Wrap Text
Dougou Extension (DX) Project Pre-Feasibility Study
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”)
Dougou Extension (DX) Project Pre-Feasibility Study
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”), is pleased to announce outcomes of the Dougou Extension (”DX”) Potash Solution Mining
Project Pre-Feasibility Study (“PFS”). A summary of the results is presented herein.
Highlights:
Strong Financial Outcomes
• Nameplate production target of 400,000 tpa MoP over an initial 18-year life based on Probable
Ore Reserves.
• Free on Board (“FOB”) Pointe Noire costs of US$86.61/t MoP.
• Average annual EBITDA of US$118 million.
• Average annual post construction, post-tax, free cash flow of approximately US$95 million.
• Approximately 4.3 years post-tax payback period from first production.
• Real ungeared post tax IRR of approximately 22.9% and NPV10 (real) of approximately US$319
million on an attributable basis at life-of-mine average MoP price for granular product of
US$422/t MoP (Argus Media’s price forecast for DX Project’s target markets).
• PFS confirms low technical risk utilising selective solution mining, an efficient potash
extraction method in use at multiple potash operations globally.
• PFS outcomes reinforce Kore’s broader development strategy for its deposits in the Sintoukola
Potash Basin containing 6.1 Bt of potash Mineral Resources.
Low capital cost and short construction period improve financing options
• Initial pre-production capital cost of approximately US$286 million (real 2019), including
contingency.
• Low pre-production capital intensity of US$715/t MoP produced.
• Short construction period of 21 months.
• Combination of modest initial capital cost and short construction period improve
attractiveness of DX Project to potential financiers.
Competitive costs to supply MoP to target markets
• Low average mine gate operating costs of US$65.26/t MoP.
• Free on board (FOB Pointe Noire) costs of US$86.61/t MoP.
• Average cost of MoP delivered to target markets of approximately US$114.61/t MoP.
• Close proximity to deep water port at Pointe Noire creates competitive advantage of reduced
shipping distance compared to northern hemisphere producers, which tend to be well inland.
• Higher grade and shallower deposits than majority of existing potash producers contributes
to competitive cost structure.
• Significant competitive advantage via low FOB costs and short shipping distance to target
markets in Africa and South America.
High quality Ore Reserves and Mineral Resources
• Sylvinite Ore Reserves of 17.7 Mt at a grade of 41.7% KCl.
• Grade of the Ore Reserves is in the top quartile of all operating potash mines and potash
development projects globally.
• Total sylvinite Mineral Resources of 145 Mt at a grade of 39.7% KCl.
Further upside potential
• Ore Reserves tonnage represent 22% of the Indicated Mineral Resources tonnage.
• Inferred Mineral Resources of 66 Mt at a grade of 40.4% KCl not included in the study.
• Additional exploration drilling and/ or seismic surveys in the future may support classification
of portions of the additional Mineral Resources of 127.3 tonnes at 39.4% KCl as Ore Reserves.
Next steps and Definitive Feasibility Study
• Planning for the Definitive Feasibility Study (DFS) is progressing well and will be communicated
to shareholders once the detailed scope and costing is completed.
• The DFS planning stage includes consultation with potential debt financiers for the
construction of the DX Project.
Cautionary Statement
• The PFS referred to in this announcement has been undertaken to investigate the potential
for a new potash development in the Republic of Congo.
• The PFS is a preliminary technical and economic study of the potential viability of the DX
project and is based on low level technical and economic assessments (AACE Class IV
estimate).
• The PFS Production plan is based on Probable Ore Reserves 17.7 Mt of sylvinite at an average
grade of 41.7% KCl.
• The PFS is based on the material assumptions outlined in this announcement and Appendix B.
These include assumptions on availability of funding. While the Company considers all the
material assumptions to be based on reasonable grounds, there is no certainty that they will
prove to be correct or that the range of outcomes indicated by the PFS will be achieved.
• To achieve the range of outcomes indicated in the PFS, base case funding in the order of
US$286 million will likely be required. Investors should note that there is no certainty that the
Company will be able to raise that amount of funding when needed. It is also possible that
such funding may only be available on terms that may be dilutive to or otherwise affect the
value of the Company’s existing shares.
• It is also possible that the Company could pursue other ‘value realisation’ strategies such as a
sale, partial sale or joint venture of the project. If it does, this could materially reduce the
Company’s proportionate ownership of the project.
• Given the uncertainties involved, investors should not make any investment decisions based
solely on the results of the PFS.
• The Mineral Resources and Ore Reserves underpinning the production targets and forecast
financial information in this combined AIM/JSE/ASX Release were prepared by Competent
Persons in accordance with the requirements of the JORC Code 2012 edition (JORC).
Brad Sampson, CEO of Kore, commented: “The completion of the DX PFS confirms the district scale
development potential of this world-class potash basin and the standalone commercial viability of the
DX Project.
“The estimated US$286 million capital cost to construct the DX Project in just 21 months makes it
attractive from a capital and near-term cashflow perspective, and low operating costs will allow Kore
to profitably deliver MoP to our target markets.
“Building on the PFS and previously published positive Scoping Study for the DX Project, we can rapidly
progress to conducting a definitive feasibility study, which will continue to improve Kore’s
understanding of the asset and de-risk the DX Project even further.
“Accelerating the Company into production and early cashflow generation via the DX Project will
provide a strong platform to continue to optimise the Tier-1 Kola project and the wider potash basin,
and a significantly improved commercial position to undertake its development. In addition,
construction of the DX Project will give advantages in terms of overlapping infrastructure, thereby
reducing the future capital cost at Kola.
“Developing the DX Project first is the best way forward for all of the Company’s stakeholders: our local
communities; the Government of the Republic of Congo; and our shareholders. We look forward to
working with all these parties as we progress the DX Project into production and look to unlock the
significant value within Kore’s portfolio.”
SGRF commented: “We are pleased with the completion of the DX PFS on time and underbudget and
with the quality of the PFS outcomes. The results of the DX PFS indicate attractive economics and
simplicity in project design which lends itself to comparatively lower risk in the subsequent construction
and operating phases. We are supportive of Kore progressing to a Definitive Feasibility Study on DX.”
Table 1: Key Project Metrics (100% basis unless otherwise stated)
Project physicals Units Project financials Units
Total MoP production kt 7 372 Total revenue US$M 3,113
MoP granular product
%KCl 98.5% Average annual revenue US$M 169
grade
Average MoP
ktpa 393 Average annual EBITDA US$M 118
production
Capital cost EBITDA margin % 69.8%
Pre-production capital Average post-construction, post
$M 285.9 US$M 95
cost tax annual free cash flow
Capital intensity
(at nameplate 400,000 US$/tpa 715 Free cashflow margin % 56.4%
tpa MoP)
Operating costs Total post tax free cash flow2 US$M 1,469
Attributable3 post tax, un-geared
Mine Gate Cost $/t 65.26 US$M 319
NPV (10% real)
FOB (Pointe Noire) Attributable3 post tax, un-geared
$/t 86.61 % 22.9%
Cost1 IRR
Payback period from date of first
CFR (Africa) Cost1 $/t 114.61 years 4.3
production
Scheduled LOM years 18.4
Average forecast MoP granular
US$/t MoP 422
price
Notes to Table 1:
1: Excludes Royalty and Sustaining Capex
2: Free cash flow defined as EBITDA minus tax, minus capex
3: Attributable to Kore’s interest (i.e. 90% basis)
Table 2: Summary of changes between Scoping and PFS Studies
Financial Drivers Scoping PFS
Capital Cost Estimate US$327 million US$285.9 million
Operating Cost: Mine Gate US$78.85/t MoP US$65.26/t MoP
Operating Cost: FOB (Pointe Noire) US$82.74/t MoP US$86.61/t MoP
Operating Cost: CFR (Africa) US$107.74/t MoP US$114.61/t MoP
Life of Project 17 years 18.4 years
Potash Price US$360/t flat US$344 /t Ave for first 6 years
US$456 /t Ave for remaining years
US$422/t LOM average
MoP Produced over life 7,074 Mt 7,372 Mt
Mineral Resource 232Mt @ 38.1% KCl 145 Mt @ 39.7% KCl
Ore Reserve Nil 17.7 Mt sylvinite @ 41.7% KCl
NPV10 US$221 million US$319 million
IRR 19.3% 22.9%
Average annual free cash flow US$74 million US$95 million
Mining Method Dual well selective dissolution Single well selective dissolution
Ship loading Purpose built Kore facility BOO at existing Pointe Noire Port
Notes to Table 2: A key point to note with regards to pricing is the forecast potash price remains beneath the
scoping study assumption of US$360/t MoP for the first 6 years of production, at an average price of $US 344/t
MoP, until 2029. The average potash price for the remaining life of mine is US$ 456/t MoP. The overall impact
of this pricing assumption adds 1% to the IRR of the DX Project when compared to the scoping study pricing
assumption
Figure 1: Contributions to Change in IRR from Scoping Study to PFS – IRR Waterfall
(available at www.korepotash.com)
Ore Reserves and Mineral Resources
Ore Reserves (Table 3) were determined from a portion of the Indicated Mineral Resource Estimate
which was updated for the PFS. The Sylvinite is hosted by two layers (‘seams’) referred to as the HWSS
and the TSS, separated by 8 to 15 m of rock-salt. Table 4 provides the Mineral Resource Estimate.
Further detail on the Ore Reserves Estimates and Mineral Resource Estimate is provided in Appendix
B: (Summary of Information required according to ASX listing Rule 5.9.1) and Appendix C (JORC Code
Table 1, Sections 1-4).
Table 3: DX Sylvinite Ore Reserves
Classification Ore Reserves KCl grade Mg Insolubles
(Mt) (% KCl) (% Mg) (% Insol.)
Probable 17.7 41.7 0.06 0.19
Total Ore Reserves 17.7 41.7 0.06 0.19
Notes to Table 3: The Ore Reserves in Table 3 are gross numbers and the attributable numbers are presented
in Appendix D: Kore Potash Mineral Resources and Ore Reserves as of 13 May 2020.
Table 4: DX Sylvinite Mineral Resources (inclusive of Ore Reserves)
Mineral Resources KCl Grade Mg Insolubles
Classification
(Mt) (% KCl) (% Mg) (% Insol.)
Indicated 79 39.1 0.06 0.20
Inferred 66 40.4 0.05 0.22
Total Mineral Resources 145 39.7 0.05 0.21
Notes to Table 4: The Sylvinite Mineral Resources in Table 4 are gross numbers and the attributable numbers
are presented in Appendix D: Kore Potash Mineral Resources and Ore Reserves as of 13 May 2020.
Reasonable Basis for Forward-Looking Statements (including production target and forecast
financial information) and Ore Reserves
This release, inclusive of Appendix A: Summary results of DX Project PFS, contains a series of forward-
looking statements. The Company has concluded that it has a reasonable basis for providing these
forward-looking statements and the forecast financial information included in this release. This
includes a reasonable basis to expect that it will be able to fund the development of the DX Project
when required.
The detailed reasons for these conclusions are outlined throughout this release, including in Section
19 of Appendix A. All material assumptions, including the modifying factors, upon which the
production target and forecast financial information is based are disclosed in this release (including
the summary information in Appendix B and Appendix C). This announcement has been prepared in
accordance with the requirements of the JORC and the ASX and AIM Rules.
The estimated Ore Reserves and Indicated Mineral Resources underpinning the production target
have been prepared by a Competent Person in accordance with the requirements of JORC. Details of
those Ore Reserves and Mineral Resources are set out in this release (including, in relation to the Ore
Reserves, the details in Appendix B and C).
The 400,000 tonnes per annum MoP production over an 18.4-year life is underpinned by scheduling
of Probable Ore Reserves. No Inferred Mineral Resources, exploration targets or qualifying foreign
estimates underpin the production target.
ENDS
13 May 2020
JSE Sponsor: Rencap Securities (Pty) Limited
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
James Asensio
Henry Fitzgerald-O’Connor
Shore Capital – Joint Broker Tel: +44 (0) 20 7408 4050
Jerry Keen
Toby Gibbs
James Thomas
Competent Persons Statement:
The estimated Ore Reserves and Mineral Resources underpinning the production target have been
prepared by a Competent Person in accordance with the requirements of the JORC Code.
All information in this report that relates to Mineral Resources is based on information compiled by
Ms. Vanessa Santos, P.Geo. of Agapito Associates Inc. 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), a Recognized
Professional Organization’ (RPO) included in a list that is posted on the ASX website from time to time.
Ms. Santos has sufficient experience that is relevant to the style of mineralisation and type of Deposit
under consideration and to the activity she is undertaking to qualify as a Competent Person, as defined
in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves” (the JORC Code). Mrs. Santos consents to the inclusion in this report of the matters
based on the information in the form and context in which it appears.
All information in this report that relates to Ore Reserves is based on information compiled or
reviewed by, Dr. Michael Hardy, a Competent Person who is a registered member in good standing
(Member #01328850) of Society for Mining, Metallurgy and Exploration (SME) which is an RPO
included in a list that is posted on the ASX website from time to time.
Dr. Michael Hardy has sufficient experience that is relevant to the style of mineralization and type of
deposit under consideration and to the activity being undertaken to qualify as a Competent Person as
defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves” (the JORC Code).. Michael Hardy has verified that this report is based on
and fairly and accurately reflects in the form and context in which it appears, the information in the
supporting documentation relating to preparation of the Ore Reserves.
Dr. Michael Hardy president of Agapito Associates Inc is not associated or affiliated with Kore Potash
or any of its affiliates. Ms. Santos is full time employee of Agapito Associates Inc. and is not associated
or affiliated with Kore Potash or any of its affiliates. Agapito Associates Inc will receive a fee for the
preparation of the Report in accordance with normal professional consulting practices. This fee is not
contingent on the conclusions of the Report and Agapito Associates Inc. Michael Hardy will receive
no other benefit for the preparation of the Report. Michael Hardy does not have any pecuniary or
other interests that could reasonably be regarded as capable of affecting their ability to provide an
unbiased opinion in relation to the Dougou Extension Potash Project. Agapito Associates Inc does not
have, at the date of the Report, and has not had within the previous years, any shareholding in or
other relationship with Kore Potash or the Dougou Extension Potash Project and consequently
considers itself to be independent of Kore Potash.
Forward-Looking Statements
This release contains certain statements that are "forward-looking" with respect to the financial
condition, results of operations, projects and business of the Company and certain plans and
objectives of the management of the Company. Forward-looking statements include those containing
words such as: “anticipate”, “believe”, "expect," “forecast”, “potential”, "intends," "estimate," "will",
“plan”, “could”, “may”, “project”, “target”, “likely” and similar expressions identify forward-looking
statements. By their very nature forward-looking statements are subject to known and unknown risks
and uncertainties and other factors which are subject to change without notice and may involve
significant elements of subjective judgement and assumptions as to future events which may or may
not be correct, which may cause the Company’s actual results, performance or achievements, to differ
materially from those expressed or implied in any of our forward-looking statements, which are not
guarantees of future performance.
Neither the Company, nor any other person, gives any representation, warranty, assurance or
guarantee that the occurrence of the events expressed or implied in any forward-looking statement
will occur. Except as required by law, and only to the extent so required, none of the Company, its
subsidiaries or its or their directors, officers, employees, advisors or agents or any other person shall
in any way be liable to any person or body for any loss, claim, demand, damages, costs or expenses of
whatever nature arising in any way out of, or in connection with, the information contained in this
document.
In particular, statements in this release regarding the Company's business or proposed business, which
are not historical facts, are "forward-looking" statements that involve risks and uncertainties, such as
Mineral Resource estimates market prices of potash, capital and operating costs, changes in project
parameters as plans continue to be evaluated, continued availability of capital and financing and
general economic, market or business conditions, and statements that describe the Company's future
plans, objectives or goals, including words to the effect that the Company or management expects a
stated condition or result to occur. Since forward-looking statements address future events and
conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each
case could differ materially from those currently anticipated in such statements. Shareholders are
cautioned not to place undue reliance on forward-looking statements, which speak only as of the date
they are made. The forward-looking statements are based on information available to the Company
as at the date of this release. Except as required by law or regulation (including the ASX Listing Rules),
the Company is under no obligation to provide any additional or updated information whether as a
result of new information, future events or results or otherwise.
Summary information
This announcement has been prepared by Kore Potash plc. This document contains general
background information about Kore Potash plc current at the date of this announcement and does
not constitute or form part of any offer or invitation to purchase, otherwise acquire, issue, subscribe
for, sell or otherwise dispose of any securities, nor any solicitation of any offer to purchase, otherwise
acquire, issue, subscribe for, sell, or otherwise dispose of any securities. The announcement is in
summary form and does not purport to be all-inclusive or complete. It should be read in conjunction
with the Company’s other periodic and continuous disclosure announcements which are available to
view on the Company’s website www.korepotash.com.
The release, publication or distribution of this announcement in certain jurisdictions may be restricted
by law and therefore persons in such jurisdictions into which this announcement is released, published
or distributed should inform themselves about and observe such restrictions.
Not financial advice
This document is for information purposes only and is not financial product or investment advice, nor
a recommendation to acquire securities in Kore Potash plc. It has been prepared without considering
the objectives, financial situation or needs of individuals. Before making any investment decision,
prospective investors should consider the appropriateness of the information having regard to their
own objectives, financial situation and needs and seek legal and taxation advice appropriate to their
jurisdiction.
Market Abuse Regulation
This announcement is released by the Company and contains inside information for the purposes of
the Market Abuse Regulation (EU) 596/2014 ("MAR") and is disclosed in accordance with the
Company's obligations under Article 17 of MAR. The person who arranged for the release of this
announcement on behalf of the Company was Brad Sampson, CEO. This announcement has been
authorised for release by the Board of Directors
APPENDIX A
Summary results of DX Project PFS
1. Project Introduction:
Kore Potash Plc (“Kore”, the “Company” or “KP2”) is a mineral exploration and development company
that is incorporated in the United Kingdom and listed on the AIM (as KP2), the Australian Securities
Exchange (ASX, as KP2) and the Johannesburg Stock Exchange (JSE, as KP2).
The primary asset of Kore is the Sintoukola Potash Project which includes the Dougou Extension
Sylvinite Deposit (“DX”) and the Kola Sylvinite deposit (“Kola”) in the Republic of Congo (RoC), held by
the 97%-owned Sintoukola Potash SA (SPSA). SPSA has 100% ownership of the Dougou Mining Lease,
on which the DX Project is located. All outcomes detailed within this PFS are expressed on a 100%
basis with exception of Project Net Cashflow, NPV and IRR, which are expressed on a 90% attributable
basis.
Following a review of the strategic options within the Sintoukola District, the Company formed the
view that a reduced-scale potash development at the DX Project has strong potential to expedite the
Company’s path to cash flow generation and consequently, accelerate the subsequent development
of the Kola Project.
The DX Solution Mining Project (the “DX Project”) provides a more rapid path to production with a
significantly smaller capital cost than required for the Kola project. Development of this project will
establish Kore Potash as the first potash producer in the Republic of Congo in over 40 years. The
smaller scale of the Project comes with relatively low operational and financial risks.
Development of the DX Project is expected to create a low-cost potash operation producing
approximately 400,000 tons per annum (tpa) of K60 Muriate of Potash (MoP) annually. The mining
target is the DX Sylvinite Mineral Resource, a sylvinite deposit with exceptionally high KCl grade.
Selective solution mining and processing technology will be employed, resulting in minimal waste
brine which will be disposed of to the sea. Solution mining is the most effective means of exploiting
an underground potash resource at a reduced scale, and the method is proven across other operations
globally.
The DX Project is located approximately 65 km North of Pointe Noire and 13 km from the coast (Figure
1).
The DX PFS considers the mining of the DX Sylvinite, and the production of circa 400,000 tpa of K60
MoP and its export and considers all associated infrastructure. It delivers an economic model with a
scheduled life of project of 18.4 years based on Ore Reserves of 17.7 Mt at 41.7% KCl.
Kore commissioned a range of subject matter expert consultants to conduct a PFS for the DX Project.
The team of consultants comprises Innovare Technologies Ltd. as solution mining, process and drilling
consultants, Agapito Associates Inc. as mine designers and Competent Persons for the Mineral
Resource and Ore Reserve estimation, Engcomp Engineering and Computing Professionals as
engineering services consultant, Change Energy Services as natural gas virtual pipeline consultant and
PRDW, port and coastal consulting engineers.
In accordance with JORC, the Competent Persons (CP) for the DX Project are:
Ms. Vanessa Santos, P.Geo. of Agapito Associates Inc., 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), an RPO included in a list that is posted on the ASX
website from time to time.
Dr. Michael Hardy of Agapito Associates Inc, for the Reserve Review (RR). Dr. Hardy is a registered
member in good standing (Member #01328850) of Society for Mining, Metallurgy and Exploration
(SME), an RPO included in a list that is posted on the ASX website from time to time.
Appendix A Figure 1 : Location Map showing DX Project
(available at www.korepotash.com)
2. Sylvinite Mineral Resource:
Appendix C provides the JORC Table 1 Sections 1 to 4.
At DX the potash is hosted by two flat-lying or gently dipping (mostly less than 10°) layers (referred to
as ‘seams’) at a depth of approximately 300-450 metres below surface. These seams are separated by
8 to 15 metres of rock-salt. The uppermost seam is the Top Seam (TS) and the lowermost is the
Hanging Wall Seam (HWS). These seams may be composed of sylvinite or carnallite. Carnallite may
occur immediately below the sylvinite but these rock types are never mixed. The Mineral Resources
Estimate (“MRE”) is for the sylvinite only and the sylvinite seams are referred to as the HWSS and the
TSS and average 3.5 and 7.4 m thick respectively. The TSS is comprised of 3 sub-seams between which
there are layers of rock-salt.
In September 2019 the Company commissioned DMT GmbH&Co KG of Germany (DMT) to carry out a
60-line km 2D seismic survey over an area coinciding with the Indicated Mineral Resource (Figure 2)
to provide higher resolution data for important geological contacts and to guide the improved
interpretation of the position and dip of the potash layers. Processing of this data was carried out by
DMT Petrologic GmbH & Co. KG of Germany (Petrologic). Between November 2019 and January 2020
Kore completed 2 new drill-holes; DX_07 and DX_09B. A third drill-hole DX_08 was stopped above the
evaporite due to drilling difficulties. The positions of all drill-holes within the DX MRE are provided in
Table 1. The sylvinite intersections in these new holes are provided in Table 2 along with the
intersections of all previous drill-holes. The MRE was completed by creating a 3D wireframe for the
sylvinite seams using drilling and seismic data, then by creating a 50 x 50 m block model with variable
thickness into which grade was estimated using Inverse Distance Squared (IDW2). Only blocks with a
thickness of 1 metre or more were considered for the MRE. Table 3 provides the MRE for the HWSS
and TSS 6-8. Figures 3 and 4 are maps showing the distribution and thickness of the HWSS and the
TSS. Figure 5 provides a typical cross-section through the deposit.
Appendix A Figure 2 : Map showing the Exploration data supporting the DX MRE
(available at www.korepotash.com)
Appendix A Table 1: Collar positions of all holes within the DX deposit. All holes were drilled
vertically
Depth Collar Survey
BHID X Y Z Notes
(m) type
DX_01 787201.22 9529045.8 54.64 551.7 DGPS Kore hole
DX_02 782845.02 9529278.3 34.73 484.4 DGPS Kore hole
DX_03 790475.49 9533343.7 39.54 421.9 DGPS Kore hole
failed
DX_06 788565 9531306 51.90 343.0 GPS/DTM
hole
DX_07 790559.2 9529112.8 61.40 486.0 DGPS Kore hole
failed
DX_08 790550.6 9529982.8 52.40 323.0 DGPS
hole
DX_09B 791082.6 9530224 50.50 480.0 DGPS Kore hole
ED_01 791144.84 9529490.7 55.29 525.2 DGPS Kore hole
ED_03 789848.75 9528941.2 62.9 492.2 DGPS Kore hole
K52 791162.76 9529488.7 56.57 1050.0 Historic survey Historic
K62 789179.19 9530654.4 59.79 531.0 DGPS Historic
Appendix A Table 2: All drill hole intersections within the DX deposit including those of carnallite
and halite
True
Mineralo Depth From Depth To
Drill-hole Seam Thickness KCl %
gy (m) (m)
(m)
TSS sylvinite 403.98 409.14 5.16 31.8
ED_01
HWSS sylvinite 421.93 426.4 4.47 57.7
TS halite - - - -
ED_03
HWSS sylvinite 398.95 403.16 4.21 59.5
TSS sylvinite 430.76 437.59 6.83 27.8
DX_01
HWS carnallite 449.4 462.35 12.95 24.6
truncated
DX_02 TS - - - -
HWSS sylvinite 429.4 430.43 1.03 61.6
TSS sylvinite 309.43 310.58 1.15 59.1
DX_03 HWSS sylvinite 323.9 324.51 0.61 62.9
HWS carnallite 324.51 336.9 12.39 25.1
TSS sylvinite 388.48 391.2 2.72 25.6
DX_07
HWSS sylvinite 401.1 405.32 4.22 56.4
TSS sylvinite 361.9 366.75 4.85 32
DX_09B HWSS sylvinite 379.3 381.01 1.71 53.8
HWS carnallite 381.01 386.25 5.24 No data
TSS sylvinite 406.15 411.02 4.87 31.9
K52
HWSS sylvinite 423.55 427.16 3.61 57.5
K62 TS carnallite 440.41 445.73 5.32 19.1
Historic
potash HWS carnallite 455.42 461.98 6.56 24.3
hole
Note to Table 2: TS or HWS refers to intersections where the seam is not sylvinite
Appendix A Table 3: Dougou Extension for the HWSS and the TSS (Mineral Resources are reported
inclusive of Ore Reserves)
Mineral Average Average
Sylvinite Contained Insol
Resource Seam grade (% thickness Mg (%)
(Mt) KCl (Mt) content (%)
Category KCl) (m)
Measured - - - - - - -
Indicated HWSS 28 57.1 15.9 3.8 0.12 0.02
Inferred HWSS 17 60.4 10.2 3.0 0.17 0.02
Total HWSS 45 58.3 26.1 3.5 0.14 0.02
Measured - - - -
Indicated TSS 6-8 51 29.3 14.9 4.6 0.25 0.08
Inferred TSS 6-8 49 33.5 16.5 4.2 0.24 0.07
Total TSS 6-8 100 31.4 31.4 4.4 0.24 0.07
Measured - - - -
both
Indicated seams 79 39.1 30.8 4.3 0.20 0.06
both
Inferred seams 66 40.4 26.7 3.8 0.22 0.05
both
Total seams 145 39.7 57.5 4.1 0.21 0.05
Notes to Table 3:
The effective date of this MRE is 13 May 2020.
Mineral Resources are reported using a 15% KCl cut-off grade
The MRE is for sylvinite only and includes areas that are modelled as being underlain by carnallitite.
The density was calculated for each model block based on the KCl content using the formula DENSITY= (KCl-
742.53)/ (-337.53), based on a regression line of density data (by pycnometer) versus KCl %.
Appendix A Figure 3 : HWSS thickness map
(available at www.korepotash.com)
Appendix A Figure 4 : TSS thickness map
(available at www.korepotash.com)
Appendix A Figure 5 : Typical cross-section through the DX deposit. Annotations referred to in the
JORC Table in Appendix C
(available at www.korepotash.com)
3. Ore Reserves:
The DX Sylvinite Ore Reserves are 17.7 Mt at 41.7% KCl, with an equivalent contained MoP of 7.37 Mt
with a KCl grade of 98.5%. The estimate of Ore Reserves was completed by Agapito Associates Inc and
was prepared in accordance with the JORC Code.
Appendix B contains a summary of information required according to ASX Listing Rule 5.9.1 and
Appendix C contains section 4 of the JORC Code Table 1 Checklist of Assessment and Reporting
Criteria.
Details of the Ore Reserve Estimate are shown in Table 4 below.
Appendix A Table 4: DX Sylvinite Ore Reserves
Seam Classification Ore Reserves KCl Mg Insolubles
Tonnage (%KCl) (%Mg) (%Insol.)
(Mt)
Proved 0 0 0 0
TSS Probable 9.9 29.8 0.08 0.23
Total 9.9 29.8 0.08 0.23
Proved
HWSS Probable 7.7 57.1 0.02 0.12
Total 7.7 57.1 0.02 0.12
Proved 0 0 0 0
Probable 17.7 41.7 0.06 0.19
Total both seams Total Ore 17.7 41.7 0.06 0.19
Reserves
4. Geotechnical and Hydrogeology:
The design for the single-well solution mining caverns is based on a radius of 60 m, with cavern centers
spaced 144 m apart. This layout results in an aerial extraction ratio of 62.9% with a volumetric
extraction of 46.2%.
During the PFS, no specific hydrogeological investigations were carried out. For the small quantity of
well water required for the process plant utilities and camps, the hydrogeological test work for the
nearby Kola Definitive Feasibility Study was referenced. The DX area was covered in the general Kola
hydrogeologic model, and the conditions at DX were assumed to be similar to Kola, where 15 m3/h
was easily sustainable from a single well. Specific Hydrogeological investigations in the DX area are
planned to be conducted during a Definitive Feasibility Study (“DFS”) phase for DX, including a test
well to verify availability and quality of well water.
For some mining methods, disturbance to aquifers overlying the deposit may present risk. In the case
of solution mining of potash, disturbance of overlying water bearing strata does not present a material
risk to the operation. Production caverns and closed caverns contain brine of higher density and
pressure than that of the overlying groundwater. There may be a possibility of brine leaking into
overlying ground water. Local communities draw water from upper aquifers which are not expected
to be impacted by operations at DX.
Zones of subsidence and structures have been avoided in the mine planning to further mitigate risk.
If connection is made to the overlying aquifer(s) during operations, leakage can be detected. If the
leakage is significant, a submersible pump can be used to lower the pressure in the cavern to control
the leakage.
5. Mining:
The Dougou Extension solution mining method utilises one well per cavern, drilled to a vertical depth
of approximately 460 m for areas where HWSS will be mined and approximately 440 m in areas where
only mining of TSS is planned. Surface casing will be installed to the top of the salt at about 400 m,
then an intermediate casing will be installed to the base of the HWSS and an open hole extended to
the total depth of 460 m or 440 m for TSS only caverns.
In the scoping study, dual-well caverns were planned. Single well caverns have been selected for the
PFS as this presents a lower initial capital cost approach and the smaller circular caverns are better
suited to the varying dip of the DX deposit.
This change also resulted in the following advantages
• well completion and equipping are easier due to fewer valves and in-connection pipes not
being required
• reduced Mineral Resource loss due to the dip of the potash beds
• improved extraction ratio, as more circular caverns can be placed tightly along the irregular
Mineral Resource boundary
• improved extraction ratio because of the higher density of caverns (packing factor)
• operational advantage because the single-well cavern development is 3 months less than for
the dual-well caverns
For the single-well caverns, a radius of 60 m was selected. Additional numerical modelling of single-
well cavern deformations is planned to be undertaken as part of the Definitive Feasibility Study
(“DFS”). Geotechnical studies competed to date indicate that the caverns are expected to be stable,
and some yielding of pillars may occur, with no adverse consequences expected as a result.
The solution mining method is divided into four phases: (1) sump development, (2) roof development,
(3) continuous mining and (4) cavern closure. Figures 6 and 7 show schematically the HWSS and the
TSS in solution mining mode respectively.
Appendix A Figure 6 : HWSS solution mining
(available at www.korepotash.com)
Appendix A Figure 7 : TSS solution mining
(available at www.korepotash.com)
Successful application of the selective dissolution method requires maintenance of adequate
permeability through the potash zone during operation. Our experts have advised that a rule of thumb
is that a minimum grade of 30% KCl is sufficient to create adequate permeability for the economic
selective solution mining process to be sustained. The percentage of KCl in the HWSS is 57.1% which
should facilitate selective mining. However, mining of the TSS which also has very high grade KCl, may
be more challenging because the halite interbeds will not be dissolved by the NaCl-rich solvent,
requiring other techniques to access the overlying high-grade potash beds. The mining method
proposed for the TSS is to selectively mine the high-grade beds and induce the low-grade beds to fall
to the bottom of the cavern. This technique has been used successfully in similar application in other
potash solution mines.
In the determination of Ore Reserves, the TSS tonnage was modified downwards by 15% to provide
for potential risk associated with the extraction of the TSS. Production scheduling prioritises HWSS
extraction first to further mitigate potential risks associated with TSS extraction. In the first 7 years of
operation, 78.1% of KCl production will be from the HWSS and 21.9% will come from the TSS. Prior to
mining the TSS, pilot testing and evaluation of alternate ways to maximise recovery in the TSS are
planned to be undertaken.
The estimated MoP production from each seam is shown in Table 5 Some production boreholes are
planned to intersect both the HWSS and TSS where caverns are planned in both seams and other
production boreholes are planned to only intersect one of the sylvinite seams and in those holes,
caverns are only planned in the relevant seam.
Appendix Table 5: Breakdown of MoP produced from each source
Average MoP
Number of produced per MoP produced
Source
Caverns Cavern (tonnes)
(tonnes)
HWSS + TSS 97 45,197 4,384,151
HWSS (only) 51 27,702 1,412,821
TSS (only) 90 17,505 1,575,491
All Caverns 238 30,977 7,372,463
The mine scheduling and processing of the Probable Ore Reserves for the Dougou Extension results in
an equivalent contained MoP of 7.37 Mt with a KCl grade of 98.5%.
The cavern production estimate includes the following steps:
• gridding potash grade, bed thickness and bed elevation over the Indicated Mineral Resource
areas based on known drill hole data and
• estimating recoverable KCl tonnages for each planned cavern.
Drill hole data was used to calculate recoverable tonnes for each planned cavern.
K
Cl tonnage within the cavern boundary depends on the cavern dimension, potash bed thickness and
grade distribution within the cavern footprint. Potash beds within the Indicated Mineral Resource
areas are generally flat lying, but local dips exist which can result in either dilution or loss of resource
as the solution mining method leaches and recovers soluble material in horizontal slices.
A model has been developed by AAI and employed to calculate the production and brine history for
each cavern. The program is based on the mass balance and simulates the entire cavern life from sump
development to the end of selective mining using a time-differential method. The program output
includes KCl, NaCl and magnesium chloride (MgCl2) production rates and concentrations. KCl
production is the total dissolved KCl minus the KCl left in the cavern.
The cavern layout within the mine plan boundary is shown in Figure 8.
The mine layout shown in Fig 9 below is the basis for the DX production plan given in Table 5
Appendix A Figure 8 : Cavern layout for the DX Life of Mine
(available at www.korepotash.com)
6. Life of Mine Production Schedule:
The life of mine based on the Ore Reserves for the DX Project is 18 years, and full-scale production of
400,000 tpa of MoP occurs approximately 2 years post commissioning. The life of mine production
schedule is shown in Figure 9. No Inferred Mineral Resources are scheduled.
Appendix A Figure 9 : Life-of-Mine Production Summary of the DX Mine
(available at www.korepotash.com)
7. Metallurgy and Process
Plant and Flowsheet: The process plant will be located east of the Dougou Extension mine plan area,
(Figure 10) with a buffer distance of 500m away from the Mineral Resources boundary. The process
plant building is 30m wide x 145m long, and 32m high and can be seen in Figure 11. The process plant
building will house all processing equipment, along with associated electrical and instrumentation.
The building will have no exterior walls, and a simple roof will be installed to keep rain off the
personnel and equipment.
Appendix A Figure 10 : Process Plant Location
(available at www.korepotash.com)
Appendix A Figure 11 : Process plant 3D schematic
(available at www.korepotash.com)
Other site buildings include:
• 52m x 45m Utilities Building
• 18m x 10m Operation Center
• 44m x 40m Warehouse (fabric building)
• 44m x 40m covered Maintenance area
• 30m x 20m Administration Building
The long, narrow plant design makes it possible to position the mechanical equipment more densely
than usual plant designs. Maintenance access is convenient from both sides of the building, so no
service aisles will be included in the building interior. All removal of equipment will be through the
open walls of the building. Elevated grated floors will be constructed for personnel access to all
equipment, and several maintenance access lanes will be created for removal of some large
components.
The potash production process shown in Figure 12 below consists of the following industry standard
process steps and the expected plant recovery is 98.5% for this process:
- Injection and solution recovery: Return brine from processing will be heated to 100°C and
pumped to the wellfield for re-injection into the mine caverns for dissolution and recovery of
potassium chloride (KCl) from the underground Sylvinite deposit containing both potassium
chloride (KCl) and sodium chloride (NaCl) minerals. The KCl mineral will be selectively
dissolved from the ore due to the almost saturated NaCl and under saturated KCl in the return
brine.
- Cooling and crystallisation: From the crystalliser feed tank, the brine will be pumped to the
vacuum crystalliser for pre-cooling to approximately 28°C and then pumped to the surface
crystallisers. In the four-stage surface cooled crystallisers, the mother liquor will be cooled to
an end point of 2°C resulting in KCl solids precipitation. Spent brine from the 4th stage
crystalliser will be pumped to the concentrate tank for return to the wellfield.
- KCl de-brining: Slurry containing KCl solids from the surface crystallisers will be pumped to
the centrifuge, where brine will be removed. KCl product exiting the centrifuges will contain
less than 5% moisture (by weight).
- KCl drying: A rotary drum dryer will be used to further reduce the residual moisture in the
potash product to 0.2% (by weight) or less. Combustion air will be heated to 800°C and mixed
with incoming feed material. Heat will be provided by burning natural gas. The exit
temperature for dried solids is expected to be 146°C.
- Compaction: Two compaction circuits will operate in parallel to properly size the product.
Each circuit will be comprised of a compactor, flake breaker, hammer mill, sizing screen and
associated conveyance system. The sizing screen oversize streams will jointly feed another
hammer mill and the crushed product will be returned to the main elevator feeding the
compactors. The sizing screens fine fraction will be re-introduced back to the compactor. The
screen middling fraction will constitute the final product, which will have a PSD typical for
granular potash product.
- Product Glazing: The glazing process will harden the particle surfaces and smoothen sharp
particle edges to avoid product degradation during transportation. The glazing process will
consist of spraying a small volume of water over the compaction circuit hot product allowing
the KCl crystal surface to slightly dissolve in a conditioning drum. The moist material will enter
a fluidized bed dryer/cooler where hot air will be used to evaporate excess water in the first
section of the unit. In the second section, ambient air will be blown to cool the product prior
to shipping.
- Product Load Out: Granular MoP product from the Glazing circuit will be treated with anti-
caking and de-dusting reagents and discharged into a 150t storage bin. 40 tonne multi-axle
trailers will continuously transport finished MoP product from the Processing Plant to the
Marine Facility located at Pointe Noire. One trailer will be loaded approximately every 45
minutes.
Appendix A Figure 12 : Potash production schematic
(available at www.korepotash.com)
Although no specific crystallisation testing has been carried out to verify the expected process plant
production capacity for the Dougou Extension resource, Kore believes it has a reasonable basis for a
production target of 400,000 tpa to be achieved with this method for the following reasons:
- During the PFS, a potash process technology specialist, Whiting Equipment Canada, provided
the Swenson process design, equipment list and estimated equipment costs relating to the
crystallisation process. The same Swenson process technology is successfully used at other
global potash operations over a large range of plant capacities.
- The proposed methods are commonly used in potash solution mining operations, including
large scale production facilities. Although these methods can be more energy-intensive than
the conventional flotation methods commonly used in conjunction with conventional
underground mining, they are known to typically yield higher KCl process recovery and higher
product KCl grade.
- Kore conducted dissolution tests on samples of the DX core and the resulting data was used
to inform the estimation of brine grades and chemistry feeding into the processing plant
It is possible that pockets of carnallite may be encountered during mining that could introduce
magnesium chloride (MgCl2) into the brine. The risk of this occurring, including its effect on KCl
recovery, has been considered in the PFS. Magnesium (Mg) content in brine can be controlled
operationally by bleeding out brine from the process stream without material impact on plant
performance.
8. Marine Facilities
Trade-off studies into the marine loading options were undertaken during the PFS considering initial
capital cost, operating cost, road hauling costs and risk.
The PFS design is for export of MoP from an existing marine berth within the Pointe Noire port, already
accessible by ship, where only the construction of a storage building and movable conveyor/ship
loading equipment would be required. The MoP produced at DX will be trucked to the planned storage
facility at the Pointe Noire port.
Preliminary negotiations around this option have resulted in a proposal from the owner of the site, an
established logistical company based in Pointe Noire. Under the potential agreement, they will
construct a suitably designed and sized product storage building for the MoP and will provide all ship
loading activities. In this arrangement, Kore will not be required to contribute capital and will pay fees
for use of the space, the use of facilities, and activities required for ship loading.
9. Land based transport
Trade-off studies into road haulage of DX MoP to port were undertaken during the PFS considering
initial capital cost, operating cost and risk.
The PFS assumed contracting land transport of MoP to a local transport provider. Quotations from
various third-party sources were obtained to transport the MoP from the process plant site to the
planned marine facility at the Pointe Noire port. The PFS assumes the use of trucks with 40 tonne
trailers.
The DX Project will require the regular use of existing highway RN5 for transport during construction
and operations. RN5 includes 25 km of unpaved sand road between Madingo-Kayes and the process
plant. Although the sand portion of the road is currently used for logging transport, some upgrades
are expected to be required to support the construction and operating traffic for DX.
The PFS capital cost includes an allowance for road upgrades on the unpaved portion of highway RN5,
shown in Figure 13. Recent quotations for similar road upgrades in Congo were used to support the
cost allowance for this work.
The current load limit for RN5 is 30 tonnes per load, and Kore Potash and the Minister of Mines are in
discussions toward a concession to allow 40 tonne loads (or higher if required) for both construction
and operations.
Appendix A Figure 13 : Proposed RN5 Upgrades
(available at www.korepotash.com)
10. Water Supply and Brine Disposal
The DX scoping study assumed multiple water bores into local aquifers would supply water for the
process operation and mine development. The scoping study also assumed that disposal of waste
brine would be by deep well disposal into a deep-seated aquifer.
Further evaluation of peak water requirement during sump and cavern development during the PFS
determined that water bores would be suitable only for supplying the utility water requirements in
the process plant, and that a source of sea water would be required to meet the peak water demand
during cavern development.
The PFS includes provision for a permanent sea water intake, pumping station, and water supply
pipeline to the production wellfield. Waste brine is planned to be placed in the sea via a pipeline.
Dedicated pipelines will be used to transport raw water to the process plant area and return waste
brine to the sea. The proposed route of the pipelines is shown below. Potential impacts of brine
discharge to the ocean was assessed and approved in the Kola Project ESIA. This assessment
demonstrated that the impact of the planned discharge will meet or exceed internationally accepted
standards for brine disposal at sea.
The proposed location of the ocean water pumping station location is approximately 13.8 km from
the DX processing plant, and approximately 500 m from the coastline. The pipeline is designed to be
buried below surface however trestles may be required to support the pipe in areas of rough terrain.
Figure 14 shows the selected pipeline route.
Appendix A Figure 14 : Proposed route for brine discharge and sea water supply pipelines
(available at www.korepotash.com)
11. Bulk Infrastructure
a. Natural Gas Supply
The overall natural gas requirement for the PFS dropped to 1.30M GJ/year from the scoping study
requirement of 1.95M GJ/year. This reduction was due to an increase in the expected brine KCl
concentration from the mine, resulting in a significant reduction in required brine flow through the
process plant. The PFS is based on the supply of compressed natural gas via transport trucks, requiring
a compression station near the supply point, and a decompression station at the process plant. This
method is known as a Natural Gas Virtual Pipeline (NGVP), and there are numerous examples of this
system in operation in areas without natural gas pipeline infrastructure.
This solution was investigated in detail by Change Energy Services, a specialist consultant with design
and operation experience with NGVP facilities. The report from Change Energy Services made a
recommendation on design, as well as an estimate of capital and operational costs for the compressor
station, the decompression station, the purchase of the compressed gas transport trailers and the
operations and maintenance. The PFS assumes that Kore Potash will contract out the NGVP trucking
operations. Figure 15 below shows the proposed route for natural gas transport, a distance of 115
km.
The RoC has not developed regulations covering the transport of compressed natural gas yet. Kore
plans to work proactively with the Regulator to develop a set of regulations, in line with international
best practices, to facilitate Kore’s planned use of compressed natural gas.
Appendix A Figure 15 : Proposed Natural Gas Transport Route
(available at www.korepotash.com)
b. Power Supply
The PFS assumes construction of power lines and purchase of electrical power from local generators
and distributor of electrical energy. Sufficient surplus gas turbine generated electrical energy is already
available close to Pointe Noire, and the power station operator, CEC, is in the process of installing
additional generating capacity.
The overall power requirement for the DX Project has reduced to 12.7 MW from the scoping study
assumption of 13.5 MW. This reduction was due to an increase in the expected brine KCl
concentration from the mine, resulting in a significant reduction in required brine flow through the
mine and process plant.
The scoping study assumed a similar route to that used for the Kola DFS where power was supplied
from the MKII sub-station. During the PFS, Kore Potash was advised by CEC that a better location to
tie in power would be at the electrical sub-station at M’Boundi.
The PFS includes construction of an overhead high-voltage power transmission line from M’Boundi to
the DX process plant site, a distance of 85 km. The capital cost for the overhead power line was
estimated for the proposed route as shown below in Figure 16. The cost structure for electricity was
obtained from CEC, the local operator of the gas turbine power station and additional operating costs
for transmission of electrical power were obtained from E2C the local electrical transmission company.
Appendix A Figure 16 : Overhead power line route
(available at www.korepotash.com)
12. Environmental and Social Impact Assessment (ESIA)
The existing ESIA for Dougou Licence area was approved in 2017 and a Certificate of environmental
compliance was granted in July 2018 by the Ministry of Tourism and Environment for a 1 year period,
which was recently extended to 25 year validity. The Company believes that a revised ESIA
incorporating the DX Project requirements for the sylvinite process plant and solution mine wellfield
will be required. The ESIA revision is planned to be undertaken concurrently with a DFS for DX.
The revised ESIA will utilise existing baseline information from both the Dougou ESIA and the Kola ESIA
completed in 2018. The existing baseline information on the DX area is believed to be adequate for
the revised ESIA to be prepared and submitted for approval within 12 months.
A Decree D’Utilité Publique (DUP) and a Resettlement Action Plan (RAP) will be required to be
developed for Longo-Bondi and possibly Youngou villages and surrounding land affected by project
land-take. The DUP is the Government-mandated and led process that identifies affected parties,
establishes their access and ownership rights and values their properties. The DUP then establishes
the quantum to be paid in compensation for loss of access to the affected land parcels. On completion
of the DUP process, the government issues a decree transferring the affected land to the
company. The RAP is a re-settlement plan based on the International Finance Corporation
Performance Standards that ensures that disruption to the livelihoods of affected communities is
minimised and that affected parties are assisted to be in an equivalent state of productivity to what
they were prior to the land acquisition. While the DUP compensates for loss of crops and structures,
the RAP provides additional support as required by good international industry practice (such as
transport, access to markets, agricultural extension services). Both procedures were followed on the
Kola Project and are well known to the Kore team. It is unlikely that physical resettlement of any
people from these villages will be required.
The Dougou mining exploitation Licence for potash on a surface area of 451 km2 in the Kouilou district
was approved on 9th May 2017 and is valid for 25 years, with an option to extend it by 15 years at
that point. The DX Project lies within the Dougou mining exploitation license.
13. Potash Marketing
MoP produced from the DX Project is planned to be marketed predominantly into select African
markets. Any excess product will be sold into the large Brazilian market or other South American
markets. The key targeted destination countries and their current demand for MoP are set out below.
Based on discussions with Argus Media and WABCO, the granular MoP demand in each of these
markets is approximately 60% of total MoP demand. Table 6 shows the current consumption for
Africa.
Appendix A Table 6: African MoP Consumption
Total 2019 Consumption
Region Estimated Granular1 (tMoP)
(tMoP)
Morocco 347,000 242,900
South Africa 350,000 245,000
Nigeria2 116,000 81,200
Other West Africa3 171,000 119,700
Other North Africa 201,000 140,700
East Africa 116,000 81,200
Other Africa 8,000 5,600
Total Africa 1,309,000 916,300
Source: Argus Media (Jan 2020)
Notes to Table 6:
1. Based on an assumed 70% (granular) / 30% (standard) split per discussions with Argus Media
2. Following Nigeria’s regulation banning import of blended product, WABCO estimates that the granular
consumption is expected to be approximately 400,000 tpa
3. Additional market information obtained from WABCO indicates that Other West African markets could be
as high as 310,000 tpa based on Ghana, Burkina Faso, Mali and Ivory Coast
The PFS price forecast is based on the weighted average of leading potash market consultant Argus
Media’s granular MoP CFR price forecast (in real 2019 terms) for South Africa, Nigeria and Morocco
from 2020 to 2033 The weightings applied are based on total imported MoP volumes for each of
these markets. The price assumption is based on a real price profile which steadily declines from
2022 to a low in 2027 and then steadily rises to a maximum of $474/t MoP in 2033 with a flat real
profile from 2033 until the end of mine life. The price forecast graph used is shown in Figure 17
below.
Appendix A Figure 17 : African Price forecast
(available at www.korepotash.com)
Notes to Figure 17: Argus Media Ltd is the source of the confidential proprietary data which Kore Potash has
aggregated and republished above. Kore Potash obtains data from Argus under licence. Argus makes no
warranties, express or implied, as to the accuracy, adequacy, timeliness, or completeness of its data or Kore
Potash’s presentation of that data, or its fitness for any particular purpose. Argus shall not be liable for any loss
or damage arising from any party’s reliance on Argus’ data, and disclaims any and all liability related to or
arising out of use of the data to the full extent permissible by law.
A key point to note with regards to pricing is the forecast potash price remains beneath the scoping
study assumption of US$360/t MoP for the first 6 years of production, at an average price of $US
344/t MoP, until 2029. With the remaining life of mine for the project price, at average of US$ 456/t
MoP, only rising above the scoping study assumption of a flat US$ 360/t MoP. The overall impact of
this pricing assumption adds 1% to the IRR of the DX Project when compared to the scoping study
pricing assumption.
14. Capital and Operating Costs
The PFS Capital Cost estimate qualifies as an AACE Class IV capital cost estimate, having an
approximate accuracy of +/- 25%. The estimate captures all project costs from various contributors
as follows:
Design and estimation of direct costs for Solution Mining & Drilling was performed by Innovare
Technologies (Innovare), based on Turnkey quotations from drilling suppliers. Engcomp provided the
design and Estimate for the electrical infrastructure in the wellfield.
Design and estimation of direct costs for the Process Plant was completed by Engcomp with support
from Innovare. Equipment vendors were issued procurement packages and budgetary quotations
were obtained.
Design and estimation of direct costs for off-site infrastructure was performed by Kore and its third-
party service providers.
Indirect and contingency costs were estimated by Engcomp, with Kore providing inputs related to
construction execution strategies. Engcomp consolidated the overall estimate, and the summary of
the capital cost estimate (CAPEX) is shown in Table 7.
Appendix A Table 7: Capital Cost estimate (real Q4 2019)
Initial Capex
Description
(kUSD)
Solution mining and wellfield 33,645
Process Plant 93,657
Offsite infrastructure 12,719
Sub-total Direct Costs 140,021
Field Construction Indirect 24,987
Other Indirect Costs 28,141
Owner's Costs 15,827
Engineering and project
22,656
management
Sub-total Direct + Indirect Costs 231,632
Contingency 50,060
Escalation 4,210
Total Capital Costs 285,902
The pre-production capital cost of US$286 million equates to a pre-production capital intensity of
US$715/t MoP annual capacity. This is very competitive in relation to MoP industry peers.
Sustaining capital costs total US$247 million over the 18 years life of mine and mostly relate to ongoing
drilling, piping relocation and cavern development. Deferred capital costs total US$0.3 million in the
first year of operation. Reclamation costs total US$21 million after operations are complete.
The sustaining capital, deferred capital and reclamation costs are summarized in Table 8.
Appendix A Table 8: Summary of Sustaining, Deferred and Reclamation costs
Description Category kUSD LOM US$/t MoP
Sustaining Capital Debottlenecking 2.0 0.27
Sustaining Capital Mining 212.8 28.86
Sustaining Capital Buildings 4.1 0.56
Sustaining Capital Electrical 28.4 3.85
Deferred Capital Process Plant 0.3 0.04
Reclamation Costs All 21.1 2.87
Total Costs 268.7 36.44
Operating Cost
The PFS confirms that the Operating Cost of the DX Project is highly competitive for supply into the
African and South American markets. The mine gate operating cost is estimated at US$65.26/t MoP
and the export (FOB) cost is estimated at US$86.61/t MoP, excluding royalty and sustaining capital.
The Operating Costs are expressed in US dollars on a real Q4 2019 basis and are based on average
annual production of 400,000 tpa of MoP over the life of mine. All costs have been prepared on an
owner operated basis and are shown in Table 9.
Electricity represents 64% of annual utility costs, while natural gas represents 36%.
Appendix A Table 9: Summary of Operating Costs
Total unit Cost
Cost Category (real Q4 2019)
(US$/t)
Labour 9.02
Utilities 27.74
Operations & Consumables 5.59
Maintenance 6.10
General and Admin 2.87
Offsite 13.94
Mine Gate Cost 65.26
Ground MoP Transport 13.57
Export Facility 7.78
FOB 86.61
Marine Transport 28.00
Total Operating cost (CFR
114.61
Africa)1
Note to Table 9: Excludes Royalty and Sustaining Capex
15. Economic Evaluation
a. Summary Economics
All financials are presented on a 100% consolidated basis; the 10% government free carried equity
interest is deducted from Post Tax Free Cash Flow to derive the Net Project Cash Flow (on a 90%
attributable basis), which is used to calculate the attributable NPV and IRR of the DX Project. The PFS
economic evaluation delivers a real post-tax, ungeared IRR of 22.9% and NPV10(real) of US$319M on
attributable basis. The evaluation is based on Argus International’s forecast granular MoP price for
DX’s target markets which results in an average life-of-mine granular MoP price of US$422/t MoP CFR
Africa (real 2019).
Table 10 summarises the financial outcomes.
Appendix A Table 10: Summary of Financials
Financials Units
Total revenue US$M 3,113
Average annual revenue US$M 169
Average annual EBITDA US$M 118
EBITDA margin % 69.8%
Average post-construction, post tax annual free cash
US$M 95
flow
Free cashflow margin % 56.4%
Total post tax free cash flow1 US$M 1,469
2
Attributable post tax, un-geared NPV (10% real) US$M 319
Attributable2 post tax, un-geared IRR % 22.9%
Payback period from date of first production years 4.3
Scheduled LOM years 18.4
Average forecast MOP granular price US$/t MoP 422
Notes to Table 10
1. Free cash flow defined as EBITDA minus tax, minus capex
2. Attributable to Kore’s interest (i.e. 90% basis)
The key assumptions underpinning the base case economic evaluation are as follows:
• 18-year initial project life from first production;
• Approximately 400,000 tpa average production of MoP;
• Granular MoP represents 100% of total MoP production and sales;
• All cashflows are on a real Q4 2019 basis;
• NPVs are ungeared and calculated after-tax applying a real discount rate of 10% (based on a
review of 7 recent potash projects, 4 of which were in Africa).
Fiscal regime assumptions aligned with the recently finalised Mining Convention:
• Corporate tax of 15% of taxable profit with concessions for the first 10 years of production
(0% for the first 5 years and 7.5% for years 6 – 10);
• Mining royalty of 3% of the Ex-Mine Market Value (defined as the value of the Product
(determined by the export market price obtained for the Product when sold) less the cost of
all Mining and Processing Operations including depreciation, all costs of Transport (including
any demurrage), and all insurance costs);
• Exemption from withholding taxes during the term of the Mining Convention;
• Exemption from VAT and import duty during construction; and
• Government receives a 10% free carried equity interest in the DX Project company until the
initial construction phase is completed.
The forecast net attributable project cash flow for 18.4 years of production is illustrated in Figure 18.
Appendix A Figure 18 : DX Project Cash Flow Forecast (real Q4 2019)
(available at www.korepotash.com)
b. Sensitivity Analysis
The PFS economic evaluation demonstrates that the DX Project economics are most sensitive to
potash price and to project capital costs.
Sensitivity of the NPV to key input assumptions, on a -20%/+20% range is illustrated in Figure 19.
Appendix A Figure 19 : NPV10 Sensitivity to key inputs
(available at www.korepotash.com)
c. Price Sensitivity
Table 11 below shows the sensitivity of the Dx Project NPV to Potash Price.
Appendix A Table 11: Sensitivity to potash price
Granular MoP NPV
(US$/t CFR Brazil) (US$ million)
260 (flat real)2 1
310 (flat real) 122
360 (flat real) 243
Argus Media Price 319
Forecast1
400 (flat real) 339
450 (flat real) 459
Notes to Table 11:
1. The Argus Media price assumption is based on a real price profile which steadily declines from 2022
to a low in 2027 and then steadily rises to a maximum of $474/t MoP in 2033 with a flat real profile
from 2033 until the end of mine life.
2. Flat real pricing assuming a fixed price from start to end of production has been applied in other
sensitivity calculations.
16. Differences between Scoping study and Pre-Feasibility study
The key differences between the DX scoping study published 29 April 2019 and the PFS details included
in this announcement are highlighted in Table 12.
Appendix Table 12: Summary of changes between Scoping and PFS Studies
Financial Drivers Scoping PFS
Capital Cost Estimate US$327 million US$285.9 million
Operating Cost: Mine Gate US$ 78.85/t MoP US$ 65.26/t MoP
Operating Cost: FOB (Pointe Noire) US$ 82.74/t MoP US$ 86.61/t MoP
Operating Cost: CFR (Africa) US$107.74/t MoP US$114.61/t MoP
Life of Project 17 years 18.4 years
Potash Price US$360/t flat US$422/t average
MoP Produced over life 7,074 Mt 7,372 Mt
Mineral Resource 232Mt @ 38.1% KCl 145 Mt @ 39.7% KCl
Ore Reserve nil 17.7 Mt sylvinite @ 41.7% KCl
NPV10 US$221 million US$319 million
IRR 19.3% 22.9%
Average annual free cash flow US$ 74 million US$95 million
Mining Method Dual well selective dissolution Single cell selective dissolution
Ship loading Purpose built Kore facility BOO at existing Pointe Noire Port
17. Project Ownership and transfer of 10% to the RoC Government
The DX Project lies within the Dougou mining licence area. The Dougou Mining Licence will be held by
Dougou Potash Mining SA, a 100% owned subsidiary of SPSA. In turn, SPSA is owned by the Kore Group
(97%) and a RoC entity (Les Etablissements Congolais MGM) (3%). An existing Share Purchase
Agreement enables Kore to purchase the remaining 3% of the shares in SPSA, with Kore shares to form
the consideration.
In accordance with the Mining Convention, the RoC Government will be transferred 10% of the shares
in Dougou Potash Mining SA.
An existing contract with the current 3% shareholder of SPSA, provides for Kore to become the 100%
owner of SPSA in advance of transferring the 10% interest in DX Potash Mining S.A. to the RoC
Government.
18. Risks and Opportunities
Key risks identified for the DX Project are:
• TSS brine grade variability: If lower brine grade concentrations are achieved than
determined in the PFS, higher flow rates may be required to achieve production targets,
or there may be reduced MoP production. This risk has been mitigated in the PFS via
commencement of mining in the TSS being delayed until Year 4. Moreover, only 21% of
the initial 7 years of scheduled MoP production is drawn from the TSS.
• Unplanned carnallite intersections: Unplanned carnallite intersection, by either a drill
hole or a cavern, could result in an operational need to abandon the drill hole or cavern.
Should this happen this could increase drill hole costs and potentially reduce Ore
Reserves in that cavern area. Cost risk (for initial caverns) is addressed through an
allowance for 3 additional caverns, and through project contingency.
• Operating cost variability: The PFS has been based on the use of 3rd party in-country
supplies for off-site infrastructure such as gas, power, transport and marine services. All
of these activities have been costed on the basis of proposals received from in-country
service providers. However, there is a risk that these prices are not achieved in final
contract negotiations. These risks are mitigated in the PFS through receipt of proposals
from multiple service providers in each area possible.
• Potash market and price variability: Kore is in advanced discussions with potential
offtake partners for the planned DX Project production. The Company has not yet
formed sales contracts for the planned production and anticipates forming offtake
agreement/s prior to completion of a DFS. There is currently no forward selling of potash
or market to hedge potash prices. The DX Project will be exposed to potash price
variability. The DX Project’s low operating cost allows it to competitively deliver high
quality MoP to its target markets cheaper than other suppliers and the net cash back to
Kore is expected to be larger than for other suppliers to the target markets. The PFS
assumption is that the inherent value in the higher grade of MoP that DX will produce
will offset potash marketing costs (DX is designed to produce K62 MoP v industry
standard K60).
Key opportunities identified for the DX Project are:
• Product Quality: The PFS indicates that the DX product (MoP) will contain 98.5% KCl
(meeting the requirements for K62 fertilizer product) which is significantly higher than the
common industry specification of 95% KCl (corresponding to K60 product). This could
present the opportunity to either market the DX product as K62, or to correct the product
to a purity consistent with K60. At a production rate of 400,000 tpa, the 3.7% excess KCl
in the DX product represents the equivalent of 14,800 additional tonnes of K60 MoP per
annum.
• Project Life: Multiple potential opportunities exist to extend the DX Project life:
o The PFS only schedules 22% of Indicated Mineral Resources for extraction in the
scheduled life of 18 years.
o The Inferred Mineral Resources at DX are 66 Mt at 40.4% KCl. No Inferred Mineral
Resources are scheduled within the PFS.
o No secondary potash recovery modes have been scheduled following initial
cavern operation and prior to ultimate cavern closure. These secondary recovery
modes are a normal approach within the potash solution mining industry.
19. Permit progress
The majority of permits and agreements required to facilitate commencement of construction and
operations of the DX Project are in place. An amendment to the ESIA for the Dougou mining
exploitation licence is required and will be applied for during the execution of the DFS.
• The Dougou Mining Licence was granted on 9th May 2017 for a period of 25 years.
• The ESIA for the Dougou Mining Licence was approved for 25 years on 31 March 2020
• The Mining Convention was gazetted into law on 7 December 2018 and is renewable after
for 25 years
20. Project Funding
Reasonable Basis for Funding Assumption
The Directors of Kore have formed the view that there is a reasonable basis to believe that requisite
financing for development of the DX Project will be available when required. Kore shareholders should
be aware of the risk that future financing for development of the DX Project may dilute their
ownership of the Company or Kore’s economic interest in DX (or the DX Project).
There are several grounds on which this reasonable basis is held:
• Kore Potash has two large strategic shareholders:
o SQM (c.19%): a large Chilean public company listed on NYSE (USA) that is an
integrated producer and distributor of specialty plant nutrients, including having
an established business in the global potash market; and
o SGRF (c.19%): the sovereign wealth fund of Oman, which holds a range of natural
resource investments, including on the African continent.
These two groups initially invested a total of c.US$40 million into Kore Potash in late 2016. They have
subsequently invested further in the Company to continue developing its pipeline of projects,
including the DX. They collectively bring a considerable and highly relevant combination of substantial
financial capacity, specific potash experience, Latin American, Middle Eastern and African operating
experience, and financing expertise.
• Kore has ongoing dialogue with a number of interested financial institutions including
commercial banks, Development Finance Institutions (DFI) and private equity funds:
• The Company’s modelling indicates the DX Project has a debt carrying capacity in excess
of 50% of the capital cost. Kore’s management team have identified a pool of interested
commercial banks with capability and indicated interest to provide debt financing for the
DX Project.
• Kore’s structure facilitates financing options for DX via the parent Company Kore plc, or
through joint venture at the DX Project level.
• Kore’s management continue advanced discussions with multiple international trading
groups with expressed interest in procuring the DX MoP production.
• DX PFS has been completed by a team of world-class solution mining experts in Innovare
Technologies and Agapito. The study meets the expected level of detail required for a PFS.
• The technical and financial parameters detailed in the DX Project PFS are robust and
economically attractive. Further opportunities to de-risk and improve the investment case
are planned in the DFS phase of the DX Project.
• Financing for the construction of the DX Project would be required in the future after
completion of the DFS.
• The Kore Board and management team is highly experienced in the broader resources
industry. They have played leading roles previously in the exploration and development
of several large and diverse mining projects in Africa and around the world. In this regard,
key Kore personnel have a demonstrated track record of success in identifying, acquiring,
defining, funding, developing and operating quality mineral assets of significant scale.
21. Execution Strategy
Kore Potash currently foresees debt forming part of the financing mix. It expects lenders will require
execution of the DX Project via EPC contracts and is planning on this basis.
Preliminary discussions with potential EPC partners indicate significant interest for construction of all
project components. Drilling of production holes forms material part of the initial capital spend on
the DX Project. Opportunity may exist to complete drilling of these holes via non-EPC models and
Kore will investigate these options further in consultation with potential lenders during the DFS
phase.
The storage facilities and the ship loading conveyor facilities are planned to be constructed as part of
a Build-Own-Operate (BOO) contract financed by the BOO service provider.
Kore will have control over BOO infrastructure designs to ensure they will meet operational
requirements.
Table 13 shows a list of the anticipated major construction contracts.
Appendix A Table 13: Major Construction Contracts
# Contract Title Type
EPC/Target
C1 Drilling
Price
C2 Pipelines (Wellfield, Water, Disposal) EPC
C3 Process Plant EPC
C4 Power Supply EPC
Build-Own-
C5 Product Transport & Storage
Operate
During construction, Kore will have a Project Management team operating from the DX Project
construction site, with support from the Kore office in Pointe Noire.
Camp accommodation will be provided for up to 250 people during construction, with any excess
temporary requirements handled in the surrounding communities. Camp capacity will be reduced to
approximately 100 during operations.
The DX Project construction effort is expected to create significant employment opportunities for
people in the surrounding communities, including Pointe Noire. EPC contractors will draw from the
local labour force where available and will also subcontract to local contractors. Kore expects most
construction skills to be available in-country.
Project Execution Schedule
The DX Project execution schedule is summarised in Figure 20.
After a final investment decision is made, year 1 of construction will be focused on drilling and
construction of the wellheads, wellfield piping, instrumentation and controls and wellfield pump
station. In tandem, water supply and disposal pipelines will be constructed to the coastal pump
station. Brine outfall and water intake structures will be installed in the ocean. Permanent power
will be established with an overhead power line from a connection point near M’Boundi. Temporary
electrical power generators will be installed for construction activities and replaced with permanent
power as early as possible in the construction schedule.
During year 2 of construction, the process plant construction, natural gas infrastructure, site
buildings and all other aspects of construction will be completed. Development of caverns will be
performed during year 2 of construction and caverns are scheduled to be ready for mining at the
end of construction.
The process plant is expected to start up after a 21-month construction period. Figure 20 shows an
indicative schedule.
Appendix A Figure 20 : Indicative Execution Schedule
(available at www.korepotash.com)
Commissioning and Handover
As the final phase of construction, project commissioning will be executed over a three-month
period before startup. A standard five-phase project commissioning process will be followed,
including:
• Phase 1 – Construction and mechanical completion;
• Phase 2 – Cold commissioning or pre-operational testing;
• Phase 3 – Wet commissioning or operational testing;
• Phase 4 – Product commissioning and
• Phase 5 – Completion certificate (Handover from project to operations).
Operations
During commissioning and first potash production the operational workforce will be onsite working
in parallel with the commissioning team. The project capital cost includes provision for
commissioning through to process plant handover.
The operational headcount totals 85. A summary of headcount by organisational area is shown in
Table 14.
Appendix A Table 14: Summary of Operational Headcount
Function Headcount
Operations 34
Maintenance 17
Health, Safety and
10
Environment
General & Administration 24
Total 85
Employees will be located in both Pointe Noire and at the DX Project site. Some site employees will
be on continuous shift work and will work an average of 56 hours/week. All other employees will be
on dayshift at 40 hours/week.
APPENDIX B
Summary of Information required for ASX
Appendix B: Summary of Information required under ASX Listing Rule 5.9.1(in relation to Ore
Reserves), Listing Rule 5.16.1 (production target) and Listing Rule 15.7.1 (forecast financial
information).
DX Project Ore Reserves and related production target and forecast financial information
Pursuant to Listing Rules 5.9.1, 5.16.1 and 15.7.1, and in addition to the information contained in the
body of this release and in Appendix C below, the Company provides the following summary
information. The assessment of the modifying factors to prepare the Ore Reserves Statement
occurred as the PFS was being finalised, with the production target and forecast financial
information based on the information contained in the finalised PFS described in this report.
Differences between the material assumptions for the Ore Reserve Statement and the production
target and financial forecast (referred to below) are attributable to improvements in the material
assumptions while finalising the PFS.
Summary of Material Assumptions – Ore Reserves
The material assumptions relating to the Ore Reserve Statement, for the DX Project are summarised
below:
• Production life (Appendix A p12-13 Appendix C, p22)- LoM of the Ore Reserves 18.4
years at nominal 400,000 tpa MoP production, this was determined during the
execution of the PFS and from an aligned production schedule for both mining and
processing.
• Product Type (Appendix A, p15, Appendix C p2) - process design was based on one
MoP product type– white granular. The marketed MoP will comprise at least 95%
KCl, with a maximum of 0.2% Mg and 0.3% Insolubles.
• Product pricing (Appendix A p22, Appendix C, p22) - MoP prices were based on
forecasts from Argus Media specifically for select African markets. The Base Case
sales price is forecast to decrease to a low in 2027 and then increase to a maximum
of $474/t MoP in 2033. Post 2033 the price has been assumed to remain flat at
$474/t MoP. The average CFR sales price over the LoM is forecast at US$422/t
MoP.
• Operating cost (Appendix A, p24 and Appendix C, p22) - ex-mine LoM average
operating cost of US$65.26/t MoP, real and FOB LoM average operating cost of
US$86.61/t MoP was calculated from first principles in the PFS
• Shipping costs (Appendix C, p22) - LoM Shipping costs of US$28/t MoP were based
on information and estimates from 3rd party expert and reflects ocean going
vessels with capacity in the range of the 10000-15000t DWT.
• Project durations – A project capital period 21 months was estimated in the PFS
and the deferred capital period defined 6 months, with sustaining capital estimated
in the PFS as 216 months
• Project Capital (Appendix A p22, Appendix C, p21) – A total nominal Project Capital
of US$ 286 million was estimated in the PFS
• Fiscal parameters (Appendix a, p25, Appendix C, p23) – The signed mining
convention determined the relevant fiscal parameters as summarised below:
• Company tax rate (15%),
• Tax holidays (5 years at 0% + 5 years at 7.5%)
• Royalties (3%) (Mining Convention)
• Government free carry (10%) (Mining Convention)
• Other minor duties and taxes (Mining Convention)
Summary of Material Assumptions – production target and forecast financial information
The material assumptions relating to the production target and forecast financial information for the
DX Project which vary from the assumptions relating to the Ore Reserve Statement described above
are summarised below:
• Production life (Appendix A p12-13 Appendix C, p22) - LoM of 18 years at nominal 400,000 tpa
MoP production, this was determined following the receipt of the PFS.
• Product pricing (Appendix A p22, Appendix C, p22) - Average MoP price of US$422/t MoP CFR
Africa (real 2019) for granular product (based on recent potash price movements, current
market prices, a review of recent releases by Potash producers and potash development
companies and potash market research from Argus Media).
• Operating cost (Appendix A, p24 and Appendix C, p22) - mine gate operating cost is estimated at
US$65.27/t and the export (FOB) cost is estimated at US$86.61/t, excluding royalty and
sustaining capital.
The Mineral Resource Estimation
The Mineral Resource Estimate was reported in accordance with the JORC Code, pursuant to Listing
Rules 5.6, 5.22 and 5.24. A full description of the methodology is provided in Appendix C.
The Mineral Resource Estimate used an interpretation based on drill-hole data and 2D seismic data
to create 3D ‘wireframes’ for the sylvinite seams. The wireframes were then ‘filled’ with a block
model, with individual block dimensions of 50 by 50 metres and variable height. The drill-hole
intersection data for KCl (%), magnesium (%) and insoluble content (%) was estimated into the block
model using Inverse Distance Weighting squared. The ddensity of each block was calculated using a
formula for the correlation between KCl content and density (by pycnometer) and has an average of
2.03 t/m3 and 2.11 t/m3 for the HWSS and TSS.
The block-model and thus the estimate was then reduced by the removal of two ‘structural
exclusion zones’ and by cutting it on the east and southeast by a boundary reflecting the ‘maximum
extent of sylvinite’ interpreted from seismic and drill-hole data.in the tabulation (not in the block
model). All blocks with a thickness of less than 1-metre were excluded from the estimate and a 15%
KCl cut-off-grade was applied. A final step was the reduction of the resultant tonnages by 15% to
account for unmodelled geological losses, to obtain the final estimated sylvinite tonnages. Two
estimates were made; one for the HWSS and the full TSS and one for the HWSS and TSS-6-8, the
latter being a higher-grade lower tonnage option and the base case for the Ore Reserve Estimate.
The classification of the Mineral Resource Estimate by the Competent Person was based on Area of
Influence (AOI) around the drill-holes. No Measured Mineral Resources were estimated. Indicated
Mineral Resources are limited to (sylvinite) blocks within an area guided by an AOI with a radius of
1.0 km around the drill-holes DX_01, K62, ED_03, ED_01. Inferred Mineral Resource are limited to
sylvinite (blocks) within an area guided by an AOI with a radius of 2.5 km around inner holes, and a
1.5 km radius beyond ‘outer’ holes (DX_03 and DX_02) and exclude the Indicated Mineral Resource
area.
The Ore Reserve Estimation
The Ore Reserve estimate was carried out by Agapito and reported in accordance with the JORC
Code, pursuant to Listing Rules 5.9.1, 5.16.1 and 15.7.1.
Classification of Ore Reserve
The Ore Reserve is that portion of the Indicated Mineral Resource within the Preliminary Feasibility
Study mine plan boundary. The mine plan boundary includes the Indicated Mineral Resource area
within 1 kilometre from the four exploration cored boreholes ED-01, ED-03, DX-07 and DX-09. These
4 cored holes are within 2,000 meters of each other so that their Area of Influence (AOI) are
interconnected. Mineral Resources were assigned to DX-01 which is not contiguous to the four
interconnected core holes so was not considered to be included in the Ore Reserves.
Mining Method and assumptions
For the PFS solution mining plan, single-well caverns were adopted. The decision to use single-well
caverns was based on the need to locate caverns as close to each other as possible to maximize
resource recovery and the Reserves for the Dougou Extension (DX). The 2D seismic and new drill
holes completed as part of the PFS resulted in better definition of the extent, thickness and dip of
the floor of the resource. Solution mining of large dual-well caverns, as proposed in the Scoping
Study, resulted in reduced resource recovery in comparison to the single, smaller caverns.
This configuration resulted in additional wells, but higher resource recovery and mine life. The plant
is designed to produce 400,000 tonnes per year of Muriate of Potash (MOP) with a purity of 98.5%
KCl. Recovery of resource is planned in the HWSS and TSS where they exist. To meet this production
goal, 25 caverns will need to be developed and put into operation at start-up and replaced over the
18-year mine life. The adopted method of solution mining will inject a hot brine with near saturation
of NaCl and KCl content of approximately 90 to 100 g/l. The brine will selectively dissolve the KCl to
produce a brine feed to the plant of up to 165 g/l KCl with the NaCl remaining in the cavern.
Laboratory-scale dissolution rate testing has verified selective dissolution of KCl at a KCl
concentration of 165 g/l.
The steps in solution mining is to first develop a sump in the salt below the lowest potash bed
available, then to expand the top of the sump with both steps utilizing an oil or nitrogen cap to
inhibit vertical cavern growth. When the roof is developed, the oil/gas cap will be removed and
solution mining of the lowest beds (HWSS or the TSS) can be achieved. If the HWSS and TSS are
present, sump development in the TSS will follow completion of mining in the HWSS.
Other mining techniques were evaluated during the Scoping Study and these included dual-well
caverns as practiced in Saskatchewan and horizontal wells as practiced by Intrepid, Natural Soda,
and in Turkey (Eti Soda and Kazan). The dip of the beds and the variability of the dip favoured the
single-well plan.
Cavern stability and size of the caverns was based on modelling of the larger dual-well caverns and
geomechanical parameters from the Definitive Feasibility Study (DFS) of the nearby Kola Project that
is owned by KORE Potash.
The selected areal extraction ratio is 63%, with the caverns approximately circular with a radius of 60
meters and pillars between caverns of 24 meters. The volumetric extraction ratio is 46.2%. This
configuration is likely to be stable during operations when the pressure in the caverns will support
the roof. Pillar degradation is possible, and subsidence or interconnection of caverns is not of
concern.
The mining recovery factors used include losses due to geologic anomalies and the brine remaining
in the cavern after completion of active mining. The geologic loss factor for the HWSS and TSS is
15%. There is greater uncertainty for resource recovery because of the banded nature of the TSS
therefore a 15% factor related to TSS mining has been allowed. The HWSS is of uniform high-grade
KCl, whereas the TSS has high-grade KCl seams interspersed with low-grade seams. The overall grade
of the TSS seam is 29.3% KCl, whereas the grade of the HWSS is 57%. Hence, selective mining of the
TSS is expected to be less reliable than for the HWS. The loss of resource to the remaining brine in
the cavern is estimated to be 16–18%. Some of this can be recovered with the use of submersible
pumps. No credit has been taken for the recovery of the residual brine in the cavern because for
some caverns, deformation above the cavern may restrict the placement of the submersible pump
and the suction pipe to the bottom of the cavern.
Mining dilution factors are not applicable to solution mining. Modelling completed for the PFS
incorporates the transition from sump development with the production of brine of high NaCl
content and no KCl to a high KCl concentration brine once solution mining is advanced to mine the
HWSS or the TSS. During this transition from sump mining to potash mining, brine grades less than
90 g/l will be discarded or recirculated. Dilution factors generally associated with conventional
mining involve reduction (dilution) of the ore grade delivered to the plant because of mining low-
grade material, either above or below the economically viable ore zone.
The mining recovery factors include the areal extraction ratio of 63% (volumetric extraction of 46%)
and the losses due to the geologic anomalies and the loss of brine remaining in the cavern. Plant
losses are estimated to be 1.5%. The final product will be 98.5% pure KCl with 1.5% NaCl.
Inferred resources have not been quantified into the mining plan.
The infrastructure requirements for solution mining include piping for delivery of the solute and
recovery of the pregnant brine, wellfield pumps, electrical, instrumentation and roads.
Instrumentation at the well head includes flow, temperature and brine density. Sampling of brine at
the well head will be done manually. Production piping will be insulated to minimize temperature
losses in the solvent and product brine. Cavern development pipelines will not be insulated.
Processing Method and Assumptions
The selective solution mining process for DX is expected to deliver brine to the process plant
containing (by weight) 66.8% water, 18.6% NaCl, 13.4% KCl, 1.1% MgCl2, and 0.1% CaSO4 at a
temperature of 60°C. All the above elements will be fully dissolved within the brine. Brine of this
nature is well understood globally and can be readily processed.
Crystallisation is the processing method selected for the DX Project and is well established in the
potash industry. KCl crystallisation involves the gradual cooling of KCl-rich brine and relies on a
strong relationship
between KCl solubility and brine temperature. As the brine is cooled, the amount of KCl that can
remain in solution decreases. Therefore, KCl crystallises as brine is cooled, while most NaCl remains
in solution. KCl crystallisation is known to yield higher KCl recovery than conventional recovery
methods used for separation of KCl solids from NaCl solids, such as flotation.
The estimated KCl losses are due to:
• Purge stream (0.50%): A purge stream is required to control the level of MgCl2 in the
process brine. MgCl2 is preferentially soluble to KCl and will gradually displace KCl if it is not
controlled. A small portion of brine is bled off and disposed to manage the level of MgCl2 in
the brine, and this also results in a loss of KCl. The DX design includes a purge stream.
• Boilout (0.15%): Crystallisation vessels are descaled with water using a process called
‘boilout’, which results in some loss of KCl from the walls of the vessels, directed to brine
discharge.
• Dust (0.29%): Dust losses to the atmosphere occur in the process of drying, and also after
KCl is dried.
• Spills and washdowns (0.20%): The plant will occasionally have process upsets and cleaning
procedures which may result in a loss of KCl to brine discharge.
• Offsite transportation losses (0.35%): Some allowance is made for transportation losses
during transport of MoP and during ship loading at the marine location.
The total losses are expected to be 1.49%, and therefore, the total process KCl recovery is expected
to be 98.5%.
Some impurities are expected to accompany the final MoP product. The minimum KCl content for
K60 MoP is 95% KCl, however the DX process is expected to yield a product grade of 98.5% KCl.
The primary basis for the above assumptions was a detailed mass balance, produced by subject
matter experts in the field of potash crystallisation and potash dry processing, with supplementary
input from a world-renowned supplier of potash crystallisation equipment.
Furthermore, dissolution test work was performed on DX core samples from both the HWSS and TSS
at Agapito Associates Inc. laboratory in Grand Junction, Colorado, USA. The testing provided a basis
for the predicted dissolution characteristics within the caverns, and the resulting brine KCl
concentration and flow to the process plant. These parameters were used in the design of the
process plant and became the basis for the prediction of LOM production for the DX project.
Cut-off Grades
For the MRE a 15% KCl cut-off-grade was applied though no blocks have a grade less than this. The
deleterious components Mg and insolubles are so low and consistent at DX that these were not
considered in the selection/exclusion of blocks from the model.
The cut-off grades and quality parameters applied in selecting the mine plan include presence of
carnallite, thickness and in-situ KCl content. The high KCl grade for the HWSS is exceptional
compared to other mined potash beds. The TSS is comprised of several narrow high-grade sylvinite
layers separated by narrow layers of ‘barren’ rock-salt. TSS lower most layer 5 and the uppermost
layer 9 were excluded from the Ore Reserve estimate and from the mine plan because they are
separated from the ‘inner’ layers 6-8 by thick layers of rock-salt. The Reserve considers the TSS 6-8
only. A potash grade of 30% KCl is considered necessary for successful selective solution mining of
potash. The mine plan involves selective dissolution of the KCl by injecting near-saturated NaCl brine
and selectively dissolving the KCl.
Estimation Methodology
• Capital Cost:
Capital Cost Estimate has been developed for each scope area, expressed in United States dollars
(USD) and based on 4th Quarter 2019 prices.
Capital Cost Estimate is a full AACEI Class IV Estimate (-15 to 30%, +20 to 50%)), based on an
equipment factored methodology where budget prices were obtained for all equipment with an
expected value higher than $50,000 all other equipment was factored as a percentage of the total of
the budget quotes received.
Indirect costs were estimated by Kore Potash and included owner’s costs and offsite infrastructure
costs based on quotes received.
Escalation of 1.5% per annum has been considered, and a total Contingency of approximately 22.0%
(of total direct and indirect costs) has been added.
Three capital periods have been defined: Initial (Construction and up to first barge loading, Month
+21); Deferred (up to ramp-up completion, Month +27); Sustaining (after Month +27).
• Operating Cost:
Operating costs were estimated from first principles using quoted rates, estimated consumption,
forecast labour complements and remuneration estimates.
Operating Cost covering the Life of Mine (18 years) has been estimated in Q4 2019 US$ terms. They
include costs for Electric power, Fuel, Gas, Labour, Maintenance parts, Operating Consumables,
General and Administration costs and Contract for Employee Facilities.
Ocean freight transportation estimate was based on shipping costs for 10-12 kt ships specifically for
the African market.
Mine Closure cost estimated in accordance with a Conceptual Rehabilitation and Closure Plan
developed during the PFS
State mineral royalties of 3% of Gross Revenue applies.
Indicated Mineral Resources were used for the estimation of Probable Ore Reserves.
The conversion of Indicated Mineral Resource to Probable Ore Reserve reflects the Competent
Person’s view of the deposit.
Material Modifying Factors
• Status of Environmental Approvals
The Dougou Extension project area falls within the Dougou mining licence which has a 25-year ESIA
approval in place. The DX scope will require an amendment to the Dougou ESIA and this application
would be prepared simultaneously with the execution of the DFS phase of the project. The base line
studies for the Dougou ESIA and the Kola infrastructure corridors (power, gas and overland access)
will provide required information for the amendment application.
Additional baseline studies required to complete the application will be centred around new areas
that would be affected by the DX project.
There are no waste rock dumps or process residue storage facilities required for the scope of the DX
project. Waste salt brine is planned to be disposed of back into the ocean. The disposal of waste
brine into the ocean was investigated and included in the Kola ESIA which was approved by the
regulator when the Kola ESIA was granted a 25-year approval in March 2020.
The Company shall carry out their construction operations in compliance with the environmental
and social management plan as part of the approved ESIA and will be subject to Regulator’s
environmental management compliance audits.
• Status of Mining Tenements and Approvals
Kore Potash Limited (which is 100% owned by Kore Potash Plc.) and formerly known as Elemental
Minerals Limited (ELM), has a 97%-holding in Sintoukola Potash SA (SPSA), a company registered in
the ROC. The remaining 3% in SPSA is held by “Les Establissements Congolais MGM” (Republic of
Congo). SPSA in turn has a 100% interest in its two ROC subsidiaries, Sintoukola Potash Mining SA
and Dougou Potash Mining SA. The DX Deposit is within the Dougou Mining Licence which is 100%
held by Dougou Potash Mining SA and was issued on the 9 May 2017 for a period of 25 years, under
decree No. 2017-139.
Other Governmental Factors
A mining convention entered into between the RoC government and the Companies on 8 June 2017
and gazetted into law on 7 December 2018 concludes the framework envisaged in the 25-year
renewable Dougou Mining Licence granted in August 2013. The Mining Convention provides
certainty and enforceability of the key fiscal arrangements for the development and operation of
Dougou Mining Licences, which amongst other items include import duty and VAT exemptions and
agreed tax rates during mine operations. The Mining Convention provides strengthened legal
protection of the Company’s investments in the Republic of Congo through the settlement of
disputes by international arbitration. The Mining Convention also provides for 10% of the shares in
the subsidiary companies holding the Dougou and Kola Mining licences to be transferred to the
Government of the Congo. This transfer of 10% to the Government has not yet occurred.
Infrastructure Requirements for Selected Mining, Processing and Product Transportation to
Market
The project infrastructure is comprised of a mine site (well field), a processing plant, a 13.8 km
buried water line to the coast, an accommodation camp, an overhead powerline from Mboundi and
overland truck transport on the national road system of both product and gas.
Land acquisition rights for the DX project area will have to be applied for during the DFS phase and a
project specific area will need to be through a ministerial order. To achieve this a governmental
process is followed that culminates in a “Declaration d’Utilite Publique” (DUP) being granted. This
process was followed successfully on the Kola project and will only be required for new areas that
are impacted by the DX project area.
The Process Plant Site is located approximately 65 km north west of Pointe Noire and 18 km inland
from the coast. The Mine Site is located next to the Project Process Plant.
The DX Project will require the regular use of existing highway RN5 for transport during construction
and operations. RN5 includes 25 km of unpaved sand road between Madingo-Kayes and the process
plant. Although the sand portion of the road is currently used for logging transport, some upgrades
may be required to support the construction and operating traffic for DX.
A High Voltage (HV) Overhead Transmission Line (OHL) will be run from a CEC tie-in point at
M’Boundi. The OHL will supply electrical power to the DX mine and process plant
Water supply will be seawater and brine will be disposed to the ocean via two 14 km long pipes
between the process plant and the coast. A water pumping station will be required near the
coastline.
A Natural Gas Virtual Pipeline (NGVP) will be used for the DX Project, involving the delivery of
compressed natural gas on trucks. A compression (mother) station is installed adjacent to the
existing natural gas pipeline. Natural gas is compressed at high pressure onto tube trailers. Tube
trailers are transported to a decanting (daughter) station at the DX process plant. The tube trailer is
connected to apparatus at the decanting station where the pressure is reduced to the correct
pressure for use by the end use customer.
APPENDIX C
JORC CODE Table 1 Checklist of Assessment and Reporting Criteria -
sections 1-4
Section 1 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections.)
Section 1 - Sampling Techniques and Data
JORC Criteria JORC Explanation Commentary
1.1 SAMPLING • Nature and quality of sampling (e.g. cut channels, random • Sampling of Kore’s holes was carried out according to an
TECHNIQUES chips, or specific specialised industry standard industry standard operating procedure (SOP) beginning at
measurement tools appropriate to the minerals under the drill rig.
investigation, such as down hole gamma sondes, or • Core drilling was used to provide core samples. Sample
handheld XRF instruments, etc.). These examples should intervals were between 0.1 and 2.0 metres and sampled
not be taken as limiting the broad meaning of sampling. to lithological boundaries where present. Minor
• Include reference to measures taken to ensure sample lithological intervals (~20cm or less) were generally
representivity and the appropriate calibration of any included within a larger sample.
measurement tools or systems used. • In all cases, core was cut along a ‘center-line’ marked such
• Aspects of the determination of mineralisation that are that both halves are as close to identical as possible.
Material to the Public Report. In cases where ‘industry • All were sampled as half-core and cut using an Almonte©
standard’ work has been done this would be relatively core cutter without water, and blade and core holder
simple (e.g. ‘reverse circulation drilling was used to obtain cleaned between samples. Samples were individually
1 m samples from which 3 kg was pulverised to produce a bagged and sealed in boxes.
30 g charge for fire assay’). In other cases, more
• At the laboratory, samples were crushed to nominal 2 mm
explanation may be required, such as where there is
then riffle split to derive a 100 g sample for analysis.
coarse gold that has inherent sampling problems. Unusual
• Historical holes (starting with ‘K’) were drilled by Mines de
commodities or mineralisation types (e.g. submarine
nodules) may warrant disclosure of detailed information. Potasse d’ Alsace S.A (MDPA) during the late 1960’s and
early 1970’s. There is no description of the sampling
methodology for these holes. Only K52 was used in the
estimate of grade for the Dougou Extension (DX) MRE and
was twinned by Kore’s hole ED_01 (20 m away) to validate
the historic grade and geology data.
• Further discussion on sampling representivity is provided
in section 1.5.
• Downhole geophysical data including gamma-ray data
were collected for all holes. Gamma-ray data provides a
useful check on the depth and thickness of the potash
intervals.
1.2. DRILLING • Drill type (e.g. core, reverse circulation, open-hole • Holes were drilled in two phases by rotary percussion
TECHNIQUES hammer, rotary air blast, auger, Bangka, sonic, etc.) and through the 'cover sequence' (Phase 1 between 9- and 12-
details (e.g. core diameter, triple or standard tube, depth inch diameter, Phase 2 between 5- and 8-inch diameter)
of diamond tails, face-sampling bit or other type, whether stopping 3-5 m into in the Anhydrite Member and cased
core is oriented and if so, by what method, etc.). and grouted to this depth. Holes were then advanced
using diamond coring with the use of tri-salt (K, Na, Mg)
mud to avoid dissolution and ensure acceptable recovery.
ED_01 and ED_03 core was drilled PQ (85 mm diameter)
then subsequent holes HQ (64.5 mm core diameter) as
standard. All holes were drilled as close to vertically as
possible.
1.3. DRILL SAMPLE • Method of recording and assessing core and chip sample • Core recovery was recorded for all cored sections of Kore’s
RECOVERY recoveries and results assessed. holes by recording the drilling advance against the length
• Measures taken to maximise sample recovery and ensure of core recovered. Recovery is between 95 and 100% for
representative nature of the samples. the evaporite and all potash intervals. A full-time mud
engineer was recruited to maintain drilling mud chemistry
• Whether a relationship exists between sample recovery
and physical properties.
and grade and whether sample bias may have occurred
due to preferential loss/gain of fine/coarse material. • Core is wrapped in cellophane sheet soon after it is
removed from the core barrel, to avoid dissolution in the
atmosphere, and is then transported at the end of each
shift to a de-humidified core storage room where it is
stored permanently.
• Recovery data is not available for all historic boreholes.
Only K52 was used in the grade estimate.
• There are no concerns relating to bias due to recovery or
due to preferential loss of certain size fractions; the
sylvinite and halite are of similar grainsize and hardness.
1.4. LOGGING • Whether core and chip samples have been geologically • The entire length of Kore’s holes was logged geologically,
and geotechnically logged to a level of detail to support from rotary chips in the ‘cover sequence’ and core in the
appropriate Mineral Resource estimation, mining studies evaporite. Logging is qualitative and supported by
and metallurgical studies. quantitative downhole geophysical data including gamma
• Whether logging is qualitative or quantitative in nature. and acoustic televiewer images, which provide a useful
Core (or costean, channel, etc.) photography. check on the conventional core logging.
• The total length and percentage of the relevant • Due to the conformable nature of the evaporite
intersections logged. stratigraphy and the observed continuity and abrupt
nature of contacts, recognition of the potash seams is
straightforward and made with confidence.
• Core was photographed to provide an additional reference
and record.
• High quality geological logs were available for historic
holes used in the model, based on cored holes. For oil well
Yangala-1, the logging was based on rotary cuttings and is
therefore less detailed. The position of the seams in these
holes was interpreted by Kore. Only K52 and K62 are
within the area of MRE.
1.5 SUB-SAMPLING • If core, whether cut or sawn and whether quarter, half or • Kore’s samples were sawn as described above, into two
TECHNIQUES AND all core taken. halves. One half was retained at site as a record, and one
SAMPLE PREPARATION half sent in a batch of samples to the laboratory, Intertek
of Perth.
• If non-core, whether riffled, tube sampled, rotary split, • Care was taken to orient the core before cutting so that
etc. and whether sampled wet or dry. the retained and submitted halves were as similar as
• For all sample types, the nature, quality and possible.
appropriateness of the sample preparation technique. • For at least 1 in 20 samples both halves were submitted,
• Quality control procedures adopted for all sub-sampling as two separate samples – an original and (field) duplicate
stages to maximise representivity of samples. sample. The results of the duplicate analyses indicate no
problematic bias, supporting the adequacy of the sample
• Measures taken to ensure that the sampling is
size and the sub-sampling procedures. This partially a
representative of the in situ material collected, including
reflection of the massive layered nature of the
for instance results for field duplicate/second-half
mineralisation, with layering that is generally close to
sampling.
perpendicular to the core axis.
• Whether sample sizes are appropriate to the grain size of
the material being sampled.
1.6 QUALITY OF ASSAY • The nature, quality and appropriateness of the assaying • Analyses for holes ED_01, ED_03 and DX_01 to DX_04
DATA AND and laboratory procedures used and whether the were carried out at Intertek in Perth. Analyses for holes
LABORATORY TESTS technique is considered partial or total. DX_07 and DX_09B were carried out at SGS Lakefield in
• For geophysical tools, spectrometers, handheld XRF Canada. At the laboratory, samples were crushed to more
instruments, etc., the parameters used in determining the than 75% passing 2 mm then split to derive a subsample
analysis including instrument make and model, reading (100 g for Intertek and 250 g for SGS) for analysis. Total K,
times, calibrations factors applied and their derivation, Na, Ca, Mg and S were determined by ICP-OES. Cl was
etc. determined volumetrically. Insolubles were determined by
filtration of the residual solution and slurry on a 0.45
• Nature of quality control procedures adopted (e.g.
micron membrane filter, washing to remove residual salts,
standards, blanks, duplicates, external laboratory checks)
drying and weighing. Loss on drying by Gravimetric
and whether acceptable levels of accuracy (i.e. lack of
Determination was also completed as a check on the mass
bias) and precision have been established.
balance.
• A full quality control and assurance (QAQC) programme
was implemented, to assess repeatability of the sampling
procedure and the precision of the laboratory sample
preparation and the accuracy of analyses.
• This comprised the insertion of blanks, duplicates,
certified reference materials and internal (non-certified)
reference material. QAQC samples make up 17% of the
total number of samples submitted, which is in line with
industry best-practices.
• The results of the QAQC data were assessed graphically
and is acceptable supporting the use of the laboratory
analyses for sylvinite for the MRE. A QAQC report was
produced.
1.7. VERIFICATION OF • The verification of significant intersections by either • Sampling and other drilling data was captured into MS
SAMPLING AND independent or alternative company personnel. Excel, then imported along with assay data into an MS
ASSAYING • The use of twinned holes. Access database. On import, checks on data are made for
errors.
• Documentation of primary data, data entry procedures,
data verification, data storage (physical and electronic) • All mineralised intervals used for the MRE were checked
protocols. and re-checked an compared against lithology and gamma
data, which provide a further check of grade and
• Discuss any adjustment to assay data.
thickness.
• As stated, K52 was the only historic hole for which assay
data was used in the MRE. To validate the historic hole, it
was twinned by ED_01, which supported the accuracy of
the K52 data.
1.8. LOCATION OF • Accuracy and quality of surveys used to locate drill holes • Drill-hole collars were surveyed by a professional surveyor
DATA POINTS (collar and down-hole surveys), trenches, mine workings using a DGPS, expected to be accurate to within ~200 mm.
and other locations used in Mineral Resource estimation. DX_07 and DX_09B were drilled at seismic survey stations
• Specification of the grid system used. which had been surveyed prior to drilling by a professional
surveyor using a DGPS.
• Quality and adequacy of topographic control.
• The drill-hole positions are given in UTM zone 32 S using
WGS 84 datum (Table in the announcement).
• Topographic elevation is from SRTM 90 satellite data,
though of relatively low resolution, it is sufficient for the
MRE.
1.9. DATA SPACING • Data spacing for reporting of Exploration Results. • The figure in the announcement shows the location of the
AND DISTRIBUTION • Whether the data spacing and distribution is sufficient to drill-holes. Those within the deposit extent are spaced
establish the degree of geological and grade continuity between 0.7 and 4 km apart.
appropriate for the Mineral Resource and Ore Reserve • Between drill-holes, 2D seismic data was important in
estimation procedure(s) and classifications applied. modelling the geometry (elevation and dip) of key
• Whether sample compositing has been applied. surfaces between holes. Kore Potash collected 60 km of
high frequency 2D data in 2019 using DMT GmbH&Co KG
of Essen, Germany (DMT). Lines were on an approximate
grid (figure in the announcement) and spaced between
240 and 800 m. The receiver interval and the source
interval were 10m.
• Beyond the area of the 2019 survey, historic oil industry
seismic data was used. These lines are between1.5 and 2.4
km apart and extend across all parts of the deposit in
various orientations, as shown on the figure in the
announcement.
• Owing to the continuity of the depositional setting of the
seams, their contacts and other surfaces and ‘markers’ can
be easily identified and correlated between drill-holes.
The change from sylvinite to carnallitite is obvious in drill-
holes based on visual observation, gamma-ray data and
laboratory analyses. Between drill-holes, on the seismic
data, the contacts/changes between sylvinite and
carnallitite are not visible. As described in Section 3.5, a
method of modelling these contacts/changes based was
developed to interpret the distribution of sylvinite
between drill-holes.
• The Competent Person (CP) has sufficient confidence that
the data spacing and the methods used for modelling are
sufficient to support grade and geological continuity
relative to the applied classification categories described
in section 3.12.
• For the reporting of sylvinite intersections (as used in the
MRE), samples within the sylvinite interval were
composited to a single grade and thickness, using the
standard length-weighted average method.
1.10. ORIENTATION OF • Whether the orientation of sampling achieves unbiased • The sylvinite grade is controlled by the original
DATA IN RELATION TO sampling of possible structures and the extent to which horizontally layered sedimentary deposition. Intersections
GEOLOGICAL this is known, considering the deposit type. have a sufficiently low angle of dip and drill-holes were
STRUCTURE • If the relationship between the drilling orientation and the drilled vertically; a correction of thickness for apparent
orientation of key mineralised structures is considered to thickness was not deemed necessary. Drill-hole inclination
have introduced a sampling bias, this should be assessed was surveyed to check verticality, it ranged -85° to -90°,
and reported if material. the hole dip through most intersections being between
88° and 90°.
1.11. SAMPLE • The measures taken to ensure sample security. • The chain of custody of samples was secure. At the rig, the
SECURITY core was under full supervision of a Company geologist. At
the end of each drilling shift, the core was transported by
Kore Potash staff to a secure site where it is stored within
a locked room.
• Sampling was carried out under the observation of
Company staff; packed samples were transported directly
from the site by Company staff to DHL couriers in Pointe
Noire 3 hours away. From there DHL airfreighted all
samples to the laboratory, either in Australia or Canada.
Samples were weighed before sending and on receipt of
the results weights were compared with those reported by
the lab.
1.12. AUDITS OR • The results of any audits or reviews of sampling • Kore’s sampling procedure has been reviewed on several
REVIEWS techniques and data. occasions by external parties, for the MRE for the Kola,
Dougou and DX Deposits.
• The supporting data has been checked by the external CP,
with inspection of logging sheets and laboratory analysis
certificates.
Section 2 Reporting of Exploration Results
(Criteria listed in the preceding section also apply to this section.)
Section 2 - Reporting of Exploration Results
JORC Criteria JORC Explanation Commentary
2.1 MINERAL • Type, reference name/number, location and ownership • The DX Deposit is entirely within the Dougou Mining
TENEMENT AND LAND including agreements or material issues with third parties Licence which is held 100% under the local company
TENURE STATUS such as joint ventures, partnerships, overriding royalties, Dougou Mining SARL which is in turn held 100% by
native title interests, historical sites, wilderness or Sintoukola Potash SA RoC, of which Kore Potash holds a
national park and environmental settings. 97% share. The Permit is valid for 25 years from 9th May
• The security of the tenure held at the time of reporting 2017.
along with any known impediments to obtaining a license • There are no impediments on the security of tenure.
to operate in the area.
2.2 EXPLORATION • Acknowledgment and appraisal of exploration by other • Potash exploration was carried out in the area in the
DONE BY OTHER parties. 1960's by Mines domaniales de Potasse d’ Alsace S.A.
PARTIES Holes K52 and K62 are within the Deposit area. High
quality geological logs are available for these holes. Hole
K52 intersected HWSS and was the initial reason for
Kore’s interest in the area, beginning with the twin-hole
drilling of K52 in 2012 by ED_01.
• Seismic data was acquired by oil exploration companies
British Petroleum Congo and Chevron during the 1980’s
and by Morel et Prom in 2006. The Company acquired
SEG-Y files for these surveys and this data has guided the
exploration and deposit modelling at DX.
2.3. GEOLOGY Deposit type, geological setting and style of mineralisation. • The potash seams are hosted by the 400-500 m thick
Loeme Evaporite formation of sedimentary evaporite
rocks. These are within the Congo Basin which extends
from the Cabinda enclave of Angola to southern Gabon
from approximately 50 km inland, extending some 200-
300 km offshore. The evaporites were deposited during
the Aptian epoch of the Lower Cretaceous, between 125
and 112 million years ago. Importantly, the sedimentation
was in a post-rift setting leading to the development of
evaporite layers with significant continuity.
• The evaporites formed by cyclic evaporation of marine-
sourced brines which were fed by seepage into an
extensive subsiding basin, each cycle generally following
the expected brine evolution and resultant mineral
precipitation model: dolomite then gypsum then halite
then the bitterns of Mg and K as chlorides. To precipitate
the thick potash beds the system experienced prolonged
periods within a range of high salinity of brine
concentration.
• Reflecting the Cl-Mg-K dominated brine composition,
halite (NaCl), carnallite (KMgCl3·6H2O) and bischofite
(MgCl2·6H2O) account for over 90% of the evaporite rocks.
• Carnallite is a rock comprised predominantly of carnallite
and halite. Sylvinite is a rock comprised predominantly of
sylvite and halite. The term ‘rock-salt’ is used to refer to a
rock comprising of halite without appreciable potash.
Both potash types are easily identified. Sylvinite is
typically reddish or pinkish in colour. Carnallite is coarser
grained, greasy and orange in colour.
• Importantly, bischofite does not occur in the floor or roof
of the HWS and TS; the nearest bischofite is over 130 m
vertically below these seams.
• At DX the evaporite stratigraphy is slightly elevated and
thinned relating to the presence of an underlying horst
block forming a paleo-topographic high in the pre- and
syn-rift rocks below the evaporite. This feature is referred
to as the ‘Yangala High’ and was an important ‘large-scale’
control on the development of sylvinite in the DX area.
• 11 evaporite cycles have been recognised, of which most
are preserved at DX, the important ‘Top Seam’ (TS) and
‘Hangingwall Seam’ (HWS) potash seams are within the
mid to upper part of cycle 9. Where sylvinite these are
referred to as the TSS and HWSS, where referred as TS
and HWS they could be sylvinite or carnallite
• The TSS is made up of several narrow high grade sylvinite
layers with barren rock-salt layers between them. The
individual layers within the TSS are numbered 5 to 9 from
lowest to uppermost. A model and MRE was completed
for 6-8 only (i.e. excluding seams 5 and 9). simply referred
to as the TSS hereon.
• The TSS and HWSS seams have an average thickness of
4.4 and 3.5 metres respectively within the MRE. The
HWSS is very high grade, being comprised of a single
massive bed comprising 53 to 63% sylvite.
• Capping the salt dominated part of the evaporite (Salt
Member or ‘Salt’) is a low permeability layer of anhydrite,
gypsum and clay (referred to as the ‘Anhydrite Member’)
between 10 and 16 m thick in drill-holes to date. It is at a
depth of between 290 and approximately 520 m at DX.
The contact between the SALT and the base of the
Anhydrite Member is referred to as the salt roof or
‘SALT_R’.
• The Anhydrite Member is covered by a thick sequence of
dolomitic rocks and clastic sediments of Cretaceous age
(Albian) to recent.
• Importantly, the SALT_R contact is an unconformity.
Reflecting this and that the layers within the Salt are
gently undulating, in some areas there is a greater
thickness of Salt above the seams (i.e. between the seams
and the Anhydrite Member) than in others, or the seams
may be ‘truncated’, as shown in the cross-section in the
announcement.
• Except where truncated by the unconformity at the
SALT_R, all layers in the Salt Member have good
continuity and the thickness of the interval between them
is relatively consistent. Even narrow mm-scale layers or
sub-layers can be correlated many km. In most holes, all
potash layers are present and have a low angle of dip
(mostly less than 10°).
• The potash seams were originally deposited as carnallite
but at DX have been replaced in some areas by sylvinite,
by a process of non-destructive leaching of Mg, OH and
some NaCl from carnallite, converting it to sylvite. The
conversion from carnallite to sylvinite leads to a
significant reduction of the seam thickness and a
concomitant increase of grade. This process has taken
place preferentially over the Yangala High, initiating from
the top of the Salt Member. The process advanced on a
laterally extensive ‘front’ and was efficient; when
converted to sylvinite, almost no residual carnallite
remains within the sylvinite.
• The zone within which carnallite seams have been
converted to sylvinite is termed the SYLVINITE zone. This
laterally extensive zone starts a short distance below the
SALT_R and extends down to typically 40-50 m below this
contact, but rarely as much as 80 m (as in drill-hole
ED_01). If the base of the SYLVINITE zone is part-way
through the potash seam, un-replaced carnallite occurs
immediately below the sylvinite part. In these situations,
the contact between the sylvinite and carnallite is abrupt
and easily identified in core.
• In the upper 5-30 m of the Salt Member, the sylvinite may
be further ‘leached’, leaving pale reddish coloured halite
with little to no KCl, referred to as ‘ghost’ seam and
generally still identifiable for lateral correlation purposes.
The zone within which the sylvinite is leached is termed
the LEACH zone.
• With reference to the above features, the main control on
the distribution of sylvinite is the position of the seams (in
vertical sense) relative to the SYLVINITE zone; if the seam
is above or below this zone they are ‘ghost’ (halite) or
carnallite respectively. This is shown in the cross-section
in the announcement.
2.4. DRILL HOLE • A summary of all information material to the • The borehole collar positions of the holes are provided in
INFORMATION understanding of the exploration results including a the announcement, along with the final depth.
tabulation of the following information for all Material • Holes were drilled vertically, the hole dip ranged from -
drill holes: 85° to -90°, the hole dip through most intersections being
• easting and northing of the drill hole collar between 88° and 90°. For the MRE, a dip of -90° was
• elevation or RL (Reduced Level – elevation above assigned to all drill-holes.
sea level in metres) of the drill hole collar • Positions of the holes in relation to other holes are shown
• dip and azimuth of the hole in the map in the announcement. All potash intersections
(or absence of) for all holes within the deposit area,
• down hole length and interception depth
including historic and ‘failed’ holes, are provided in the
• hole length. announcement. No information is excluded.
• If the exclusion of this information is justified on the basis
that the information is not Material and this exclusion
does not detract from the understanding of the report,
the Competent Person should clearly explain why this is
the case.
2.5 DATA • In reporting Exploration Results, weighting averaging • For the calculation of the grade over the full thickness of
AGGREGATION techniques, maximum and/or minimum grade truncations the seams, the standard length-weighted average method
METHODS
(e.g. cutting of high grades) and cut-off grades are usually of compositing was used to combine results of each
Material and should be stated. sample.
• Where aggregate intercepts incorporate short lengths of • No selective cutting of high or low-grade material was
high-grade results and longer lengths of low-grade carried out.
results, the procedure used for such aggregation should • No metal equivalents were calculated.
be stated and some typical examples of such
aggregations should be shown in detail.
• The assumptions used for any reporting of metal
equivalent values should be clearly stated.
2.6 RELATIONSHIP • These relationships are particularly important in the • Core and acoustic televiewer (ATV) images provide a
BETWEEN reporting of Exploration Results. reliable measurement of hole dip. The ATV images
MINERALISATION • If the geometry of the mineralisation with respect to the provide azimuth. ATV data was not collected for DX_07
WIDTHS AND drill hole angle is known, its nature should be reported. and DX_09B.
INTERCEPT LENGTHS • Seams have sufficiently low degree of dip, and drill-holes
• If it is not known and only the down hole lengths are
reported, there should be a clear statement to this effect are close enough to vertical that a correction of
(e.g. ‘down hole length, true width not known’). intersected thickness was not deemed necessary.
2.7 DIAGRAMS • Appropriate maps and sections (with scales) and • A relevant map, tables and a cross-section are provided in
tabulations of intercepts should be included for any the announcement.
significant discovery being reported These should include,
but not be limited to a plan view of drill hole collar
locations and appropriate sectional views.
2.8 BALANCED • Where comprehensive reporting of all Exploration Results • All relevant exploration data is reported. All intersections
REPORTING is not practicable, representative reporting of both low including carnallitite and ‘ghost’ seams within the deposit
and high grades and/or widths should be practiced area are provided in the table in the announcement. The
avoiding misleading reporting of Exploration Results. reporting is balanced and not misleading.
2.9 OTHER • Other exploration data, if meaningful and material, • Holes DX_05B, DX_06, DX_08 were stopped above the
SUBSTANTIVE should be reported including (but not limited to): evaporite due to drilling difficulties. DX_09B is named
EXPLORATION DATA geological observations; geophysical survey results; such as the first attempt to drill this hole failed. DX_09B
geochemical survey results; bulk samples – size and was drilled successfully at the same location.
method of treatment; metallurgical test results; bulk • As stated in section 1.9, 60 km of high frequency 2D
density, groundwater, geotechnical and rock seismic data was acquired in 2019. This data was used for
characteristics; potential deleterious or contaminating the MRE, for the modelling of the seams between drill-
substances. holes and for the identification of structures.
2.10 FURTHER WORK • The nature and scale of planned further work (e.g. tests • Infill drilling is recommended initially for the area planned
for lateral extensions or depth extensions or large-scale for early years of mining. Additional holes would provide
step-out drilling). new data points for the model, for the depths of the
• Diagrams clearly highlighting the areas of possible seams and importantly for the depth of the base of the
extensions, including the main geological interpretations SYLVINITE and LEACH zones.
and future drilling areas, provided this information is not • In support of the depth conversion of seismic data,
commercially sensitive. additional downhole density and full waveform sonic
(FWS) data and possibly vertical seismic profiling (VSP) or
check-shot data would be helpful.
• It would be beneficial to carry out infill 2D seismic
surveying along lines between the existing lines to achieve
a 100-200 m line spacing over the Indicated MRE or a
portion of it. This should allow more confident correlation
of structural features between seismic lines.
• In advance of mining, 3D seismic surveying should be
carried out to provide a detailed ‘image’ of the Salt
Member and overlying rocks, to guide mine planning.
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)
Section 3 – Estimation and Reporting of Mineral Resources
JORC Criteria JORC Explanation Commentary
3.1. DATABASE • Measures taken to ensure that data has not been • Geological data is recorded in hardcopy then captured
INTEGRITY corrupted by, for example, transcription or keying errors, digitally. During import into Micromine© software, an
between its initial collection and its use for Mineral error file is generated identifying any overlapping
Resource estimation purposes. intervals, gaps and other forms of error. The data is then
• Data validation procedures used. compared visually in the form of strip logs against
geophysical data.
• Assay data was imported from laboratory certificates into
an Access database. The importing process checks for
errors. Original laboratory certificates (pdf files) are kept
as a secure record.
• The grade and depth data for all mineralised intervals
used in the MRE were thoroughly checked to ensure no
errors were present.
3.2. SITE VISITS • Comment on any site visits undertaken by the Competent • The CP visited the site from 9th to 12th January 2020 to
Person and the outcome of those visits. observe the drill-core, drilling of the evaporite and review
• If no site visits have been undertaken indicate why this is sampling and logging procedures. The CP found all to be
the case. of acceptable standard.
3.3. GEOLOGICAL • Confidence in (or conversely, the uncertainty of) the • Recognition and correlation of potash and other
INTERPRETATION geological interpretation of the mineral deposit. important layers or contacts between drill-holes is
• Nature of the data used and of any assumptions made. straightforward and did not require assumptions to be
made; each being distinct when thickness, grade
• The effect, if any, of alternative interpretations on
distribution, and stratigraphic position relative to other
Mineral Resource estimation.
• The use of geology in guiding and controlling Mineral layers is considered. Correlation is further aided using
Resource estimation. downhole geophysical data.
• The factors affecting continuity both of grade and • Between drill-holes there is reliance on seismic data to
geology. guide the geometry (elevation and dip) of the seams,
which in turn influences the extent of sylvinite.
• Sylvinite cannot be ‘seen’ directly in the seismic data. As
described above, the extent of sylvinite is controlled
largely by the thickness of the SYLVINITE and to a lesser
extent the LEACH zones. These are determined from the
drill logs. If future drilling leads to changes of the
thickness of these zones between the drill-holes, then the
MRE would change accordingly.
• Some uncertainty is inherent in seismic interpretation,
especially further away from control points (drill-holes);
this is reflected in the classification of the Indicated or
Inferred categories.
• The geological model for the formation of sylvinite at DX is
summarised in section 2.3. It is well understood. This
model was used in the construction of the model for the
MRE, as described in 3.5.
• The factors affecting continuity are as follows.
o Where the seams are truncated at the unconformity
at the top of the Salt Member, the seams are absent.
o Below the SYLVINITE zone, there is no sylvinite and
only carnallite is present. This is an abrupt change
affecting the continuity.
o Close to the SALT_R, within the LEACH zone the
sylvinite may be ‘leached’ and is barren.
o Structures were observed within the MRE area in the
2D seismic data. Two structural ‘exclusion areas’ were
delineated and excluded from the MRE (see map in
the announcement). Other structures were identified
but were not correlated between seismic lines.
• The above factors were a consideration in the application
of the 15% geological loss applied to the MRE.
3.4 DIMENSIONS • The extent and variability of the Mineral Resource • The DX deposit extent covers an area of approximately 4
expressed as length (along strike or otherwise), plan by 10 km. The sylvinite is found at a depth of
width, and depth below surface to the upper and lower approximately 310 to 490 m below surface. Dip of the
limits of the Mineral Resource. seams is low, up to 20° but mostly less than 5-10°.
• Within this area, the sylvinite is not continuous; there are
internal areas where the seams are carnallite, generally in
areas where, due to gentle undulation, the seams are a
greater distance from the SALT_R surface and therefore
below the SYLVINITE zone.
• The TSS and HWSS seams have an average thickness of 4.4
and 3.5 metres respectively within the MRE.
3.5 ESTIMATION AND • The nature and appropriateness of the estimation • Drill-holes within and surrounding the deposit were used
MODELLING technique(s) applied and key assumptions, including to construct the model (map in the announcement). Even
TECHNIQUES treatment of extreme grade values, domaining, if not sylvinite, the holes around the deposit contain the
interpolation parameters and maximum distance of same seams and other key contacts such as the SALT_R
extrapolation from data points. If a computer assisted and are therefore helpful in guiding the model close to
estimation method was chosen include a description of and beyond the deposit extents.
computer software and parameters used. • The seismic data was imported in SEG-Y format into
• The availability of check estimates, previous estimates Micromine™ 2013 software and viewed in section and in
and/or mine production records and whether the Mineral 3D. The data has been converted to depth by DMT
Resource estimate takes appropriate account of such Petrologic (Petrologic) application of a velocity model and
data. then ‘tied’ to the drill-hole data using the main reflectors.
• The assumptions made regarding recovery of by- Drill-holes DX_07 and DX_09B postdated well-tying of the
products. seismic data. Predicted DX_09B intersections were several
metres ‘out’ in terms of the depth of the surfaces based
• Estimation of deleterious elements or other non-grade
on the seismic data and so the HWS_R and SALT_R
variables of economic significance (e.g. Sulphur for acid
surfaces had to be adjusted accordingly to fit the new
mine drainage characterisation).
drill-hole data.
• In the case of block model interpolation, the block size in
• For the historic seismic data, a uniform velocity of
relation to the average sample spacing and the search
between 3900 and 4200 m/s was used for a simple depth
employed.
conversion of the seismic data, ‘hanging’ it from the top of
• Any assumptions behind modelling of selective mining
the Salt Member (an obvious reflector that can be ‘tied’ to
units. the same contact in drill-hole data).
• Any assumptions about correlation between variables.
• For the 2019 seismic data, Petrologic provided an
• Description of how the geological interpretation was used interpretation of key surfaces; notably the SALT_R and the
to control the resource estimates. ‘base of cycle 8’ (BoC8), a reflector within the upper part
• Discussion of basis for using or not using grade cutting or of the Salt Member. The SALT_R and the ‘roof of HWS’
capping. (HWS_R) surfaces were modelled as ‘strings’ (in
• The process of validation, the checking process used, the Micromine 2013) by Mr. A Pedley, a Consultant to Kore
comparison of model data to drill hole data, and use of Potash. Between drill-holes the seismic data was used to
reconciliation data if available. model the elevation of these surfaces.
• CSA Global (South Africa) then imported these strings into
Leapfrog Geo to create ‘meshes’ for the SALT_R and the
HWS_R, using Leapfrog’s ‘radial basis’ function. These
surfaces were then imported into Datamine Studio 3 and
‘resampled’ on a 50x50 m grid.
• The HWS_R was then used as a ‘reference horizon’ to
guide the models for the other key potash seam surfaces;
the floor of the HWS, and the floor and roof of the TS. This
was achieved by ‘gridding’ (using Inverse Distance Cubed
– IDW3) the thickness (as intersected in the drill-holes) of
the interval between these surfaces from the HWS_R,
across the deposit. By this method, ‘seam models’ for the
HWSS and TSS (irrespective of whether they are carnallite
or sylvinite) were created.
• To determine the extent and thickness of the sylvinite
areas, the base of the SYLVINITE zone was determined
from the drill-hole data. This is visible if this contact is
within a potash layer. If occurring between the potash
layers, the mid-point them was used. The thickness of this
interval was ‘gridded’ in Datamine using IDW3 into the
50x50 m grid, then subtracted from the elevation of the
SALT_R to create the SYLVINITE zone floor surface.
Similarly, the floor of the LEACH zone was created.
• The seam models were then cut by these surfaces, to give
surfaces for the top and base of the sylvinite portion of
the seams.
• Minor manual edits were made to the SYLVINITE surface
to remove pockets/slivers of carnallite in the models that
were considered unlikely.
• The maximum thickness of the seam models was ‘capped’
by the maximum thickness observed in the drill-hole data
i.e. so that there are no parts of the model where the
seams are thicker than the maximum intersected
thickness.
• The products of the above steps were final ‘sylvinite-only’
wireframes (closed solids) for HWSS and TSS5-9. The
cross-section in the announcement illustrates these.
• The wireframes were checked against all borehole
intersections on screen in Micromine.
• A surface was also created for the extent of carnallite
Hangingwall Seam (HWSC) to help the understanding of
the distribution of this material in the floor of the seam,
being an important consideration for solution mining.
• Block models of 50 by 50 metres with variable height
were created for the HWSS. TSS 5-9 and TSS wireframes.
KCl, Mg and insoluble content were estimated into the
block model using Inverse Distance Weighting Squared
(IDW2), using the composited drill-hole assay data.
• Both Mg and insoluble material are considered
deleterious elements but are only present in extremely
small quantities, less than in most potash deposits
globally. They were estimated for completeness.
• Density was calculated for each block, based on the grade,
as discussed in section 3.11. All blocks with a height of less
than 1.0 m were excluded from the MRE.
• In the CPs view, the resulting model reflects the geological
controls well, more so than would have been achieved
using the potash industry standard polygonal method
extrapolating the grade and thickness of intersections to
areas around drill-holes. The CP is satisfied that the grade
modelling and estimation method used is appropriate to
the assigned classification.
• No top or bottom cutting based on grade was carried out.
The TSS intersection in drill-hole DX_03 is a partial (thin)
intersection and as a result is higher grade than
intersections in other drill-holes but was not excluded
from the MRE. Elsewhere the lateral grade variation is
relatively low.
• The estimated grade values in the block model were
checked in section in Micromine, comparing against the
supporting assay data, for all drill-holes.
• The eastern and southern limits of the block-models were
cut by the ‘maximum extent of sylvinite’ a boundary
interpreted from seismic data. Beyond this the seams are
considered unlikely to be sylvinite, reflecting the limit of
influence of the Yangala High, as described in section 2.3.
• The block model was also cut to exclude all material
within the two structural exclusion zones (refer to map in
the announcement).
• Extrapolation beyond data points is limited a distance
deemed appropriate in terms of the confidence of the
classification into Inferred and Indicated, as described in
section 3.13.
• A further 15 % of the tonnage for both seams was
deducted from the totals as a provision for unmodelled
geological losses due to faults, internal carnallitite zones
or leaching of the sylvinite. This was not applied to the
block model itself but to the tabulation of the MRE only.
• The CP is confident in the grade estimation method used,
aided by the fact that the grade variation between holes is
relatively low and that there appears to be no discernible
directional control on sylvinite or grade. More complex
methods such as kriging were not deemed appropriate.
• A check estimate of the Indicated MRE was conducted
using a simple 2D method using polygons around the
sylvinite intersections based on an Area of Influence (AOI)
of 800 m radius around the drill-holes. If the check
estimate AOIs are also cut by the structural exclusions and
the ‘maximum extent of sylvinite’ (described in section
3.5) as per the MRE. The check estimate tonnages are
slightly lower than those of the MRE (25.6 Mt vs 27.9 Mt
for the HWSS, 45.9 Mt vs 50.9 Mt for the TSS). The check
estimate KCl grades are within 3% of those of the MRE.
3.6 MOISTURE • The sylvinite seams are dry and the estimate is on a dry
basis. Moisture content was checked by weighing before
and after drying.
3.7 CUT-OFF • The basis of the adopted cut-off grade(s) or quality • For the MRE a 15% KCl cut-off-grade was applied though
PARAMETERS parameters applied. no blocks have a grade less than this.
• The deleterious components Mg and insolubles are so low
and consistent at DX that these were not considered in
the selection/exclusion of blocks from the model.
3.8 MINING FACTORS • Assumptions made regarding possible mining • The DX PFS and Ore Reserve estimation is based on
OR ASSUMPTIONS methods, minimum mining dimensions and internal selective solution mining of KCl using NaCl-saturated brine
(or, if applicable, external) mining dilution. It is injected into the sylvinite layers to develop caverns. The
always necessary as part of the process of solution mining method utilises one well per cavern,
determining reasonable prospects for eventual drilled to a vertical depth of approximately 460 m.
economic extraction to consider potential mining • The solution mining method is divided into four phases:
methods, but the assumptions made regarding (1) sump development, (2) roof development, (3)
mining methods and parameters when estimating continuous mining and (4) cavern closure.
Mineral Resources may not always be rigorous.
• The design for the single-well caverns is based on a radius
Where this is the case, this should be reported with
of 60 m, with cavern centers spaced 144 m apart. This
an explanation of the basis of the mining assumptions
layout results in an aerial extraction ratio of 62.9% with a
made.
volumetric extraction of 46.2%.
• In the early stages of the PFS, dual-well caverns were
numerically modelled for stability. This modelling was
done with 70 m cavern radius and spacing between wells
of 80 m. The results of the numerical modelling for cavern
stability indicated that in all cases, the roof and pillars
were stable and no leakage between caverns was
indicated.
• For the single-well caverns, the radius was reduced from
70 m, for the dual-well configuration, to 60 m so cavern
roof stability is improved. On this basis, the high-
extraction single-well caverns were adopted for the PFS.
Additional numerical modelling of single-well cavern
deformations will be undertaken as part of the Definitive
Feasibility Study (DFS). The caverns are expected to be
stable, but some yielding of pillars may occur, however no
adverse consequences are expected as a result.
3.9 METALLURGICAL • The basis for assumptions or predictions regarding • The Dougou Extension Sylvinite ore represents a simple
FACTORS OR metallurgical amenability. It is always necessary as mineralogy, containing only sylvite, halite and traces of
ASSUMPTIONS part of the process of determining reasonable other soluble elements. Solution mining brine is expected
prospects for eventual economic extraction to to contain negligible amounts of insoluble materials. Brine
consider potential metallurgical methods, but the of this nature is well understood globally and can be
assumptions regarding metallurgical treatment readily processed.
processes and parameters made when reporting • Dissolution test work was performed on DX core samples
Mineral Resources may not always be rigorous. from both the HWSS and TSS at Agapito Associates Inc.
Where this is the case, this should be reported with laboratory in Grand Junction, Colorado, USA. The testing
an explanation of the basis of the metallurgical provided a basis for the predicted dissolution
assumptions made. characteristics within the caverns, and the resulting brine
KCl concentration and flow to the process plant. These
parameters were used in the design of the process plant.
3.10 ENVIRONMENTAL • Assumptions made regarding possible waste and • The deposit area is outside of the ‘Integral’ zone Conkuati
FACTORS OR process residue disposal options. It is always Douali National Park. It is within the ‘buffer’ and
ASSUMPTIONS necessary as part of the process of determining ‘economic development’ zones of the park.
reasonable prospects for eventual economic • A comprehensive Environmental Social Impact
extraction to consider the potential environmental Assessment (ESIA) was prepared and approved for the
impacts of the mining and processing operation. Dougou Mining Permit and will be amended for DX.
While at this stage the determination of potential
• Discharge brine from the process plant will be disposed to
environmental impacts, particularly for a Greenfields
the ocean via a buried pipe from the process plant to the
project, may not always be well advanced, the status
coast. A brine disposal diffuser will be located about 250
of early consideration of these potential
m from the shoreline. The diffuser will be designed to
environmental impacts should be reported. Where
ensure proper disposal flow characteristics.
these aspects have not been considered this should be
reported with an explanation of the environmental • Based on preliminary reviews, subsidence is not expected
to result in significant surface impacts. Subsidence will be
assumptions made.
examined more closely in the DFS.
• A Reclamation (Closure) cost allowance is included to
rehabilitate areas used for the process plant, wellfield and
other offsite infrastructure.
3.11 BULK DENSITY • Whether assumed or determined. If assumed, the • At DX (and at Kola), it has been shown that density of
basis for the assumptions. If determined, the method sylvinite is directly correlated to the relative proportion of
used, whether wet or dry, the frequency of the sylvite and halite (which have known densities of 1.99 and
measurements, the nature, size and 2.16 t/m3 respectively). These can be determined from
representativeness of the samples. the laboratory analytical data. This method of density
• The bulk density for bulk material must have been determination is used in some operating potash mines. At
measured by methods that adequately account for DX the method is made simpler due to the small amounts
void spaces (vugs, porosity, etc.), moisture and (less than 2.5%) of other minerals i.e. that effectively all K
differences between rock and alteration zones within is within sylvite and that the balance of the mass can be
the deposit. assumed to be halite.
• Discuss assumptions for bulk density estimates used • A regression line of KCl against density (measured by gas
in the evaluation process of the different materials. pycnometry) for samples was plotted. The formula for the
regression line is DENSITY = (KCl-742.53)/(-337.53) where
KCl is % and density is tonnes per cubic metre. Using is
formula and the KCl % for each block the density was
assigned to each block for the HWSS, and TSS models. The
average density for the seams is 2.03 and 2.11 t/m3
respectively. These densities are similar to the sylvinite
density determined for deposits elsewhere, typically
between 2.00 and 2.15 t/m3.
3.12 CLASSIFICATION • The basis for the classification of the Mineral • A portion of the deposit has sufficient drill-hole control
Resources into varying confidence categories. seismic data to assume continuity of grade and geology
• Whether appropriate account has been taken of all sufficient for it to be classified as Indicated Mineral
relevant factors (i.e. relative confidence in Resources.
tonnage/grade estimations, reliability of input data, • A portion of the DX deposit is classified as Inferred, being
confidence in continuity of geology and metal values, supported by relatively widely spaced drill-hole and
quality, quantity and distribution of the data). seismic data. Within this area grade and geological
• Whether the result appropriately reflects the continuity is implied but will require additional data-
Competent Person’s view of the deposit. points to verify.
• For the extent of the Mineral Resources within the
Inferred and Indicated categories, and Area of Influence
(AOI) around drill-holes was determined, based on an
understanding of the controls on the sylvinite, and
confidence in the model in relation to data points, and
with comparison of AOI’s used for potash deposits
elsewhere. It is important to note that within the AOI only
a portion is sylvinite unlike at other sylvinite deposits
where the AOI is the extent of the sylvinite.
• Indicated Mineral Resources are limited to sylvinite within
an area guided by an AOI with a radius of 1.0 km around
the drill-holes DX_01, K62, ED_03, ED_01.
• Inferred Mineral Resource are limited to sylvinite within
an area guided by an AOI with a radius of 2.5 km around
inner holes, and a 1.5 km radius beyond ‘outer’ holes
(DX_03 and DX_02) and exclude the Indicated Mineral
Resource area.
• As explained in section 3.5, the block-model and thus the
MREs were ‘cut’ on the east and southeast side of the
deposit by the interpreted ‘maximum extent of sylvinite’
and the structural exclusion zones.
• The Mineral Resource Estimate for the different
categories for each seam within the DX Deposit are shown
in table form in the announcement, after the application
of the 15% geological loss.
• The CP considers the classification of the Mineral
Resources to be appropriate.
3.13 AUDITS OR • The results of any audits or reviews of Mineral • The CP has reviewed all exploration data that have been
REVIEWS Resource estimates. used in the MRE reviewed the model and estimation
methodology and checked assay data and composites
used for the MRE.
• In using CSA Global to assist with the work, there has been
additional review of the drill-hole data, the resource
model, and estimation procedure.
3.14 DISCUSSION OF • Where appropriate a statement of the relative • The accuracy of the estimate reflects the confidence
RELATIVE ACCURACY/ accuracy and confidence level in the Mineral Resource assigned as per the resource classification.
CONFIDENCE estimate using an approach or procedure deemed • It is likely that additional data points in the form of drill-
appropriate by the Competent Person. For example, hole and seismic data would lead to an adjustment of the
the application of statistical or geostatistical seam model for the Inferred MRE, with a similar chance of
procedures to quantify the relative accuracy of the a global increase or decrease in tonnage.
resource within stated confidence limits, or, if such an
• Additional data is less likely to lead to a global change to
approach is not deemed appropriate, a qualitative
the Indicated MRE. Local changes to the Indicated MRE
discussion of the factors that could affect the relative
are possible.
accuracy and confidence of the estimate.
• The main impact would be changes to the modelled
• The statement should specify whether it relates to
position of the seams relative to the LEACH and SYLVINITE
global or local estimates, and, if local, state the
zones, as described in section 3.3.
relevant tonnages, which should be relevant to
technical and economic evaluation. Documentation • As stated in section 3.3 it is also possible that structures
impact on the continuity of the sylvinite.
should include assumptions made and the procedures
used. • The above factors were a consideration in the
classification and in the allocation of the 15% geological
• These statements of relative accuracy and confidence
of the estimate should be compared with production loss factor.
data, where available. • The check-estimate described in section 3.5 provides
support for the MRE.
• It is unlikely that further data will impact significantly on
the grade of the seams as the grade variation is relatively
low. If the proportion of TSS to HWSS changed
significantly (within the Inferred MRE), the average ‘total’
grade of the deposit would change accordingly, the HWSS
being significantly higher grade than the TSS.
Section 4 Estimation and Reporting of Ore Reserves
(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section)
Criteria JORC Code explanation Commentary
Description of the Mineral Resource estimate used as a basis for the The Mineral Resource described in Section 2 of the
conversion to an Ore Reserve. PFS identifies 79 million tonnes of Indicated
Clear statement as to whether the Mineral Resources are reported Resource, including the HWSS and TSS for beds 6
additional to, or inclusive of, the Ore Reserves. through 8. The Resource is identified in an area
defined by interpretation of the 2D seismic data
and supported by eight cored and assayed drill
holes with three core holes within the mine plan
Mineral Resource area. There is no Measured Mineral Resource. The
estimate for mine plan is exclusively within the identified
conversion to Ore Indicated Resource for the Hanging Wall Seam
Reserves (HWS) and Top Seam (TS) for beds 6 through 8. The
large difference in the Indicated Resource and the
Probable Reserves is because the mine plan did not
include all the Indicated Resource areas. The
reported Mineral Resource is inclusive of the Ore
Reserves and this is specified in each tabulation of
Mineral Resources.
Comment on any site visits undertaken by the Competent Person and the The CP for the Ore Reserves, Dr Michael Hardy of
outcome of those visits. Agapito Associates Inc. (AAI), has not visited the
Site visits If no site visits have been undertaken indicate why this is the case. site. A site visit was not considered necessary as
other geotechnical representatives of AAI have
been to the site and AAI’s role was limited to
Criteria JORC Code explanation Commentary
developing the mine plan based on the resource
definition provided by other Kore Potash personnel
and respected professionals.
The type and level of study undertaken to enable Mineral Resources to be The Ore Reserve estimate is based on a Pre-
converted to Ore Reserves. Feasibility Study (PFS) that includes a mine plan
The Code requires that a study to at least Pre-Feasibility Study level has which is technically achievable and economically
been undertaken to convert Mineral Resources to Ore Reserves. Such viable. Modifying factors include loss of resource
Study status
studies will have been carried out and will have determined a mine plan because of dip of the beds, pregnant brine
that is technically achievable and economically viable, and that material remaining in the caverns, unforeseen geologic
modifying factors have been considered. factors and plant losses.
The basis of the cut-off grade(s) or quality parameters applied. The Ore Reserve includes mining of both HWSS and
TSS beds 6 to 8. The KCl grade for the HWSS is
exceptional compared to other mined potash beds.
The TSS has high-grade sylvinite seams which are
separated by halite interbeds. A potash grade of
Cut-off parameters 30% KCl is considered necessary for selective
solution mining of potash. Within the Reserve, all
KCL grades in blocks to be selectively solution
mined are higher than 30%
The method and assumptions used as reported in the Pre-Feasibility or For the PFS solution mining plan, single-well
Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e. caverns were adopted. The decision to use single-
Mining factors or
either by application of appropriate factors by optimization or by well caverns was based on the need to locate
assumptions
preliminary or detailed design). caverns as close to each other as possible to
maximize resource recovery and the Reserves for
Criteria JORC Code explanation Commentary
The choice, nature and appropriateness of the selected mining method(s) the Dougou Extension (DX). The 2D seismic and
and other mining parameters including associated design issues such as new drill holes completed as part of the PFS
pre-strip, access, etc. resulted in better definition of the extent,
The assumptions made regarding geotechnical parameters (e.g. pit thickness and dip of the floor of the resource.
slopes, stope sizes, etc.), grade control and pre-production drilling. Solution mining of large dual-well caverns, as
proposed in the Scoping Study, resulted in reduced
The major assumptions made, and Mineral Resource model used for pit
resource recovery in comparison to the smaller
and stope optimisation (if appropriate).
single well caverns. This configuration resulted in
The mining dilution factors used. additional wells, but higher resource recovery and
The mining recovery factors used. mine life.
Any minimum mining widths used.
The manner in which Inferred Mineral Resources are utilised in mining The plant is designed to produce 400,000 tpa of
studies and the sensitivity of the outcome to their inclusion. Muriate of Potash (MoP) with a purity of 98.5%
The infrastructure requirements of the selected mining methods. KCl. Recovery of resource is planned in the HWSS
and TSS where they exist. To meet this production
goal, 25 caverns at a minimum and 3 additional to
allow flexibility in operations will be developed.
and put into operation at start-up and replaced
over the 19-year mine life.
The adopted method of solution mining will inject
a hot brine with near saturation of NaCl and KCl
content of approximately 90 to 100 g/l. The brine
will selectively dissolve the KCl to produce a brine
feed to the plant of up to 165 g/l KCl. Laboratory-
scale dissolution testing was conducted to predict
dissolution characteristics, and modelling of brine
concentrations has verified the expected KCl
Criteria JORC Code explanation Commentary
concentration of 165 g/l in the HWSS. Brine
concentration is expected to be lower in the TSS.
The steps in solution mining is to first develop a
sump in the salt below the lowest potash bed
available, then to expand the top of the sump with
both steps utilizing an oil or nitrogen cap to inhibit
vertical cavern growth. When the roof is
developed, the oil/gas cap will be removed and
solution mining of the lowest beds (HWSS or the
TSS) can be achieved. If the HWSS and TSS are
present, sump development in the TSS will follow
completion of mining in the HWSS.
Other mining techniques were evaluated during
the Scoping Study and these included dual-well
caverns as practiced in Saskatchewan and
horizontal wells as practiced by Intrepid, Natural
Soda, and in Turkey (Eti Soda and Kazan). The dip
of the beds and the variability of the dip favoured
the single-well plan.
Cavern stability and size of the caverns was based
on modelling of the larger dual-well caverns and
geomechanical parameters from the Definitive
Feasibility Study (DFS) of the nearby Kola Project
that is owned by KORE Potash.
Criteria JORC Code explanation Commentary
The selected areal extraction ratio is 63%, with the
caverns approximately circular with a radius of 60
meters and pillars between caverns of 24 meters.
The volumetric extraction ratio is 46%. This
configuration is likely to be stable during
operations when the pressure in the caverns will
support the roof. Pillar degradation is possible, and
subsidence or interconnection of caverns is not
expected to impede the mine plan.
The modifying factors in converting the Mineral
Resource to Ore Reserves are as follows;
• TSS Seams 5 and 9: The interlaying salt
layer between Seams 5 and 6 and Seams 8
and 9 were considered too large to allow
economical extraction and were excluded
from Ore Reserve classification.
• Mine Plan Boundary: The mine plan
boundary is defined in Figure 8, and all
Mineral Resource outside this boundary
have been excluded from the mine plan.
• Pillars: The pillar losses between caverns
were calculated and used as a modifying
factor.
• Dip: The layout of the caverns results in a
loss of tonnage due to the dip of the floors
of the caverns. The modifying factor was
based on the calculated loss per cavern.
Criteria JORC Code explanation Commentary
• Brine Entrapment: Approximately 18% of
KCl remains in the cavern at the end of
cavern life for an average cavern recovery
ratio of 82% (assuming the brine
concentration within a cavern was fully
saturated).
• Geological anomalies: An allowance of
15% for the HWSS and TSS for unknown
geological anomalies was applied.
• TSS Mining Loss: An allowance of 15% for
mining uncertainty in the TSS bed was
applied.
Mining dilution factors are not applicable to
solution mining. Modelling completed for the PFS
incorporates the transition from sump
development with the production of brine of high
NaCl content and no KCl to a high KCl
concentration brine once solution mining is
advanced to mine the HWSS or the TSS. During this
transition from sump mining to potash mining,
brine grades less than 90 g/l will be discarded or
recirculated. Dilution factors generally associated
with conventional mining involve reduction
(dilution) of the ore grade delivered to the plant
because of mining low-grade material, either
above or below the economically viable ore zone.
Criteria JORC Code explanation Commentary
The mining recovery factors include the areal
extraction ratio of 63% (volumetric extraction of
46%) and the losses due to the geologic
uncertainty and the loss of brine remaining in the
cavern. Plant losses are estimated to be 1.5%. The
final product will be 98.5% pure KCl with 1.5%
NaCl.
Inferred Mineral Resources have not been
quantified into the mining plan.
The infrastructure requirements for solution
mining include piping for delivery of the solute and
recovery of the pregnant brine, wellfield pumps,
electrical, instrumentation and roads.
Instrumentation at the well head includes flow,
temperature and brine density. Sampling of brine
at the well head will be done manually. Production
piping will be insulated to minimize temperature
losses in the solvent and product brine. Cavern
development pipelines will not be insulated.
The metallurgical process proposed and the appropriateness of that The selective solution mining process for DX is
process to the style of mineralization. expected to deliver brine to the process plant
Whether the metallurgical process is well-tested technology or novel in containing (by weight) 66.8% water, 18.6% NaCl,
Metallurgical factors 13.4% KCl, 1.1% MgCl2, and 0.1% CaSO4 at a
nature.
or assumptions temperature of 60°C. All the above elements will
The nature, amount and representativeness of metallurgical test work
be fully dissolved within the brine. Brine of this
undertaken, the nature of the metallurgical domaining applied and the
corresponding metallurgical recovery factors applied.
Criteria JORC Code explanation Commentary
Any assumptions or allowances made for deleterious elements. nature is well understood globally and can be
The existence of any bulk sample or pilot scale test work and the degree readily processed.
to which such samples are considered representative of the orebody as a
whole. Crystallisation is the processing method selected
For minerals that are defined by a specification, has the Ore Reserve for the DX Project and is well established in the
estimation been based on the appropriate mineralogy to meet the potash industry. KCl crystallisation involves the
specifications? gradual cooling of KCl-rich brine and relies on a
strong relationship between KCl solubility and
brine temperature. As the brine is cooled, the
amount of KCl that can remain in solution
decreases. Therefore, KCl crystallises as brine is
cooled, while most NaCl remains in solution. KCl
crystallisation is known to yield higher KCl recovery
than conventional recovery methods used for
separation of KCl solids from NaCl solids, such as
flotation.
The estimated KCl losses are due to:
• Purge stream (0.50%): A purge stream is
required to control the level of MgCl2 in
the process brine. MgCl2 is preferentially
soluble to KCl and will gradually displace
KCl if it is not controlled. A small portion
of brine is bled off and disposed to
manage the level of MgCl2 in the brine,
and this also results in a loss of KCl. The
DX design includes a purge stream.
Criteria JORC Code explanation Commentary
• Boilout (0.15%): Crystallisation vessels are
descaled with water using a process called
‘boilout’, which results in some loss of KCl
from the walls of the vessels, directed to
brine discharge.
• Dust (0.29%): Dust losses to the
atmosphere occur in the process of drying,
and also after KCl is dried.
• Spills and washdowns (0.20%): The plant
will occasionally have process upsets and
cleaning procedures which may result in a
loss of KCl to brine discharge.
• Offsite transportation losses (0.35%):
Some allowance is made for
transportation losses during transport of
MoP and during ship loading at the marine
location.
The total losses are expected to be 1.49%, and
therefore, the total process KCl recovery is
expected to be 98.5%.
Some impurities are expected to accompany the
final MoP product. The minimum KCl content for
K60 MoP is 95% KCl, however the DX process is
expected to yield a product grade of 98.5% KCl.
The primary basis for the above assumptions was a
detailed mass balance, produced by subject matter
Criteria JORC Code explanation Commentary
experts in the field of potash crystallisation and
potash dry processing, with supplementary input
from a world-renowned supplier of potash
crystallisation equipment.
Furthermore, dissolution test work was performed
on DX core samples from both the HWSS and TSS
at Agapito Associates Inc. laboratory in Grand
Junction, Colorado, USA. The testing provided a
basis for the predicted dissolution characteristics
within the caverns, and the resulting brine KCl
concentration and flow to the process plant. These
parameters were used in the design of the process
plant and became the basis for the prediction of
LOM production for the DX project.
The status of studies of potential environmental impacts of the mining The Dougou Extension project area falls within the
and processing operation. Details of waste rock characterisation and the Dougou mining Licence which has a 25 year ESIA
consideration of potential sites, status of design options considered and, approval in place. The DX scope will require an
where applicable, the status of approvals for process residue storage and amendment to the ESIA and this application would
waste dumps should be reported. be prepared simultaneously with the execution of
Environmental
the DFS phase of the project. The base line studies
for the Dougou ESIA and the base line studies for
the Kola infrastructure corridors (power, gas and
overland access) will provide required information
for the amendment application.
Criteria JORC Code explanation Commentary
Additional baseline studies required to complete
the application will be centered around new areas
that would be affected by the DX project.
There are no waste rock dumps or process residue
storage facilities required for the scope of the DX
project. Waste salt brine is planned to be disposed
of back into the ocean. The disposal of waste brine
into the ocean was investigated and included in the
Kola ESIA which was approved by the regulator
when the Kola ESIA was granted a 25-year approval
in March 2020.
The existence of appropriate infrastructure: availability of land for plant The project infrastructure is comprised of a mine
development, power, water, transportation (particularly for bulk site (well field), a processing plant, a 14 km buried
commodities), labour, accommodation; or the ease with which the water line to the coast, an accommodation camp,
infrastructure can be provided or accessed. an overhead powerline from Mboundi and
overland truck transport on the national road
system of both product and gas.
Land acquisition rights for the DX project area will
Infrastructure have to be applied for during the DFS phase and a
project specific area will need to be through a
ministerial order. To achieve this a governmental
process is followed that culminates in a
“Declaration d’Utilite Publique” (DUP) being
granted. This process was followed successfully on
the Kola project and will only be required for new
areas that are impacted by the DX project area.
Criteria JORC Code explanation Commentary
The Process Plant Site is located approximately 65
km north west of Pointe Noire and 18km inland
from the coast. The Mine Site is located next to the
Project Process Plant.
The DX Project will require the regular use of
existing highway RN5 for transport during
construction and operations. RN5 includes 25 km
of unpaved sand road between Madingo-Kayes and
the process plant. Although the sand portion of
the road is currently used for logging transport,
some upgrades may be required to support the
construction and operating traffic for DX.
A High Voltage (HV) Overhead Transmission Line
(OHL) will be run from a CEC tie-in point at
M’Boundi. The OHL will supply electrical power to
the DX mine and process plant
Water supply will be seawater and brine will be
disposed to the ocean via two 14 km long pipes
between the process plant and the coast. A water
pumping station will be required near the
coastline.
Natural Gas Virtual Pipeline (NGVP) will be used for
the DX Project, involving the delivery of
compressed natural gas on trucks. A compression
(mother) station is installed adjacent to the
existing natural gas pipeline. Natural gas is
compressed at high pressure onto tube trailers.
Tube trailers are transported to a decanting
(daughter) station at the DX process plant. The
Criteria JORC Code explanation Commentary
tube trailer is connected to apparatus at the
decanting station where the pressure is reduced to
the correct pressure for use by the end use
customer.
The derivation of, or assumptions made, regarding projected capital costs Capital Cost:
in the study. The Capital Cost Estimate is a full AACEI Class IV
The methodology used to estimate operating costs. Estimate (-15 to 30%, +20 to 50%)), based on an
Allowances made for the content of deleterious elements. equipment factored methodology where budget
prices were obtained for all equipment with an
The derivation of assumptions made of metal or commodity price(s), for
expected value higher than $50,000 all other
the principal minerals and co- products.
equipment was factored as a percentage of the
The source of exchange rates used in the study. total of the budget quotes received.
Derivation of transportation charges.
The estimate includes the total direct field costs,
The basis for forecasting or source of treatment and refining charges, direct field support costs, indirect costs and
penalties for failure to meet specification, etc. contingency of approximately 22% of the direct +
Costs
The allowances made for royalties payable, both Government and indirect costs. All costs are reported in 4th quarter
private. 2019 US dollars with an allowance of one year’s
escalation at 1.5% per annum. No management
reserve is included.
Design and estimating of direct costs for solution
mining and drilling area was performed by
Innovare Technologies (Innovare). Engcomp
provided the design and estimate for the electrical
infrastructure for these areas. Design and
estimating of direct costs for the process plant was
completed by Engcomp with support from
Criteria JORC Code explanation Commentary
Innovare. Equipment vendors were issued
procurement packages and budgetary quote
pricing used for the project was obtained. Design
and estimating of direct costs for off-site
infrastructure was performed by Kore Potash and
their third-party service providers. Contingency
was estimated by Engcomp. Indirect costs were
estimated by Engcomp and Kore Potash.
Engcomp consolidated the overall estimate.
Operating Cost:
Operating costs were estimated from first
principles using quoted rates, estimated
consumption, forecast labour complements and
remuneration estimates.
Operating Cost covering the Life of Mine (18 years)
has been estimated in US$. They include costs for
Electric power, Fuel, Gas, Labour, Maintenance
parts, Operating Consumables, General and
Administration costs and Contract for Employee
Facilities.
Ocean freight transportation estimate was based
on shipping costs for 10-12 kt ships specifically for
the African market
Mine Closure cost estimated in accordance with a
Conceptual Rehabilitation and Closure Plan
developed during the PFS
State mineral royalties of 3% of Gross Revenue
applies
Criteria JORC Code explanation Commentary
Other criteria
The marketed K60 MoP will comprise at least 95%
KCl, with a maximum of 0.2% Mg and 0.3%
Insolubles.
The derivation of, or assumptions made regarding revenue factors Head grade, recovery and product grade forecasts
including head grade, metal or commodity price(s) exchange rates, were based on the PFS results.
Revenue factors transportation and treatment charges, penalties, net smelter returns, etc. Commodity prices were informed by Argus Media
The derivation of assumptions made of metal or commodity price(s), for who provided an African specific forecast of selling
the principal metals, minerals and co-products. prices until 2033 in real 2019 terms.
The demand, supply and stock situation for the particular commodity, Based on Argus Media estimates, global potash
consumption trends and factors likely to affect supply and demand into demand is forecast to grow from 71 Mt in 2022 to
the future. 87 Mt by 2033 and global nameplate potash
A customer and competitor analysis along with the identification of likely capacity to increase from 107 Mt by the end of
market windows for the product. 2022, reaching 135 Mt by 2033.
Price and volume forecasts and the basis for these forecasts. The Argus Media forecast for African consumption
is an increase from 1.4Mt in 2022 to 1.9Mt in 2033.
For industrial minerals the customer specification, testing and acceptance
requirements prior to a supply contract. The Company’s current market strategy therefore
Market assessment is focused on servicing the African market with any
excess being sold into Brazil.
MoP prices were based on forecasts from Argus
Media.
For DX PFS, a price profile has been developed
using the information provided by Argus,
specifically for the African potash market. The
following assumptions were used to develop the
pricing profile for DX PFS:
Criteria JORC Code explanation Commentary
1. Weighted average Argus forecast MoPG
CFR price for South Africa, Nigeria and
Morocco from 2020 to 2033;
2. Weightings based on total imported MoP
volumes for each of these markets;
3. After 2033, prices are assumed to stay flat
at 2033 levels until the end of mine life;
Customer specifications are based on K60 product,
which means the MoP product has a minimum K2O
content of 60%, corresponding to a KCl content of
95%. Product will be sampled regularly on site and
tested in a site-based laboratory to ensure product
grade is consistently met. Product that does not
satisfy grade will be removed from the product
stream and reprocessed
The inputs to the economic analysis to produce the net present value Key valuation assumptions and (sources)
(NPV) in the study, the source and confidence of these economic inputs Production - LoM of 18 years at nominal 400,000
including estimated inflation, discount rate, etc. tpa MoP production.
NPV ranges and sensitivity to variations in the significant assumptions Single MoP product types – White Granular MoP
and inputs.
Average LoM CFR price of US$422/t MoP (Argus)
Economic
Ex-mine LoM average operating cost of US$65.26/t
MoP, Real (PFS estimate)
FOB LoM average operating cost of US$86.61/t
MoP, Real (PFS estimate)
LoM Shipping of US$28/t MoP Real (PFS estimate)
Criteria JORC Code explanation Commentary
Project capital period 21 months, deferred capital
period 6 months, sustaining capital 216 months
(PFS outcome)
Total Nominal: Project Capital US$ 286 million (PFS
estimate)
Deferred Capital US$270,000 (PFS estimate)
Sustaining Capital US$33.54/MoP t, Real (PFS
estimate)
Fiscal parameters: Company tax rate (15%), tax
holidays (5 years at 0% + 5 years at 7.5%) (Mining
Convention)
Royalties 3% (Mining Convention)
Government free carry (10%) (Mining Convention)
Other minor duties and taxes (Mining Convention)
The PFS Real NPV at real discount rate of 10% is
US$319 million (as at the date just prior to
commencement of construction of 31 August 2021
in Q4 2019 money terms), and Real IRR is 22.9%
Payback period: approximately 6.0 years from first
capital and 4.3 years from first production
Pre-tax margin: 70%.
Highest sensitivities to Price and Capital. Each
percentage movement in Price has an approximate
US$9 M movement in NPV10, and each percentage
movement in Project Capital has an approximate
US$3 M impact on NPV10.
Criteria JORC Code explanation Commentary
The status of agreements with key stakeholders and matters leading to Approval of an ESIA is a prerequisite for beginning
social license to operate. construction of a mining project in the Republic of
Congo. The Dougou ESIA, initially approved on 9
May 2017, will require to be amended to reflect
the design changes made to the DX Project as part
of the Pre-Feasibility Study (“PFS”). This process is
planned to take place concurrently with the
execution of the DFS. The Company shall carry out
their construction operations in compliance with
the environmental and social management plan as
part of the approved ESIA and will be subject to
Regulator’s environmental management
compliance audits. Upon construction completion,
the DX project will be subject to the Minister of
Social Tourism and Environment’s final approval of the
construction activities environmental and social
management compliance allowing the Company to
effectively commission and start the mining and
processing operations for the export of 400,000
tpa from the DX Mining Licence.
The DX Mining Licence is held within subsidiary
which will be owned 10% by the ROC government.
Socio-economic, cultural heritage, archeological
and livelihood baseline reports have been
prepared and approved as part of the ESIA baseline
process.
Kore Potash has implemented a Stakeholder
Engagement Process and is actively engaging with
a wide range of project stakeholders, including
Criteria JORC Code explanation Commentary
conservation NGO's, adjacent National Parks, the
regulator and communities.
Three separate land take corridors have been
identified, the Service Corridor Process Plant and
wellfield, the HV line and the Gas Pipeline:
For each corridor a declaration d'utilite publique
(DUP) will be required to be declared by the
Ministry of Land Affairs
Physical displacement is minimal with most actions
requiring livelihood restoration
There are believed to be no social related issues
that do not have a reasonable likelihood of being
resolved.
To the extent relevant, the impact of the following on the project and / or DX is currently compliant with all legal and
on the estimation and classification of the Ore Reserves: regulatory requirements subject to final
Any identified material naturally occurring risks. submission for approval of the DX Environmental
and Social Impact Assessment Amendments (which
The status of material legal agreements and marketing arrangements.
was required following the project design changes
The status of governmental agreements and approvals critical to the implemented during the PFS) which will be done
viability of the project, such as mineral tenement status, and government
concurrently with the envisaged DFS for DX
Other and statutory approvals. There must be reasonable grounds to expect project.
that all necessary Government approvals will be received within the
A mining convention entered into between the RoC
timeframes anticipated in the Pre-Feasibility or Feasibility study. Highlight
government and the Companies on 8 June 2017
and discuss the materiality of any unresolved matter that is dependent on
and gazetted into law on 29 November 2018
a third party on which extraction of the reserve is contingent.
concludes the framework envisaged in the 25-year
renewable Dougou Mining Licence granted in 9
May 2017 covers the DX Project which is part of
Criteria JORC Code explanation Commentary
the Dougou Mining Licence. The Mining
Convention provides certainty and enforceability of
the key fiscal arrangements for the development
and operation of DX Mining Licences, which
amongst other items include import duty and VAT
exemptions and agreed tax rates during mine
operations. The Mining Convention provides
strengthened legal protection of the Company’s
investments in the Republic of Congo through the
settlement of disputes by international arbitration.
To the best of the Competent Person’s knowledge,
there is no reason to assume any government
permits and licences or statutory approvals will not
be granted. There are no unresolved matters upon
which extraction is contingent.
The basis for the classification of the Ore Reserves into varying confidence The Indicated Mineral Resources were used for the
categories. estimation of Probable Ore Reserves.
Whether the result appropriately reflects the Competent Person’s view of The conversion of Indicated Mineral Resource to
Classification
the deposit. Probable Ore Reserve reflects the Competent
The proportion of Probable Ore Reserves that have been derived from Person’s view of the deposit.
Measured Mineral Resources (if any).
The results of any audits or reviews of Ore Reserve estimates. The Ore Reserve has been peer reviewed and is in
Audits or reviews
line with the current industry standards.
Where appropriate a statement of the relative accuracy and confidence In the Competent Person's view, the DX PFS
level in the Ore Reserve estimate using an approach or procedure deemed achieves the required level of confidence in the
Discussion of relative
appropriate by the Competent Person. For example, the application of modifying factors to justify the estimation of an
accuracy/ confidence
statistical or geostatistical procedures to quantify the relative accuracy of Ore Reserve. All relevant modifying factors were
the reserve within stated confidence limits, or, if such an approach is not considered in the Ore Reserve Estimation and
Criteria JORC Code explanation Commentary
deemed appropriate, a qualitative discussion of the factors which could deemed to be modelled at a level of accuracy
affect the relative accuracy and confidence of the estimate. appropriate to the classification. A global change
The statement should specify whether it relates to global or local of greater than 10% is considered unlikely.
estimates, and, if local, state the relevant tonnages, which should be The PFS determined a mine plan and production
relevant to technical and economic evaluation. Documentation should schedule that is technically achievable and
include assumptions made and the procedures used. economically viable.
Accuracy and confidence discussions should extend to specific discussions The capital and operating costs are based on the
of any applied modifying factors that may have a material impact on Ore outcome of a prefeasibility study.
Reserve viability, or for which there are remaining areas of uncertainty at Factors that could affect the Ore Reserves locally
the current study stage. include; greater dip of the seam in some areas,
It is recognized that this may not be possible or appropriate in all unexpected geological anomalies, areas of
circumstances. These statements of relative accuracy and confidence of unexpected carnallite, unexpected challenges with
the estimate should be compared with production data, where available. mining the TSS. The geological model attempted to
model these features to a high level of detail and
are ‘passed-on’ into the Ore Reserve and mine
plan.
While local variation from the mine plan in the
above are expected, is considered unlikely that
these would lead to significant negative change in
the Ore Reserves, and that positive changes are
equally likely.
For the PFS, data from existing potash mining
operations was used to guide and check the design
and cost estimates. The input data and design are
likely to be realistic and achievable in the
Competent Persons view.
APPENDIX D
Kore Potash Mineral Resources and Ore Reserves as of 13 May 2020
Kore’s Potash Mineral Resource and Ore Reserves - Gross and according to future 90% interest (10% by the RoC government)
KOLA SYLVINITE DEPOSIT
Gross Net Attributable (90% interest)
Sylvinite Average Contained Sylvinite Average
Mineral Resource Contained KCl
Million Grade KCl KCl million Million Grade
Category million tonnes
Tonnes % tonnes Tonnes KCl %
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)
Sylvinite Average Contained Sylvinite Average
Contained KCl
Ore Reserve Category Million Grade KCl KCl million Million Grade
million tonnes
Tonnes % tonnes Tonnes KCl %
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)
Sylvinite Average Contained Sylvinite Average
Mineral Resource Contained KCl
Million Grade KCl KCl million Million Grade
Category million tonnes
Tonnes % tonnes Tonnes KCl %
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)
Sylvinite Average Contained Sylvinite Average
Contained KCl
Ore Reserve Category Million Grade KCl KCl million Million Grade
million tonnes
Tonnes % tonnes Tonnes KCl %
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)
Million Average Contained Million Average
Mineral Resource Contained KCl
Tonnes Grade KCl KCl million Tonnes Grade
Category million tonnes
carnallite % tonnes carnallite KCl %
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)
Million Average Contained Million Average
Mineral Resource Contained KCl
Tonnes Grade KCl KCl million Tonnes Grade
Category million tonnes
carnallite % tonnes carnallite KCl %
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
Notes: 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 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
Dougou carnallite Mineral Resource estimate was 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 Dougou Extension sylvinite Mineral Resource Estimate is reported herein. Ms. Vanessa Santos, P.Geo. of Agapito
Associates Inc., 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). 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.
APPENDIX E
Glossary of Terms & Abbreviations
Term Explanation
AACE American Association of Cost Engineers
a tool which is lowered down the drill-hole to provide a continuous high-resolution oriented ultrasound image of the side-
acoustic televiewer wall
The uppermost subdivision of the Early/Lower Cretaceous epoch/series. Its approximate time range is 113.0 ± 1.0 Ma to
Albian
100.5 ± 0.9 Ma (million years ago)
analysis in this case the determination of the content (by weight%) of K, Mg and other chemical elements
anhydrite Anhydrous calcium sulphate, CaSO4.
Anhydrite A hard-white mineral consisting of anhydrous calcium sulphate (CaSO4) typical in evaporite deposits
Anhydrite member A unit comprised mostly of anhydrite and clay
a subdivision of the Early or Lower Cretaceous epoch or series and encompasses the time from 125.0 ± 1.0 Ma to 113.0 ±
Aptian
1.0 Ma
Aquifer An underground layer of water-bearing permeable rock, rock fractures or unconsolidated materials
assay in this case refers to the analysis of the chemical composition of samples in the laboratory
Basal Carnallitite Carnallitite that may be present in the immediate footwall of the base (bottom) of any of the targeted sylvinite seams
bischofite Hydrous magnesium chloride minerals with formula, MgCl2·6H2O and CaMgCl2·12H2O
a 3D model created in mining software to 'fill' a geological domain with blocks of given dimensions, into which the
block model
attributes of the deposit are estimated
brine Brine is a high-concentration solution of salt in water
carnallite an evaporite mineral, a hydrated potassium magnesium chloride with formula KMgCl. 3· 6(H2O)
carnallitite a rock comprised predominantly of the minerals carnallite and halite
Cavern An underground void created by the dissolution and removal of water-soluble underground salts
classification (of Resources
The determination of the level of confidence of the estimations, in this case using the categories of the JORC Code
and Reserves)
clastic Clastic rocks are composed of fragments, or clasts, of pre-existing minerals and rock.
clay A fine-grained sedimentary rock.
collars (drill-hole) the top of the drill-hole
A ‘Competent Person’ is a minerals industry professional who is a Member or Fellow of The Australasian Institute of Mining
Competent Person and Metallurgy, or of the Australian Institute of Geoscientists, or of a ‘Recognised Professional Organisation’ (RPO), as
included in a list available on the JORC and ASX websites.
method by which drill-hole intersection attributes such as grade are combined to a different length by averaging and/or
composited (sample)
cutting
conformable refers to layers of rock between which there is no loss of the geological record
core (drill) the cylindrical length of rock extracted by the process of diamond drill coring
Cost and freight are a legal term in international trade. In a contract specifying that a sale is made CFR, the seller is required
Cost and Freight (CFR) to arrange for the carriage of goods by sea to a port of destination and provide the buyer with the documents necessary to
obtain the goods from the carrier
the last of the three periods of the Mesozoic Era. The Cretaceous began 145.0 million years ago and ended 66 million
Cretaceous
years ago
cross-section an image showing a slice (normally vertical) through the sub-surface
The lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given
Cut-off-grade (CoG) deposit. May be defined on the basis of economic evaluation, or on physical or chemical attributes that define an
acceptable product specification.
a method by which samples above or below a certain grade are assigned a lower or higher grade to remove the influence of
cutting (of grade)
anomalous values
A (Definitive) Feasibility Study is a comprehensive technical and economic study of the selected development option for a
mineral project that includes appropriately detailed assessments of applicable Modifying Factors together with any other
relevant operational factors and detailed financial analysis that are necessary to demonstrate at the time of reporting that
(Definitive) Feasibility Study
extraction is reasonably justified (economically mineable). The results of the study may reasonably serve as the basis for a
final decision by a proponent or financial institution to proceed with, or finance, the development of the project. The
confidence level of the study will be higher than that of a Pre-Feasibility Study.
diamond coring the method of extracting cores of rock by using a circular diamond-tipped bit (though may be tungsten carbide)
dip in this case refers to the angle of inclination of a layer of rock, measured in degrees or % from horizontal
anhydrous carbonate mineral composed of calcium magnesium carbonate, ideally CaMg(CO3)2. The term is also used for a
dolomite
sedimentary carbonate rock composed mostly of the mineral dolomite. Mineral form is indicated by italic font
process by which a spatial zone is identified by within which material is modelled/expected to be of a type or types that can
domaining (mineral)
be treated in the same way, in this case in terms of resource estimation
drill-hole a hole drilled to obtain samples of the mineralization and host rocks, also known as boreholes or just holes
Engineering, Procurement, Forms of engineering contract where EPC is generally in the form of a fixed price with risk of delivery sitting with the
Construction (EPC) and contractor while EPCM the contractor acts for and behalf of the owner on a re-imbursible basis and the risk of project cost
Engineering, Procurement, and time overruns sits more with the owner.
Construction and
Management (EPCM)
evaporite Sediments chemically precipitated due to the evaporation of an aqueous solution or brine
extraction ratio refers to the amount if mineralized material mined as a ratio of the amount that is left in place
A planar fracture or discontinuity in a volume of rock, across which there has been significant displacement as a result of
fault
rock mass movement.
Footwall The floor of the seam or mine opening (room)
A gamma ray or gamma radiation is penetrating electromagnetic radiation arising from the radioactive decay of atomic
gamma-ray
nuclei.
Features that affect the integrity of the evaporite and overlying rocks found in many potash deposits and depending on the
Geological Anomalies severity of the type and severity of the anomaly, may represent a zone of hydrogeological risk due to connection between
the evaporite (hosting the potash) and water bearing cover rocks above.
geotechnical Refers to the physical behaviour of rocks, particularly relevant for the Mine design requiring geotechnical engineering
graben A graben is a basin bound by normal faults either side, formed by the subsidence of the basin due to extension
grade in this case the amount of potassium, expressed as potassium chloride (KCl)
gridding a term used to refer to estimation of data into a grid of cells from data values spaced more widely than the cells
gypsum soft sulfate mineral composed of calcium sulfate dehydrate, with the chemical formula CaSO. 4·2H2O.
halite The mineral form of sodium chloride (NaCl), salt.
a horst is a raised fault block bounded by normal faults. A horst is a raised block of the Earth's crust that has lifted, or has
horst
remained stationary, while the land on either side (grabens) have subsided
Hydrogeology The branch of geology concerned with the distribution and movement of groundwater in the subsurface
An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape
and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in
sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is
derived from adequately detailed and reliable exploration, sampling and testing gathered through appropriate techniques
Indicated Mineral Resource
from locations such as outcrops, trenches, pits, workings and drill holes, and is sufficient to assume geological and grade (or
quality) continuity between points of observation where data and samples are gathered. An Indicated Mineral Resource has
a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable
Ore Reserve.
An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade (or quality) are estimated on
the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and
grade (or quality) continuity. It is based on exploration, sampling and testing information gathered through appropriate
Inferred Mineral Resource techniques from locations such as outcrops, trenches, pits, workings and drill holes. An Inferred Mineral Resource has a
lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to an Ore
Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral
Resources with continued exploration.
insoluble material in this report, refers to material that cannot be dissolved by water such as organic material, clay, quartz, anhydrite
(Australasian) Joint Ore Reserves Committee requirements for the reporting of Exploration Results, Mineral Resources and
JORC Code
Ore Reserves (2012 edition)
Life-of-Mine (LoM) The duration in years and months from commencement of mining to the end of mining
lithological refers to the observed characteristics if a rock type (or lithology)
A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape,
and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to
support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived
from detailed and reliable exploration, sampling and testing gathered through appropriate techniques from locations such
Measured Mineral Resource
as outcrops, trenches, pits, workings and drill holes, and is sufficient to confirm geological and grade (or quality) continuity
between points of observation where data and samples are gathered. A Measured Mineral Resource has a higher level of
confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be
converted to a Proved Ore Reserve or under certain circumstances to a Probable Ore Reserve.
Metallurgical recoveries The % of the contained KCl that can be extracted from the ore by the processing
Mine Gate Cost Cost of getting product to mine gate, generally ex-works plus any additional storage and transport costs to mine gate
Mineral Deposit A mineral deposit is a natural concentration of minerals in the earth's crust.
the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and
allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility
Mineral Reserve
or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time
of reporting, extraction could reasonably be justified
A ‘Mineral Resource’ is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in
such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The
Mineral Resource location, quantity, grade (or quality), continuity and other geological characteristics of a Mineral Resource are known,
estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-
divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
mineralised/mineralisation a natural concentration of an economic commodity within the earth’s crust, in this case potassium
Mining royalty Cost payable to the government of RoC as documented din the mining convention
modelling (resource) modelling refers to the creation of outlines in 2D or 3D for geological domains or structures
Muriate of Potash (MoP) The saleable form of potassium chloride, comprising a minimum of 95% KCl
Ore is the economically and technically mineable material. The orebody is the mineable part of the deposit comprising the
Ore and orebody
Ore Reserves
The economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and
allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility
Ore Reserve
or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time
of reporting, extraction could reasonably be justified
paleo-topography topography of an ancient land surface
the columns of rock left in place in mining to support the mine opening, either within the mined out areas (rooms) or
pillars (in mining)
adjacent to them
refers to any of various mined and manufactured salts that contain potassium in water-soluble form. In this report
potash
generally refers to the potassium bearing rock types
A Preliminary Feasibility Study (Pre-Feasibility Study) is a comprehensive study of a range of options for the technical and
economic viability of a mineral project that has advanced to a stage where a preferred mining method, in the case of
underground mining, or the pit configuration, in the case of an open pit, is established and an effective method of mineral
Pre-Feasibility Study processing is determined. It includes a financial analysis based on reasonable assumptions on the Modifying Factors and the
evaluation of any other relevant factors which are sufficient for a Competent Person, acting reasonably, to determine if all
or part of the Mineral Resources may be converted to an Ore Reserve at the time of reporting. A Pre-Feasibility Study is at a
lower confidence level than a Feasibility Study.
pycnometer A laboratory device used for measuring the density of solids.
recovery (of drill core) refers to the amount of core recovered as a % of the amount that should have been recovered if no loss was incurred.
riffle (splitter) a device used for the separation of crushed or pulverised material into equal portions
rift refers to the splitting apart of the earth's crust due to extension, typically resulting in crustal thinning and normal faulting
Rock Salt A rock comprising predominantly of the mineral halite
rock-salt rock comprising predominantly of the mineral halite
a method of drilling using a rotating destructive bit to penetrate the rocks and using water with various additives referred
rotary (drilling)
to as the drilling fluid or 'mud'
Salt-back Rock salt between the cavern and the top of the salt member
sample (core) a length of drill-core that may be tested, for grade or other attributes
A naturally occurring material that is broken down by processes of weathering and erosion, and is subsequently
sediment
transported by the action of wind, water, or ice, and/or by the force of gravity acting on the particles.
in this case seismic reflection, a method of exploration geophysics that uses the principles of seismology to estimate the
seismic properties of the Earth's subsurface from reflected seismic waves. The method requires a controlled seismic source of
energy, such as dynamite or Tovex blast, a specialized air gun or a seismic vibrator
Stratigraphy is a branch of geology concerned with the study of rock layers and layering. It is primarily used in the study of
Stratigraphy
sedimentary and layered volcanic rocks
refers to the direction of preferred control of the mineralization be it structural or depositional. In this direction it is
strike
expected that there be greater correlation of attributes
strip logs also known as graphic logs, are the graphical display of drill-hole data such a lithology, typically plotted against depth
structure here refers to faults, fractures of zones of subsidence that affect the stratigraphy
sylvinite a rock type comprised predominately of the mineral sylvite and halite
sylvite an evaporite mineral, potassium chloride (KCl)
An unconformity is a buried erosional or non-depositional surface separating two rock masses or strata of different ages,
unconformity
indicating that sediment deposition was not continuous
wireframe a 3D surface created in mining software to enclose a geological domain
Abbreviations
CFR Cost and Freight
CoG Cut-off Grade
CP Competent Person
DFS Definitive Feasibility Study
DUP Decree D’Utilite Publique
EBITDA Earnings before interest, tax, depreciation and amortization
EPC Engineering, Procurement and Construction
EPCM Engineering, Procurement and Construction Management
ESIA Environmental and Social Impact Assessment
ESMP Environmental and Social Management Plan
FOB Free on board
HWS Hangingwall Seam
IRR Internal rate of Return
JORC (Australasian) Joint Ore Reserves Committee
K60 MoP product has a minimum K2O content of 60%, corresponding to a KCl content of 95%.
KCl Potassium Chloride
LoM Life-of-Mine
MoP Muriate of Potash
MoPG Muriate of Potash - Granular
MoPS Muriate of Potash - Standard
MRE Mineral Resource Estimate
Mtpa Million tons per annum
NaCl Sodium Chloride
NPV10 (real) Net Present Value
PFS Pre-Feasibility Study
RAP Resettlement Action Plan
RoC Republic of Congo
ROM Run of Mine
RPO Recognized Professional Organization
SME Society for Mining, Metallurgy and Exploration
SPSA Sintoukola Potash SA
SWI Seawater Intake
SWO Seawater Outfall
Date: 13-05-2020 12:00:00
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