TIDMKP2
RNS Number : 3518G
Kore Potash PLC
18 July 2023
18 July 2023
Kore Potash Plc
("Kore Potash" or "the Company")
Review of Operations 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.
S
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
Emily Moss 7920 3150
Adam Baynes
SP Angel Corporate Finance - Nomad Tel: +44 (0) 20
and Broker 7470 0470
Ewan Leggat
Charlie Bouverat
Shore Capital - Joint Broker Tel: +44 (0) 20
Toby Gibbs 7408 4050
James Thomas
Questco Corporate Advisory - JSE Tel: +27 (11) 011
Sponsor 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 & Tenement Issued Company Interest Title Registered
Type to
Kola Decree 2013-412 100% Kola Potash Mining
Mining of 9 August potassium rights S.A.
2013 only
------------------ ------------------- -------------------
Dougou Decree 2017-139 100% Sintoukola Potash
Mining of 9 May 2017 potassium rights S.A.
Revised Decree only
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 Attributable (90% interest)
-------------------------------------------- --------------------------------------------
Mineral Resource Sylvinite Average Contained Sylvinite Average Contained
Category Million Tonnes Grade KCl KCl million Million Tonnes Grade KCl KCl million
% tonnes % 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 +
Indicated 508 35.4 179.7 457 35.4 161.7
---------------- ----------- ------------- ---------------- ----------- -------------
Inferred 340 34.0 115.7 306 34.0 104.1
---------------- ----------- ------------- ---------------- ----------- -------------
TOTAL 848 34.8 295.4 763 34.8 265.8
---------------- ----------- ------------- ---------------- ----------- -------------
Gross Net Attributable (90% interest)
Ore Reserve Sylvinite Average Contained Sylvinite Average Contained
Category Million Tonnes Grade KCl KCl million Million Tonnes Grade KCl KCl million
% tonnes % 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 addition to Mineral Resources but are derived from
them by the application of modifying factors
DOUGOU EXTENSION SYLVINITE DEPOSIT (HWSS and TSS)
Gross Net Attributable (90% interest)
-------------------------------------------- --------------------------------------------
Mineral Resource Sylvinite Average Contained Sylvinite Average Contained
Category Million Tonnes Grade KCl KCl million Million Tonnes Grade KCl KCl million
% tonnes % 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 +
Indicated 28 29.9 8.3 25 29.9 7.5
---------------- ----------- ------------- ---------------- ----------- -------------
Inferred 101 23.5 23.8 91 23.5 21.4
---------------- ----------- ------------- ---------------- ----------- -------------
TOTAL 129 24.8 32.1 116 24.8 28.9
---------------- ----------- ------------- ---------------- ----------- -------------
Gross Net Attributable (90% interest)
Ore Reserve Sylvinite Average Contained Sylvinite Average Contained
Category Million Grade KCl KCl million Million Grade KCl KCl million
Tonnes % tonnes Tonnes % tonnes
-------------- ----------- ------------- -------------- ----------- ---------------
Proved 6.1 32.5 2.0 5.5 32.5 1.8
-------------- ----------- ------------- -------------- ----------- ---------------
Probable 3.2 41.8 1.3 2.9 41.8 1.2
-------------- ----------- ------------- -------------- ----------- ---------------
TOTAL 9.3 35.7 3.3 8.4 35.7 3.0
-------------- ----------- ------------- -------------- ----------- ---------------
Ore Reserves are not in addition to Mineral Resources but are derived from
them by the application of modifying factors
DOUGOU CARNALLITE DEPOSIT
Gross Net Attributable (90% interest)
------------------------------------------ ----------------------------------------------
Mineral Million Average Contained Million Average Contained
Resource Tonnes Grade KCl KCl million Tonnes Grade KCl KCl million
Category carnallite % tonnes carnallite % tonnes
-------------- ----------- ------------- -------------- ----------- -----------------
Measured 148 20.1 29.7 133 20.1 26.8
-------------- ----------- ------------- -------------- ----------- -----------------
Indicated 920 20.7 190.4 828 20.7 171.4
-------------- ----------- ------------- -------------- ----------- -----------------
Sub-Total
Measured +
Indicated 1,068 20.6 220.2 961 20.6 198.2
-------------- ----------- ------------- -------------- ----------- -----------------
Inferred 1,988 20.8 413.5 1,789 20.8 372.2
-------------- ----------- ------------- -------------- ----------- -----------------
TOTAL 3,056 20.7 633.7 2,750 20.7 570.3
-------------- ----------- ------------- -------------- ----------- -----------------
KOLA CARNALLITE DEPOSIT
Gross Net Attributable (90% interest)
------------------------------------------ ----------------------------------------------
Mineral Million Average Contained Million Average Contained
Resource Tonnes Grade KCl KCl million Tonnes Grade KCl KCl million
Category carnallite % tonnes carnallite % tonnes
-------------- ----------- ------------- -------------- ----------- -----------------
Measured 341 17.4 59.4 307 17.4 53.5
-------------- ----------- ------------- -------------- ----------- -----------------
Indicated 441 18.7 82.6 397 18.7 74.4
-------------- ----------- ------------- -------------- ----------- -----------------
Sub-Total
Measured +
Indicated 783 18.1 142.0 705 18.1 127.8
-------------- ----------- ------------- -------------- ----------- -----------------
Inferred 1,266 18.7 236.4 1,140 18.7 212.8
-------------- ----------- ------------- -------------- ----------- -----------------
TOTAL 2,049 18.5 378.5 1,844 18.5 340.6
-------------- ----------- ------------- -------------- ----------- -----------------
Competent Persons Statements
All Mineral Resource and Ore Reserves are reported in accordance
with the JORC Code (2012 edition). Numbers are rounded to the
appropriate decimal place. Rounding 'errors' may be reflected in
the "totals".
The Kola Mineral Resources were reported 6 July 2017 in an
announcement titled 'Updated Mineral Resource for the High -Grade
Kola Deposit'. It was prepared by Competent Person Mr. Garth
Kirkham, P.Geo., of Met-Chem division of DRA Americas Inc., a
subsidiary of the DRA Group, and a member of the Association of
Professional Engineers and Geoscientists of British Columbia. The
Ore Reserves for sylvinite at Kola was first stated on 29 January
2019 in an announcement titled "Kola Definitive Feasibility Study"
and was prepared by Met-Chem. The Competent Person for the estimate
was Mr Mo Molavi, member of good standing of Engineers and
Geoscientists of British Columbia. The Ore Reserves were reviewed
when the changes to the underlying assumptions (as detailed in the
27 June 2022 announcement "Kola Project optimisation study
outcomes") were made and Mr Molavi verified that the Ore Reserves
remained unchanged.
The Dougou carnallite Mineral Resources were reported on 9
February 2015 in an announcement titled 'Elemental Minerals
Announces Large Mineral Resource Expansion and Upgrade for the
Dougou Potash Deposit'. It was prepared by Competent Persons Dr.
Sebastiaan van der Klauw and Ms. Jana Neubert, senior geologists
and employees of ERCOSPLAN Ingenieurgesellschaft Geotechnik und
Bergbau mbH and members of good standing of the European Federation
of Geologists.
The Dougou Extension sylvinite Mineral Resource Estimate and Ore
Reserve Estimate were reported in an announcement titled "Updated
Dougou Extension (DX) PFS and Production Target" on 24 January
2023. Dr. Douglas F. Hambley, Ph.D., P.E., P.Eng., P.G of Agapito
Associates Inc., for the Exploration Results and Mineral Resources.
Mr. Hambley is a licensed professional geologist in states of
Illinois (Member 196-000007) and Indiana (Member 2175), USA, and is
an Honorary Registered Member (HRM) of the Society of Mining,
Metallurgy and Exploration, Inc. (SME, Member 1299100RM), a
Recognized RPO included in a list that is posted on the ASX website
from time to time and Dr. Michael Hardy was the Competent Person
for the Ore Reserves, and he is a registered member in good
standing (Member #01328850) of Society for Mining, Metallurgy and
Exploration (SME) which is an RPO included in a list that is posted
on the ASX website from time to time.
The Company confirms that, it is not aware of any new
information or data that materially affects the information
included in the original market announcements and, in the case of
estimates of Mineral Resources or statements of Ore Reserves that
all material assumptions and technical parameters underpinning the
estimates in the relevant market announcement continue to apply and
have not materially changed. The Company confirms that the form and
context in which the Competent Person's findings are presented have
not been materially modified from the original market
announcement.
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
UPDSFSSIAEDSEIW
(END) Dow Jones Newswires
July 18, 2023 02:30 ET (06:30 GMT)
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