TIDMKP2
RNS Number : 8685R
Kore Potash PLC
10 November 2021
10 November 2021
Kore Potash Plc
("Kore Potash" or the "Company")
Kola Optimisation Study Interim Report
Kore Potash, the potash development company with 97%-ownership
of the Kola and DX Potash Projects in the Sintoukola Basin, located
within the Republic of Congo ("RoC"), is pleased to report the
receipt of the Interim Report ("Interim Report") for the
Optimisation Study ("Study") on the Kola Potash Project ("Kola")
from the Summit Consortium ("Consortium").
Highlights:
-- Kola Optimisation Study on track for successful completion in Q1 2022.
-- 53 capital cost reduction opportunities considered to date.
-- Further capital reduction opportunities will be reviewed prior to completion of the Study.
-- The Consortium has reconfirmed it remains on track to present
a financing proposal for the full Kola construction costs in the
first half of 2022.
Brad Sampson, Chief Executive Officer of Kore Potash,
commented:
"We are pleased at the quantum of potential capital cost saving
initiatives being identified in the Interim Report , and that the
process to finance Kola remains on track. We will review the
interim information and proposed changes to the Kola design while
the Consortium continues the Study. There are additional capital
cost reduction opportunities for the Consortium to consider over
the next few months, and we look forward to delivery of the full
Study report in early 2022."
Optimisation Study
On 6(th) of April 2021, Kore Potash announced the signing of a
Memorandum of Understanding (" MoU" ) with the Consortium for the
full financing of the construction of Kola. The agreed process
included the Consortium completing an Optimisation Study on Kola,
and on completion of a successful Study, providing an Engineering,
Procurement and Construction (" EPC ") contract proposal along with
a potential royalty and debt financing proposal for the full
construction costs of Kola.
The Study is being undertaken by the key engineering and
construction partner of the Consortium, SEPCO Electric Power
Construction Corporation (" SEPCO ") and has key goals to add value
to Kola through reducing the capital cost of Kola with a target of
less than US$1.65 billion and shortening the construction schedule
with a target of 40 months.
The Consortium has reported that the Study is on track for
completion and presentation to the Company in Q1 2022.
Interim Report for the Optimisation Study on the Kola Potash
Project
The Consortium has presented a set of documents that
collectively form the Interim Report on the Study to the
Company.
The Interim Report has been provided following their review of
the Definitive Feasibility Study (DFS) of the Kola Potash project
as released in our announcement dated 29 January 2019 entitled
"Kola Definitive Feasibility Study". The Interim Report details the
identified optimisation opportunities and confirms the progress
they have made to date towards reducing the capital cost of
Kola.
The Interim Report details optimisation opportunities that
should substantially reduce the capital cost of Kola compared to
the DFS capital cost once implemented. The potential capital cost
reduction opportunities cover mining, mineral processing,
infrastructure, utilities, and indirect cost areas of Kola.
To this point in the study, 53 capital cost reduction
initiatives have been identified of which 45 have been incorporated
into the optimisation of Kola. The remaining initiatives will be
further considered over the next few months leading to completion
of the Study.
The 53 capital reduction initiatives identified to date are
focused on the following areas:
-- Potential relocation of the processing plant site closer to the Mine site.
-- Mining: 2 initiatives related to alternate sourcing of major
equipment and construction materials.
-- Processing: 8 initiatives related to the optimisation of
processing layouts, major equipment selection and sourcing.
-- Processing wet area: 21 initiatives related to the process
design and major equipment selection.
-- Processing dry areas: 12 initiatives related to the muriate
of potash product produced, processing reagent management and MoP
product storage.
-- Infrastructure: 3 initiatives related to road design and
construction and run of mine overland conveyor belt and product
conveyor belt optimisations.
-- Utilities: 6 initiatives related to electrical transmission,
instrumentation designs and laboratory area cost reductions.
The potential for cost reductions in the marine area has not yet
been assessed and there will be focus on this area during the next
few months.
In the period leading up to the completion of the Study the
remaining optimisation ideas will be assessed along with
opportunities to shorten the construction schedule.
On completion of a successful Study the Consortium has agreed to
provide the Company with an EPC contract proposal with capital cost
that reflects the capital cost achieved in the completed Study.
There is a large amount of information that collectively
constitutes the Interim Report, and the Company is undertaking a
detailed review of all the information and proposed design changes
presented to it by the Consortium. The Company's review of this
Interim Report is expected to take some weeks to complete and will
not impact the timing of completion of the Study in 2022.
Financing Process
The MoU provides for the Consortium to present a royalty and
debt financing proposal for the full construction cost of Kola, and
an EPC contract proposal to the Company following completion of the
Study.
In conjunction with the Interim Report, the Consortium has
advised the Company that it is pleased with the progress to date on
the Study, and that it remains on track to provide the EPC proposal
and the full financing proposal to the Company in the first half of
2022 following completion of a successful Study.
This announcement has been approved for release by the Board of
Kore Potash.
ENDS
For further information, please visit www.korepotash.com or
contact:
Kore Potash Tel: +27 84 603
Brad Sampson - CEO 6238
Tavistock Communications Tel: +44 (0) 20
Jos Simson 7920 3150
Oliver Lamb
Canaccord Genuity - Nomad and Tel: +44 (0) 20
Broker 7523 4600
James Asensio
Henry Fitzgerald-O'Connor
Shore Capital - Joint Broker Tel: +44 (0) 20
Jerry Keen 7408 4050
Toby Gibbs
James Thomas
Questco Corporate Advisory - Tel: +27 (11) 011
JSE Sponsor 9205
Doné Hattingh
Forward-Looking Statements
This release contains certain statements that are
"forward-looking" with respect to the financial condition, results
of operations, projects and business of the Company and certain
plans and objectives of the management of the Company.
Forward-looking statements include those containing words such as:
"anticipate", "believe", "expect," "forecast", "potential",
"intends," "estimate," "will", "plan", "could", "may", "project",
"target", "likely" and similar expressions identify forward-looking
statements. By their very nature forward-looking statements are
subject to known and unknown risks and uncertainties and other
factors which are subject to change without notice and may involve
significant elements of subjective judgement and assumptions as to
future events which may or may not be correct, which may cause the
Company's actual results, performance or achievements, to differ
materially from those expressed or implied in any of our
forward-looking statements, which are not guarantees of future
performance. Neither the Company, nor any other person, gives any
representation, warranty, assurance or guarantee that the
occurrence of the events expressed or implied in any
forward-looking statement will occur. Except as required by law,
and only to the extent so required, none of the Company, its
subsidiaries or its or their directors, officers, employees,
advisors or agents or any other person shall in any way be liable
to any person or body for any loss, claim, demand, damages, costs
or expenses of whatever nature arising in any way out of, or in
connection with, the information contained in this document.
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END
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