Kore Potash PLC Revised agreement with SEPCO (6286I)
08 August 2023 - 4:20PM
UK Regulatory
TIDMKP2
RNS Number : 6286I
Kore Potash PLC
08 August 2023
8 August 2023
KORE POTASH PLC
("Kore Potash" or "the Company")
Revised agreement with SEPCO
Kore Potash plc, the potash development company with 97%
ownership of the Kola and DX Potash Projects in the Sintoukola
Basin, located in the Republic of Congo ("RoC"), is pleased to
announce that it has entered into a revised agreement ("Agreement")
with SEPCO Electric Power Construction Corporation ("SEPCO") to
provide the Company with an Engineering, Procurement and
Construction ("EPC") contract for the construction of the Kola
Potash Project ("Kola" or the "Project").
Following completion of SEPCO's Parent Company, PowerChina
International Group Limited's (" PowerChina ") review of the Kola
design and construction schedule (announced on 31 March 2023), one
of the agreed outcomes is that further engineering design works
must be completed prior to PowerChina and SEPCO jointly presenting
an EPC Proposal and EPC contract to the Company.
To assist in advancing these works as rapidly as possible,
PowerChina has subcontracted five technical groups who have
commenced additional design and engineering works. Specific design
areas include the underground mine, mineral processing jetty and
transhipment operations, energy transportation and storage,
conveyor systems and material handling (the "Works"). PowerChina
has advised the Company that the Works will cost in excess of US$10
million to complete. Illustrating PowerChina's commitment to Kola,
it has capped Kore Potash's contribution at a maximum of US$5
million of these costs with the balance of the cost to be paid by
PowerChina.
Under the Agreement Kore Potash is required to make an initial
payment of US$1 million within three days of signing this agreement
and the remainder, which is contingent upon the Company completing
further fund raises and SEPCO delivery of the EPC contract, is
planned to be paid in three tranches between 25 October 2023 and 12
months from the date that the Company signs the EPC contract.
The Company has been advised that PowerChina, SEPCO and the
subcontractors are well progressed with the Works, having commenced
immediately following the direction from PowerChina that further
work was required, and in advance of reaching this Agreement with
the Company on costs.
SEPCO has had personnel living in the RoC for the past 6 months
who continue dialogue with potential service providers, and who
have conducted site visits to Kola collecting information to
further enable the Works. SEPCO plans to mobilise a larger team to
Kola during the second half of August, for a period of up to eight
weeks, and who are expected to collect additional information on
the planned service corridors, planned conveyor route, and
geomechanical information on foundation materials in the proposed
processing plant and infrastructure areas.
SEPCO has committed to a work schedule that provides for:
- Site visits during the months of August 2023 and September 2023
- Completion of all of the engineering design works before end December 2023.
- EPC Contract offer to be made to the Company during January 2024.
- Kore Potash and SEPCO scheduled to sign the EPC contract before the end of January 2024.
PowerChina and SEPCO have confirmed that on completion of the
Works they will have all of the information required to issue an
EPC contract to the Company. Importantly PowerChina and SEPCO have
indicated that certain of the works to be completed now would have
formed part of front end design and engineering (FEED) works which
would have been completed at the inception of the Project, which
assist with reducing certain timelines during the construction
phase.
The Company and the intended financiers within the Summit
Consortium are highly supportive and recognise that undertaking
these Works now should further de-risk the design of Kola to the
benefit of the Company, the financiers, and the constructor.
Kore Potash continues to work with the Summit Consortium to
provide financing for the full construction cost of Kola which is
intended to be based on royalty and debt finance.
The Summit 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.
Market abuse regulation
Market Abuse Regulation (MAR) Disclosure The information
contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014 ('MAR') which has been incorporated
into UK law by the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement via Regulatory Information Service
('RIS'), this inside information is now considered to be in the
public domain.
This announcement has been approved for release by the
Board.
For further information, please visit www.korepotash.com or
contact:
Kore Potash Tel: +27 84 603 6238
Brad Sampson - CEO
Tavistock Communications Tel: +44 (0) 20 7920
Nick Elwes Adam Baynes 3150
SP Angel Corporate Finance - Nomad Tel: + 44 (0) 20 7470
and Broker Ewan Leggat 0470
Charlie Bouverat
Shore Capital - Joint Broker Toby Tel: +44 (0) 20 7408
Gibbs 4050
James Thomas
Questco Corporate Advisory - JSE Tel: +27 (11) 011 9205
Sponsor Doné Hattingh
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END
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