Review of Operations Quarter ended 30 Sept 2022
26/10/2022 10:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221026:nRSZ1739Ea&default-theme=true
RNS Number : 1739E Kore Potash PLC 26 October 2022
26 October 2022
Kore Potash Plc
("Kore Potash" or "the Company")
Review of Operations for the Quarter ended 30 September 2022
Kore Potash (AIM: KP2, ASX: KP2, JSE: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 the quarterly update for the period ended
30 September 2022 (the "Quarter").
Quarterly Highlights:
Kola Potash Project
· The process to potentially finance the construction of Kola further
progressed in line with the Memorandum of Understanding ("MoU") signed with
the Summit Consortium ("Consortium") in April 2021.
· The Engineering, Procurement and Construction ("EPC") proposal for
the construction of Kola was provided to the Company by SEPCO Electric Power
Construction Corporation ("SEPCO"), the engineering partner of the Summit
Consortium ("Consortium").
· The financing proposal for the full construction cost of Kola is
expected to be provided by the Consortium following agreement on the EPC
contract terms that the Company is currently discussing with SEPCO.
· Subsequent to the end of Quarter on 19 October 2022, the Company
announced receipt of correspondence from the Minister of Mines of the RoC (the
"Minister") expressing discontent with the progress towards construction of
the Kola Project and providing the Company 30 days within which to respond.
Corporate Highlights
· The Company released its Half Year Report for the six months ended 30
June 2022 on 13 September 2022.
· As of 30 September 2022, the Company held US$ 6.2 million in cash.
Operational activities
Kola Potash Project
The financing process for the construction of the Kola Project progressed
further, in line with the MoU signed with the Consortium in April 2021.
Kola EPC
Kore Potash signed a MoU with the Consortium in April 2021 for the
Optimisation of Kola, the provision of an EPC contract proposal and to provide
a debt and royalty financing proposal for the full construction cost of Kola.
The results of the Optimisation Study ("Study") announced on 27 June 2022
supported moving to the next phase of the Kola development.
On 28 June 2022 the Company announced that it had signed a Heads of Agreement
("HoA") for the construction of Kola with SEPCO.
During the Quarter SEPCO delivered the EPC proposal for Kola to the Company.
The EPC proposal was approved for presentation to Kore Potash 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 (2nd Edition 2017) conditions of contract.
There are a number of proposed contractual terms that require further
discussion before acceptance. Kore Potash and SEPCO are in dialogue to
complete this process. The Company notes that 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 advised that the strongly positive outcomes of the Study
continue to support its proposed financing of Kola and it intends to provide
the royalty and debt financing proposal for the full construction cost of Kola
after the EPC contract terms are finalised.
Correspondence from Minister of Mines
The Company's local subsidiary received a letter dated 12 October 2022 from
the Minister expressing his discontent with aspects of the administration of
the Company's subsidiary companies in the RoC and the apparent lack of
progress that Kore Potash and the Consortium are making towards the financing
of Kola.
The letter generally reserves the Government's right to take measures in
accordance with its existing agreements and the Mining Code of the RoC,
failing a response from the Company within 30 days.
The Company advises that it is continuing to progress the development of the
Kola and DX projects towards production, believes that it is in compliance
with its obligations to the Government of the RoC under the Mining Code and
Mining Convention and will continue to keep the Minister briefed on the
Company's plans and progress.
The Company intends to formally respond to the Minister's letter within the
30-day period afforded by the Minister.
Other Kola matters
Separate from the Consortium's activity, Kore Potash's management team also
continued discussions with potential offtake partners with the capability to
procure all Kola production and who have expressed interest in partnering with
the Company.
DX Potash Project
The Company is currently updating the Pre Feasibility Study and production
target for the DX project and will update shareholders on the outcomes of this
work once complete.
Corporate
The Company released its Half Year Report for the six months ended 30 June
2022 on 13 September 2022.
As at 30 September 2022, the Company held US$ 6.2 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. Included in those cashflows are
non-executive directors' fees and the CEO 's salary of US$ 198,000 settled in
cash.
The Company invested US$ 999,000 in exploration in the Quarter, which
comprised US$ 931,000 related to the Kola Study and US$ 68,000 for the DX DFS
Study. The Company ended the Quarter with US$ 6.2 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
(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
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 - - - - - -
Indicated 79 39.1 30.8 71 39.1 27.7
Sub-Total Measured + Indicated 79 39.1 30.8 71 39.1 27.7
Inferred 66 40.4 26.7 59 40.4 24.0
TOTAL 145 39.7 57.5 130 39.7 51.8
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 - - - - - -
Probable 17.7 41.7 7.4 16 41.7 6.6
TOTAL 17.7 41.7 7.4 16 41.7 6.6
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 1789 20.8 372.2
TOTAL 3,056 20.7 633.7 2750 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 1140 18.7 212.8
TOTAL 2,049 18.5 378.5 1844 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., of Met-Chem division of DRA
Americas Inc., a subsidiary of the DRA Group, and 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 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 DX sylvinite Mineral Resources and Ore Reserves were reported in an
announcement titled "Dougou Extension (DX) Project Pre-Feasibility Study" on
13 May 2020. Ms. Vanessa Santos, P.Geo. of Agapito Associates Inc. was the
Competent Person, for the Exploration Results and Mineral Resources. Ms.
Santos is a licensed professional geologist in South Carolina (Member 2403)
and Georgia (Member 1664), USA, and is a registered member (RM) of the Society
of Mining, Metallurgy and Exploration, Inc. (SME, Member 04058318). 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, other than the activity currently underway to
develop an improved geological model for the DX deposit which may in the
future necessitate a change in the DX Mineral Resources, 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
information contained in this document.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END MSCBKABQFBDKOKB
Recent news on Kore Potash
See all newsNotice of 2026 Annual General Meeting
Brief: Kore Potash Continues To Engage With Owi-Rams Regarding Financial Package For Kola Project
Review of Operations - Quarter ended 31 March 2026
Financial Results for Year Ended 31 December 2025
Brief: Kore Potash Purchases 0.46% Interest In Sintoukola Potash SA