Wrap Text
Review of Operations for the Quarter Ended 30 June 2019
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”)
Review of Operations for the Quarter Ended 30 June 2019
Kore Potash, the potash exploration and development company whose flagship asset is the 97%-
owned Sintoukola Potash Project (“Kola” or the “Project”), located within the Republic of Congo
(“RoC”), provides the following quarterly update, for the period to 30 June 2019 (the “Quarter”).
Corporate Activities
• At 30 June 2019, the Company held USD 1.7 million cash at bank.
• On 19 July 2019, an additional USD 13.1 million was raised through the placing and direct
subscription of new ordinary shares in the Company.
Operational activities
Dougou Extension Sylvinite Scoping Study
• During the quarter, the Company finalised planning for a Pre-feasibility Study (PFS) on the DX
project. The PFS work programme includes a 2D seismic survey, a 4-hole, diamond drill
programme and a series of technical studies that collectively should satisfy the requirements
for a pre-feasibility study. The prefeasibility study is scheduled for completion in Q1 2020.
The Kola Potash Project
• The Company continued discussions with the French consortium of engineering companies
(“FC”) to explore options to reduce the capital cost and shorten the construction schedule for
Kola.
• In July 2019, the Company received a proposal from the FC that identifies opportunity to
reduce the capital cost of the Kola project by $415M below that indicated in the Kola Definitive
Feasibility Study.
• Kola project optimisation discussions are planned to continue with the FC through the next
quarter.
• The Company invited a number of international engineering and construction companies to
provide pricing against the bills of quantities for the Kola project. It is anticipated that this
pricing information will be received by the Company in the quarter ahead. Receipt of this
competitive pricing information forms part of the Company’s plan for capital optimisation of
the Kola project.
Environmental and social impact assessment for Kola (“ESIA”)
• The regulator in the Republic of the Congo previously requested the Company to reformat the
amended Kola ESIA document. No further technical studies or report content are required.
During the quarter, further discussions with the regulator took place to clarify their
requirements and the amended Kola ESIA is now planned to be submitted for approval in Q3
2019.
Mining Convention and Research Convention
• The Company continues to engage with the RoC Government on the implementation of
commitments contained within the Mining Convention. This includes the intra-group transfer
of the Dougou Mining License from Sintoukola Potash S.A. to the operating entity Dougou
Potash Mining S.A. and the transfer of a 10% shareholding in Kola Potash Mining S.A. and
Dougou Potash Mining S.A. to the State.
• The Company further progressed discussion with the Government on terms and conditions
for a Mining Research Convention covering the Sintoukola 2 exploration license. This
convention is required to be negotiated in advance of any exploration activity.
Exploration activity
• No field-work exploration activities were undertaken during the period.
31 July 2019
JSE Sponsor: Rencap Securities (Pty) Limited
ENDS
For further information, please visit www.korepotash.com or contact:
Kore Potash Tel: +27 11 469 9140
Brad Sampson – CEO
Canaccord Genuity – Nomad and Joint Broker Tel: +44 (0) 20 7523 4600
Henry Fitzgerald-O’Connor
James Asensio
Shore Capital – Joint Broker Tel: +44 (0) 20 7408 4050
Jerry Keen
Toby Gibbs
Mark Percy
Tavistock – Financial PR & IR Tel: +44 (0) 20 7920 3150
Jos Simson
Edward Lee
Emily Fenton
Renaissance Capital – JSE Sponsor Tel: +27 (11) 750 1448
Yvette Labuschagne
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% holding in SPSA in the RoC. SPSA is the 100% owner
of Dougou Potash Mining S.A. which will hold the Dougou Mining Lease (Table 1) upon the transfer
from SPSA to Dougou Potash Mining S.A. through the issue of a Presidential Decree. In addition, SPSA
were recently awarded the Sintoukola 2 Exploration Permit. The Kola Deposit is located within the
Kola Mining Lease. The Dougou Mining lease hosts the Dougou Deposit and the Dougou Extension
Deposit.
Table 1: Schedule of mining tenements (Republic of Congo)
Project & Type Tenement Company Interest Title Registered to
Kola – Mining Decree 2013-412 100% potassium rights Kola Potash Mining
only S.A.
of 9 August 2013
Dougou – Mining Decree 2017-139 100% potassium rights Sintoukola Potash S.A.
only
of 9 May 2017
Sintoukola 2 – Decree 2018-34 100% potassium rights Sintoukola Potash S.A.
Exploration only
of 9 February 2018
About Kore Potash’s Projects
Kore Potash is an advanced stage mineral exploration and development company whose primary asset
is 97%-owned interest in the Sintoukola project, a potash project located in the Republic of Congo.
The Sintoukola project comprises the Kola sylvinite and carnallite Deposits, the Dougou Extension
sylvinite Deposit and the Dougou carnallite Deposit (Table 2). These deposits are within the Kola and
Dougou Mining Licenses. The Sintoukola project also includes the Sintoukola 2 Exploration License.
Sintoukola is located approximately 80 km to the north of the city of Pointe Noire which has a major
port facility, and within 30 km of the Atlantic coast. Sintoukola has the potential to be among the
world’s lowest-cost potash producers and its location near the coast offers a transport cost advantage
to global fertilizer markets.
The Kola sylvinite Deposit has a Measured and Indicated sylvinite Mineral Resource Estimate of 508
million tonnes grading 35.4 % KCl. The results of a Definitive Feasibility Study (“DFS”) were announced
on 29 January 2019, which determined Ore Reserves of 152.4 Mt with an average grade of 32.5% KCl.
The deposit is open laterally; an Exploration Target for the Southward extension of sylvinite was
announced on the 21 November 2018.
The Dougou Extension sylvinite Deposit contains a total sylvinite Mineral Resource Estimate of 232 Mt
grading 38.1% KCl, hosted by two seams. The Mineral Resource includes 67 Mt grading 60.1 % KCl.
Dougou Extension is located 15 km southwest of Kola. The deposit is open laterally; an Exploration
Target for the northward extension of sylvinite was announced on the 21 November 2018.
The Kola and Dougou Extension sylvinite Deposits are considered high grade relative to most potash
deposits globally and have the advantage of having very low content of insoluble material, less than
0.3% which provides a further processing advantage.
The Dougou carnallite Deposit has a Measured and Indicated Potash Mineral Resource of 1.1 billion
tonnes grading 20.6% KCl (at a depth of between 400 and 600 meters) hosted by 35-40 meters of
carnallitite within 4 flat-lying seams. A Scoping Study was completed in February 2015. This Study
indicated that a Life of Mine operating cost of US$68 per tonne MoP was achievable.
• Muriate of Potash (MoP) is the saleable form of potassium chloride (KCl), comprising of a
minimum 95% KCl.
• Sylvinite is a rock type comprised predominantly of the potash mineral sylvite (KCl) and halite
(NaCl).
• Carnallitite is a rock type comprised predominantly of the potash mineral carnallite
(KMgCl3·6H2O) and halite (NaCl).
Table 2: Kore’s Potash Mineral Resources and Ore Reserves, provided as Gross and Net Attributable
(to Kore’s 97% holding), prepared and reported according to the JORC Code, 2012 edition.
SYLVINITE DEPOSITS
KOLA SYLVINITE DEPOSIT
Gross Net Attributable (97%)
Contained Contained
Million Grade Million Grade
Mineral Resource Category KCl million KCl million
Tonnes KCl % Tonnes KCl %
tonnes tonnes
Measured 216 34.9 75 209 34.9 73
Indicated 292 35.7 104 283 35.7 101
Sub-Total Measured + Indicated 508 35.4 180 492 35.4 174
Inferred 340 34.0 116 330 34.0 112
TOTAL 848 34.8 295 822 34.8 286
Gross Net Attributable (97%)
Contained Contained
Million Grade Million Grade
Ore Reserve Category KCl million KCl million
Tonnes KCl % Tonnes KCl %
tonnes tonnes
Proved 62 32.1 20 60 32.1 19
Probable 91 32.8 30 88 32.8 29
TOTAL 152 32.5 50 148 32.5 48
Ore Reserves are not in addition to Mineral Resources but are derived from them by the
application of modifying factors
DOUGOU EXTENSION SYLVINITE DEPOSIT
Gross Net Attributable (97%)
Contained Contained
Million Grade Million Grade
Mineral Resource Category KCl million KCl million
Tonnes KCl % Tonnes KCl %
tonnes tonnes
Measured - - - - - -
Indicated 111 37.2 41 108 37.2 40
Sub-Total Measured + Indicated 111 37.2 41 108 37.2 40
Inferred 121 38.9 47 117 38.9 46
TOTAL 232 38.1 88 225 38.1 86
DOUGOU CARNALLITE DEPOSIT
Gross Net Attributable
Contained Contained
Million Grade Million Grade
Mineral Resource Category KCl million KCl million
Tonnes KCl % Tonnes KCl %
tonnes tonnes
Measured 148 20.1 30 144 20.1 29
Indicated 920 20.7 190 892 20.7 185
Sub-Total Measured + Indicated 1,068 20.6 220 1,036 20.6 214
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
Contained Contained
Million Grade Million Grade
Mineral Resource Category KCl million KCl million
Tonnes KCl % Tonnes KCl %
tonnes tonnes
Measured 341 17.4 59 331 17.4 58
Indicated 441 18.7 83 428 18.7 80
Sub-Total Measured + Indicated 783 18.1 142 760 18.1 138
Inferred 1,266 18.7 236 1,228 18.7 229
TOTAL 2,049 18.5 378 1,988 18.5 367
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 referred to herein, and available
to view on the Company’s website www.korepotash.com The Kola Mineral Resource Estimate was
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 Reserve Estimate for sylvinite at Kola was
first reported 29 January 2019 in an announcement titled ‘Kola Definitive Feasibility Study’ and was
prepared by Met-Chem; the Competent Person for the estimate is Mr. Molavi, member of good
standing of Engineers and Geoscientists of British Columbia. The Dougou carnallite Mineral Resource
Estimate was reported 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 Dougou Extension sylvinite Mineral Resource
Estimate was reported 20 August 2018 in an announcement titled ‘Maiden Sylvinite Mineral Resource
at Dougou Extension’. It was prepared by Competent Person Mr. Andrew Pedley when he was a full-
time employee of Kore Potash, a registered professional natural scientist 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.
+Rule 5.5
Appendix 5B
Mining exploration entity and oil and gas exploration entity
quarterly report
Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16
Name of entity
KORE POTASH plc
ARBN Quarter ended (“current quarter”)
621 843 614 30 June 2019
Consolidated statement of cash flows Current quarter Year to date
$US’000 (6 months)
$US’000
1. Cash flows from operating activities
1.1 Receipts from customers - -
1.2 Payments for
(a) exploration and evaluation (929) (1,855)
(b) development - -
(c) production - -
(d) staff costs (654) (1,204)
(e) administration and corporate costs (667) (1,345)
1.3 Dividends received (see note 3) - -
1.4 Interest received 5 23
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - (21)
1.7 Research and development refunds - -
1.8 Other (provide details if material) - -
1.9 Net cash from / (used in) operating
(2,245) (4,402)
activities
2. Cash flows from investing activities
2.1 Payments to acquire:
(a) property, plant and equipment (6) (17)
(b) tenements (see item 10) - -
(c) investments - -
Consolidated statement of cash flows Current quarter Year to date
$US’000 (6 months)
$US’000
(d) other non-current assets - -
2.2 Proceeds from the disposal of:
(a) property, plant and equipment - -
(b) tenements (see item 10) - -
(c) investments - -
(d) 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
(6) (17)
activities
3. Cash flows from financing activities
3.1 Proceeds from issues of shares 2 2
3.2 Proceeds from issue of convertible - -
notes
3.3 Proceeds from exercise of share options - -
3.4 Transaction costs related to issues of - -
shares, convertible notes or options
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
2) 2)
activities
4. Net increase / (decrease) in cash and cash
equivalents for the period
4.1 Cash and cash equivalents at beginning
of period 4,002 6,187
4.2 Net cash from / (used in) operating
(2,245) (4,402)
activities (item 1.9 above)
4.3 Net cash from / (used in) investing
(6) (17)
activities (item 2.6 above)
Consolidated statement of cash flows Current quarter Year to date
$US’000 (6 months)
$US’000
4.4 Net cash from / (used in) financing
2 2
activities (item 3.10 above)
4.5 Effect of movement in exchange rate
(28) (45)
on cash held
4.6 Cash and cash equivalents at end of
1,725 1,725
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 1,725 4,002
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
5.5 Cash and cash equivalents at end of
1,725 4,002
quarter (should equal item 4.6 above)
6. Payments to directors of the entity and their associates Current quarter
$US'000
6.1 Aggregate amount of payments to these parties included in
354
item 1.2
6.2 Aggregate amount of cash flow from loans to these parties -
included in item 2.3
6.3 Include below any explanation necessary to understand the transactions included in
items 6.1 and 6.2
All transactions included in item 6.1 are for payment of directors fees.
7. Payments to related entities of the entity and their associates Current quarter
$US'000
7.1 Aggregate amount of payments to these parties included in -
item 1.2
7.2 Aggregate amount of cash flow from loans to these parties -
included in item 2.3
7.3 Include below any explanation necessary to understand the transactions included in
items 7.1 and 7.2
8. Financing facilities available Total facility Amount drawn at
Add notes as necessary for an amount at quarter quarter end
understanding of the position end $US’000
$US’000
8.1 Loan facilities - -
8.2 Credit standby arrangements - -
8.3 Other (please specify) - -
8.4 Include below a description of each facility above, including the lender, interest rate
and whether it is secured or unsecured. If any additional facilities have been entered
into or are proposed to be entered into after quarter end, include details of those
facilities as well.
9. Estimated cash outflows for next quarter $US’000
9.1 Exploration and evaluation 612
9.2 Development -
9.3 Production -
9.4 Staff costs 510
9.5 Administration and corporate costs 744
9.6 Other (provide details if material) -
9.7 Total estimated cash outflows 1,866
10. Changes in Tenemen Nature of interest Interest at Interest
tenements t beginning at end of
(items 2.1(b) and reference of quarter quarter
2.2(b) above) and
location
10.1 Interests in mining - - - -
tenements and
petroleum
tenements lapsed,
relinquished or
reduced
10.2 Interests in mining - - - -
tenements and
petroleum
tenements acquired
or increased
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.
Sign here: ........(signed electronically) ........................... Date: 31 July 2019
Joint Company Secretary
Print name: Henko Vos.
Notes
1. The quarterly report provides a basis for informing the market how the entity’s activities
have been financed for the past quarter and the effect on its cash position. An entity that
wishes to disclose additional information is encouraged to do so, in a note or notes
included in or attached to this report.
2. If this quarterly 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 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.
Date: 31/07/2019 08:00:00
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