Name of the Project
Kola potash project.

Location
Sintoukola basin, Congo-Brazzaville.

Project Owner/s
Potash development company Kore Potash has a 97% ownership of the Kola and Dougou (DX) potash projects.

Project Description
Kore Potash completed a definitive feasibility study (DFS) in 2019, in which it proposed the production of about 2.2-million tonnes a year of muriate of potash (MoP). This is based on a mine life of 33 years comprising 23 production years, exploiting ore reserves of 152.4-million tonnes and 9.7-million tonnes of inferred mineral resources, and an additional ten production years exploiting 70-million tonnes of the remaining inferred mineral resources.

Total MoP production has decreased from 2.2-million tonnes a year in the 2019 DFS to 2.14-million tonnes a year in the 2022 optimisation study.

The optimisation study estimates a 31-year mine life, which includes 25 production years exploiting ore reserves of 152.4-million tonnes, together with 9.7-million tonnes of inferred mineral resources, and an additional six production years exploiting 49-million tons of the remaining inferred mineral resources.

The Kola orebody is planned to be mined using conventional underground mechanised methods, extracting the ore within ‘panels’ using continuous miner equipment of the drum-cutting type. Mine access will be provided through two 270-m-deep vertical shafts, each 8 m in diameter. The shafts will be sunk near the centre of the orebody.

Underground access will be provided through equipping the intake shaft with a hoist and cage system to transport persons and material.

The exhaust shaft will be equipped with a pocket lift conveyor system to continuously convey the mined-out ore to the surface.

Ore from underground will be transported to the process plant by a 24-km-long overland conveyor. A conventional potash flotation plant with a maximum design capacity of 2.24-million tons a year of MoP has been designed for the project. As a result of the low insolubles content, no separate process circuit will be required to extract insoluble material. The final MoP product will then be transported 11 km by conveyor belt from the process plant to the marine export facility at the coast.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The optimisation study estimates an ungeared after-tax net present value (NPV), at a 10% discount rate, of $1.62-billion and an internal rate of return (IRR) of 20%, compared with an NPV, at a 10% discount rate, of $1.42-billion and an IRR of 17.2% in the DFS.

Capital Expenditure
The capital cost of the project is estimated at $2.1-billion.

Planned Start/End Date
The construction period has been reduced from 46 months in the DFS to 40 months in the optimisation study.

Latest Developments
Kore Potash and Shanghai Electric Power Company (Sepco) are preparing for crucial developments.

Sepco is aiming to complete all engineering design tasks by December. Following this, in January 2024, an engineering, procurement and construction (EPC) contract offer will be extended to Sepco, marking a pivotal moment in the project timeline.

This progress follows a comprehensive agreement initiated between Kore and Sepco on August 8. Under the terms of this agreement, Sepco, supported by its parent company PowerChina, embarked on essential additional engineering design works for the Kola project.

These efforts encompass various critical areas, such as the underground mine, mineral processing jetty, transshipment operations, energy transportation and storage, as well as conveyor systems and materials handling.

PowerChina committed to cover costs of more than $10-million, capping Kore's contribution at $5-million. An initial payment of $1-million, made in August, kickstarted the project's financial aspects.

Subsequent payments, contingent on Kore's fundraising efforts and Sepco's delivery of the EPC contract, are planned between October 25 this year and 12 months from the contract signing date.

Sepco's engagement has been comprehensive, with personnel having been stationed in Congo-Brazzaville for six months, fostering partnerships and conducting vital site visits at Kola.

Moreover, Kore says, a dedicated team is mobilised, focusing on gathering essential data regarding service corridors, conveyor routes and geomechanical specifics pertaining to the processing plant and infrastructure areas.

The ongoing works include elements that could potentially streamline construction timelines.

Kore is also actively collaborating with Summit Consortium to secure financing for the complete construction expenses of the Kola project, which is intended to rely on a combination of royalties and debt finance.

The consortium is satisfied with the outcomes of the study, aligning with its requirements and bolstering the ongoing financing discussions, the developer noted in an update to shareholders on October 12.

The parties involved in the consortium have reiterated their strong interest in funding Kola and are “eagerly anticipating the finalisation of the EPC contract terms”.

The detailed financing proposal covering the entire construction cost of Kola will be presented to Kore within six weeks of finalising the EPC terms.

In terms of relations with the Congo-Brazzaville government, the Minister of Mines has conveyed support for Kore’s Kola and Dougou projects through a formal letter.

While acknowledging some unmet development objectives outlined in the Mining Convention, the Minister has assured unwavering moral and security support to overcome the remaining challenges in financing Kola, Kore has noted.

Kore has also stated that the Minister reaffirmed the validity of the company's mining tenement titles and the operating agreement, emphasising government's confidence in Kore.

Kore remains focused on completing financing for the Kola project and will “continue exploring what strategic options are available for the Dougou extension potash project”.

Key Contracts, Suppliers and Consultants
Met-Chem DRA Global (mineral resource estimate); and SRK Consulting (environmental- and social-impact assessment).

Contact Details for Project Information
Tavistock, on behalf of Kore Potash, tel +44 207 920 3150 or email kore@tavistock.co.uk.