Wrap Text
Review of Operations for the Quarter ended 30 September 2022
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”)
26 October 2022
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.
ASX Listing Rules Appendix 5B (01/12/19)
+ See chapter 19 of the ASX Listing Rules for defined terms.
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 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
ASX Listing Rules Appendix 5B (01/12/19)
+ See chapter 19 of the ASX Listing Rules for defined terms.
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)
Contained KCl Contained KCl
Mineral Resource Sylvinite Million Average Grade KCl Sylvinite Million Average Grade
million million
Category Tonnes % Tonnes KCl %
tonnes 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 +
508 35.4 179.7 457 35.4 161.7
Indicated
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)
Contained KCl Contained KCl
Sylvinite Million Average Grade KCl Sylvinite Million Average Grade
Ore Reserve Category million million
Tonnes % Tonnes KCl %
tonnes 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)
Contained KCl Contained KCl
Mineral Resource Sylvinite Million Average Grade KCl Sylvinite Million Average Grade
million million
Category Tonnes % Tonnes KCl %
tonnes tonnes
Measured - - - - - -
Indicated 79 39.1 30.8 71 39.1 27.7
Sub-Total Measured +
79 39.1 30.8 71 39.1 27.7
Indicated
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)
Contained KCl Contained KCl
Sylvinite Million Average Grade KCl Sylvinite Million Average Grade
Ore Reserve Category million million
Tonnes % Tonnes KCl %
tonnes 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)
Contained KCl Contained KCl
Mineral Resource Million Tonnes Average Grade Million Tonnes Average Grade KCl
million million
Category carnallite KCl % carnallite %
tonnes 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 +
1,068 20.6 220.2 961 20.6 198.2
Indicated
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)
Contained KCl Contained KCl
Mineral Resource Million Tonnes Average Grade Million Tonnes Average Grade KCl
million million
Category carnallite KCl % carnallite %
tonnes 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 +
783 18.1 142.0 705 18.1 127.8
Indicated
Inferred 1,266 18.7 236.4 1140 18.7 212.8
TOTAL 2,049 18.5 378.5 1844 18.5 340.6
ASX Listing Rules Appendix 5B (01/12/19)
+ See chapter 19 of the ASX Listing Rules for defined terms.
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.
Rule 5.5
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
Kore Potash Plc
ABN Quarter ended (“current quarter”)
621 843 614 30 September 2022
Consolidated statement of cash flows Current quarter Year to date
$US’000 (9 months)
$US’000
1. Cash flows from operating activities
1.1 Receipts from customers - -
1.2 Payments for
(a) exploration & evaluation (if expensed) - -
(b) development - -
(c) production - -
(d) staff costs (74) (370)
(e) administration and corporate costs (342) (740)
1.3 Dividends received (see note 3) - -
1.4 Interest received 22 39
1.5 Interest and other costs of finance paid (1) (3)
1.6 Income taxes paid - -
1.7 Government grants and tax incentives - -
1.8 Intercompany payments - -
1.9 Net cash from / (used in) operating
(395) (1,074)
activities
2. Cash flows from investing activities
2.1 Payments to acquire:
(a) entities - -
(b) tenements - -
(c) property, plant and equipment - -
(d) exploration & evaluation (if capitalised) (999) (3,497)
(e) investments - -
(f) other non-current assets - -
ASX Listing Rules Appendix 5B (01/12/19)
+ See chapter 19 of the ASX Listing Rules for defined terms.
Consolidated statement of cash flows Current quarter Year to date
$US’000 (9 months)
$US’000
2.2 Proceeds from the disposal of:
(a) entities - -
(b) tenements - -
(c) property, plant and equipment - -
(d) investments - -
(e) other non-current assets - -
2.3 Cash flows from loans to other entities - -
2.4 Dividends received (see note 3) - -
2.5 Other (provide details if material) - -
2.6 Net cash from / (used in) investing (999) (3,497)
activities
3. Cash flows from financing activities
3.1 Proceeds from issues of equity securities
- 1
(excluding convertible debt securities)
3.2 Proceeds from issue of convertible debt
- -
securities
3.3 Proceeds from exercise of options - -
3.4 Transaction costs related to issues of equity
- -
securities or convertible debt securities
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings - -
3.7 Transaction costs related to loans and
- -
borrowings
3.8 Dividends paid - -
3.9 Other (provide details if material) - -
3.10 Net cash from / (used in) financing - 1
activities
4. Net increase / (decrease) in cash and
cash equivalents for the period
4.1 Cash and cash equivalents at beginning of
7,630 11,093
period
4.2 Net cash from / (used in) operating
(395) (1,074)
activities (item 1.9 above)
4.3 Net cash from / (used in) investing activities
(999) (3,497)
(item 2.6 above)
4.4 Net cash from / (used in) financing activities
- 1
(item 3.10 above)
Consolidated statement of cash flows Current quarter Year to date
$US’000 (9 months)
$US’000
4.5 Effect of movement in exchange rates on (83) (370)
cash held
4.6 Cash and cash equivalents at end of
6,153 6,153
period
5. Reconciliation of cash and cash Current quarter Previous quarter
equivalents $US’000 $US’000
at the end of the quarter (as shown in the
consolidated statement of cash flows) to the
related items in the accounts
5.1 Bank balances 6,153 7,630
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
5.5 Cash and cash equivalents at end of
6,153 7,630
quarter (should equal item 4.6 above)
6. Payments to related parties of the entity and their Current quarter
associates $USD'000
6.1 Aggregate amount of payments to related parties and their
106
associates included in item 1
6.2 Aggregate amount of payments to related parties and their
92
associates included in item 2
Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of,
and an explanation for, such payments.
ASX Listing Rules Appendix 5B (01/12/19)
+ See chapter 19 of the ASX Listing Rules for defined terms.
7. Financing facilities Total facility Amount drawn at
Note: the term “facility’ includes all forms of financing amount at quarter quarter end
arrangements available to the entity.
end $US’000
Add notes as necessary for an understanding of the $US’000
sources of finance available to the entity.
7.1 Loan facilities - -
7.2 Credit standby arrangements - -
7.3 Other (please specify) - -
7.4 Total financing facilities - -
7.5 Unused financing facilities available at quarter end -
7.6 Include in the box below a description of each facility above, including the lender, interest
rate, maturity date and whether it is secured or unsecured. If any additional financing
facilities have been entered into or are proposed to be entered into after quarter end,
include a note providing details of those facilities as well.
8. Estimated cash available for future operating activities $US’000
8.1 Net cash from / (used in) operating activities (Item 1.9) (395)
8.2 Capitalised exploration & evaluation (Item 2.1(d)) (999)
8.3 Total relevant outgoings (Item 8.1 + Item 8.2) (1,394)
8.4 Cash and cash equivalents at quarter end (Item 4.6) 6,153
8.5 Unused finance facilities available at quarter end (Item 7.5) -
8.6 Total available funding (Item 8.4 + Item 8.5) 6,153
8.7 Estimated quarters of funding available (Item 8.6 divided by
4.42
Item 8.3)
8.8 If Item 8.7 is less than 2 quarters, please provide answers to the following questions:
1. Does the entity expect that it will continue to have the current level of net operating
cash flows for the time being and, if not, why not?
Answer: N/A
2. Has the entity taken any steps, or does it propose to take any steps, to raise further
cash to fund its operations and, if so, what are those steps and how likely does it
believe that they will be successful?
Answer: N/A
3. Does the entity expect to be able to continue its operations and to meet its business
objectives and, if so, on what basis?
Answer: N/A
Compliance statement
1 This statement has been prepared in accordance with accounting standards and policies which
comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.
Date: 26 October 2022
Authorised by: By the Board
(Name of body or officer authorising release – see note 4)
Notes
1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the
entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An
entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is
encouraged to do so.
2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions
in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash
Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting
standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.
3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”.
If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the
[name of board committee – eg Audit and Risk Committee]”. If it has been authorised for release to the market by a
disclosure committee, you can insert here: “By the Disclosure Committee”.
5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out
as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles
and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the
financial records of the entity have been properly maintained, that this report complies with the appropriate accounting
standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the
basis of a sound system of risk management and internal control which is operating effectively.
ASX Listing Rules Appendix 5B (01/12/19)
+ See chapter 19 of the ASX Listing Rules for defined terms.
Date: 26-10-2022 11:00:00
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