REG - Kore Potash PLC - Kola optimisation study received

Kore PotashAnnouncement

01/04/2022 09:30

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RNS Number : 9393G  Kore Potash PLC  01 April 2022

1 April 2022

Kore Potash Plc

("Kore Potash" or the "Company")

 

Kola optimisation study received

 

Kore Potash, the potash development company with 97%-ownership of the Kola and
DX Potash Projects in the Sintoukola Basin, located within the Republic of
Congo ("RoC"), is pleased to provide an update on the progress of the
Optimisation Study and financing process for the Kola Potash Project ("Kola").

 

The Company is pleased to announce it has received the Kola Optimisation Study
("Study") undertaken by the engineering partner of the Summit Consortium
("Consortium"), SEPCO Electric Power Construction Corporation ("SEPCO"). The
Company has commenced its detailed review of the Study which is expected to
take several weeks.

 

The Study has been produced by SEPCO following extensive review of the Kola
Definitive Feasibility Study ("DFS") announced by Kore on 29 January 2019.

 

Highlights

 

·      Delivery of the Study completes work on the optimisation of Kola.
Focus now shifts towards the terms of an Engineering, Procurement and
Construction contract ("EPC") proposal.

·      The Consortium has advised that it expects to submit an EPC
proposal based on the outcomes of the Study within the next 2 months.

·      The Consortium has advised that it is pleased with the outcome of
the Study and is expected to provide the financing proposal for the
construction of Kola following Kore Potash's receipt of the EPC proposal and
agreement on EPC terms.

·      The Company has commenced its detailed review of the Study and
expects that this will take some weeks to complete and to finalise agreement
with the Consortium on the scope for inclusion in the EPC contract. The
Company does not anticipate this review period will negatively impact the
timing of the EPC and financing proposals.

 

Brad Sampson, Chief Executive Officer of Kore Potash, commented, "Receipt of
the Kola Optimisation Study represents another key milestone towards the
financing process for Kola.  We enthusiastically await the EPC proposal and
are excited to be closer to receiving the financing proposal from the
Consortium, at a time when the world has become acutely aware of the need to
develop new and high quality long life potash deposits like Kola that are
located close to key global potash customers."

 

Optimisation Study

On 6 April 2021, Kore Potash announced the signing of a Memorandum of
Understanding ("MoU") with the Consortium for the optimisation, construction
and financing of the Kola Project.

 

The Study, which represented the first part of the financing process, has been
undertaken by SEPCO, the engineering and construction partner of the
Consortium. The key goals of the Study were to improve the value of Kola
through reductions in the capital cost and by shortening the construction
schedule.

 

During the Study, SEPCO employed two key sub-contractors, China ENFI
Engineering Corporation to review the mining, processing and infrastructure
aspects of the project and CCCC-FHDI Engineering Co. Ltd to consider the
optimisation of the marine facilities. These subcontractors provided
significant and relevant technical capability to complement SEPCO's
construction capability.

 

There is a large amount of information that collectively constitutes the
Study. The Company has commenced a detailed review of the Study and the
proposed Kola design changes presented to it by the Consortium.  This review
is expected to take some weeks and is not expected to impact the timing of the
EPC and financing proposals being prepared for presentation to the
Company.

 

As soon as the Company has completed its review and has the results available
for public disclosure in a format acceptable to its market regulators it will
announce the results of the review to the market.

 

With delivery of the Study, the Consortium's work on the optimisation of Kola
has now concluded and its attention is focused on finalisation of the EPC
proposal.

 

EPC Contract and Financing Process

Following delivery of the Study, the Consortium has advised that it remains
committed to providing the Company with an EPC proposal for the construction
of Kola within 2 months and that the proposal will be based on the capital
costs presented in the Study.

 

Kore Potash intends to continue dialogue with the Consortium on the
optimisation opportunities to be included in the EPC scope to enable the
Consortium to finalise the capital cost and construction schedule for Kola to
be included in the EPC proposal.

 

Kore Potash and the Consortium have been in discussion for a number of months
on the detailed EPC terms and conditions and these discussions are expected to
be concluded within the second quarter of 2022, prior to the receipt of the
EPC proposal. These EPC terms and conditions are based on the FIDIC Silver
Book (2(nd) Edition 2017) conditions of contract.

 

The Consortium has agreed to present the financing proposal for the full
construction costs of the Kola project to the Company following Kore Potash's
receipt of the EPC proposal and agreement on EPC terms.

 

Over the last year potash prices have risen dramatically in all global markets
reinforcing the need to develop new low cost potash projects such as Kola. At
the same time, the Company is conscious of the current volatile global context
and inflationary pressures on input costs.  The Company is working with the
Consortium in an effort to expedite completion of both the EPC and financing
proposals as quickly as possible.

 

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.

 

END

 

For further information, please visit www.korepotash.com
(http://www.korepotash.com)  or contact:

END

 

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

       Jos Simson

       Oliver Lamb
       SP Angel Corporate Finance - Nomad and Joint 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

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.

 

In particular, statements in this release regarding the Company's business or
proposed business, which are not historical facts, are "forward-looking"
statements that involve risks and uncertainties, such as Mineral Resource
estimates market prices of potash, capital and operating costs, changes in
project parameters as plans continue to be evaluated, continued availability
of capital and financing and general economic, market or business conditions,
and statements that describe the Company's future plans, objectives or goals,
including words to the effect that the Company or management expects a stated
condition or result to occur. Since forward-looking statements address future
events and conditions, by their very nature, they involve inherent risks and
uncertainties. Actual results in each case could differ materially from those
currently anticipated in such statements. Shareholders are cautioned not to
place undue reliance on forward-looking statements, which speak only as of the
date they are made. The forward-looking statements are based on information
available to the Company as at the date of this release. Except as required by
law or regulation (including the ASX Listing Rules), the Company is under no
obligation to provide any additional or updated information whether as a
result of new information, future events, or results or otherwise.

 

Summary information

This announcement has been prepared by Kore Potash plc. This document contains
general background information about Kore Potash plc current at the date of
this announcement and does not constitute or form part of any offer or
invitation to purchase, otherwise acquire, issue, subscribe for, sell or
otherwise dispose of any securities, nor any solicitation of any offer to
purchase, otherwise acquire, issue, subscribe for, sell, or otherwise dispose
of any securities. The announcement is in summary form and does not purport to
be all-inclusive or complete. It should be read in conjunction with the
Company's other periodic and continuous disclosure announcements which are
available to view on the Company's website www.korepotash.com
(http://www.korepotash.com) .

 

The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in such
jurisdictions into which this announcement is released, published or
distributed should inform themselves about and observe such restrictions.

 

Not financial advice

This document is for information purposes only and is not financial product or
investment advice, nor a recommendation to acquire securities in Kore Potash
plc. It has been prepared without considering the objectives, financial
situation or needs of individuals. Before making any investment decision,
prospective investors should consider the appropriateness of the information
having regard to their own objectives, financial situation and needs and seek
legal and taxation advice appropriate to their jurisdiction

 

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