KORE POTASH PLC 18 July 2023
Kore Potash Plc
("Kore Potash" or "the Company")
Review of Opera�ons for the Quarter ended 30 June 2023
Kore Potash (AIM: KP2, ASX: KP2, JSE:KP2), the potash development company with 97%-ownership of the Kola Potash Project ("Kola" or the "Kola Project") and Dougou Extension ("DX") Potash Project in the Sintoukola Basin, located in the Republic of Congo ("RoC"), provides its quarterly update for the period ended 30 June 2023 (the "Quarter").
Quarterly Highlights
Projects
- Discussions continue towards finalising terms for the Engineering, Procurement and Construction ("EPC") contract at the Kola Project.
- PowerChina International Group Limited ("PowerChina") and SEPCO Electric Power Construction Corporation ("SEPCO") have commenced work to support the provision of guarantees regarding an EPC contract for Kola.
- Summit Consortium ("Consortium") has confirmed that the financing proposal for the full capital cost of Kola will be provided within six weeks of finalisation of EPC contract terms.
- A review of the strategic options available for the DX Project is underway.
Corporate
- The Company held its Annual General Meeting ("AGM") on 20 June 2023.
- Pablo Hernandez-MacDonald did not offer himself for re-election as a non-executive director to the Board at the AGM. A replacement Sociedad Química y Minera de Chile S.A ("SQM") nominated non-executive director will be announced in due course.
- As of 30 June 2023, the Company held US$2.6 million in cash.
Operational Activities
Kola EPC
Kore Potash signed a Memorandum of Understanding with the Consortium in April 2021 for the Optimisation of Kola, the provision of an EPC contract proposal and to provide a debt and royalty financing proposal for the full construction cost of Kola.
The results of the Optimisation Study ("Study") announced on 27 June 2022 supported moving to the next phase of Kola's development.
On 28 June 2022, the Company announced that it had signed a Heads of Agreement ("HoA") for the construction of Kola with SEPCO.
Under the HoA, SEPCO undertook to continue negotiations with Kore Potash towards an EPC contract for the construction of Kola. Importantly, the HoA recognises the outcomes of the Study, and confirmed the capital cost of Kola, the construction period and related EPC contract terms.
Discussions with SEPCO to finalise key EPC terms continue.
Recognising the world-class scale of Kola, the length of the proposed construction period and the total financing requirement, Kore Potash has requested that SEPCO's parent company, PowerChina, provides the typically required EPC contract guarantees, including performance and retention bonds supporting the completion of construction and the operating performance of Kola.
PowerChina is now actively involved in the process to finalise the EPC contract terms. As part of this process, PowerChina is reviewing aspects of the Kola design and the planned construction schedule and has had direct communications with the management of Kore Potash. PowerChina's review has generated a number of potential design improvements to the Kola Project that identify potential opportunities to further reduce the capital cost and the construction schedule. Discussions on incorporating these design improvements into the EPC contract continue.
PowerChina has engaged a number of external experts to support its review of the Kola design and they require completion of this review to support the provision of the required EPC contract guarantees. PowerChina has not yet advised Kore Potash of the timeline to complete its reviews and internal approvals.
The process to conclude EPC contract discussions has taken longer than the Consortium initially envisaged, however it is necessary to conclude these discussions prior to receiving their financing proposal.
Kola Financing
Kore Potash continues to work with the Consortium to provide financing for the full construction cost of Kola which is intended to be based on royalty and debt finance.
The successful outcomes of the Study were in line with the Consortium's requirements and supported the ongoing financing discussions. The financing parties of the Consortium have again reinforced their ongoing strong interest in financing Kola and await finalisation of the EPC contract terms.
The Consortium has advised that the financing proposal for the full construction cost of Kola will be provided to the Company within six weeks of EPC terms being finalised.
Kore Potash continues to hold the view that the members of the Consortium have the capability to provide the required financing to commit to the construction of Kola and that pursuing this financing opportunity currently remains the best path forward for Kore Potash's shareholders.
Congo Government Relations
Key members of the Kore Potash Board and the Consortium, including SEPCO and PowerChina, met with the Ministry of Mines ("Ministry") during the Quarter. The Ministry feedback from the visit was positive and that it improved the Ministry's understanding of the financing process.
DX Potash Project
At present, the Company remains focused on completing the financing of Kola and moving forward to construction of Kola as soon as possible.
The Company is now exploring what strategic options are available for the DX project.
Corporate
At the Company's AGM held on 20 June 2023, all resolutions were duly passed on a poll by the requisite majority.
Pablo Hernandez-MacDonald having resigned from SQM to pursue other interests and did not offer himself for re-election at the AGM. A replacement SQM nominated non-executive director will be announced in due course.
As at 30 June 2023, the Company held US$2.6 million in cash.
There were no mining production or construction activities during the Quarter.
Quarterly cashflow report
In accordance with the ASX Listing Rules, the Company will also lodge its cashflow report for the Quarter today. Included in those cashflows are non-executive directors' fees and the CEO's salary of US$198,000 settled in cash.
The Company invested US$1,083,000 in exploration in the Quarter, which comprised US$1,015,000 related to the Kola Study and US$68,000 for the DX DFS Study. The Company ended the Quarter with US$2.6 million in cash.
This announcement has been approved for release by the Board of Kore Potash.
Market Abuse Regulation
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.
ENDS
For further information, please visit www.korepotash.comor contact:
Kore Potash | Tel: +27 84 603 6238 |
Brad Sampson - CEO | |
Tavistock Communications | Tel: +44 (0) 20 7920 3150 |
Emily Moss | |
Adam Baynes |
SP Angel Corporate Finance - Nomad and Broker | Tel: +44 | (0) 20 7470 0470 |
Ewan Leggat | ||
Charlie Bouverat | ||
Shore Capital - Joint Broker | Tel: +44 | (0) 20 7408 4050 |
Toby Gibbs | ||
James Thomas | ||
Questco Corporate Advisory - JSE Sponsor | Tel: +27 | (11) 011 9205 |
Doné Hattingh |
Tenement Details and Ownership
The Company is incorporated and registered in England and Wales and wholly owns Kore Potash Limited of Australia. Kore Potash Limited has a 97% shareholding in Sintoukola Potash SA ("SPSA") in the RoC. SPSA has 100% ownership of Kola Potash Mining SA ("KPM"). KPM has 100% ownership of the Kola Mining Lease on which the Kola Deposit is situated. The Kola Deposit is located within the Kola Mining Lease. SPSA is also the 100% owner of the Dougou Mining Lease. The Dougou Mining lease hosts the Dougou Deposit and the DX Deposit.
Under the existing Mining Convention, the RoC Government is entitled to 10% ownership in the Kola and DX Projects. The transfer of this 10% awaits instructions from the Government and the Mineral Resources and Ore Reserves are shown below in gross and 90% attributable bases.
Table 1: Schedule of mining tenements (Republic of Congo)
Project & Type | Tenement Issued | Company Interest | Title Registered to |
Kola | Decree 2013-412 | 100% | Kola Potash Mining S.A. |
Mining | of 9 August 2013 | potassium rights only | |
Dougou | Decree 2017-139 | 100% | Sintoukola Potash S.A. |
Mining | of 9 May 2017 | potassium rights only | |
Revised Decree No | |||
2021-389 of 2 | |||
August 2021 | |||
Kore Potash Mineral Resources and Ore Reserves - Gross and according to future 90% interest (10% by the RoC government)
KOLA SYLVINITE DEPOSIT
Gross | Net Atributable (90% interest) | |||||
Mineral Resource | Sylvinite Million | Average Grade | Contained KCl | Sylvinite Million | Average Grade | Contained KCl |
Category | Tonnes | KCl % | million tonnes | Tonnes | KCl % | million tonnes |
Measured | 216 | 34.9 | 75.4 | 194 | 34.9 | 67.8 |
Indicated | 292 | 35.7 | 104.3 | 263 | 35.7 | 93.9 |
Sub-Total Measured | 508 | 35.4 | 179.7 | 457 | 35.4 | 161.7 |
+ Indicated | ||||||
Inferred | 340 | 34.0 | 115.7 | 306 | 34.0 | 104.1 |
TOTAL | 848 | 34.8 | 295.4 | 763 | 34.8 | 265.8 |
Gross | Net Atributable (90% interest) | |||||
Ore Reserve | Sylvinite Million | Average Grade | Contained KCl | Sylvinite Million | Average Grade | Contained KCl |
Category | Tonnes | KCl % | million tonnes | Tonnes | KCl % | million tonnes |
Proved | 62 | 32.1 | 19.8 | 56 | 32.1 | 17.9 |
Probable | 91 | 32.8 | 29.7 | 82 | 32.8 | 26.7 |
TOTAL | 152 | 32.5 | 49.5 | 137 | 32.5 | 44.6 |
Ore Reserves are not in | addi�on to Mineral | Resources but are derived from them by the applica�on of modifying factors | ||||
DOUGOU EXTENSION SYLVINITE DEPOSIT (HWSS and TSS) | ||||||
Gross | Net Atributable (90% interest) | |||||
Mineral Resource | Sylvinite Million | Average Grade | Contained KCl | Sylvinite Million | Average Grade | Contained KCl |
Category | Tonnes | KCl % | million tonnes | Tonnes | KCl % | million tonnes |
Measured | 20 | 32.4 | 6.5 | 18 | 32.4 | 5.9 |
Indicated | 8 | 23.1 | 1.8 | 7 | 23.1 | 1.6 |
Sub-Total Measured | 28 | 29.9 | 8.3 | 25 | 29.9 | 7.5 |
+ Indicated | ||||||
Inferred | 101 | 23.5 | 23.8 | 91 | 23.5 | 21.4 |
TOTAL | 129 | 24.8 | 32.1 | 116 | 24.8 | 28.9 |
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Disclaimer
Kore Potash plc published this content on 18 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 July 2023 06:40:22 UTC.
