29 April 2024

Kore Potash Plc

("Kore Potash" or "the Company")

Review of Operations for the Quarter ended 31 March 2024

Kore Potash (AIM: KP2, ASX: KP2, JSE:KP2), the potash development company with 97%-ownership of the Kola Potash Project ("Kola" or the "Kola Project") and Dougou Extension ("DX") Potash Project in the Sintoukola Basin, located in the Republic of Congo ("RoC"), provides its quarterly update for the period ended 31 March 2024 (the "Quarter").

Quarterly Highlights

Projects

·    PowerChina International Group Limited ("PowerChina") delivered the Engineering, Procurement and Construction ("EPC") proposal and draft EPC contract on 6 February 2024.

·    Kore Potash and PowerChina commenced further detailed negotiation on the EPC proposal and draft EPC contract, targeting signing the full EPC documentation in Q2 2024. The Company is meeting PowerChina senior officials in Beijing in early May 2024 which is a major step forward in bringing the EPC process to a conclusion.

Corporate

·    On 28 March 2024, the Company released its Financial Results and Annual Report for the Year Ended 31 December 2023.

·    Successful completion of US$0.53 million fundraise with a further US$0.15m conditionally raised subject to shareholder approval at a General Meeting to be held on 13 May 2024.

·    As of 31 March 2024, the Company held US$1.4 million in cash.

·    On 4 April 2024, the Company announced the appointment of Mr J. M. André ("André") Baya as non-board Chief Executive Officer ("CEO") effective from 15 April 2024.

Operational Activities

Kola EPC

Kore Potash signed a Memorandum of Understanding with the Summit Consortium ("Consortium") in April 2021 for the Optimisation of Kola, the provision of an EPC contract proposal, and a debt and royalty financing proposal for the total construction cost of Kola.

The results of the Optimisation Study ("Study") announced on 27 June 2022 supported moving to the next phase of Kola's development.

On 28 June 2022, the Company announced that it had signed a Heads of Agreement ("HoA") for the construction of Kola with SEPCO Electric Power Construction Corporation ("SEPCO"). Under the HoA, SEPCO undertook to continue negotiations with Kore Potash towards an EPC contract for the construction of Kola. Importantly, the HoA recognised that the Study's outcomes confirmed the capital cost of Kola, the construction period and related EPC contract terms.

Recognising the world-class scale of Kola, the length of the proposed construction period and the total financing requirement, Kore Potash requested that SEPCO's parent company, PowerChina, provide the typically required EPC contract guarantees, including performance and retention bonds supporting the completion of construction and the operating performance of Kola.

On 8 August 2023, Kore Potash entered into a revised agreement ("Agreement") with SEPCO to provide the Company with an EPC contract for the construction of the Kola Project. Following the completion of SEPCO's parent company, PowerChina's, review of the Kola design and construction schedule, one of the agreed outcomes was that further engineering design works must be completed before PowerChina and SEPCO jointly present an EPC proposal and EPC contract to the Company.

PowerChina subcontracted five technical groups who commenced additional design and engineering works. Specific design areas included the underground mine, mineral processing jetty and transhipment operations, energy transportation and storage, conveyor systems and material handling (the "Works"). PowerChina advised the Company that the Works would cost in excess of US$10 million to complete. Illustrating PowerChina's commitment to Kola, it capped Kore Potash's contribution at a maximum of US$5 million, with the balance of the costs to be paid by PowerChina.

Two payments of US$1.0 million each were made in August and November 2023 as required under the Agreement. The remaining payments are contingent upon the Company completing further fund raises and PowerChina and SEPCO's delivery of the EPC contract. The remaining payments are planned to be paid in two tranches 12 months from date of the execution of the EPC contract.

PowerChina, SEPCO and the subcontractors, in pursuit of the timeline objectives, commenced the Works before reaching an agreement with the Company on costs.

PowerChina delivered the EPC proposal and draft EPC contract on 6 February 2024.

Kore Potash and SEPCO continue to negotiate the EPC proposal and draft the EPC contract, targeting signing full EPC documentation in Q2 2024. The Company is meeting PowerChina senior officials in Beijing in early May 2024 to materially progress the finalisation of the EPC contract.

Kola Financing

Kore Potash continues to work with the Consortium to provide financing for the total construction cost of Kola, which is intended to be based on royalty and debt finance.

The successful outcomes of the Study were in line with the Consortium's requirements and supported the ongoing financing discussions. The financing parties of the Consortium have again reinforced their ongoing strong interest in financing Kola and await the finalisation of the EPC contract terms.

The Consortium has advised that the financing proposal for the total construction cost of Kola will be provided to the Company within six weeks of the execution of the EPC Contract.

Kore Potash maintains that the Consortium members can provide the required financing for Kola's construction of Kola and that pursuing this financing opportunity remains the best path forward for Kore Potash's shareholders.

Congo Government Relations

On 21 August 2023 the Minister of Mines wrote a letter to the Company that pledged the Ministry and the RoC's support for Kore's development of its projects at Kola and Dougou ("Projects").

The Minister acknowledged that some of the development objectives for the Projects, as outlined in the Mining Convention, have not yet been met. He also assured the Ministry's steadfast support, in the form of a moral guarantee, to assist in addressing the remaining challenges to completing the financing of Kola. The Minister reaffirmed the validity of the Company's mining tenement titles and the Mining Convention, which is the operating agreement between the Company and the Government.

The Minister of Mines of the RoC showed further support for the Company's development of the Kola Project during a visit to the Kola Project in September 2023.

Kore Potash held a ceremony at the intended location of the Kola processing plant in recognition of the extensive development work completed by Kore Potash. The ceremony also recognised the commencement of work on the ground at the Kola site by SEPCO.

The ceremony was held near the village of Yanga in the Kouilou province of the RoC. The Minster, members of his Ministry and local dignitaries were in attendance, along with the Chairman of Kore Potash, David Hathorn, Warren Thompson from the Summit Consortium and SEPCO Vice President Zhang Quan.

On 24 February 2024 David Hathorn and Warren Thompson met with The Minister of Mines of the RoC to update him on the EPC progress.

Company's CEO, André Baya was received by His Excellency, Minister Pierre Oba, and his Advisor, Pr Hilaire Elenga, in Brazzaville on 18 April 2024. He updated the Minister of Mines of the RoC regarding the Kola EPC contracting progress. Minister Oba reiterated the full support of the Congolese Government in the development of Kola which is in line with the Government's plan to develop and create jobs in the region in which Kola is located.

DX Potash Project

At present, the Company remains focused on completing the financing of Kola and moving forward to construction of Kola as soon as possible. The Company is also exploring what strategic options are available for the DX project.

Corporate

On 28 March 2024, the Company released its Financial Results and Annual Report for the Year Ended 31 December 2023 to the market.

On 22 March 2024 the Company raised US$530,000 via issue of five separate Convertible Loan Notes ("CLNs"). On 28 March 2024 the Company converted these CLNs into 109,865,053 new ordinary shares of US$0.001 each in the Company ("Subscription Shares") at a price of 0.38 pence per share ("Subscription Price").

On 28 March 2024 the Company also announced that David Hathorn, Chairman of Kore Potash conditionally subscribed for 31,093,883 new ordinary shares of US$0.001 each in the Company ("new Ordinary Shares") at a price of 0.38 pence per new Ordinary Share, for a total consideration of US$150,000 (the "Conditional Subscription"). The Conditional Subscription is subject to the approval of shareholders at a General Meeting ("GM") scheduled to be held on 13 May 2024.

As at 31 March 2024, the Company held US$1.4 million in cash.

On 4 April 2024, the Company announced the appointment of Mr J. M. André Baya as non-board CEO effective from 15 April 2024.

André has over 20 years of experience in the global mining and agriculture sectors and brings significant African experience including having held senior positions for groups with operations in the RoC.  Immediately prior to joining Kore Potash, André worked as a management consultant, leading the corporate re-engineering of Fraser Alexander (Pty) Ltd.'s African subsidiaries and the corporate development of Fortescue Mining Group's Belinga iron ore project in Gabon.

Prior to this, André was Country and General Manager for a variety of global mining corporations including Sundance Resources, Cominco, Roxgold, Alliance Mining Commodities, Orezone and Central Copper Resources. Other notable positions include Chief Operating Officer at Managem Group, the international Moroccan mining group, where he was responsible for the management of the Managem Group's operations and development projects across eight African nations.

Between 1985 and 2001, André spent 15 years in trade and agriculture, in both technical and managerial roles for industrial chemicals and agrochemicals businesses in Africa and beyond.

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

Quarterly cashflow report

In accordance with the ASX Listing Rules, the Company will also lodge its cashflow report for the Quarter today.

The Company invested US$625,000 in exploration in the Quarter, which comprised US$622,000 related to the Kola Study and US$3,000 for the DX DFS Study. The Company ended the Quarter with c.US$1.4 million in cash.

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

Market Abuse Regulation

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

ENDS

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

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% shareholding in Sintoukola Potash SA ("SPSA") in the RoC. SPSA has 100% ownership of Kola Potash Mining SA ("KPM"). KPM has 100% ownership of the Kola Mining Lease on which the Kola Deposit is situated. The Kola Deposit is located within the Kola Mining Lease. SPSA is also the 100% owner of the Dougou Mining Lease. The Dougou Mining lease hosts the Dougou Deposit and the DX Deposit.

Under the existing Mining Convention, the RoC Government is entitled to 10% ownership in the Kola and DX Projects. The transfer of this 10% awaits instructions from the Government and the Mineral Resources and Ore Reserves are shown below in gross and 90% attributable bases. 

Table 1: Schedule of mining tenements (Republic of Congo)