Source - LSE Regulatory
RNS Number : 5145G
Kore Potash PLC
27 July 2021
 

27 July 2021

 

Kore Potash Plc

("Kore Potash" or the "Company")

 

Review of Operations for the Quarter ended 30 June 2021

 

Kore Potash plc, the potash development company with 97%-ownership of the Kola and DX Potash Projects in the Sintoukola Basin, located within the Republic of Congo ("RoC"), provides the following quarterly update for the period to 30 June 2021 (the "Quarter").

 

Quarterly Highlights:

 

The Kola Potash Project

·    During the Quarter, the Company and the Summit Consortium signed the Optimisation Agreement for the Kola Potash Project ("Kola Project") on terms congruent with the Memorandum of Understanding ("MoU") announced by the Company on 6 April 2021.

·    The key engineering partner of the Summit Consortium, SEPCO Electric Power Construction Corporation ("SEPCO") and its subcontractor China ENFI Engineering Corporation ("ENFI"), commenced work on the Optimisation Study for the Kola Project.

·    The study is considering capital cost reduction initiatives in most of the project areas including mine design, underground access, material transportation system, processing plant design and location, key infrastructure design and marine facilities.

·    The Optimisation Agreement requires the Summit Consortium to provide an interim report by the end of September 2021 and to complete the optimisation study by 29 January 2022.

 

DX Project

·    The Phase 1 work programme of the DX Definitive Feasibility Study was completed on budget within the Quarter and the results were released to shareholders on the 27 May 2021.

·    Work has commenced to develop an improved geological model for the DX deposit incorporating all recent drilling information and is expected to be completed before the end of 2021. The completion of this work may result in a re-estimate of the DX Mineral Resources.

 

Corporate Highlights

·    On 8 April 2021, the Company successfully completed an oversubscribed fundraising. A total of 823,475,6181 New Ordinary Shares were issued at the Placing Price of 1.1 pence (2.0 Australian cents) for a total value of approximately US$12.50 million (the "Fundraise"), exceeding the initial US$11 million target.

·    Subsequent to the Fundraise, the Oman Investment Authority, Kore's largest shareholder, in line with its rights under their investment agreement with the Company, subscribed for 92,226,613 new ordinary shares in the Company at the Placing Price for a total cash consideration of $1.4m.

·    On 9 June 2021 the Company held its Annual General Meeting, at which all resolutions were passed.

·    On 9 June 2021 the Company announced the appointment of Mr Jean-Michel Bour as the Chief Financial Officer. Subsequent to the close of the Quarter, on 15 July 2021 Mr Bour resigned as a result of his personal circumstances preventing his continued employment.

·    Ms Amanda Farris was appointed as interim CFO on 15 July 2021 while the Company conducts a search for a permanent CFO.  Ms Farris is a respected mining industry accountant who has been working with the Company since May 2021 and is familiar with the Company's systems, processes and people.

·    As at 30 June 2021, the Company held USD 14.2 million cash.

 

 

Brad Sampson, Chief Executive Officer of Kore Potash, commented:

 

"The Company is pleased that the agreement to deliver the Optimisation Study was signed and that the engineering partner of the Summit Consortium (SEPCO) is committed to completing the study within the same timeframe contemplated in the MoU.

 

"Successful completion of the Optimisation Study will potentially lead to the Company receiving in the first half of 2022 a binding engineering, procurement and construction contract and financing proposal from the Summit Consortium to fully finance the construction of Kola."

 

Operational activities

 

Kola

·    During the Quarter representatives of SEPCO and the Company met with the RoC Minister of Mines and his staff in Brazzaville. A site inspection at the Kola Project was conducted with an ENFI representative and delegates from the Ministry of Mines.

·    The Optimisation Agreement with SEPCO to undertake the Kola optimisation study was signed.

·    Further Kola Project data was sent to SEPCO to facilitate the Optimisation Study.

·    SEPCO and ENFI have commenced the Optimisation Study.

·    The study is considering capital cost reduction initiatives in most of the project areas including mine design, underground access, material transportation system, processing plant design and location, key infrastructure design and marine facilities.

·    The Optimisation Agreement requires the Summit Consortium to provide an interim report by the end of September 2021 and to complete the Optimisation Study by 29 January 2022.

 

DX

·    The first phase of the DX Definitive Feasibility Study was completed, and results released in "Dougou Extension (DX) Project drilling results and progress update" on 27 May 2021.

·    Work to incorporate all the recent drilling results into an improved geological model has commenced and is expected to be completed before the end of 2021. The completion of this work may result in a re-estimate of the DX Mineral Resources.

 

Sintoukola 2 exploration permit

·    The Company did not renew the Sintoukola 2 exploration permit. The Company's focus is on the development of Kola and DX deposits.  

 

There were no mining production or construction activities during the Quarter.

 

Planned Activity

 

During the Quarter ending 30 September 2021, the Company aims to:

 

Kola

·    Continue to progress the Kola Optimisation Study with the Summit Consortium.

 

DX

·    Progress the development of an improved geological model which incorporates the results of the recent drilling campaign. This work is expected to be completed by the end of 2021.

 

Quarterly cashflow report

In accordance with the ASX Listing Rules, the Company will also lodge its cashflow report for the Quarter today. Included in those cashflows are non-executive directors' fees and CEO salary of approximately US $165,000 settled in cash. The Company settled outstanding directors' fees for the quarter ended 31 March 2021 through the issue of 1,103,296 ordinary shares, as announced on 9 April 2021. The Company also settled outstanding directors' fees for the Quarter ended 30 June 2021 through the issue of 2,954,079 ordinary shares, as announced on 8 July 2021.

 

The Company raised US $14,025,000 during the quarter at a cost of US $931,000. The Company invested US $1,768,000 in exploration in the Quarter which comprised US $1,548,000 related to the Kola Study and US $214,000 for the DX DFS study. The Company ended the Quarter with US $14.2 million in cash.

 

This announcement has been approved for release by the Board of Kore Potash PLC.

 

ENDS

 

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

 

Kore Potash

Brad Sampson - CEO

 

Tel: +27 84 603 6238

Tavistock Communications

Jos Simson

Oliver Lamb

 

Tel: +44 (0) 20 7920 3150

Canaccord Genuity - Nomad and Broker

James Asensio

Henry Fitzgerald-O'Connor

 

Tel: +44 (0) 20 7523 4600

Shore Capital - Joint Broker

Jerry Keen

Toby Gibbs

James Thomas

 

Tel: +44 (0) 20 7408 4050

 

Questco Corporate Advisory - JSE Sponsor

Mandy Ramsden

 

Tel: +27 (11) 011 9208

 

 

 

Tenement Details and Ownership

The Company is incorporated and registered in England and Wales and wholly owns Kore Potash Limited of Australia. Kore Potash Limited has a 97% holding in SPSA in the RoC. SPSA is the 100% owner of Dougou Potash Mining S.A. which will hold the Dougou Mining Lease upon the transfer from SPSA to Dougou Potash Mining S.A. through the issue of a Presidential Decree. The Kola Deposit is located within the Kola Mining Lease. The Dougou Mining lease hosts the Dougou Deposit and the Dougou Extension Deposit.

 

Table 1: Schedule of mining tenements (Republic of Congo)

 

Project & Type

 

 

Tenement Issued

 

Company Interest

 

Title Registered to

Kola

Mining

 

Decree 2013-412

of 9 August 2013

 

100%

potassium rights only

Kola Potash Mining S.A.

Dougou

Mining

 

Decree 2017-139

of 9 May 2017

 

100%

potassium rights only

Sintoukola Potash S.A.

 

During the Quarter the Company surrendered the Sintoukola 2 Exploration Permit, comprising Decree 2018-34 of 9 February 2018.

 

Kore's Potash Mineral Resources and Ore Reserves - Gross and according to future 90% interest (10% by the RoC government)

 

KOLA SYLVINITE DEPOSIT

 

Gross

Net Attributable (90% interest)

Mineral Resource

Category

Sylvinite Million

Tonnes

Average Grade KCl

%

Contained KCl

million tonnes

Sylvinite Million

Tonnes

Average Grade

KCl %

Contained KCl

million tonnes

Measured

216

34.9

75.4

194

34.9

67.8

Indicated

292

35.7

104.3

263

35.7

93.9

Sub-Total Measured +

Indicated

508

35.4

179.7

457

35.4

161.7

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)

Ore Reserve Category

Sylvinite Million

Tonnes

Average Grade KCl

%

Contained KCl

million tonnes

Sylvinite Million

Tonnes

Average Grade

KCl %

Contained KCl

million tonnes

Proved

62

32.1

19.8

56

32.1

17.9

Probable

91

32.8

29.7

82

32.8

26.7

TOTAL

152

32.5

49.5

137

32.5

44.6

Ore Reserves are not in addition to Mineral Resources but are derived from them by the application of modifying factors

 

 

 

 

 

 

 

DOUGOU EXTENSION SYLVINITE DEPOSIT (HWSS and TSS)

 

Gross

Net Attributable (90% interest)

Mineral Resource

Category

Sylvinite Million

Tonnes

Average Grade KCl

%

Contained KCl

million tonnes

Sylvinite Million

Tonnes

Average Grade

KCl %

Contained KCl

million tonnes

Measured

 -

 -

 -

 -

 -

 -

Indicated

79

39.1

30.8

71

39.1

27.7

Sub-Total Measured +

Indicated

79

39.1

30.8

71

39.1

27.7

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)

Ore Reserve Category

Sylvinite Million

Tonnes

Average Grade KCl

%

Contained KCl

million tonnes

Sylvinite Million

Tonnes

Average Grade

KCl %

Contained KCl

million tonnes

Proved

 -

 -

 -

 -

 -

 -

Probable

17.7

41.7

7.4

16

41.7

6.6

TOTAL

17.7

41.7

7.4

16

41.7

6.6

Ore Reserves are not in addition to Mineral Resources but are derived from them by the application of modifying factors

 

 

 

 

 

 

 

DOUGOU CARNALLITE DEPOSIT

 

Gross

Net Attributable (90% interest)

Mineral Resource

Category

Million Tonnes carnallite

Average Grade KCl %

Contained KCl million tonnes

Million Tonnes carnallite

Average Grade KCl %

Contained KCl million tonnes

Measured

148

20.1

29.7

133

20.1

26.8

Indicated

920

20.7

190.4

828

20.7

171.4

Sub-Total Measured +

Indicated

1,068

20.6

220.2

961

20.6

198.2

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)

Mineral Resource

Category

Million Tonnes

carnallite

Average Grade

KCl %

Contained KCl

million tonnes

Million Tonnes

carnallite

Average Grade KCl

%

Contained KCl

million tonnes

Measured

341

17.4

59.4

307

17.4

53.5

Indicated

441

18.7

82.6

397

18.7

74.4

Sub-Total Measured + Indicated

783

18.1

142.0

705

18.1

127.8

Inferred

1,266

18.7

236.4

1140

18.7

212.8

TOTAL

2,049

18.5

378.5

1844

18.5

340.6

                         

 

 

Competent Persons Statements

All Mineral Resource and Ore Reserves are reported in accordance with the JORC Code (2012 edition). Numbers are rounded to the appropriate decimal place. Rounding 'errors' may be reflected in the "totals". The Kola Mineral Resource Estimate was reported 6 July 2017 in an announcement titled 'Updated Mineral Resource for the High -Grade Kola Deposit'. It was prepared by Competent Person Mr. Garth Kirkham, P.Geo., of Met-Chem division of DRA Americas Inc., a subsidiary of the DRA Group, and a member of the Association of Professional Engineers and Geoscientists of British Columbia. The Ore Reserve Estimate for sylvinite at Kola was first reported 29 January 2019 in an announcement titled "Kola Definitive Feasibility Study" and was prepared by Met-Chem; the Competent Person for the estimate was Mr Mo Molavi, member of good standing of 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 and Ore Reserve Estimate were reported in an announcement titled "Dougou Extension (Dx) Project Pre-Feasibility Study" on 13 May 2020. Ms. Vanessa Santos, P.Geo. of Agapito Associates Inc. was the Competent Person, for the Exploration Results and Mineral Resources.  Ms. Santos is a licensed professional geologist in South Carolina (Member 2403) and Georgia (Member 1664), USA, and is a registered member (RM) of the Society of Mining, Metallurgy and Exploration, Inc. (SME, Member 04058318). Dr. Michael Hardy was the Competent Person for the Ore Reserves and he is a registered member in good standing (Member #01328850) of Society for Mining, Metallurgy and Exploration (SME) which is an RPO included in a list that is posted on the ASX website from time to time

 

The Company confirms that, other than the activity currently underway to develop an improved geological model for the DX deposit which may in the future necessitate a change in the DX Mineral Resources, that it is not aware of any new information or data that materially affects the information included in the original market announcements and, in the case of estimates of Mineral Resources or Ore Reserves that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

 

Forward-Looking Statements

This release contains certain statements that are "forward-looking" with respect to the financial condition, results of operations, projects and business of the Company and certain plans and objectives of the management of the Company. Forward-looking statements include those containing words such as: "anticipate", "believe", "expect," "forecast", "potential", "intends," "estimate," "will", "plan", "could", "may", "project", "target", "likely" and similar expressions identify forward-looking statements. By their very nature forward-looking statements are subject to known and unknown risks and uncertainties and other factors which are subject to change without notice and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct, which may cause the Company's actual results, performance or achievements, to differ materially from those expressed or implied in any of our forward-looking statements, which are not guarantees of future performance. Neither the Company, nor any other person, gives any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statement will occur. Except as required by law, and only to the extent so required, none of the Company, its subsidiaries or its or their directors, officers, employees, advisors or agents or any other person shall in any way be liable to any person or body for any loss, claim, demand, damages, costs or expenses of whatever nature arising in any way out of, or in connection with, the information contained in this document.

 

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