Wrap Text
Review of Operations for the Quarter ended 31 December 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 31 December 2019
Kore Potash, the potash exploration and development company whose flagship asset is the 97%-
owned Sintoukola Potash Project (“Sintoukola” or the “Project”), located within the Republic of Congo
(“RoC”), provides the following quarterly update, for the period to 31 December 2019 (the “Quarter”).
Quarterly Highlights:
- Dougou Extension (“DX”) Pre-feasibility Study
- Pre-feasibility study (PFS) on track to be completed in April 2020 within budget and
with potentially improved financial outcomes.
- Dissolution test work results released on 30 December 2019.
- 2D seismic survey data processing completed and issued to geologists to incorporate
information into the geological model, as reported on 30 December 2019.
- The transaction to purchase 2 drill rigs for use in the drilling campaign was concluded
- Two reverse circulation (“RC”) drill holes reached the anhydrite layer in December
2019 and, post-period, diamond drilling from the base of the RC holes through the
salt layers has commenced as planned in January 2020.
- Optimisation of the Kola Project (“Kola”)
- Pricing proposals from multiple companies against the Kola Bill of Quantities covering
the same scope as the EPC proposal received from the French Consortium were
obtained.
- No new pricing proposal has been received from the consortium of French
engineering companies (“FC”) in relation to their proposal to reduce capital cost.
Corporate
- At 31 December 2019, the Company held USD 7.6 million cash at bank.
Brad Sampson, Chief Executive of Kore Potash, commented:
“Progress on the DX PFS continues gratifyingly quickly. We have been able to announce solid progress
and some extremely encouraging results from certain workstreams, such as dissolution testing and
seismic survey data analysis. In addition, we have engaged a number of high-quality consultants to
help us advance the other items necessary to complete the PFS and remain happy that we will meet
the previously announced schedule for release."
“The more work that is undertaken at DX, the greater our confidence in the asset grows. We believe
that DX is one of the highest grade potash deposits anywhere in the world, and has the potential to
be one of the most environmentally sustainable fertiliser producers too."
“This potential needs to be realised, and Kore are determined to deliver the best result for
shareholders, local communities, and the Republic of Congo.”
Operational activities
Dougou Extension Sylvinite Pre-feasibility Study
During the quarter, the Company progressed the Pre-feasibility Study (“PFS”) on the Dougou Extension
(“DX”) project. The Company reports the following progress:
- The DX PFS is on track for completion by the end of April 2020 and within budget.
- Subject matter expert consultants have been engaged for plant engineering, solution mining
and drilling, natural gas virtual pipeline, and marine studies. These include Innovare
Technologies Ltd as solution mining and drilling consultants, Agapito Associates as mine
designers and competent persons for Mineral Resources and Ore Reserves, Engcom
Engineering and Computing Professionals as engineering services consultant, Change Energy
Services as virtual gas pipeline consultant and PRDW, port and coastal consulting engineers.
- Dissolution test work to estimate the KCl dissolution rate was completed in August at
Agapito’s laboratories in Grand Junction, USA using core samples from the earlier drilling
campaigns in the DX areas. The dissolution test result report was received in October and
announced on 30 December 2019.
- Geotechnical modelling of the planned caverns formed in recovering the potash from
underground has been completed, with the results to the modelling to inform optimum
extraction ratio and cave dimensions in the DX PFS.
- The 2D Seismic data processing was completed in November by DMT Petrologic GmbH & Co.
KG of Germany. This data will be incorporated into an updated geological model, to determine
the PFS mine design and layout and a key input for an updated Mineral Resource Estimate.
- The processed 2D seismic survey information was used to determine positioning of the
planned in-fill diamond drill-holes.
- 2 drill rigs were reassembled on site and RC drilling reached the anhydrite layers immediately
above the potash bearing ‘Salt’ formation in two drill-holes.
- Diamond drilling from the base of the RC drill holes into the ‘Salt’ formation commenced as
planned in January.
The Kola Potash Project
- Pricing proposals from multiple companies against the Kola Bill of Quantities covering the
same scope as the EPC proposal received from the French Consortium were obtained.
- No new pricing proposal has been received from the consortium of French engineering
companies (“FC”) in relation to their proposal to reduce capital cost.
Environmental and social impact assessment for Kola (“ESIA”)
- Amendments to the Kola ESIA were submitted to the regulator on 20 December 2019 for their
consideration for approval.
Mining Convention and Research Convention
- The Company continues to engage with the RoC Government on the implementation of
specific commitments contained within the Mining Convention. This includes the
government’s approval for 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
Government.
- 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.
ENDS
For further information, please visit www.korepotash.com or contact:
30 January 2020
JSE Sponsor: Rencap Securities (Pty) Limited
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
James Asensio
Henry Fitzgerald-O’Connor
Shore Capital – Joint Broker Tel: +44 (0) 20 7408 4050
Jerry Keen
Toby Gibbs
James Thomas
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.
only
Exploration 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 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. 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.
- 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
Note: Table entries are rounded to the appropriate significant figure
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.
Date: 30-01-2020 09:00:00
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