REG - Kore Potash PLC - Revised agreement with SEPCO

Kore PotashAnnouncement

08/08/2023 07:30

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RNS Number : 6286I  Kore Potash PLC  08 August 2023

8 August 2023

 

KORE POTASH PLC

("Kore Potash" or "the Company")

Revised agreement with SEPCO

 

Kore Potash plc, 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 it has entered into a revised
agreement ("Agreement") with SEPCO Electric Power Construction Corporation
("SEPCO") to provide the Company with an Engineering, Procurement and
Construction ("EPC") contract for the construction of the Kola Potash Project
("Kola" or the "Project").

 

Following completion of SEPCO's Parent Company, PowerChina International Group
Limited's ("PowerChina") review of the Kola design and construction schedule
(announced on 31 March 2023), one of the agreed outcomes is that further
engineering design works must be completed prior to PowerChina and SEPCO
jointly presenting an EPC Proposal and EPC contract to the Company.

 

To assist in advancing these works as rapidly as possible, PowerChina has
subcontracted five technical groups who have commenced additional design and
engineering works. Specific design areas include the underground mine, mineral
processing jetty and transhipment operations, energy transportation and
storage, conveyor systems and material handling (the "Works"). PowerChina has
advised the Company that the Works will cost in excess of US$10 million to
complete. Illustrating PowerChina's commitment to Kola, it has capped Kore
Potash's contribution at a maximum of US$5 million of these costs with the
balance of the cost to be paid by PowerChina.

 

Under the Agreement Kore Potash is required to make an initial payment of US$1
million within three days of signing this agreement and the remainder, which
is contingent upon the Company completing further fund raises and SEPCO
delivery of the EPC contract, is planned to be paid in three tranches between
25 October 2023 and 12 months from the date that the Company signs the EPC
contract.

 

The Company has been advised that PowerChina, SEPCO and the subcontractors are
well progressed with the Works, having commenced immediately following the
direction from PowerChina that further work was required, and in advance of
reaching this Agreement with the Company on costs.

 

SEPCO has had personnel living in the RoC for the past 6 months who continue
dialogue with potential service providers, and who have conducted site visits
to Kola collecting information to further enable the Works. SEPCO plans to
mobilise a larger team to Kola during the second half of August, for a period
of up to eight weeks, and who are expected to collect additional information
on the planned service corridors, planned conveyor route, and geomechanical
information on foundation materials in the proposed processing plant and
infrastructure areas.

 

SEPCO has committed to a work schedule that provides for:

-      Site visits during the months of August 2023 and September 2023

-      Completion of all of the engineering design works before end
December 2023.

-      EPC Contract offer to be made to the Company during January 2024.

-      Kore Potash and SEPCO scheduled to sign the EPC contract before
the end of January 2024.

 

PowerChina and SEPCO have confirmed that on completion of the Works they will
have all of the information required to issue an EPC contract to the Company.
Importantly PowerChina and SEPCO have indicated that certain of the works to
be completed now would have formed part of front end design and engineering
(FEED) works which would have been completed at the inception of the Project,
which assist with reducing certain timelines during the construction phase.

 

 

The Company and the intended financiers within the Summit Consortium are
highly supportive and recognise that undertaking these Works now should
further de-risk the design of Kola to the benefit of the Company, the
financiers, and the constructor.

 

Kore Potash continues to work with the Summit Consortium to provide financing
for the full construction cost of Kola which is intended to be based on
royalty and debt finance.

 

The Summit Consortium has advised that the financing proposal for the full
construction cost of Kola will be provided to the Company within six weeks of
EPC terms being finalised.

 

Market abuse regulation

Market Abuse Regulation (MAR) Disclosure The information contained within this
announcement is deemed by the Company to constitute inside information as
stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR') which
has been incorporated into UK law by the European Union (Withdrawal) Act
2018.  Upon the publication of this announcement via Regulatory Information
Service ('RIS'), this inside information is now considered to be in the public
domain.

 

This announcement has been approved for release by the Board.

 

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

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

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

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

 

 

 

 

 

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