Kola construction contract and financing update

Kore Potash

10/10/2022 11:15

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RNS Number : 3383C  Kore Potash PLC  10 October 2022

10 October 2022

 

Kore Potash Plc

("Kore Potash" or "the Company")

 

Kola Potash project construction contract and financing update

 

Kore Potash (AIM: KP2, ASX: KP2, JSE:KP2), 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"), provides the following update on the
construction contract and financing for the Kola Project ("Kola").

 

Kola construction contract

Kore Potash signed a Memorandum of Understanding ("MoU") with the Summit
Consortium ("Consortium") in April 2021 for the optimisation of Kola, the
provision of an Engineering, Procurement and Construction ("EPC") contract
proposal and to provide a debt and royalty financing proposal for the full
construction cost of Kola.

 

The receipt of the Optimisation Study ("Study") on Kola was announced to
shareholders on 1 April 2022 and detailed results announced on 27 June 2022
following completion of the Company's review of the Study reports.

 

On 28 June 2022 the Company announced that it had signed a Heads of Agreement
("HoA") for the construction of the Kola with SEPCO Electric Power
Construction Corporation ("SEPCO"), the engineering partner of the Consortium
and that it expected to receive an EPC contract proposal from SEPCO in August
2022.

 

Following some delays caused by multiple COVID lockdowns within China, SEPCO
has now delivered the EPC proposal for Kola to the Company. The EPC proposal
has been approved for presentation to Kore by the Boards of SEPCO, and its
parent company, Power Construction Corporation of China ("Power China").

 

The EPC proposal reflects the capital cost and construction timeline reported
in the Study and the terms agreed to in the HoA. The EPC proposal includes an
EPC Agreement which details the contractual terms in a format congruent with
the FIDIC silver book (2(nd) Edition 2017) conditions of contract.

 

There are a number of proposed contractual terms that the Company believes now
require further discussion before acceptance. These discussions have already
commenced and Kore and SEPCO are making every effort to expedite this process.
It may transpire that SEPCO will require further SEPCO and Power China Board
approvals prior to the finalisation of the contractual terms.

 

Kola financing

 

The Consortium has communicated that it remains committed to the financing of
Kola and are currently awaiting Kore and SEPCO finalising the EPC contract
terms prior to presenting its royalty and debt financing proposal for the full
construction cost of Kola.

 

 

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
(http://www.korepotash.com) or contact:

 

 Kore Potash                                      Tel: +27 84 603 6238

 Brad Sampson - CEO

 Tavistock Communications                         Tel: +44 (0) 20 7920 3150

 Emily Moss

 Adam Baynes
 SP Angel Corporate Finance - Nomad and Broker    Tel: +44 (0) 20 7470 0470

 Ewan Leggat

 Charlie Bouverat
 Shore Capital - Joint Broker                     Tel: +44 (0) 20 7408 4050

 Toby Gibbs

 James Thomas
 Questco Corporate Advisory - JSE Sponsor         Tel: +27 (11) 011 9205

 Doné Hattingh

 

 

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