Kropz PLC Elandsfontein and Hinda Update (6366Z)
25 May 2021 - 4:00PM
UK Regulatory
TIDMKRPZ
RNS Number : 6366Z
Kropz PLC
25 May 2021
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constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
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25 May 2021
Kropz Plc
("Kropz" or the "Company")
Elandsfontein and Hinda Update
Kropz Plc (AIM: KRPZ), an emerging African phosphate developer,
is providing updates for its Elandsfontein project
("Elandsfontein") located in the Republic of South Africa and its
Hinda project ("Hinda"), located in the Republic of the Congo.
Elandsfontein
Significant progress continues to be made at Elandsfontein. The
project remains on track and within the original projected capital
budget for commissioning in Q4 2021. These achievements have been
realised against the backdrop of the COVID-19 pandemic.
Earthworks and civil construction are largely complete; the
fabrication and erection of structural steel, platework and piping
are well advanced, and the first mechanical equipment has been
installed. Installation by the electrical, control and
instrumentation contractor has also commenced.
The project schedule remains tight, with a high number of
critical path, and near critical path items being managed
concurrently.
The current and further potential effects of COVID-19, and the
possibility of a third wave of infections in South Africa remains a
risk to the project schedule. The Company has mitigated this risk
as far as reasonably practicable by compliance to the Kropz
COVID-19 policies and procedures.
For the past eight months, Kropz (together with the
Elandsfontein management team) and Transnet have been engaging
regarding the finalisation of the port capacity agreement for the
export sales of the Elandsfontein phosphate rock through the Port
of Saldanha. Transnet recently informed the Company that capacity
is not available in Saldanha, although Transnet has committed to
provide an alternative solution for a portion of the Elandsfontein
production through the Port of Cape Town. Sales through Cape Town
would incur additional transportation costs due to the greater
travel distance involved. Kropz and Elandsfontein management are
investigating all possible solutions and discussions with Transnet
are continuing.
Images of the progress at the Elandsfontein site are available
online at
www.kropz.com/projects/elandsfontein/gallery-elandsfontein .
Kropz secured a convertible loan facility of up to US$ 40
million (not exceeding a maximum of ZAR 680 million) from the ARC
Fund ("ARC"), Kropz's major shareholder ("Original Equity
Facility") in June 2020, to be used exclusively for the development
of Elandsfontein in South Africa. At the time of concluding the
Original Equity Facility, the exchange rate was well above ZAR 17 /
US$ and budgets and cashflows were calculated based on that ZAR
exchange rate. Due to the strengthening of the ZAR to the US$ in
recent months, ZAR drawdown receipts in South Africa are expected
to be well below the ZAR 680 million anticipated at the time of
concluding the Original Equity Facility. The current shortfall is
expected to be ZAR 80 million, subject to exchange rates for the
rest of 2021, and that this would be required by the Company in Q4
2021. Management are in the process of investigating alternatives
for the funding of this potential shortfall.
The Company will provide further updates on the Elandsfontein
project and funding progress in due course.
Hinda
Hatch Africa (Pty) Ltd ("Hatch"), a leading global engineering
and construction firm, was appointed in February 2021 to complete
the updated feasibility study ("Updated FS") on Hinda, targeting a
phased approach in line with the terms of the mining investment
agreement.
The Updated FS is on track to be concluded by the end of
September 2021. The Company will announce the results as soon as
they become available.
For further information visit www.kropz.com or contact:
Kropz Plc
Mark Summers (CEO) +27 (0)79 744 8708
Grant Thornton UK LLP Nominated Adviser
Samantha Harrison
Harrison Clarke +44 (0) 20 7383
George Grainger 5100
Hannam & Partners Broker
Andrew Chubb +44 (0)20 7907
Ernest Bell 8500
Tavistock Financial PR &
IR (UK)
Nick Elwes +44 (0) 207 920
Jos Simson 3150
kropz@tavistock.co.uk
R&A Strategic Communications PR (South Africa)
James Duncan +27 (0)11 880 3924
james@rasc.co.za
About Kropz Plc
Kropz is an emerging African phosphate explorer and developer,
with an advanced stage phosphate mining project in South Africa and
a phosphate project in the Republic of Congo. The vision of the
Group is to become a leading independent phosphate rock producer
and to develop into an integrated, mine-to-market plant nutrient
company focusing on sub-Saharan Africa.
-ENDS-
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