Kola enhancement agreement on track for interim completion in September
JSE- and Aim-listed potash developer Kore Potash and the Summit Consortium have signed an enhancement agreement for the Kola potash project on terms congruent with the memorandum of understanding (MoU) announced by Kore in April.
Kore holds a 97% stake in the Kola and Dougou Extension (DX) potash projects located in the Sintoukola basin, in Congo-Brazzaville.
Thus far, Kore reports that the key engineering partner of the Summit Consortium, Sepco Electric Power Construction Corporation and its subcontractor China ENFI Engineering Corporation, have started work on the enhancement study for the Kola project.
During the second quarter of the year, representatives of Sepco and Kore met with the Congo-Brazzaville Mines Minister and his staff, following which a site inspection at the Kola project was conducted with an ENFI representative and delegates from the Ministry of Mines.
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 enhancement agreement requires that Summit Consortium provide an interim report by the end of September, and to complete the study by January 29, 2022.
Kore CEO Brad Sampson says Sepco is committed to completing the study within the same timeframe contemplated in the MoU.
“Successful completion of the [enhancement] study will potentially lead to [Kore] receiving, in the first half of 2022, a binding engineering, procurement and construction contract and financing proposal from Summit Consortium to fully finance the construction of Kola,” he says.
As for Kore’s DX project, the Phase 1 work programme of a definitive feasibility study was completed on budget within the second quarter of the year.
Also during the quarter, Kore started work 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 the year. Kore notes that the completion of this work may result in a re-estimate of the DX mineral resources.
In terms of finances, Kore reports that on April 8, it successfully completed an oversubscribed fundraising, with 823.47-million new ordinary shares being issued at the placing price of 1.1p apiece, for a total value of about $12.5-million, thereby exceeding the initial $11-million target.
Subsequent to the fundraise, Kore’s largest shareholder – the Oman Investment Authority, in line with its rights under their investment agreement with Kore – subscribed for 92.22-million new ordinary shares in Kore at the placing price for a total cash consideration of $1.4-million.
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