REG - Kore Potash PLC - EPC Update

Kore PotashAnnouncement

09/02/2024 07:00

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RNS Number : 5505C  Kore Potash PLC  09 February 2024

9 February 2024

 

Kore Potash Plc

("Kore Potash" or "the Company")

 

EPC Update

Kore Potash plc (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"), is pleased to announce that, in line
with expectations, PowerChina International Group Limited ("PowerChina")
delivered its Engineering, Procurement and Construction ("EPC") proposal and
draft EPC contract on the 6(th) of February 2024.

 

Kola Construction Contract

In April 2021, Kore Potash established a Memorandum of Understanding ("MoU")
with the Summit Consortium ("Consortium") for optimisation and EPC services,
alongside a debt and royalty financing proposal of the Kola Project ("Kola").
The Optimisation Study ("Study") results, released on 27 June 2022, supported
advancing to Kola's next developmental phase. On 28 June 2022, Kore Potash
entered into a Heads of Agreement ("HoA") with SEPCO Electric Power
Construction Corporation ("SEPCO"). The HoA acknowledged the Study's
verification of Kola's capital costs and construction timeframe and initiated
further EPC contract negotiations.

 

Due to Kola's significant scale, lengthy construction period, and extensive
financing needs, Kore Potash sought from SEPCO's holdings company, PowerChina,
the customary EPC contract assurances, including performance and retention
bonds to ensure construction and operational efficacy. On 8 August 2023, Kore
Potash and SEPCO reached a revised agreement to furnish an EPC contract for
the Kola Project, contingent on completing further engineering designs
resulting from PowerChina's review, leading to a joint EPC proposal and
contract presentation by PowerChina and SEPCO to Kore Potash.

 

During the past five months, PowerChina led five external technical groups
that completed additional design and engineering work. Specific design areas
included the underground mine, mineral processing jetty and transhipment
operations, energy transportation and storage, conveyor systems and material
handling (the "Works").

 

SEPCO had personnel living in the RoC for the past 24 months who continued
dialogue with potential in-country service providers and 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 finalisation of
the Works, including the planned service corridors, conveyor route, and
geomechanical information on foundation materials. These findings were
presented to PowerChina in early December 2023.

 

In line with the expectations PowerChina has now delivered the EPC Proposal
and draft EPC contract offer. The initial EPC contract price aligns with
expectations and reconfirms the capital cost detailed in the Study. Kore
Potash and SEPCO/PowerChina will now further negotiate the EPC proposal and
draft the EPC contract, targeting signing full EPC documentation by the end of
April 2024. The Summit 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 documentation terms finalisation.

 

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
(https://url.avanan.click/v2/___http:/www.korepotash.com___.YXAxZTpzaG9yZWNhcDphOm86NjE3ZDQ4NTIwYjAwMTA5MGQ5ZjYyMzY5ZGFiN2ZlMTE6Njo4NWJiOmI2Y2M5MmQzNjcwODhmMGY4ZGJiMzA5YmM0ZTRkMjQ5NWEyYzdjM2NlZjU2Yzg0NWU3NGQwZGJlNzIwZmQ1ZTM6cDpU)
or contact:

 

 Kore Potash

 David Hathorn - Chairman & Interim CEO           Tel: +27 84 603 6238

 Andrey Maruta - CFO                              Tel: +44 (0) 20 3963 1776
 Tavistock Communications                         Tel: +44 (0) 20 7920 3150

 Nick Elwes

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

 Ewan Leggat

 Charlie Bouverat

 Kasia Brzozowska

 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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