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Updated Dougou Extension (DX) PFS and Production Target
Kore Potash plc
(Incorporated in England and Wales)
Registration number 10933682
ASX share code: KP2
AIM share code: KP2 JSE share code: KP2
ISIN: GB00BYP2QJ94
(“Kore Potash” or the “Company”)
24 January 2023
Updated Dougou Extension (DX) PFS and Production Target
Kore Potash plc, 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 announce
an update of the JORC (2012) compliant Mineral Resource, Ore Reserve, Pre Feasibility Study (“PFS”)
information and Production Target at the DX Project. The updated Mineral Resource incorporates the
most recent drilling results and interpretation of the geophysical data. A summary of the results is
presented herein.
Highlights:
• Production Target of 15.5MT sylvinite at a grade of 30.63 % KCl demonstrates initial project life
of 12 years at a production rate of 400,000 tpa Muriate of Potash (“MOP”).
• Production Target based on Proven and Probable Ore Reserves and 13% of the Inferred Mineral
Resources that represents 30% of the life of project MOP production.
• NPV10 (real) of US$275 million and 27% IRR on a real post tax basis at life of project average granular
MOP price of US$450/t.
• Approximately 2.9 years post-tax payback period from first production.
• Proven and Probable Ore Reserve of 9.31 Mt sylvinite at an average grade of 35.7% KCl.
• Mineral Resource of 129 Mt at an average grade of 24.9% KCl.
• Higher confidence in the distribution of Sylvinite within the Top Seams and improved
understanding of the Sylvinite/Carnallite boundary within the Hanging Wall Seam.
Cautionary Statement
• There is a low level of geological confidence associated with Inferred Mineral Resources. There is
no certainty that further exploration work will result in the determination of Indicated Mineral
Resources or that the production target itself will be realised.
• The Updated Production Target for DX is an interim evaluation of the potential viability of the DX
project and is limited to a Pre-Feasibility level technical and economic assessment (AACE Class IV
estimate).
• The Production Target is based on Proven and Probable Ore Reserves of 9.31 Mt sylvinite at an
average grade of 35.7% KCl, plus production from 13% of the total Inferred Mineral Resources
totalling 30% of LOM MOP production. The average KCl grade of the MOP product is 98.5%.
• The Production Target is not reliant on any exploration targets or qualifying foreign estimates.
• The Production Target is based on the material assumptions outlined in this announcement. These
include assumptions on availability of funding. While the Company considers all the material
assumptions to be based on reasonable grounds, there is no certainty that they will prove to be
correct or that the range of outcomes indicated by the PFS will be achieved.
• To achieve the range of outcomes indicated in the Production Target, base case funding in the
order of US$316 million will likely be required. Investors should note that there is no certainty that
the Company will be able to raise that amount of funding when needed. It is also possible that
such funding may only be available on terms that may be dilutive to or otherwise affect the value
of the Company’s existing shares.
• It is also possible that the Company could pursue other ‘value realisation’ strategies such as a sale,
partial sale or joint venture of the project. If it does, this could materially reduce the Company’s
proportionate ownership of the project.
• Given the uncertainties involved, investors should not make any investment decisions based solely
on the results of the Updated Production Target.
• The Mineral Resources and Ore Reserves underpinning the Production Target and forecast
financial information in this combined AIM/JSE/ASX release were prepared by independent expert
Dr. Michael Hardy, Competent Persons in accordance with the requirements of the JORC Code
2012 edition (JORC).
Brad Sampson, CEO of Kore, commented: “We are pleased to be able to update shareholders on the
value of the DX project. The most recent drilling and geophysical data has further improved confidence
in the DX Deposit and the economic attractiveness of the DX Project.
“The updated resource futher confirms this Project to be a low operating cost potash operation that
can produce approximately 400,000 tonnes per annum of MOP. What makes DX unique is its low
capex and shallow deposit containing high grade potassium chloride, qualities which are very rare in
the potash industry.”
Executive Summary
The DX Project is located in the RoC, approximately 65 km North of Pointe Noire and 13 km from the
coast (Figure 1). Kore Potash has completed a full update of the Production Target previously
published in “Updated DX Pre-Feasibility Study Production Target” on 11 November 2020 that
includes:
• drilling results as published in “DX Project drilling results and progress update” on 27 May 2021;
• additional geophysical interpretation of the area;
• compilation of a new geological model incorporating the drilling and geophysical information;
• new Mineral Resource; and,
• new Ore Reserves.
The Production Target models the DX project producing 400,000 tpa MOP via selective solution mining
of high grade sylvinite seams.
The DX Production Target demonstrates a scheduled life of project of 12 years producing 4.82 Mt MoP.
The Production Target is based on the Ore Reserves, and a portion of the Inferred Resources
representing less than 30% of Life Of Mines (“LOM”) production.
Table 1: Summary of Production Target Economic Evaluation
Production Target Production Target
Description January 2023 11 November 2020
Capital Cost Estimate US$315.7 million US$285.9 million
Operating Cost: Mine Gate US$67.44/t MoP US$65.26/t MoP
Operating Cost: FOB (Pointe US$90.54/t MoP
Noire) US$86.61/t MoP
Operating Cost: CFR (Africa) US$112.94/t MoP US$114.61/t MoP
Life of Project 12 years 30 years
Potash Price Flat US$450/t for LOM US$422/t LOM average
MOP Produced over life 4.82 Mt 12.10 Mt
Mineral Resource 129 Mt @24.8 KCl 145 Mt @ 39.7% KCl
Ore Reserve 9.31 Mt sylvinite @35.7% KCl 17.7 Mt sylvinite @ 41.7% KCl
NPV10 US$275 million US$412 million
IRR 27.3 % 23.4%
Consultants Team
The Production Target was prepared by Agapito Associates Inc. The Company’s team provided
infrastructure information and costs, project management, exploration and site management services
and oversaw the financial analysis conducted by Fraser McGill.
Ore Reserves and Mineral Resources
Ore Reserves (Table 2) were determined from Measured and Indicated Mineral Resource. The Sylvinite
is hosted by two layers (‘seams’) referred to as the HWSS and the TSS, separated by 8 to 15 m of rock-
salt. Table 3 provides the Mineral Resource. Further detail on the Ore Reserves and Mineral Resource
Estimate is provided in Appendix B (JORC Code Table 1, Sections 1-4).
Table 2: DX Sylvinite Ore Reserves
Classification Ore Reserves KCl grade Mg Insolubles
(Mt) (% KCl) (% Mg) (% Insol.)
Proved 6.13 32.55 0.05 0.14
Probable 3.18 41.86 0.03 0.08
Total Ore Reserves 9.31 35.73 0.04 0.12
Notes to Table 2: The Ore Reserves in Table 2 are gross numbers and the attributable numbers are presented
in Appendix C: Kore Potash Mineral Resources and Ore Reserves as of 20 January 2023.
Table 3: DX Sylvinite Mineral Resource (inclusive of Ore Reserves)
Mineral Resources KCl Grade Mg Insolubles
Classification
(Mt) (% KCl) (% Mg) (% Insol.)
Measured 20.16 32.43 0.05 0.14
Indicated 7.64 23.13 0.03 0.13
Inferred 101.22 23.47 0.06 0.18
Total Mineral Resources 129.02 24.85 0.06 0.15
Notes to Table 3: The Sylvinite Mineral Resources in Table 3 are gross numbers and the attributable numbers
are presented in Appendix C: Kore Potash Mineral Resources and Ore Reserves as of 20 January 2023.
Reasonable Basis for Forward-Looking Statements (including production target and forecast
financial information) and Ore Reserves
This release, inclusive of Appendix A: Summary results of Production Target for DX Project , contains a
series of forward-looking statements. The Company has concluded that it has a reasonable basis for
providing these forward-looking statements and the forecast financial information included in this
release. This includes a reasonable basis to expect that it will be able to fund the development of the
DX Project when required.
The detailed reasons for these conclusions are outlined throughout this release. All material
assumptions, including the modifying factors, upon which the production target and forecast financial
information is based are disclosed in this release (including the summary information in Appendix B).
This announcement has been prepared in accordance with the requirements of the JORC and the ASX
Rules.
The Ore Reserves and Inferred Mineral Resources underpinning the Production Target have been
prepared by a Competent Person in accordance with the requirements of JORC. Details of those Ore
Reserves and Mineral Resources are as set out in Appendix A: Summary results of Production Target
for DX Project, of this release.
The 400,000 tonnes per annum MOP Production Target over a 12 year LOM is underpinned by
scheduling of Proven and Probable Ore Reserves, plus production from Inferred Resources totalling
no more than 30% of LOM MOP production. No exploration targets or qualifying foreign estimates
underpin the Production Target.
This announcement has been approved by the Board of Kore Potash plc.
ENDS
For further information, please visit 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 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
Competent Persons Statement:
The estimated Ore Reserves and Mineral Resources underpinning the Production Target have been
prepared by Competent Persons in accordance with the requirements of the JORC Code.
All information in this report that relates to Mineral Resources is based on information compiled by
Dr. Douglas F. Hambley, Ph.D., P.E., P.Eng., P.G. of Agapito Associates Inc. Dr. Hambley is a licensed
Professional Geologist in the states of Illinois (196-000007) and Indiana (2175), USA, and is an
Honorary Registered Member (HRM) of the Society of Mining, Metallurgy and Exploration, Inc. (SME,
Member 1299100RM), a Recognized Professional Organization’ (RPO) included in a list that is posted
on the ASX website from time to time. Dr. Hambley served on the Illinois Board of Licensing for
Professional Geologists from its establishment in 1996 until 2000. He is currently a member of the
Resource and Reserve and Registered Member Ethics Committees of SME and the Industrial Minerals
Subcommittee of the Mineral Resource/Mineral Reserve Committee of the Canadian Institute for
Mining, Metallurgy and Petroleum (CIM).
Dr. Hambley has more than 15 years’ experience that is relevant to the style of mineralisation and
type of Deposit under consideration and to the activity he is undertaking to qualify as a Competent
Person, as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves” (the JORC Code). Dr. Hambley consents to the inclusion in this
report of the matters based on the information in the form and context in which it appears.
All information in this report that relates to Ore Reserves is based on information compiled or
reviewed by, Dr. Michael Hardy, a Competent Person who 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.
Dr. Michael Hardy has sufficient experience that is relevant to the style of mineralization and type of
deposit under consideration and to the activity being undertaken to qualify as a Competent Person as
defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves” (the JORC Code). Michael Hardy has verified that this report is based on
and fairly and accurately reflects in the form and context in which it appears, the information in the
supporting documentation relating to preparation of the Ore Reserves.
Dr. Michael Hardy president of Agapito Associates Inc. is not associated or affiliated with Kore Potash
or any of its affiliates. Dr Hambley is not associated or affiliated with Kore Potash or any of its affiliates.
Agapito Associates Inc. will receive a fee for the preparation of the Report in accordance with normal
professional consulting practices. This fee is not contingent on the conclusions of the Report and
Agapito Associates Inc. Neither Michael Hardy or Douglas Hambley will receive other benefit for the
preparation of the Report, or have any pecuniary or other interests that could reasonably be regarded
as capable of affecting their ability to provide an unbiased opinion in relation to the Dougou Extension
Potash Project. Agapito Associates Inc. does not have, at the date of the Report, and has not had within
the previous years, any shareholding in or other relationship with Kore Potash or the Dougou
Extension Potash Project and consequently considers itself to be independent of Kore Potash.
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.
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.
Market Abuse Regulation
This announcement is released by the Company and contains inside information for the purposes of
the Market Abuse Regulation (EU) 596/2014 ("MAR") and is disclosed in accordance with the
Company's obligations under Article 17 of MAR. The person who arranged for the release of this
announcement on behalf of the Company was Brad Sampson, CEO. This announcement has been
authorised for release by the Board of Directors
Short-form announcement
This short-form announcement is the responsibility of the board of directors of Kore Potash and is a
summarised version of the Company’s full announcement and as such, it does not contain full or
complete details pertaining to the full announcement.
Any investment decision should be made after taking into consideration the full announcement.
The full announcement is available on the Company’s website at
https://korepotash.com/investors/announcements/
The full announcement can be requested via direct message under the contact section on the
company website at https://korepotash1.wpengine.com/contact/offices/
Date: 24-01-2023 09:00:00
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