REG - Kore Potash PLC - Review of Operations - Quarter ended 31 March 2025
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RNS Number : 7000G Kore Potash PLC 30 April 2025
30 April 2025
Kore Potash Plc
("Kore Potash" or "the Company")
Review of Operations for the Quarter ended 31 March 2025
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 March 2025 (the "Quarter").
Quarterly Highlights
Projects
· On 27 February 2025, the Company provided an update in relation to the
optimised Kola Definitive Feasibility Study ("Optimised DFS") for the Kola
Project further to the announcement regarding the signing of the Engineering,
Procurement and Construction contract ("EPC") for the Kola Project with
PowerChina International Group Limited ("PowerChina") on 20 November 2024.
· On 27 February 2025, the Company also announced a restatement of the
Mineral Resource estimate for the Kola deposit.
Corporate
· On 31 March 2025, the Company released its Financial Results and
Annual Report for the Year Ended 31 December 2024.
· Successful completion of c.US$10.1 million fundraise with a further
US$0.5m conditionally raised subject to shareholder approval at the upcoming
Annual General Meeting ("AGM") to be held in June 2025.
· As of 31 March 2025, the Company held c.US$10.2 million in cash.
Operational Activities
Kola Project Optimised DFS
On 27 February 2025, the Company provided an update in relation to the
optimised Kola Definitive Feasibility Study for the Kola Project further to
the announcement regarding the signing of the EPC for the Kola Project with
PowerChina on 20 November 2024.
Prior to signing the EPC, two studies have been completed by the Company: the
Kola Definitive Feasibility Study ("DFS") in January 2019 and the Kola Project
Optimisation Study ("Optimisation Study") in June 2022, details of both of
which have been released to AIM, JSE and ASX on 29 January 2019 and 28 June
2022 respectively. Following signing of the EPC contract, the Company
undertook an exercise to optimise the DFS to account for the EPC contract,
including updating the Kola production schedule and the forecast financial
information. The Company has now completed its review of the Optimised DFS.
The results of the Optimised DFS incorporate the most current information
available to the Company, have been updated from the DFS and Optimisation
Study to ensure compliance with the latest applicable listing rule
requirements and other regulatory policies of the Australian Stock Exchange
Limited, and therefore should be considered as superseding the results of both
the DFS and the earlier Optimisation Study.
Unlike the DFS and the Optimisation Study, the Optimised DFS is based on a
production period which utilises all Proved and Probable Ore Reserves and only
6% of Inferred Minerals Resources, giving a Life of Mine ("LoM") of 23 years.
Kore Potash considers there is strong potential for the mine plan on which
this Optimised DFS is based to be extended beyond 23 years by upgrading a
portion of the 340 Mt of Inferred Mineral Resources to Measured or Indicated
Resources through further exploration during the 23 years of operations.
Highlights of the Optimised DFS
· Capital cost of US$2.07 billion (nominal basis) on a signed fixed
price EPC basis, including owner's costs.
· Assumed construction start date of 1 January 2026, with construction
period of 43 months.
· Kola designed with a nameplate capacity of 2.2 million tonnes per
annum ("Mtpa") of Muriate of Potash ("MoP").
· Average MoP production per year of 2.2 Mtpa of MoP for total MoP
production of 50Mt over a 23-year life of mine.
· Average cost of MoP delivered to Brazil is US$128/t. Based on an
independent MoP market study commissioned by the Company, management considers
Kore Potash is projected to become one of the lowest cost producers in the
global agricultural market to Brazil.
· Average annual EBITDA is approximately US$733 million. Kore Potash is
projected to continue to enjoy a very high average EBITDA margin of 74%.
· Key financial metrics, at MoP CFR Brazil pricing averaging
US$449/tonne and on a 90% attributable basis (reflecting Kore's future holding
of 90% and the RoC government 10%):
• Kola NPV10% (real) post-tax US$1.7 billion
• IRR 18% (real) on ungeared post-tax basis
· Kola is designed as a conventional mechanised underground potash mine
with shallow shaft access. Ore from underground is transported to the
processing plant via an approximately 25.5 km long overland conveyor. After
processing, the finished product is conveyed 8.5 km to the marine export
facility. MoP is transferred from the storage area onto barges via a dedicated
barge loading jetty before being transhipped into ocean-going vessels for
export
Confirmation of Mineral Resource for Kola Deposit
On 27 February 2025, the Company also announced a restatement of the Mineral
Resource estimate for the Kola deposit.
This announcement is a restatement of the Mineral Resource estimate for the
Kola deposit. The Mineral Resource estimate was originally released by the
Company's wholly-owned subsidiary, Kore Potash Limited, which was formerly
listed on the ASX under the ticker "K2P".
The original announcement was entitled "Updated Mineral Resource for the High
Grade Kola Deposit" dated 6 July 2017. This announcement contains additional
information summarising the material information relating to the Kola Mineral
Resource in accordance with ASX Listing Rule 5.8.1. No other material changes
have been made to the original announcement.
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.
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 27 March 2025, the Company successfully completed a c.US$10.1 million
fundraise via the issue of 455,734,110 new ordinary shares of US$0.001 each in
the Company with existing and new shareholders at a price of 1.7 pence per
share.
On 31 March 2025, the Company released its Financial Results and Annual Report
for the Year Ended 31 December 2024.
As at 31 March 2025, the Company held c.US$10.2 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$685,000 in exploration in the Quarter, which comprised
US$682,000 related to the Kola Study and US$3,000 for the DX DFS Study. The
Company ended the Quarter with c.US$10.2 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
(https://url.avanan.click/v2/___http:/www.korepotash.com___.YXAxZTpzaG9yZWNhcDphOm86MDlkN2QxNGJhNDk0MzNjMTI4MTVmZjFjOWJhOTQ0MDg6NjplMTY5OjNlYWYwYmY3Zjk2NzhjZDU2NzQxOGU4ZmYwZGE1ZmE3MDNiODhlZTk1Y2QzYTg1YjE3ZmMzMTY2MDYwYzc2YmY6cDpGOk4)
or contact:
Kore Potash Tel: +44 (0) 20 3963 1776
André Baya, CEO
Andry Maruta, CFO
Tavistock Communications Tel: +44 (0) 20 7920 3150
Emily Moss
Nick Elwes
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 (63) 482 3802
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 & Type Tenement Issued Company Interest Title Registered to
Kola Decree 2013-412 100% Kola Potash Mining S.A.
Mining of 9 August 2013 potassium rights only
Dougou Decree 2017-139 100% Sintoukola Potash S.A.
Mining of 9 May 2017 potassium rights only
Revised Decree 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 Category Sylvinite Million Tonnes Average Grade KCl % Contained KCl million tonnes Sylvinite Million Tonnes Average Grade KCl % Contained KCl million 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 Category Sylvinite Million Tonnes Average Grade KCl % Contained KCl million tonnes Sylvinite Million Tonnes Average Grade KCl % Contained KCl million 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 Category Sylvinite Million Tonnes Average Grade KCl % Contained KCl million tonnes Sylvinite Million Tonnes Average Grade KCl % Contained KCl million 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 Category Sylvinite Million Tonnes Average Grade KCl % Contained KCl million tonnes Sylvinite Million Tonnes Average Grade KCl % Contained KCl million 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 Resource Category Million Tonnes carnallite Average Grade KCl % Contained KCl million tonnes Million Tonnes carnallite Average Grade KCl % Contained KCl million 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 Resource Category Million Tonnes carnallite Average Grade KCl % Contained KCl million tonnes Million Tonnes carnallite Average Grade KCl % Contained KCl million 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., 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
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