TIDMKP2
RNS Number : 0743A
Kore Potash PLC
18 January 2024
18 January 2024
Kore Potash Plc
("Kore Potash" or "the Company")
Review of Operations for the quarter ended 31 December 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 Potash Project
("DX") in the Sintoukola Basin, located in the Republic of Congo
("RoC"), provides its quarterly update for the period ended 31
December 2023 (the "Quarter").
Quarterly Highlights
Projects
-- PowerChina International Group Limited ("PowerChina")
continues with the review process of the Engineering, Procurement
and Construction ("EPC") proposal, announced in December 2023.
Corporate
-- Resignation of Brad Sampson, the Company's Chief Executive
Officer ("CEO"), on 31 October 2023. The Company does not intend to
appoint a new CEO until after the receipt of the financing proposal
for the construction of the Kola Potash Project.
-- David Hathorn, (Chairman) has assumed the role of CEO in the interim.
-- Acting Chief Financial Officer ("CFO") Amanda Farris resigned
on 11 December 2023 with Andrey Maruta appointed as non-board
CFO.
-- Successful completion of US$2.5 million equity fundraise.
-- As of 31 December 2023, the Company held c.US$1.6 million in cash.
Operational Activities
Kola EPC
Kore Potash signed a Memorandum of Understanding with the Summit
Consortium ("Consortium") in April 2021 for the Optimisation of
Kola, the provision of an EPC contract proposal, and a debt and
royalty financing proposal for the total 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 recognised that the Study's outcomes confirmed
the capital cost of Kola, the construction period and related EPC
contract terms.
Recognising the world-class scale of Kola, the length of the
proposed construction period and the total financing requirement,
Kore Potash requested that SEPCO's parent company, PowerChina,
provide the typically required EPC contract guarantees, including
performance and retention bonds supporting the completion of
construction and the operating performance of Kola.
On 8 August 2023, Kore Potash entered into a revised agreement
("Agreement") with SEPCO to provide the Company with an EPC
contract for the construction of the Kola Project. Following the
completion of SEPCO's parent company, PowerChina's, review of the
Kola design and construction schedule, one of the agreed outcomes
was that further engineering design works must be completed before
PowerChina and SEPCO jointly presenting an EPC proposal and EPC
contract to the Company.
PowerChina subcontracted five technical groups who commenced
additional design and engineering works. Specific design areas
included the underground mine, mineral processing jetty and
transhipment operations, energy transportation and storage,
conveyor systems and material handling (the "Works"). PowerChina
advised the Company that the Works would cost in excess of US$10
million to complete. Illustrating PowerChina's commitment to Kola,
it capped Kore Potash's contribution at a maximum of US$5 million,
with the balance of the costs to be paid by PowerChina.
Two payments of US$1.0 million each were made in August and
November 2023 as required under the Agreement. The remaining
payments are contingent upon the Company completing further fund
raises and PowerChina and SEPCO's delivery of the EPC contract. The
remaining payments are planned to be paid in two tranches 12 months
from date of the execution of the EPC contract.
PowerChina, SEPCO and the subcontractors, in pursuit of the
timeline objectives, commenced the Works before reaching an
agreement with the Company on costs.
SEPCO has had personnel living in the Republic of Congo ("RoC")
for the past 24 months who continue dialogue with potential
in-country service providers and who have conducted several Kola
site visits collecting information for both the Study and the
Works. Additionally, SEPCO mobilised a larger team to Kola for four
months in the second half of 2023 to source additional information
to enable the Works finalisation, including the planned service
corridors, conveyor route, and geomechanical information on
foundation materials in the proposed processing plant and
infrastructure areas. These findings were presented to PowerChina
in early December 2023.
PowerChina and SEPCO have confirmed that they have received all
the information relating to the Works, internal reports are being
finalised, and the EPC contract is in draft form.
Regarding the Works detailed in the Agreement:
-- Additional engineering design works - Completed;
-- Finalisation of internal reports - week commencing 15 January
2024;
-- EPC Proposal and EP Contract offer - on track to be delivered
to the Company by the end of January 2024;
-- Kore Potash and SEPCO/PowerChina signing the EPC contract -
targeting before the end of February 2024.
Kola Financing
Kore Potash continues to work with the Consortium to provide
financing for the total 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 the finalisation of the EPC contract terms.
The Consortium has advised that the financing proposal for the
total construction cost of Kola will be provided to the Company
within six weeks of EPC Contract terms finalisation.
Kore Potash maintains that the Consortium members can provide
the required financing for Kola's construction of Kola and that
pursuing this financing opportunity remains the best path forward
for Kore Potash's shareholders.
Congo Government Relations
The Minister of Mines wrote a letter to Kore Potash that pledged
the Ministry and the RoC's support for Kore's development of its
projects at Kola and Dougou ("Projects").
The Minister acknowledged that some of the development
objectives for the Projects, as outlined in the Mining Convention,
have not yet been met. He also assured the Ministry's steadfast
support, in the form of a moral guarantee, to assist in addressing
the remaining challenges to completing the financing of Kola. The
Minister reaffirmed the validity of the Company's mining tenement
titles and the Mining Convention, which is the operating agreement
between the Company and the Government.
He further conveyed a pledge of security reflecting the RoC's
confidence in Kore Potash to support ongoing dialogue and action
towards developing our projects in the RoC.
The Minister of Mines of the RoC showed further support for the
Company's development of the Kola Project during a visit to the
Kola Project in September .
Kore Potash held a ceremony at the intended location of the Kola
processing plant in recognition of the extensive development work
completed by Kore Potash. The ceremony also recognised the
commencement of work on the ground at the Kola site by SEPCO.
The ceremony was held near the village of Yanga in the Kouilou
province of the RoC. The Minster, members of his Ministry and local
dignitaries were in attendance, along with the Chairman and Interim
CEO of Kore Potash, David Hathorn, Warren Thompson from the Summit
Consortium and SEPCO Vice President Zhang Quan.
DX Potash Project
At present, the Company remains focused on completing the
financing of Kola and moving forward to the construction of Kola as
soon as possible.
The Company is continuing to explore the strategic options
available for the DX project.
Corporate
The Company successfully raised US$2.5 million through the issue
of 542,250,000 new ordinary shares of US$0.001 each in the Company
("Subscription Shares") to certain eligible existing shareholders
at a price of 0.38 pence per share ("Subscription Price"). The
Company's Chairman has participated with US$750,000 investment.
At the Company's GM, held on 7 December 2023, all resolutions
were duly passed on a poll by the requisite majority.
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 Brad Sampson 's salary of US$164,000 settled in
cash.
The Company invested US$1,683,000 in exploration in the Quarter,
which comprised US$1,667,000 related to the Kola Study and
US$16,000 for the DX DFS Study. The Company ended the Quarter with
c.US$1.6 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
David Hathorn - Chairman & Interim 6238
CEO
Tavistock Communications Tel: +44 (0) 20
Nick Elwes 7920 3150
Adam Baynes
SP Angel Corporate Finance - Nomad Tel: +44 (0) 20
and Broker 7470 0470
Ewan Leggat
Charlie Bouverat
Kasia Brzozowska
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
MSCBDLLFZFLBBBZ
(END) Dow Jones Newswires
January 18, 2024 02:00 ET (07:00 GMT)
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