Kore making strides to gain full ownership of Kola project
Site of the Dougou Extension potash project. Under the existing Mining Convention, the Congo-Brazzaville government is entitled to 10% ownership in both the Kola project and Dougou Extension potash project
JSE-, Aim- and ASX-listed Kore Potash announced the purchase of a 0.46% interest in the share capital of Sintoukola Potash SA (SPSA) and the conditional right to acquire the remaining interest in the Kola project not owned by the company.
Kore currently indirectly owns 97% of the Kola potash project in the Sintoukola basin, in Congo-Brazzaville.
Kore currently owns 97% of SPSA with the remaining 3% being held by Etablissements MGM (MGM).
Under the terms of the agreement entered into on March 1 between Kore and MGM, Kore will buy shares that represent 0.46% of the issued share capital of SPSA from MGM for $1-million in cash, which will be funded from Kore’s existing cash resources.
Also, Kore has been granted the right to acquire MGM’s remaining outstanding minority 2.54% share interest in SPSA, on certain conditions.
The consideration payable for the acquisition of the remaining shares by Kore will be the issue of such number of Kore shares to MGM that will result in MGM holding, following such issue, 2.54% of Kore Potash on a fully diluted basis.
The terms of the agreement are aligned with the company’s strategy and will ensure that, in the event Kore exercises its right to acquire the remaining 2.54% interest in SPSA, Kore is the sole owner of the Kola project.
However, under the existing Mining Convention, the Congo-Brazzaville government is entitled to 10% ownership in the Kola project and Dougou Extension potash project (DX project) through the acquisition of free carry interests of 10% in each of Kola Potash Mining SA and Dougou Potash Mining SA, the respective owners of the Kola project and DX project.
Kore is still awaiting formal instructions from the authorities as to the government-owned entity that will hold its 10% free carry stake.
A formal reminder has been sent to that effect.
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