30 January 2025
Kore Potash
Plc
("Kore Potash" or
"the Company")
Review of Operations for the
Quarter ended 31 December 2024
Kore Potash (AIM: KP2, ASX: KP2, JSE: KP2, A2X:
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 31 December 2024 (the "Quarter").
Quarterly
Highlights
Projects
·
Engineering, Procurement and Construction contract
("EPC" or the "Contract") for the Kola Project with
PowerChina International Group Limited ("PowerChina" or the "Contractor") was signed in Brazzaville
in the presence of the RoC Minister of Mines and Geology on 19
November 2024.
Corporate
· Lodgement
of the cleansing prospectus on 22 November 2024 to remove any
on-sale restrictions in relation to the shares to be issued
pursuant to the Company's US$0.9 million placement.
·
Successful completion of c.US$0.9 million fundraise announced
on 26 November 2024.
· As
of 31 December 2024, the Company held US$1.34 million in
cash.
Operational
Activities
Kola
EPC
The EPC for the Kola Project with PowerChina
was signed in Brazzaville in the presence of the RoC Minister of
Mines and Geology on 19 November 2024.
The EPC is a fixed price contract worth
US$1.929 billion. This fixed price is of significant benefit to the
Company as it minimises the risk of cost overruns for the Company.
The EPC also includes provisions for penalties in the event of
delayed completion and non-compliance to performance
metrics.
The EPC remains subject to Financial
Close.
Entry into the EPC reaffirms the board of
directors' strategy for Kore Potash to become one of the lowest
cost producers globally for the Brazilian agricultural market and
high growth African markets.
Kola
Financing
As announced on 6 April 2021, a non-binding
memorandum of understanding was signed with the Summit Consortium
("Summit" or "Summit Consortium") to arrange the full
financing required for the construction of the Kola Project
("Summit MoU").
The Company confirms the Summit Consortium is
not a related party of the Company.
In line with this memorandum of understanding,
following the signing of the EPC, Summit is expected to deliver a
non-binding financing term sheet within three months. This term
sheet will be subject to the completion of detailed and definitive
legal documentation.
The Company confirms its confidence in the
Summit Consortium as a financier for the construction of the Kola
Project. This confidence is based on the Company having worked with
the Summit Consortium for the past 10 years and their track record
in assisting with financing for Kore Potash including sourcing the
approximately US$40 million equity investment provided by the Oman
Investment Authority ("OIA") and Sociedad Quimica y Minera de
Chile S.A. ("SQM") in 2016.
OIA and SQM are among top three largest shareholders of the Company
who together hold 27.58% in the issued share capital of the
Company.
The material terms of the Summit MoU were set
out in the 6 April 2021 announcement and are reaffirmed as
follows:
· The
Summit MoU outlines a roadmap to optimise the capital design to
fully finance and construct Kola via a mix of debt and royalty
financing.
·
Under the proposed financing arrangements, the RoC Government
will retain their 10% shareholding in Kola.
·
Under Summit's proposed financing structure, the Company will
not contribute to the capital needed to build the Kola Project and
will retain a 90% equity interest in Kola.
The Company retains the right not to accept any
finance proposal presented by Summit and there is no guarantee that
any proposal or legally binding agreement will be forthcoming.
The Company provides no assurance to shareholders that the
Summit Consortium will provide the financing required on terms
which are acceptable to the Company. If the Summit Consortium does
not provide an acceptable financing package leading to binding
legal documents, the Company will need to explore other debt,
equity and structured finance alternatives having regard to the
prevailing capital market conditions.
The Company expects any financing provided by
the Summit Consortium to be subject to the Summit Consortium being
granted full security over the Kola Project, however (as noted
above) the full terms of any financing proposal from the Summit
Consortium (including any security package) will be subject to
further discussions.
The Summit Consortium is currently expected to
deliver this finance proposal by the end of February
2025.
Further details about the financing
arrangements will be notified to the market in accordance with the
Company's continuous disclosure obligations.
Congo
Government Relations
In August 2023, the RoC State Minister of Mines
and Geology (the "Minister"), H.E. Mr Pierre Oba, pledged
written support for Kore Potash's projects despite some unmet
deadlines, reaffirming the validity of the Company's mining titles
and agreements; reiterating RoC Government support. One month
later, the Minister visited the Kola Project, where the Company
held a ceremony to mark development progress and the start of work
by SEPCO Electric Power Construction Corporation
("SEPCO").
PowerChina is SEPCO's parent company.
Thereafter, RoC government engagement was
continual and positive. On 24 February 2024, David Hathorn and
Warren Thompson visited RoC and updated the Minister on EPC
progress. Two months later, the newly appointed CEO, André
Baya, met with the Minister in Brazzaville to keep him informed
about further progress.
At all times and without exception, the
Minister expressed support and enjoined Kore Potash to continue
diligently. He was regularly informed of negotiation meetings with
PowerChina in Beijing and Dubai. Finally, on 19 November
2024, the EPC construction contract was signed between Kore Potash
and PowerChina in Brazzaville in the presence of a large and
supportive delegation from the RoC Ministry of Mines & Geology.
During his speech, Summit Consortium reassured the audience that
the next step was well underway and that the financing process
would result in a finance proposal by the end of February
2025.
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 also exploring what
strategic options are available for the DX project.
Corporate
On 22 November 2024, the Company issued a
cleansing prospectus for the offer of up to 500 CHESS Depositary
Interests ("CDIs") in the
capital of the Company at an issue price of AUD 0.0543 per CDI to
raise up to AUD 27.15 (before expenses). This cleansing prospectus
had been prepared primarily for the purpose of section 708A(11) of
the Australian Corporations Act 2001 (Cth) to remove any on-sale
restrictions in relation to the shares to be issued pursuant to the
Company's US$900,000 placement announced on 6 November
2024.
On 26 November 2024, the Company successfully
completed a c.US$0.9 million fundraise via the issue of 25,441,268
new ordinary shares of US$0.001 each in the Company with existing
and new shareholders at a price of 2.76 pence per share.
As at 31 December 2024, the Company held
US$1.34 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.
The Company invested US$553,000 in exploration
in the Quarter, which comprised US$550,000 related to the Kola
Study and US$3,000 for the DX DFS Study. The Company ended the
Quarter with c.US$1.34 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.
ENDS
For further information, please
visit
www.korepotash.com or
contact:
|
Kore Potash
André Baya, CEO
Andry Maruta, CFO
|
|
Tel: +44
(0) 20 3963 1776
|
|
Tavistock Communications
Emily Moss
Nick Elwes
Josephine Clerkin
|
|
Tel: +44
(0) 20 7920 3150
|
|
SP
Angel Corporate Finance - Nomad and
Broker
Ewan Leggat
Charlie Bouverat
|
|
Tel: +44
(0) 20 7470 0470
|
|
Shore Capital - Joint
Broker
Toby Gibbs
James Thomas
|
|
Tel: +44
(0) 20 7408 4050
|
|
Questco Corporate Advisory -
JSE Sponsor
Doné Hattingh
|
|
Tel: +27
63 482 3802
|
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 & Type
|
Tenement Issued
|
Company Interest
|
Title Registered to
|
|
Kola
Mining
|
Decree 2013-412
of 9 August 2013
|
100%
potassium rights only
|
Kola Potash
Mining S.A.
|
|
Dougou
Mining
|
Decree 2017-139
of 9 May 2017
Revised Decree No 2021-389 of 2
August 2021
|
100%
potassium rights only
|
Sintoukola
Potash S.A.
|
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.
