Kore Potash has provided a positive quarterly update for the period ending 30 June 2023, showcasing significant advancements in its potash projects. The company holds a 97% ownership stake in the Kola Potash Project and the Dougou Extension Potash Project, both located in the Sintoukola Basin in the Republic of Congo.
Quarterly Highlights
The company has made notable progress in its projects during the quarter. Some of the key highlights include:
- Kola Project: Kore Potash has been in discussions to finalize the terms for the Engineering, Procurement, and Construction (EPC) contract at the Kola Project. To support the provision of guarantees for the EPC contract, PowerChina International Group Limited and SEPCO Electric Power Construction Corporation have commenced work.
- Financing for Kola: The Summit Consortium has confirmed its commitment to providing financing for the full capital cost of the Kola Project. However, the financing proposal is contingent upon finalizing the EPC contract terms, which are currently being discussed with PowerChina.
- DX Project: The company is actively reviewing strategic options for the DX Project. Further details about potential plans for the project are yet to be announced.
- Corporate News: The Company held its Annual General Meeting (AGM) on 20 June 2023. At the AGM, Pablo Hernandez-MacDonald resigned as a non-executive director. A replacement non-executive director nominated by Sociedad QuÃmica y Minera de Chile S.A (SQM) will be announced shortly.
- Cash Reserves: As of 30 June 2023, Kore Potash had US$2.6 million in cash.
Operational Activities
Kola EPC: The company had signed a Memorandum of Understanding with the Summit Consortium in April 2021, leading to the Optimization Study results announced on 27 June 2022, which supported advancing Kola’s development. Discussions with SEPCO to finalize key EPC terms have been ongoing, and PowerChina’s involvement has generated potential design improvements to reduce capital costs and construction schedules.
Kola Financing: The financing parties of the Consortium expressed strong interest in financing Kola and await the finalization of EPC contract terms. They are expected to provide the financing proposal within six weeks of reaching these terms.
Congo Government Relations: Key representatives from Kore Potash and the Consortium, including SEPCO and PowerChina, met with the Ministry of Mines during the quarter. The meeting yielded positive feedback and improved the Ministry’s understanding of the financing process.
DX Potash Project: As Kore Potash focuses on completing Kola’s financing and moving forward with construction, the company is actively exploring strategic options for the DX Project.
Financial Overview
The company reported cash outflows of US$1,084,000 for exploration and evaluation in the quarter. After converting to South African Rand (ZAR) at the exchange rate of 1 USD = 18 ZAR, the exploration expenditure amounts to ZAR 19,512,000. This, coupled with administration and corporate costs of ZAR 8,136,000 (USD 452,000), resulted in total cash outflows of ZAR 27,648,000 during the quarter.
Outlook
Kore Potash remains confident in the progress made so far and the capability of the Consortium to provide the required financing for Kola’s construction. The company is dedicated to advancing its potash projects and achieving its business objectives in the Republic of Congo.
