25 Oct - 14 min read

Review of Operations for the Quarter ended 30 September 2021

Review of Operations for the Quarter ended 30 September 2021

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”)

25 October 2021

                Review of Operations for the Quarter ended 30 September 2021

Kore Potash, 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 ended 30 September 2021 (the “Quarter”).

Quarterly Highlights:

Kola Potash Project
    • The process to potentially finance the construction of the Kola Potash Project ("Kola Project")
       progressed in line with the Memorandum of Understanding (“MoU”) signed with the Summit
       Consortium (“Consortium”) in April 2021.
    • The Optimisation Study (“Study”) on the Kola Project remains on track for completion in Q1
       2022.
    • The Company expects to receive an interim report on the Study within weeks.
    • Engineering, Procurement and Construction (“EPC”) contract terms are being discussed with
       the Consortium consistent with the 2017 2nd edition FIDIC Silver book.
    • The Consortium remains on track to present an EPC proposal for the construction of Kola to
       the Company in Q2 of 2022.
    • The Consortium also continues to progress its debt and royalty financing arrangements and is
       finalising its interest in product offtake.
    • The Consortium advise that subject to completion of a successful Study, they remain on track
       to provide the royalty and debt financing proposal for the full construction cost of Kola to the
       Company in Q2 of 2022.
    • Kore Potash management also continued to brief potential offtake partners with the capability
       to procure all of the Kola production and who have expressed interest in partnering with the
       Company.

DX Potash Project
   • Work commenced developing an updated geological model for the DX deposit which is
       expected to be completed in Q4 2021.

Corporate Highlights
   • Ms Amanda Farris was appointed as interim Chief Financial Officer on 15 July 2021.
   • Mr Ignacio Maijluf was appointed as a Non-Executive Director on the Board as a nominee of
       Sociedad Química y Minera de Chile S.A.
   • As of 30 September 2021, the Company held US$ 12.6 million in cash.
   • After the end of the Quarter, as a result of the COVID-19 pandemic, two long term Congolese
       consultants to the Company sadly passed away. Kore Potash expresses its deepest sympathy
       to their families, friends, and colleagues. The Company’s Pointe Noire office has been
       temporarily closed while risks to our employees and additional mitigation measures are
        further assessed. This action is not expected to have any material impact on the next Quarter’s
        activities.

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

“We are saddened by the recent COVID-19 impacts on our people and their families in the Congo and
continue to work with our communities and the Government to further mitigate COVID-19 risks to our
people in the Congo.”

“The Company is very pleased that the Optimisation Study and the Consortium’s financing process are
progressing to schedule. We are excited that the next key milestones for the Consortium are imminent
and look forward to receiving the interim study report and being able to update shareholders further
on the progress to develop Kola.”

Operational activities

Kola Potash Project
The financing process for the construction of the Kola Project progressed in line with the MoU signed
with the Consortium in April 2021.

Optimisation Study
The Consortium’s first key milestone in the MoU is to complete the Study on the Kola Project with key
goals to improve the project value, reduce the capital cost and shorten the construction schedule. The
Consortium set objectives at the start of the Study to reduce the capital cost to US$ 1.65 billion and
the construction schedule to 40 months. The Study continues to progress as planned and remains on
track for completion in Q1 2022.

The completion of the Study has been the major focus of the Company and the Consortium during the
Quarter.

The Consortium has advised the Company that its key technical partner with accountability for
engineering design and construction, SEPCO Electric Power Construction Corporation (“SEPCO”), is
nearing completion of an interim report on the Study and that the interim report will be delivered to
the Company during Q4 2021.

The Company intends to update shareholders further on the Study progress following the completion
of this interim report.

SEPCO and its subcontractor China ENFI Engineering Corporation (“ENFI”) have had more than 80
personnel engaged full time on the Study including a review of value opportunities identified in all
major areas of the Kola Definitive Feasibility Study (“DFS”) design.

During the Quarter, SEPCO appointed CCCC-FHDI Engineering (“FHDI”) as marine consultants to bring
additional marine capability to the Study team. FHDI is a wholly-owned subsidiary of the China
Communications Construction Company Ltd founded in 1964 and was previously known as the Fourth
Harbour Design Institute of the Ministry of Transport.

The Study process includes weekly meetings between SEPCO, other members of the Consortium, and
Kore Potash management. These meetings include discussion on capital cost and construction
schedule reduction initiatives being considered by SEPCO. Some of the topics discussed during the
Quarter included accommodation camp design and construction methodology, possible relocation of
the processing plant closer to the mining area, improved mine shaft design, improved shaft sinking
methodology, optimum process plant equipment design and a reduced cost approach to key
component and equipment sourcing.

Construction Contract Terms
In advance of completion of the Study and facilitating the earliest possible receipt of a construction
proposal from the Consortium, the Company is engaging with SEPCO to agree EPC contract terms
consistent with the 2017 2nd edition FIDIC Silver book and appropriate for the construction of Kola.

The Consortium has also advised it remains on track to present an EPC proposal for the construction
of Kola to the Company in Q2 2022 following completion of the Study.

Kola Financing
The Study and the EPC proposal are two key milestones committed to by the Consortium in the MoU
the Company signed with the Consortium in April 2021. The Study will confirm the total quantum of
capital required to construct Kola and the construction timeframe. This is important information the
Consortium require to be able to present the financing proposal to the Company.

Kore Potash management continued twice-weekly meetings with the Consortium to remain briefed
on the Consortium’s progress towards forming its debt and royalty financing proposal. The Consortium
has also continued to keep the Company informed on their level of product offtake interest.

The Consortium advises that it remains on track, subject to the completion of a successful Study, to
provide the royalty and debt financing proposal for the full construction cost of Kola to the Company
in Q2 2022.

Other Kola matters
Separate from the Consortium’s activity, Kore Potash management also continued to brief potential
offtake partners with the capability to procure all of the Kola production and who have expressed
interest in partnering with the Company.

During the Quarter, the Company requested the Government of the RoC to extend the existing Kola
land access agreement Decree D’Utilité Publique (“DUP”) to incorporate additional land areas to allow
flexibility for possible relocation of the Kola Processing Plant following completion of the Study.
Representatives of the Ministry of Land Affairs visited the Kola Project site during September to
facilitate the Company’s request. This request was well received by the Government and the Ministry’s
staff are working cooperatively with the Company to complete this as rapidly as possible.

DX Potash Project
Following completion of the drilling at the DX Potash Project (“DX Project”) by the Company earlier in
2021 as part of the first phase of a DFS for the DX Project, all of the geological data for the DX Project
has now been provided to the geological consultants to develop an updated geological model for the
DX deposit.

This modelling work is expected to be completed late in Q4 2021 and presented to the Company for
review.

This new model is expected to facilitate decision making on the most appropriate next steps in the
development of the DX Project. The completion of this work may also result in a re-estimate of the DX
Mineral Resources.
Corporate

On 15 July 2021, Mr Jean-Michel Bour resigned from the Chief Financial Officer role due to personal
circumstances that prevented his continued employment with the Company.

Ms Amanda Farris was subsequently appointed as Chief Financial Officer on 15 July 2021. 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.

On 24 August 2021, the Company announced its financial results for the half year ended 30 June 2021.

On 2 September 2021, the Company announced the appointment of Mr Ignacio Maijluf as a Non-
Executive Director. Mr Majluf was nominated by Sociedad Química y Minera de Chile S.A. (“SQM”) to
replace Ms Trinidad Reyes, who has taken maternity leave from SQM and resigned from the Board on
1 September 2021.

As at 30 September 2021, the Company held US$ 12.6 million cash.

After the end of the Quarter, as a result of the COVID-19 pandemic, two long term Congolese
consultants to the Company sadly passed away. The Company expresses its deepest sympathy to their
families, friends, and colleagues. The Company has provided support to the families in line with our
normal practice in the Congo.

The Company’s Pointe Noire office has been temporarily closed, and the staff are working from home,
while risks to our employees and additional potential mitigating actions are further assessed.

This action is not expected to have any material impact on the next quarter’s activities.

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

Planned Activity

During the quarter ending 31 December 2021, the Company aims to:

Kola Potash Project

    •   Receive the interim Study report from the Consortium.
    •   Update shareholders on the Study progress following the completion of this interim report by
        SEPCO.
    •   Continue to work with SEPCO to evaluate the optimisation initiatives for inclusion in the Final
        Optimisation Study Report.
    •   Finalise the granting of the revised DUP with the Minister of Land Affairs.
    •   Continue discussing the financing proposal with the Consortium for the royalty and debt
        financing for the full cost of construction of the Kola Project.

DX Potash Project
   • Receive the completed updated geological model for the DX Project incorporating the results
       of the 2021 drilling campaign.
   • Commence review of this model and determination of the appropriate next steps in
       developing the DX Project.

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 US$
198 thousand settled in cash. The Company 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 invested US $681 thousand in exploration in the Quarter, which comprised US$ 671
thousand related to the Kola Study and US$ 10 thousand for the DX DFS Study. The Company ended
the Quarter with US$ 12.6 million in cash.

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

The full announcement is available on the JSE’s website at:
https://senspdf.jse.co.za/documents/2021/jse/isse/kp2e/q3sep2021.pdf


                                              ENDS

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

  Kore Potash                                                   Tel: +27 84 603 6238
  Brad Sampson – CEO


  Tavistock Communications                                      Tel: +44 (0) 20 7920 3150
  Jos Simson
  Oliver Lamb

  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


  Questco Corporate Advisory – JSE Sponsor                      Tel: +27 (11) 011 9205
  Doné Hattingh

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                 Decree 2013-412         100%                     Kola Potash Mining S.A.
 Mining               of 9 August 2013        potassium rights only

 Dougou               Decree 2017-139         100%                     Sintoukola Potash S.A.
 Mining               of 9 May 2017           potassium rights only

Kore 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)
                                                                                        Contained KCl                                                           Contained KCl
               Mineral      Resource      Sylvinite Million     Average Grade KCl                               Sylvinite Million      Average Grade
                                                                                                 million                                                                 million
                           Category                  Tonnes                  %                                             Tonnes               KCl %
                                                                                                 tonnes                                                                  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 +
                                                 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)
                                                                                        Contained KCl                                                          Contained KCl
                                          Sylvinite Million    Average Grade KCl                               Sylvinite Million         Average Grade
               Ore Reserve Category                                                               million                                                               million
                                                     Tonnes                   %                                           Tonnes                   KCl %
                                                                                                  tonnes                                                                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)
                                                                                        Contained KCl                                                           Contained KCl
               Mineral      Resource      Sylvinite Million     Average Grade KCl                               Sylvinite Million      Average Grade
                                                                                                 million                                                                 million
                           Category                  Tonnes                  %                                             Tonnes               KCl %
                                                                                                 tonnes                                                                  tonnes
               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)
                                                                         Contained KCl                                                         Contained KCl
                           Sylvinite Million    Average Grade KCl                              Sylvinite Million         Average Grade
Ore Reserve Category                                                              million                                                               million
                                       Tonnes                  %                                          Tonnes                   KCl %
                                                                                  tonnes                                                                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)
                                                                         Contained KCl                                                           Contained KCl
Mineral     Resource        Million Tonnes         Average Grade                                Million Tonnes        Average Grade KCl
                                                                                   million                                                                 million
            Category                 carnallite             KCl %                                        carnallite                %
                                                                                   tonnes                                                                  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 +
                                 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)
                                                                         Contained KCl                                                           Contained KCl
Mineral     Resource        Million Tonnes         Average Grade                                Million Tonnes        Average Grade KCl
                                                                                  million                                                                 million
            Category                 carnallite             KCl %                                        carnallite                %
                                                                                  tonnes                                                                  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 +
                                  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

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.

Date: 25-10-2021 08:00:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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