31 October 2024

Kore Potash Plc

("Kore Potash" or "the Company")

Review of Operations for the Quarter ended 30 September 2024

Kore Potash (AIM: KP2, ASX: KP2, JSE: KP2, A2X: 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 30 September 2024 (the "Quarter").

Quarterly Highlights

Projects

·   Final agreement on outstanding points in respect of the Engineering, Procurement and Construction ("EPC") contract was reached with PowerChina International Group Limited ("PowerChina") on 28 October 2024. The EPC agreements have now been finalised and Kore Potash and PowerChina are working towards convening a date which is currently set for 19 November 2024 for the signing ceremony with the Minister of Mines (the "Minister") and other high officials of the RoC in Brazzaville. Following the signing ceremony, relevant details of the agreement will be made public.

Corporate

·   Successful completion of US$1.221 million fundraise on 1 July 2024 with a further US$60,000 conditionally raised and subsequently approved by shareholders at a General Meeting on 23 August 2024.

·   The Company released its Half Year Report for the six months ended 30 June 2024 on 13 September 2024.

·   As of 30 September 2024, the Company held US$1.28 million in cash.

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 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. Of the remaining US$3 million, US$800,000 is payable up to 6 weeks from the date of PowerChina and SEPCO having presented to Kore a "complete contractual document capable of finalising the financing arrangement of the Kola Project and capable of acceptance by Kore to form a binding construction contract" and US$2.2 million to be paid subject to Kore concluding its fund raise with a target date of no later than 12 months from the signing of the EPC.

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.

The Company met PowerChina's senior officials in Beijing in May 2024 and then again in Dubai in July 2024 where both parties satisfactorily resolved all outstanding commercial points to enable Kore Potash and PowerChina to conclude the agreements.

Final agreement on outstanding points in respect of the EPC contract was reached on 28 October 2024. The EPC agreements have now been finalised and Kore Potash and PowerChina are working towards convening a date which is currently set for 19 November 2024 for the signing ceremony with the Minister and other high officials of the Republic of Congo in Brazzaville. Following the signing ceremony, relevant details of the agreement will be notified to shareholders.

Kola Financing

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

The financing parties of the Consortium have confirmed their ongoing strong interest in financing Kola and await the execution of the EPC contract in the Republic of Congo.

The Consortium has advised that the financing term sheet for the construction cost of Kola will be provided to the Company within three months of the execution of the EPC Contract.

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

The Company plans to conduct a small capital fund raise in November 2024 to finance working capital.

Congo Government Relations

On 21 August 2023, Minister Pierre Oba, the Minister 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 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 Minister, 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 to update him on the EPC progress.

The Company's CEO, André Baya was also received by Minister Pierre Oba, and his Adviser, Professor Hilaire Elenga, in Brazzaville on 18 April 2024 where he updated the Minister 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.

While discussions with PowerChina were progressing, communications have been ongoing with the Ministry of Mines in the RoC to schedule the signature ceremony which is expected to take place in November 2024 in Brazzaville.

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 1 July 2024, the Company raised US$1,221,000 via the issue of 87,503,183 new ordinary shares of US$0.001 each in the Company with existing and new shareholders at a price of 1.1 pence per share.

On 1 July 2024, the Company also announced that David Hathorn, Chairman of Kore Potash conditionally subscribed for 4,299,454 new Ordinary Shares of US$0.001 each in the Company at a price of 1.1 pence per new Ordinary Share, for a total consideration of US$60,000 (the "Conditional Subscription"). The Conditional Subscription was approved by the shareholders at a General Meeting held on 23 August 2024.

As at 30 September 2024, the Company held US$1.28 million in cash.

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$592,000 in exploration in the Quarter, which comprised US$589,000 related to the Kola Study and US$3,000 for the DX DFS Study. The Company ended the Quarter with c.US$1.28 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)