TIDMKP2
RNS Number : 0815M
Kore Potash PLC
12 September 2023
12 September 2023
Kore Potash Plc
("Kore Potash" or the "Company")
(The "Group" refers to Kore Potash Plc and its subsidiaries)
Financial Results for Half Year Ended 30 June 2023
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"), today reports its unaudited
financial results and operational highlights for the half year
ended 30 June 2023 ("the Period").
The full financial report is available online at the Company's
website at
https://korepotash.com/wp-content/uploads/2023/09/20230911-Half-Year-Interim-Report-2023.pdf
The financial statements contained within this announcement should
be read in conjunction with the notes contained within the full
financial report.
Highlights
-- 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 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.
-- On 24 January 2023, the Company announced an update of the
JORC (2012) compliant Mineral Resource, Ore Reserve, Pre
Feasibility Study ("PFS") information and Production Target at the
DX Project. The updated Mineral Resource incorporates the most
recent drilling results and interpretation of the geophysical
data.
-- Cash and cash equivalents, at 30 June 2023 was USD 2,555,254.
-- The exploration and evaluation assets at 30 June 2023 was USD
167,201,357, an increase of USD 4,472,163 from USD 162,729,194 at
31 December 2022. During the Period the Company capitalised USD
1,882,884 in exploration and evaluation expenditure and the
expenditure increased by USD 2,589,279 as a result of the weakening
of the USD against the currency of the RoC.
-- Despite the on-going Russian/Ukraine conflict and increasing
fuel prices, the Group's operations have not been materially
impacted during the Period.
Kola Potash Project
Kore Potash signed a Memorandum of Understanding with the Summit
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 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 Head
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 Optimisation
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.
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 successful outcomes of the Optimisation 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 strategy for Kore Potash's
shareholders.
Key members of the Kore Potash Board and the Summit Consortium,
including SEPCO and PowerChina, met with the Ministry of Mines
during the period. The Ministry of Mines feedback from the visit
was positive and that it improved the Ministry's understanding of
the financing process.
Dougou Extension ("DX") Sylvinite Defined Feasibility Study
Phase 1
The DX Project update of the JORC (2012) compliant Mineral
Resource, Ore Reserve, PFS information and Production Target was
announced on the 24 January 2023. The updated Mineral Resource
incorporates the most recent drilling results and interpretation of
the geophysical data. A summary of the results is presented
below:
o Production Target of 15.5Mt sylvinite at a grade of 30.63 %
KCl demonstrates initial project life of 12 years at a production
rate of 400,000 tpa Muriate of Potash ("MoP").
o Production Target based on Proven and Probable Ore Reserves
and 13% of the Inferred Mineral Resources that represents 30% of
the life of project MoP production.
o NPV 10 (real) of USD 275 million and 27% IRR on a real post
tax basis at life of project average granular MoP price of USD
450/t.
o Approximately 2.9 years post-tax payback period from first
production.
o Proven and Probable Ore Reserve of 9.31 Mt sylvinite at an
average grade of 35.7% KCl.
o Mineral Resource of 129 Mt at an average grade of 24.8%
KCl.
o Higher confidence in the distribution of Sylvinite within the
Top Seams and improved understanding of the Sylvinite/Carnallite
boundary within the Hanging Wall Seam.
The updated information confirms that the DX Project is a
financially attractive, low capital cost project with a shorter
construction period than Kola.
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.
The financial statements below should be read in conjunction
with the notes contained within the full financial report which is
available online at the Company's website at
https://korepotash.com/wp-content/uploads/2023/09/20230911-Half-Year-Interim-Report-2023.pdf
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME FOR THE 6 MONTHSED 30 JUNE 2023
6 months 6 months Year ended
ended ended
30 June 2023 30 June 31 Dec 2022
2022
USD USD USD
Unaudited Unaudited Audited
Directors' remuneration (151,769) (198,521) (418,962)
Equity compensation benefits - (8,523) (9,412)
Salaries, employee benefits and
consultancy expense (95,704) (207,766) (293,292)
Administration expenses (273,020) (222,798) (546,507)
Interest income 51,348 17,029 66,956
Interest and finance expenses (1,395) (2,182) (3,935)
Net realised and unrealised foreign
exchange gain (loss) 5,557 (280,449) (308,801)
------------------- ------------------ ---------------
Loss before income tax expense (464,983) (903,210) (1,513,953)
------------------- ------------------ ---------------
Income tax income/(expense) - - -
------------------- ------------------ ---------------
Loss for the period (464,983) (903,210) (1,513,953)
------------------- ------------------ ---------------
Other comprehensive income/(loss)
Items that may be reclassified
subsequently to profit or loss
Exchange differences gain/(loss)
on translating
operations 2,540,490 (11,887,165) (8,660,408)
------------------- ------------------ ---------------
Other comprehensive profit/(loss)
for the period 2,540,490 (11,887,165) (8,660,408)
------------------- ------------------ ---------------
Total comprehensive profit/(loss)
for the period 2,075,507 (12,790,375) (10,174,361)
------------------- ------------------ ---------------
Loss attributable to:
Owners of the Company (464,474) (903,210) (1,513,822)
Non-controlling interest (509) - (131)
------------------- ------------------ ---------------
(464,983) (903,210) (1,513,953)
------------------- ------------------ ---------------
Total comprehensive profit/(loss)
attributable to:
Owners of the Company 2,076,016 (12,790,375) (10,174,230)
Non-controlling interest (509) - (131)
------------------- ------------------ ---------------
2,075,507 (12,790,375) (10,174,361)
------------------- ------------------ ---------------
Loss per share
Basic and diluted loss per share
(cents per share) (0.01) (0.03) (0.04)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30
JUNE 2023
30 June 2023 30 June 2022 31 Dec 2022
USD USD USD
Unaudited Unaudited Audited
ASSETS
Current Assets
Cash and cash equivalents 2,555,254 7,628,417 5,046,629
Trade and other receivables 140,479 145,458 200,251
--------------- --------------- ---------------
Total Current Assets 2,695,733 7,773,875 5,246,880
--------------- --------------- ---------------
Non-Current Assets
Trade and other receivables 39,218 99,562 38,597
Property, plant and equipment 373,633 433,385 385,103
Exploration and evaluation
expenditure 167,201,357 157,518,638 162,729,194
--------------- --------------- ---------------
Total Non-Current Assets 167,614,208 158,051,585 163,152,894
--------------- --------------- ---------------
TOTAL ASSETS 170,309,941 165,825,460 168,399,774
--------------- --------------- ---------------
LIABILITIES
Current Liabilities
Trade and other payables 572,417 803,064 749,469
Derivative financial liability 26 26 26
--------------- --------------- ---------------
Total Current Liabilities 572,443 803,090 749,495
--------------- --------------- ---------------
Non-Current Liabilities
--------------- --------------- ---------------
Total Non-Current Liabilities - - -
--------------- --------------- ---------------
TOTAL LIABILITIES 572,443 803,090 749,495
--------------- --------------- ---------------
NET ASSETS 169,737,498 165,022,370 167,650,279
--------------- --------------- ---------------
EQUITY
Issued share capital - Ordinary
Shares 3,421,937 3,420,177 3,420,177
Reserves 223,948,269 218,347,816 221,586,467
Accumulated losses (57,069,485) (56,183,040) (56,793,651)
--------------- --------------- ---------------
Equity attributable to the
shareholders of
Kore Potash plc 170,300,721 165,584,953 168,212,993
Non-controlling interests (563,223) (562,583) (562,714)
--------------- --------------- ---------------
TOTAL EQUITY 169,737,498 165,022,370 167,650,279
--------------- --------------- ---------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE 6
MONTHSED 30 JUNE 2023
Ordinary Share Merger Accumulated Option Foreign Owners Non- Total
Shares Premium Reserve Reserve Currency of the controlling Equity
Reserve Parent Interest
USD USD USD Losses USD Translation USD USD USD
Reserve
USD USD
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Balance
as at
1 Jan
2023 3,420,177 44,537,309 203,738,800 (56,793,651) 734,259 (27,423,901) 168,212,993 (562,714) 167,650,279
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Loss
for the
period - - - (464,474) - - (464,474) (509) (464,983)
Other
Comprehensive
(loss)/gain - - - - - 2,540,490 2,540,490 - 2,540,490
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Total
Comprehensive
(loss)/gain - - - (464,474) - 2,540,490 2,076,016 (509) 2,075,507
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Transactions
with owners:
Issue
of Shares 1,760 - - - - - 1,760 - 1,760
Conversion
of
performance
rights - - - 188,640 (188,640) - - - -
Share
Based
payments - - - - 9,952 - 9,952 - 9,952
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Balance
at 30
June 2023 3,421,937 44,537,309 203,738,800 (57,069,485) 555,571 (24,883,411) 170,300,721 (563,223) 169,737,498
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Ordinary Share Merger Accumulated Option Foreign Owners Non- Total
Shares Premium Reserve Reserve Currency of the controlling Equity
Reserve Parent Interest
USD USD USD Losses USD Translation USD USD USD
Reserve
USD USD
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Balance
as at
1 Jan
2022 3,375,494 44,205,971 203,738,800 (55,422,779) 708,486 (18,623,503) 177,982,470 (562,583) 177,419,887
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Loss
for the
period - - - (903,210) - - (903,210) - (903,210)
Other
Comprehensive
(loss)/gain - - - - - (11,887,165) (11,887,165) - (11,887,165)
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Total
Comprehensive
(loss)/gain - - - (903,210) - (11,887,165) (12,790,375) - (12,790,375)
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Kore
Potash
Ltd Southt
Africa
wound
down - - - 138,500 - (139,989) (1,489) - (1,489)
Transactions
with owners:
Issue
of Shares 44,683 331,338 - - - - 376,021 - 376,021
Conversion
of
performance
rights - - - 4,449 (4,449) - - - -
Share
Based
payments - - - - 18,327 - 18,327 - 18,327
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Balance
at 30
June 2022 3,420,177 44,537,309 203,738,800 (56,183,040) 722,364 (30,650,657) 165,584,953 (562,583) 165,022,370
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Ordinary Share Merger Accumulated Option Foreign Owners Non- Total
Shares Premium Reserve Losses Reserve Currency of the controlling Equity
Reserve Parent Interest
Losses Translation
Reserve
USD USD USD USD USD USD USD USD USD
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Balance
at 1 Jan
2022 3,375,494 44,205,971 203,738,800 (55,422,779) 708,486 (18,623,503) 177,982,470 (562,583) 177,419,887
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Loss for
the period: - - - (1,513,822) - .- (1,513,822) (131) (1,513,953)
Other
comprehensive
(loss)/gain - - - - - (8,660,408) (8,660,408) - (8,660,408)
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Total
comprehensive
(loss)/gain - - - (1,513,822) - (8,660,408) (10,174,230) (131) (10,174,361)
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
Kore Potash
Ltd SA
Divestment - - - 138,501 - (139,989) (1,488) - (1,488)
Transactions
with owners:
Conversion
of
performance
rights - - - 4,449 (4,449) - - - -
Share
issues 44,683 331,338 - - - - 376,021 - 376,021
Share
issue
costs - - - - 11,895 - 11,895 - 11,895
Share
based
payments - - - - 18,327 - 18,327 - 18,327
Balance
at 31
Dec 2022 3,420,177 44,537,309 203,738,800 (56,793,651) 734,259 (27,423,901) 168,212,993 (562,714) 167,650,279
------------ ------------- -------------- --------------- ------------ --------------- --------------- ------------ ---------------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 6 MONTHSED 30 JUNE 203
6 months ended 6 months ended Year ended
30 June 2023 30 June 2022 31 Dec 2022
USD USD USD
Unaudited Unaudited Audited
Cash Flows from Operating
Activities
Payments to suppliers and
employees (577,006) (697,416) (1,236,245)
--------------- --------------- ---------------
Net cash flows (used in) ( 1,236,245
operating activities (577,006) (697,416) )
--------------- --------------- ---------------
Cash Flows from Investing
Activities
Payments for plant and equipment - (658) (633)
Payments for exploration and
evaluation (1,984,021) (2,497,533) (4,574,363)
Interest received 51,348 17,029 66,956
--------------- --------------- ---------------
Net cash flows (used in)
investing activities (1,932,673) (2,481,162) (4,508,040)
--------------- --------------- ---------------
Cash Flows from Financing
Activities
Proceeds from issue of shares 1,760 550 550
Net cash flows generated
from
--------------- --------------- ---------------
financing activities 1,760 550 550
--------------- --------------- ---------------
Net decrease in cash and
cash
Equivalents (2,507,919) (3,178,028) (5,743,735)
Cash and cash equivalents
at beginning of
period 5,046,629 11,092,509 11,092,509
Foreign currency differences 16,544 (286,064) (302,145)
--------------- --------------- ---------------
Cash and Cash Equivalents
at Period End 2,555,254 7,628,417 5,046,629
--------------- --------------- ---------------
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.
This announcement has been approved for release by the Board of
Kore Potash.
For further information, please visit www.korepotash.com or
contact:
Kore Potash Tel:
Brad Sampson - + 27
CEO 84
603
6238
Tavistock Tel:
Communications +44
Nick Elwes (0)
Adam Baynes 20
7920
3150
SP Angel Tel:
Corporate +44
Finance - (0)
Nomad 20
and Joint 7470
Broker 0470
Ewan Leggat
Charlie
Bouverat
Shore Capital Tel:
- Joint Broker +44
Toby Gibbs (0)
James Thomas 20
7408
4050
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.
In particular, statements in this release regarding the
Company's business or proposed business, which are not historical
facts, are "forward-looking" statements that involve risks and
uncertainties, such as Mineral Resource estimates market prices of
potash, capital and operating costs, changes in project parameters
as plans continue to be evaluated, continued availability of
capital and financing and general economic, market or business
conditions, and statements that describe the Company's future
plans, objectives or goals, including words to the effect that the
Company or management expects a stated condition or result to
occur. Since forward-looking statements address future events and
conditions, by their very nature, they involve inherent risks and
uncertainties. Actual results in each case could differ materially
from those currently anticipated in such statements. Shareholders
are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date they are made. The
forward-looking statements are based on information available to
the Company as at the date of this release. Except as required by
law or regulation (including the ASX Listing Rules), the Company is
under no obligation to provide any additional or updated
information whether as a result of new information, future events,
or results or otherwise.
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END
IR KFLFFXKLEBBV
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