PHOS.CN – CNQ
Report Highlights
- First Phosphate (PHOS) is developing a vertically integrated supply chain for Lithium Iron Phosphate (LFP) batteries, managing the full process from extracting high-purity igneous phosphate to producing LFP cathode active material (CAM). LFP batteries support key markets like electric vehicles (EVs), and energy storage systems (ESS), and are gaining traction in rapidly growing sectors such as AI data centers, robotics, and automation.
- Most phosphate mined globally today is lower-grade sedimentary rock used for fertilizers. Igneous phosphate, recognized for its high purity, is the preferred choice for the LFP battery market, as it meets the stringent purity standards required by the technology sector. In LFP batteries, phosphate makes up 50–55% of the cathode and about 10–15% of the total battery weight. LFP batteries are gaining traction, driven by their lower cost, longer lifespan, and especially strong adoption in China.
- A 2024, Preliminary Economic Assessment (PEA) on the company’s flagship Bégin-Lamarche project in Quebec, targeting a 23-year open-pit operation producing 900 ktpa phosphate concentrate, returned an AT-NPV8% of $1.6B, and a high AT-IRR of 33%, using US$350/t igneous phosphate concentrate vs the current spot price of US$315/t (five year range: US$140–US$700/t). PHOS is trading at just 2% of the NPV. Management plans to complete a feasibility study, advance permitting, and pursue strategic and financing partners, with production potentially starting in 2029.
- While advancing Bégin-Lamarche, PHOS is also developing two downstream facilities: a) a 190 ktpa phosphoric acid plant using 500 ktpa of concentrate from Bégin-Lamarche, and b) First Saguenay – a 10 ktpa iron phosphate plant, targeting 2026 operations (US$76M CAPEX, 10-year lease, tech partner secured). Both facilities will produce precursor material for LFP CAM.
- The company has already entered into definitive offtake agreements for 200 ktpa of phosphate concentrate (22% of its proposed production), and 60 ktpa of phosphoric acid (32% of its proposed production).
- Since PHOS will require significant purchases from U.S. suppliers, the Export-Import Bank of the United States (EXIM) has offered up to US$170M in financing.
- Upcoming catalysts include infill drilling to upgrade resource confidence, a feasibility study and permitting for Bégin-Lamarche, progress toward commercial production at the iron phosphate plant, offtake agreements, and project financing.
Risks
- Commodity prices
- Permitting and development
- Access to capital and potential for share dilution
- There is no assurance that the company can advance all of its projects simultaneously
Fundamental Research Corp. Equity Rating Scale:
Fundamental Research Corp. Equity Rating Scale (ratings are not a recommendation to acquire, dispose of, or take no action regarding a security; the definition of our ratings are explained below):
- Buy – Fair value is 12% above the current market price; or risk and reward is favorable
- Hold – Fair value is between 5% to 12% above the current market price
- Sell – Fair value is 5% above, or less, than the current market value; or risk and reward is unfavorable
- Suspended or Rating N/A – Coverage and ratings suspended until more information can be obtained from the company regarding recent events.
Fundamental Research Corp. – Risk Rating Scale:
- (Low Risk) – The company operates in an industry where it has a strong position (for example a monopoly, high market share etc.) or operates in a regulated industry. The future outlook is stable or positive for the industry. The company generates positive free cash flow and has a history of profitability. The capital structure is conservative with little or no debt.
- (Below Average Risk) – The company operates in an industry where the fundamentals and outlook are positive. The industry and company are relatively less sensitive to systematic risk than companies with a Risk Rating of 3. The company has a history of profitability and has demonstrated its ability to generate positive free cash flows (though current free cash flow may be negative due to capital investment). The company’s capital structure is conservative with little to modest use of debt.
- (Average Risk) – The company operates in an industry that has average sensitivity to systematic risk. The industry may be cyclical. Profits and cash flow are sensitive to economic factors although the company has demonstrated its ability to generate positive earnings and cash flow. Debt use is in line with industry averages, and coverage ratios are sufficient.
- (Speculative) – The company has little or no history of generating earnings or cash flow. Debt use is higher. These companies may be in start-up mode or in a turnaround situation. These companies should be considered speculative.
- (Highly Speculative) – The company has no history of generating earnings or cash flow. They may operate in a new industry with new, and unproven products. Products may be at the development stage, testing, or seeking regulatory approval. These companies may run into liquidity issues and may rely on external funding. These stocks are considered highly speculative.
Definition of FRC’s Fair Value Estimate – Our fair value estimate is the theoretical value of the company’s equity using widely accepted methods of valuation such as discount cash flow or comparables. IT IS NOT A TARGET PRICE or PREDICTION OF THE FUTURE STOCK PRICE.
Disclaimers and Disclosure
Analyst Certification: The views expressed in this report accurately reflect the personal views of the analyst, and no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed.
Any “forward looking statements” are our best estimates and opinions based upon information that is publicly available and that we believe to be correct, but we have not independently verified with respect to truth or correctness. There is no guarantee that our forecasts will materialize. Actual results will likely vary. The analyst and Fundamental Research Corp.
Fundamental Research Corp. “FRC” owns shares of the subject company: Yes. The analyst owns shares of the subject company: No , does not make a market or offer shares for sale of the subject company, and does not have any investment banking business with the subject company.
Annual fees ranging from $15,000 to $30,000 have been paid to FRC by First Phosphate Corp. to commission this report and research coverage including update reports. This fee creates a potential conflict of interest which readers should consider. FRC takes steps to mitigate conflicts including setting fees in advance and utilizing analysts who must abide by CFA Institute Code of Ethics and Standards of Professional Conduct. Additionally, analysts may not trade in any security under coverage. Our full editorial control of all research, timing of release of the reports, and release of liability for negative reports are protected contractually. The issuer has agreed to a minimum coverage term and coverage cannot be unilaterally terminated. Distribution procedure: our reports are distributed first to our web-based subscribers on the date shown on this report then made available to delayed access users through various other channels for a limited time.
The distribution of FRC’s ratings are as follows: BUY (71%), HOLD (3%), SELL / SUSPEND (26%). First Phosphate Corp.
This report contains “forward looking” statements. Forward-looking statements regarding the Company and/or stock’s performance inherently involve risks and uncertainties that could cause actual results to differ from such forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company’s products/services in the marketplace; acceptance in the marketplace of the Company’s new product lines/services; competitive factors; new product/service introductions by others; technological changes; dependence on suppliers; systematic market risks and other risks discussed in the Company’s periodic report filings, including interim reports, annual reports, and annual information forms filed with the various securities regulators. By making these forward-looking statements, Fundamental Research Corp. and the analyst/author of this report undertakes no obligation to update these statements for revisions or changes after the date of this report. A report initiating coverage will most often be updated quarterly while a report issuing a rating may have no further or less frequent updates because the subject company is likely to be in earlier stages where nothing material may occur quarter to quarter.
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