KORE POTASH PLC - Financial Report for the half year ended 30 June 2018

Release Date: 12/09/2018 11:15
Code(s): KP2
 
Wrap Text
Financial Report for the half year ended 30 June 2018

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”)


                   FINANCIAL REPORT FOR THE HALF YEAR ENDED 30 JUNE 2018



Kore Potash, the potash exploration and development company whose flagship asset is the Kola
Project (“Kola” or the “Project”), located within the Company’s 97%-owned Sintoukola Potash
Project in the Republic of Congo, is pleased to provide its financial statements for the half year
ended 30 June 2018 (the "Period"). The full report is available on the Company's website at
http://www.korepotash.com/wp-content/uploads/2018/09/Half-Year-Report-June-2018.docx.pdf



Highlights

    -   On 29 March 2017 Kore Potash completed its listing on the AIM market of the London Stock
        Exchange (“AIM”) as well as a secondary listing on the main board of the Johannesburg Stock
        Exchange (“JSE”), in addition to its existing Australian Securities Exchange (“ASX”) listing.
    -   US$13.14M was raised through the placing and direct subscription of new ordinary shares in
        the Company, and a convertible loan note, at a 67% premium to the Company’s last closing
        share price on the ASX. The Placees have been granted equity warrants on the basis of one
        equity warrant for every US$1.00 invested in the Placing exercisable at AUS$0.30 for one
        ordinary share with a 3 year subscription period.
    -   Kore Potash through its 97% subsidiary Sintoukola Potash S.A. was awarded the Sintoukola 2
        Exploration Permit, dated 9th February 2018, by the government of the Republic of Congo
        (RoC). This permit covers areas the Company believes are prospective for Potash
        mineralisation.
    -   The Kola Definitive Feasibility Study (“DFS”) is at an advanced stage. Work continues to
        complete the overall estimate of the construction schedule, capital and operating costs and
        the DFS Report and the Company expects to receive the DFS from the engineering consortium
        undertaking the work by the end of September 2018 upon which it will commence its review.
    -   The Company has contracted a consortium of French engineering companies comprising of
        Technip France, Vinci Construction Grands Projets, Egis International and Louis Dreyfus
        Armateurs SAS. (“the French Consortium” or “FC”) to complete the DFS.
    -   The FC now anticipate completion of the current scope of work for the DFS by the end of
        September 2018 following which the Company will commence its review of the completed
        DFS, prior to finalising and publishing the report.
    -   A licence for the Company to use an Offshore Area for the transhipment of potash and the
        discharge of waste brine has been authorised by the Minister of Transport, Civil Aviation and
        Merchant Marine of the Republic of Congo was issued to the Company on 6 September 2018.
    -   Amendments to the Kola environmental and social impact assessment (the “ESIA”) have been
        made reflecting project design changes since the ESIA was approved on 10 October 2013. The
        amendments were submitted to the Director General of the office of the Minister of
        Environment and Tourism on 7 July 2018 for their review.
    -   The ratification, into RoC law, of the mining convention for the Kola Project is still in progress.
    -   Appointment of Brad Sampson to replace Sean Bennett as Chief Executive Officer and
        Executive Director, effective from 4 June 2018.
    -   Appointment of Jose Antonio Merino as a Non-Executive Director on 23 May 2018. Jose
        Antonio is nominated by Sociedad Quimica y Minera de Chile S.A. (“SQM”) and replaced Pablo
        Altimiras, whose resignation was announced on 26 April 2018.
    -   The Company declared a maiden sylvinite Mineral Resource Estimate for the Dougou
        Extension sylvinite Deposit on 20 August 2018.


                For further information, please visit www.korepotash.com or contact:

 Kore Potash                                                    Tel: +27 11 469 9140
 Brad Sampson – CEO

 Tavistock Communications                                       Tel: +44 (0) 20 7920 3150
 Jos Simson
 Edward Lee

 Canaccord Genuity – Nomad and Broker                           Tel: +44 (0) 20 7523 4600
 Martin Davison
 James Asensio

 Renaissance Capital – JSE Sponsor                              Tel: +27 (11) 750 1448
 Yvette Labuschagne



12 September 2018
JSE Sponsor: Rencap Securities (Pty) Limited


Operating results

Net operating loss after tax for the half-year ended 30 June 2018 was US$4,570,790 (H1 2017:
US$691,130). The Company incurred a one-off expenses totalling US$1,087,911 for the half-year
relating to the London and Johannesburg listings and re-domicile expenses, non-cash expense in
regard to the issuance of options and performance rights of US$676,255 (H1 2017: US$ 906,265),
salaries, employee benefits and consultancy expense of US$712,539 (H1 2017: US$455,012) and other
administration expenses of US$1,994,967 (H1 2017: US$865,694). The foreign exchange gain for the
period was US$99,749 (H1 2017: USD 1,664,560 gain).
At 30 June 2018, the Group had $145,043,137 in capitalised Exploration and Evaluation asset (31 Dec
2017: $140,254,520). Cash and cash equivalents reduced by US$2,236,134 during the period to
US$14,219,356 at 30 June 2018. Expenditure incurred on the Kola Definitive Feasibility Study and
capitalised into Exploration and Evaluation Assets along with operating expenses was partially offset
by the capital raise described below. The total equity of the Group increased from $154,286,056 at 31
December 2017 to $158,820,432 at 30 June 2018.



Corporate activities

London and JSE listings successfully completed along with a well-supported Fundraising
    -   On 29 March 2018 the Company successfully completed its admission to AIM and a concurrent
        secondary listing of its ordinary shares on the main board of the Johannesburg Stock Exchange
        (“JSE”) as part of its strategy to better access capital markets where there is a strong
        understanding of large scale African mining projects and therefore attract a broader investor
        base. The Company remains listed on the ASX.
    -   On 29 March 2018, the Company also raised gross aggregate proceeds of US$13.14m,
        comprising a total of US$12.89m raised from existing and new investors (the “Placees”)
        through the placing and direct subscription of 83,523,344 ordinary shares in the Company at
        a placing price of AUD0.20 per new Ordinary Share, which was at a 67% premium to the
        Company’s last closing share price on the ASX prior to the raise. In addition, the Company
        raised US$250,000 from the Chairman, David Hathorn, through a convertible loan note that
        has converted into ordinary shares on 27 July 2018 pursuant to shareholder approval at the
        annual general meeting of the Company held on 27 June 2018. The Placees have been granted
        equity warrants on the basis of one equity warrant for every US$1.00 invested exercisable at
        AUD0.30 for one ordinary share with a 3 year subscription period.
    -   Brad Sampson was appointed as Chief Executive Officer on 4 June 2018. Brad, a mining
        engineer, has more than 25 years’ resources industry experience across numerous locations
        including West and Southern Africa. In addition to significant mine development and
        operating experience, Brad has held leadership positions at several publicly listed companies.
        Brad was most recently CEO of Australian Securities Exchange listed Tiger Resources. Prior to
        this Brad held senior positions at Newcrest Mining Ltd, was CEO at AIM/ASX listed Discovery
        Metals Ltd, and other notable positions include General Manager at Goldfields operations in
        South Africa and Australia.
    -   Appointment of Jose Antonio Merino as a Non-Executive Director nominated by SQM. Jose
        Antonio joined SQM in 2016 and is currently M&A Director, prior to which he worked at EPG
        partners as head of a mining private equity fund, at Asset Chile, a Chilean boutique investment
        bank and at Santander Investment. He is a qualified civil engineer having graduated from
        Pontificia Universidad Catolica de Chile.
    -   On 27 June 2018, the Company’s AGM was held with all resolutions passed.

Operational activities

The Kola Definitive Feasibility Study

    -   The Company’s activities are focused on the development of the Sintoukola Potash project
        and the Company is currently working to complete a DFS on this project. The DFS is being
        undertaken by the French Consortium.
    -   The DFS is at an advanced stage with test work and engineering design complete and work to
        conclude capital and operating cost estimates are continuing. The FC now anticipate
        completion of the current scope of work for the DFS by the end of September 2018 and to
        then present it to the Company for review prior to its finalisation and publication.
    -   In parallel with the completion of the DFS the Company has commissioned third-party review
        of some aspects of the DFS with a view to optimising the DFS outcomes and subsequent
        Engineering, Procurement and Construction (EPC) pricing.
    -   The Company is also engaging with the FC to optimise the capital costs of the project prior to
        finalisation of capital and operating cost estimates.
Environmental and social impact assessment (“ESIA”)

    -   The Kola ESIA received a Certificate of Conformity from the Government of the Republic of
        the Congo on 10 October 2013.
    -   Subsequently, the DFS design has incorporated a number of value adding design changes to
        Kola since the approval of the ESIA and the Company undertook to amend the ESIA
        accordingly.
    -   The work to amend the Kola ESIA is complete. The amended ESIA was submitted to the
        Director General of the office of the Minister of Environment and Tourism on 7 July 2018 and
        is currently awaiting the Minister’s approval.
    -   In addition to the ESIA, the Company is completing an analysis to identify and close any gaps
        between the ESIA approved by the Government of the RoC and established international
        industry practice and the Equator Principles. This process will generate an environmental and
        social action plan (ESAP) that the Company believes will meet debt financiers’ requirements.
    -   Public consultations with Interested and Affected Parties on the amendments to the ESIA took
        place between 7 -15 July 2018.
    -   The ESIA for the Dougou Mining License was approved by the Minister of Tourism and
        Environment of the RoC on 13 July 2018. The ESIA approval is granted for a 12 month period
        and is renewable annually until construction of a project commences.

Work streams initiated with RoC stakeholders and authorities

    -   The Company is progressing discussions toward a Memorandum of Understanding for power
        supply with an existing independent power producer (IPP), Centrale Electrique du Congo.
    -   Discussions with ENI Congo are continuing for the supply of gas (for drying and/ or for self-
        generating power).
    -   A licence for the Company to use an Offshore Area for the transhipment of potash and the
        discharge of waste brine has been authorised by the Minister of Transport, Civil Aviation and
        Merchant Marine of the Republic of Congo was issued to the Company on 6 September 2018.
    -   A Resettlement Action Plan (“RAP”) for the project land and a second framework RAP for the
        services corridor (for gas and power conveyance) have been prepared.
    -   A new Declaration d’Utilité Publique (“DUP”) process covering the entire project land area
        (mine, over land conveyor, process plant and services corridor) is expected to be launched
        shortly by the Ministry of Land Affairs and Public Domain. The DUP will define any
        compensation arrangements required as a result of Kore’s activity on the land area.

RoC regulatory requirements

    -   The Mining Convention (approved by the cabinet on 8 June 2017) is currently in the process
        of ratification into RoC law.
    -   The Company has submitted a proposed Mining Research Convention to the Government in
        relation to the Sintoukola 2 exploration licence that was granted to the Company on 9
        February 2018. The approval of a Mining Research Convention is a required step prior to
        commencement of exploration activity (including drilling).
    -   The intra-group transfer of the Dougou Mining License from Sintoukola Potash S.A., to the
        operating entity incorporated in the RoC, Dougou Potash Mining S.A, is expected to be
        approved by the Ministry of Mines and Geology shortly and implemented through
        Governmental Decree.

Exploration activity

    -   No field-work exploration activities were undertaken during the period, or are currently
        underway, and as such no exploration results were received or are expected in the near term.
    -   Based on results from drilling in 2017 and earlier, and an interpretation of historic seismic
        data, the Company declared a maiden sylvinite Mineral Resource Estimate for the Dougou
        Extension sylvinite Deposit on 20 August 2018. The combined Inferred and Indicated sylvinite
        Mineral Resource Estimate is 232 Mt grading 38.1% KCl (Table 1), reported according to JORC
        2012. Added to the Kola sylvinite Deposit, this new deposit brings the Company’s total
        sylvinite Mineral Resources to over 1 billion tonnes.

   Kore’s Potash Mineral Resources

   Table 1. Kore’s Potash Mineral Resources, provided as Gross and Net Attributable (to Kore’s 97%
   holding)
   Table 1. Kore’s Potash Mineral Resources provided as Gross and Net Attributable (to Kore’s 97% holding)

KOLA SYLVINITE DEPOSIT

                            Gross                                       Net Attributable

                            Million                    Contained KCl    Million            Grade KCl   Contained KCl
Mineral Resource Category                Grade KCl %
                            Tonnes                     million tonnes   Tonnes             %           million tonnes

Measured                    216          34.9          75               209                34.9        73
Indicated                   292          35.7          104              283                35.7        101

Sub-Total
                            508          35.4          180              492                35.4        174
Measured + Indicated

Inferred                    340          34.0          116              330                34.0        112


TOTAL                       848          34.8          295              822                34.8        286



DOUGOU EXTENSION SYLVINITE DEPOSIT

                            Gross                                       Net Attributable

                            Million                    Contained KCl    Million            Grade KCl   Contained KCl
Mineral Resource Category                Grade KCl %
                            Tonnes                     million tonnes   Tonnes             %           million tonnes

Measured                    -            -              -               -                  -           -
Indicated                   111          37.2          41               108                37.2        40

Sub-Total
                            111          37.2          41               108                37.2        40
Measured + Indicated

Inferred                    121          38.9          47               117                38.9        46


TOTAL                       232          38.1          88               225                38.1        85



TOTAL SYLVINITE, KOLA & DOUGOU EXTENSION DEPOSITS COMBINED
Measured + Indicated +
                            1,080        35.5          384              1,048              35.5        372
Inferred
DOUGOU CARNALLITE DEPOSIT

                              Gross                                                Net Attributable

                              Million                            Contained KCl     Million            Grade KCl    Contained KCl
Mineral Resource Category                       Grade KCl %
                              Tonnes                             million tonnes    Tonnes             %            million tonnes

Measured                      148               20.1             30                144                20.1         29
Indicated                     920               20.7             190               892                20.7         185

Sub-Total
                              1,068             20.6             220               1,036              20.6         214
Measured + Indicated

Inferred                      1,988             20.8             414               1,928              20.8         401


TOTAL                         3,056             20.7             634               2,964              20.7         615



KOLA CARNALLITE DEPOSIT
                              Gross                                                Net Attributable

                              Million                            Contained KCl     Million            Grade KCl    Contained KCl
Mineral Resource Category                       Grade KCl %
                              Tonnes                             million tonnes    Tonnes             %            million tonnes

Measured                      341               17.4             59                331                17.4         58
Indicated                     441               18.7             83                428                18.7         80

Sub-Total
                              783               18.1             142               760                18.1         138
Measured + Indicated

Inferred                      1,266             18.7             236               1,228              18.7         229


TOTAL                         2,049             18.5             378               1,988              18.5         367


    Table 1 Notes:
-   The Mineral Resource Estimates are reported in accordance with the JORC code 2012 edition.
-   Table entries are rounded to the appropriate significant figure.
-   The Kola Mineral Resource Estimate was reported on the 6 July 2017. The Competent Person (CP) is Garth Kirkham of Met-
    Chem division of DRA Americas Inc., a subsidiary of the DRA Group. It was reported using a cut-off grade (CoG) of 10% KCl.
-   The Dougou Extension Mineral Resource Estimate was reported on the 20 of August 2018; the CP is Mr. Andrew Pedley of
    Kore Potash. The Dougou Extension MRE is reported using a CoG of 15% KCl.
-   The Dougou Mineral Resource Estimate was reported on the 9 February 2015; the Competent Persons are Dr. Sebastiaan
    van der Klauw and Ms. Jana Neubert of ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH (“ERCOSPLAN“).
-   The form and context of the Competent Person’s findings as presented in this document have not materially changed since
    the resource was first reported.

Condensed consolidated statement of profit or loss and other comprehensive income for the half-
year ended 30 June 2018
                                                                6 months ended   6 months ended   Year ended
                                                                 30 June 2018     30 June 2017    31 Dec 2017
                                                        Notes        US$              US$             US$
Continuing operations
Interest income                                                       20,454          36,678)        50,858)
                                                                      20,454          36,678)        50,858)
Expenses
Directors remuneration                                              (420,210)        (162,080)     (365,371)
Equity compensation benefits                             5          (676,255)        (906,265)    (1,919,924)
Salaries, employee benefits and consultancy expense                 (712,539)        (455,012)    (1,595,607)
London listing and re-domicile expenses                           (1,087,911)                 -   (1,549,554)
Other administration expenses                            6        (1,994,967)        (865,694)    (1,746,603)
Net unrealised and realised foreign exchange gains                    99,749        1,664,560      2,864,226
Fair value change of a derivative financial liability    18          213,313                  -               -
Interest and finance expenses                                         (1,542)          (3,317)      (39,378)


Loss before income tax expense                                    (4,559,909)        (691,130)    (4,301,353)


Income tax expense                                       7           (10,881)                 -     (42,969)
Loss for the period from continuing operations                    (4,570,790)        (691,130)    (4,344,322)


Other comprehensive (loss)/income
Items that may be reclassified subsequently to
profit or loss
Exchange differences on translating foreign
                                                                  (3,786,338)       7,923,150     13,590,884
operations
Other comprehensive (loss)/income for the period                  (3,786,338)       7,923,150     13,590,884


Total comprehensive (loss)/income for the period                  (8,357,128)       7,232,020     9,246,562


Loss attributable to:
Owners of the Company                                             (4,538,341)        (691,130)    (4,344,322)
Non-controlling interest                                             (32,449)                 -               -
                                                                  (4,570,790)        (691,130)    (4,344,322)
Total comprehensive (loss)/income attributable to:
Owners of the Company                                             (7,892,158)       7,232,020      9,246,562
Non-controlling interest                                            (464,970)                 -               -
                                                                  (8,357,128)       7,232,020      9,246,562


Earnings per Share from Continuing Operations
Basic and diluted loss per share (cents per share)       16         (0.56)           (0.09)          (0.57)


                                                          30 June 2018       30 June 2017       31 Dec 2017
                                                  Notes       US$                US$               US$
ASSETS
Current Assets
Cash and cash equivalents                                    14,219,356         33,946,629       16,455,490
Trade and other receivables                                    312,251            230,668           299,399
Total Current Assets                                         14,531,607         34,177,297       16,754,889


Non-Current Assets
Trade and other receivables                                    134,938            121,631           139,163
Property, plant and equipment                                  357,081            387,827           413,801
Exploration and evaluation expenditure             8       145,043,137        117,038,885       140,254,520
Total Non-Current Assets                                   145,535,156        117,548,343       140,807,484
TOTAL ASSETS                                               160,066,763        151,725,640       157,562,373


LIABILITIES
Current Liabilities
Trade and other payables                           9           846,131            533,416         3,276,317
Derivative financial liability                     17          400,200                      -                 -
Total Current Liabilities                                     1,246,331           533,416         3,276,317


TOTAL LIABILITIES                                             1,246,331           533,416         3,276,317


NET ASSETS                                                 158,820,432        151,192,224       154,286,056


EQUITY
Issued share capital – Ordinary Shares             10          859,234        204,510,196)          771,396
Redeemable Preference Shares                                             -                  -        65,631
Reserves                                                   216,046,613         23,010,292)      206,805,823
Accumulated losses                                         (57,620,445)       (76,328,264)      (53,356,794)
Equity attributable to the shareholders of Kore
Potash plc                                                 159,285,402        151,192,224       154,286,056
Non-controlling interests                                     (464,970)                     -                 -
TOTAL EQUITY                                               158,820,432        151,192,224       154,286,056


Condensed consolidated statement of changes in equity for the half-year ended 30 June 2018
                                                                                                                          Foreign
                                                     Share                  Redeemable                                   Currency                        Non-
                                      Ordinary    Premium        Merger      Preference   Accumulated       Option     Translation     Owners of    Controlling           Total
                                        Shares     Reserve       Reserve          Share        Losses      Reserve        Reserve      the Parent     Interest           Equity
                                          US$          US$          US$             US$           US$         US$             US$            US$          US$              US$


Balance at 1 Jan 2018                 771,396             -   203,738,800        65,631   (53,356,794)   11,814,770    (8,747,747)   154,286,056                -   154,286,056


Loss for the period                          -            -             -             -    (4,538,341)            -              -    (4,538,341)     (32,449)       (4,784,102)
Other comprehensive income                   -            -             -             -              -            -    (3,353,817)    (3,353,817)    (432,521)       (3,786,338)
Total comprehensive income                   -            -             -             -    (4,538,341)            -    (3,353,817)    (7,892,158)    (464,970)       (8,570,440)
Transfer of previously lapsed
options                                      -            -             -             -       888,202     (888,202)              -              -               -              -
Transactions with owners:
  Issue of shares                      87,838    12,806,554             -             -              -            -              -    12,894,392                -    12,894,392
  Share based payments                       -            -             -             -              -     676,255               -       676,255                        676,255
  Redeemable Preference
  Shares cancelled                           -            -             -      (65,631)              -            -              -       (65,631)               -       (65,631)
  Free-attaching warrants                    -            -             -             -      (613,512)            -              -      (613,512)               -     (613,512)


Balance at 30 June 2018               859,234    12,806,554   203,738,800             -   (57,620,445)   11,602,823   (12,101,564)   159,285,402     (464,970)      158,820,432



Balance at 1 Jan 2017              200,572,926            -             -             -   (75,637,134)   36,279,828   (22,338,631)   138,876,989                -   138,876,989


Loss for the period                          -            -             -             -      (691,130)            -             -)      (691,130)               -      (691,130)
Other comprehensive income                   -            -             -             -              -            -     7,923,150)     7,923,150)           -         7,923,150)
Total comprehensive income                   -            -             -             -      (691,130)            -     7,923,150)     7,232,020                -     7,232,020
Transactions with owners:
  Issue of shares (net of costs)     3,937,270            -             -             -              -     239,680              -)     4,176,950)               -     4,176,950)
  Share based payments                       -            -             -             -              -     906,265              -)      906,265)                -      906,265)


Balance at 30 June 2017            204,510,196            -             -             -   (76,328,264)   37,425,773   (14,415,481)   151,192,224)               -   151,192,224)


Condensed consolidated statement of changes in equity for the half-year ended 30 June 2018
                                                                                                                           Foreign
                                                     Share                 Redeemable                                     Currency                        Non-
                                                  Premium       Merger      Preference   Accumulated         Option     Translation    Owners of     controlling             Total
                                Ordinary Shares    Reserve      Reserve          Share        Losses        Reserve        Reserve     the Parent      Interest             Equity
                                           US$        US$          US$             US$           US$           US$             US$           US$           US$                US$


Balance at 1 Jan 2017              200,572,926           -             -             -   (75,637,134)    36,279,828    (22,338,631)   138,876,989              -       138,876,989


Loss for the period                           -          -             -             -    (4,344,322)              -              -   (4,344,322)             -        (4,344,322)
Other comprehensive income                    -          -             -             -              -              -    13,590,884     13,590,884             -         13,590,884
Total comprehensive income                    -          -             -             -    (4,344,322)              -    13,590,884      9,246,562             -          9,246,562



Transfer of previously lapsed                            -             -             -
options                                       -                                           26,624,662    (26,624,662)              -             -              -                 -
Redeemable Preference Shares                  -          -             -        65,631              -              -              -        65,631              -           65,631
Share issue (net of costs)           3,937,270           -             -             -              -       239,680               -     4,176,950              -         4,176,950
Share based payments                          -          -             -             -              -     1,919,924               -     1,919,924              -         1,919,924
Scheme of Arrangement             (203,738,800)          -   203,738,800             -              -              -              -             -              -                 -
Balance at 31 Dec 2017                 771,396           -   203,738,800        65,631   (53,356,794)    11,814,770     (8,747,747)   154,286,056)                 -   154,286,056


Condensed consolidated statement of cash flows for the half-year ended 30 June 2018
                                                      6 months ended       6 months ended       Year ended
                                                       30 June 2018         30 June 2017        31 Dec 2017
                                              Notes        US$                  US$                US$
Cash Flows from Operating Activities
Net cash used in operating activities          18          (4,604,070)          (1,374,158)        (4,957,110)


Cash Flows from Investing Activities
Payments for plant and equipment                                 (4,547)           (37,563)           (94,262)
Payments for exploration and evaluation                   (11,043,648)         (13,065,335)       (28,023,569)
Interest received                                                10,675               36,678)            50,858


Net Cash Flows Used in Investing Activities
                                                          (11,037,520)         (13,066,220)       (28,066,973)


Cash Flows from Financing Activities
Proceeds from issue of shares                              12,894,392            5,000,000           5,000,000
Proceed from Convertible Note                                 250,000                       -                 -
Payment for share issue costs                                          -          (823,050)          (823,050)


Net Cash Flows Generated from Financing
Activities                                                 13,144,392            4,176,950           4,176,950


Net decrease in cash and cash equivalents                  (2,497,198)         (10,263,428)       (28,847,133)
Cash and cash equivalents at beginning of
period                                                     16,455,490           42,609,787          42,609,786
Foreign currency differences                                  261,064            1,600,270           2,692,837
Cash and Cash Equivalents at Period End                    14,219,356           33,946,629          16,455,490




Forward-Looking Statements

This report contains statements that are "forward-looking". Generally, the words "expect,"
“potential”, "intend," "estimate," "will" and similar expressions identify forward-looking statements.
By their very nature and whilst there is a reasonable basis for making such statements regarding the
proposed placement described herein; forward-looking statements are subject to known and
unknown risks and uncertainties that may cause our 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. Statements in this report regarding the Company's business or
proposed business, which are not historical facts, are "forward looking" statements that involve risks
and uncertainties, such as resource estimates 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.

Investors are cautioned not to place undue reliance on forward-looking statements, which speak only
as of the date they are made.



Competent Person Statement

The information relating to Exploration Targets, Exploration Results, Mineral Resources or Ore
Reserves in this report is based on, or extracted from previous reports, as referred to in footnotes
herein, and available to view on the Company’s website. The Mineral Resource Estimate for the Kola
Deposit was prepared by Competent Person Mr. Garth Kirkham, P.Geo., a Member of the Association
of Professional Engineers and Geoscientists of British Columbia. The Mineral Resource Estimate for
the Dougou carnallite Deposit 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
Mineral Resource Estimate for the Dougou Extension sylvinite Deposit was prepared by Competent
Person Mr. Andrew Pedley a full-time employee of Kore Potash, a registered professional natural
scientist (Pr. Sci. Nat) with the South African Council for Natural Scientific Professions and member of
the Geological Society of South Africa. 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 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.

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