21 November 2018
Kore Potash Plc
("Kore Potash" or the "Company")
Significant Extensions to Kore's Existing Sylvinite Deposits Expected
Kore Potash plc (ASX: KP2, AIM: KP2, JSE: KP2) the potash development company whose flagship asset is the 97%-owned Sintoukola Potash Project in the Republic of Congo, is pleased to provide Exploration Targets for potential extensions of the Kola and Dougou Extension sylvinite Deposits, reported in accordance with the JORC Code (2012 edition). These Exploration Targets have been identified as part of the work program to improve the Company's understanding of both the potential scale and the strategic opportunities presented by the multiple occurrences of potash in the Sintoukola Project area.
An Exploration Target is not a Mineral Resource but a statement of exploration potential and in this case, is based on drilling and 2D seismic survey data and the Company's understanding of the controls on sylvinite mineralisation.
Highlights
· Potential identified to increase the Company's sylvinite Deposits to a total of between 1.5 and 1.9 billion tonnes (Bt) of sylvinite with an average grade of between 34 and 37% KCl
· The Exploration Targets are as follows and provided in Table 1 and located on Figure 1
o 'Kola South', the potential southward extension to the Kola Deposit
§ 95 to 175 Mt
§ average grade of between 34 and 42% KCl
o 'DX North', the potential northward extension to the Dougou Extension Deposit
§ 320 to 600 Mt
§ average grade of between 30 and 38% KCl
· The potential quantity and grade of an Exploration Target is conceptual in nature and is an approximation. There has been insufficient exploration at Kola South and DX North to estimate
· Mineral Resources and it is uncertain if further exploration will result in the estimation of Mineral Resources
· The Exploration Targets are immediately adjacent to the Company's existing sylvinite Mineral Resources which total 1.08 Bt with an average grade of 35.5% KCl at the Kola and Dougou Extension Deposits
· The Exploration Targets are within 40 km of the Company's proposed processing and export facility (Figure 3).
· Insoluble content of the sylvinite within the Exploration Targets is expected to be <0.5% which is extremely low compared to potash industry averages
Brad Sampson, CEO of Kore, commented:
"Quantifying the potential scale of the Sylvinite and Carnallite deposits of the Sintoukola project area is important. It positions the Company to assess the strategic options available for these world-class, shallow and high-grade Potash deposits while continuing to allow flexibility on the best development pathway for this globally important Potash province."
Table 1. Summary of parameters and the Exploration Targets for Kola South and DX North.
Existing sylvinite Mineral Resources
The location of the Kola and Dougou Extension sylvinite Deposits are shown in Figure 1 and 3, along with the adjacent Exploration Target areas (or 'target areas'). A table including the existing sylvinite Mineral Resource estimates is provided below this announcement, reported according to JORC 2012. Kola hosts a Measured and Indicated sylvinite Mineral Resource totalling 508 Mt with an average grade of 35.4% KCl (Company announcement dated 6 July 2017). Dougou Extension hosts an Indicated and Inferred sylvinite Mineral Resource totalling 232 Mt with an average grade of 38.1 % KCl (announcement dated 20 August 2018).
Overview of the Geology
The potash at the Kola and Dougou Extension is hosted by sub-horizontal or gently dipping layers or 'seams' within the upper part of a 400-500 m thick 'Salt Member' ('the Salt') of the Lower Cretaceous-aged Loeme Evaporite formation (Figure 2). The evaporite rocks extend from approximately 50 km inland to over 200 km offshore and is comprised of up to 11 'cycles' which can be correlated across the onshore part of the basin. The existing Kola and Dougou Extension Deposits are large, occupying areas several km across and in length. At Kola the Salt is covered by 180 to 280 m of sediments referred to as the 'Cover Rocks'. At Dougou Extension the Cover Rocks are between and 290 and 420 m thick. The Salt is overlain by a 5-20 m thick aquitard, referred to as the Anhydrite Member. The base of this unit (the top of the Salt) is an unconformity, so that the upper parts of the Salt are variably preserved or truncated by this contact.
At Kola and Dougou Extension, the sylvinite formed by the replacement of pre-existing carnallitite of 1 or 2 of the four seams in the upper Salt cycles. Carnallitite is a relatively low-grade potash rock comprised primarily of the mineral carnallite (KMgCl3·6H2O) and halite (NaCl). The seams are as follows; the Top Seam (TS), the Hangingwall Seam (HWS), the Upper Seam (US) and Lower Seam (LS) separated by rock-salt (Figure 2). At Kola the TS is mostly absent due to it being truncated by the unconformity at the top of the Salt so does not form part of the Mineral Resource or Exploration Target. At Dougou Extension the TS is 12-15 m above the HWS and is widely preserved, hosting the bulk of the sylvinite Mineral Resource. At both Deposits internal zones of carnallitite occur, and this is not mixed with the sylvinite, always being lateral or below the sylvinite with abrupt contacts between the two.
The extent of the Kola South and DX North Exploration Targets is controlled by the extent of broad structural 'highs' (100's m) beneath or adjacent to them (Figure 1). In these areas the process of sylvinite replacement was 'promoted' in the upper 10-90 m of the Salt. These structural features pre-date the Salt and had an influence on the formation of sylvinite.
Fundamental to the Exploration Targets is the well-established continuity of the evaporite layers, including the potash seams. Each seam, regardless of whether it is sylvinite or carnallitite can be correlated over tens of kilometres relating to the continuity of the original depositional setting of the evaporite. Lateral grade variation of the sylvinite of each seam and the content of insoluble material is low for the same reason. The HWS is the highest grading seam, where sylvinite grades up to 62% KCl at the Kola and Dougou Extension Deposits. The US, then the TS and LS, have grades between 24 and 42% KCl.
The Kola South Exploration Target
The intersections of sylvinite in two of the Company's drill-holes completed in 2017 provide support for the Kola South Exploration Target and were reported previously along with Table 1 of the JORC Code (Company announcement dated 7 December 2017). These holes, EK_53 and EK_54, intersected sylvinite in the HWS grading 61.9 and 60.0 % KCl over a thickness of 2.22 and 3.26 m respectively.
Based on EK_53, EK_54 and available historic seismic data, the sylvinite at the Kola deposit is likely to extend up to 7 km southeast of the current Inferred Resource extent (Figure. 1) and the sylvinite mineralised zones are likely to be contiguous with that of the current Mineral Resource. The extent of the prospective area is controlled by a subtle structural 'high' below the Salt Member, extending southwards on strike from the Kola deposit. This 'high' is evident on the plot of the thickness of the Salt Member (Figure 1). Seismic survey data also guides the overall geometry of the Salt and suggests that there are no features disrupting the Salt stratigraphy within the target area.
In determining the Exploration Target, the average expected thickness of the HWS was determined from the EK_53 and EK_54 intersections, both of which are sylvinite. In these holes the US and LS is carnallitite, but it is expected these seams will be sylvinite over significant portions of the target area, as is the case at the Kola Deposit. The thickness of the US and LS for the Exploration Target was determined from the data for these seams at the Kola Deposit, with a slight reduction to the LS thickness (to account for a slightly thinned LS carnallite seam in EK_54). The grade range of the seams was determined from the large amount of data for the seams at Kola, along with the intersections in EK_53 and EK_54 for the sylvinite HWS. For each seam, the minimum grade was guided by the 10th percentile of the grade data for all existing intersections and the maximum was assigned to less than the 80th percentile, considered appropriate as low or high-grade outliers do not exist.
Based on the understanding on the distribution of sylvinite at the Kola Deposit, a minimum and maximum 'abundance' of each of the seams was developed for Kola South, expressed as a percentage of the prospective area (Table 1). It is expected that sylvinite of the US will contribute most to the potential tonnage, followed by the LS and HWS in roughly equal proportions. The predicted abundance of the HWS is greater than at the Kola Deposit, reflecting the expectation that it is less widely truncated (by the unconformity at the top of the Salt) at Kola South.
The DX North Exploration Target
This is the potential northward extension of the recently announced Dougou Extension Deposit (Company announcement dated 20 August 2018). The prospective area is defined by slight elevation and thinning of the Salt where the rocks (100's m) below the Salt are affected by horst development within an area referred to as the Yangala High (Figure 1), and northwards of this feature adjacent to the basin margin. The delineation of the prospective zone was based on a large amount of historical 2D seismic survey data and several historical drill-holes (Figure 1). Appendix 1 contains the JORC 2012 Table 1 for exploration data relating to the DX North Exploration Target, having not been part of previous announcements. Table 3 provides summarises of potash intersections in the historic drill-holes. The Company's 2017 drill-hole DX_05 planned to test the DX North area east of historic hole Yangala-1 but stopped short of the Salt Member due to drilling difficulties.
The estimation of the Exploration Target range of tonnes for DX North is based on the assumption that a portion of the total area of each seam will host sylvinite, in the proportions provided in Table 1. There is less supporting data in relation to the size of the target area than for Kola South; this lower level of confidence is reflected in the maximum assigned proportions. It is expected that in some areas the seams are either truncated by the unconformity at the top of the Salt or are present but are carnallitite but that the material quantified by the Exploration Target would be within areas that are sufficiently extensive and continuous to be potentially amenable to economic extraction.
Historic drill-hole Yangala-1 contains sylvinite in the TS, US and LS but are partially leached so that grade is likely to be less than what is typical for these seams. This is encouraging as it shows that the process of sylvinite formation has taken place well into the Salt. The Historic hole Maf-1 (Figure 1) intersected a 4.1 m thick sylvinite seam, interpreted to be the US or LS. Hole TK-1 contains carnallitite in the TS, HWS, US and LS.
The average thickness of the seams in the DX North area were determined from the sylvinite intersections of the TS and HWS in the Company's drill-holes at the Dougou Extension Deposit. The thickness of the sylvinite US and LS was estimated based on the thickness of the carnallitite intersections in the area, as this is proportional to the thickness when replaced by sylvinite. The grade range for the HWS and TS is based on the intersections at the Dougou Extension Deposit. The grade range for the US and LS is based on the grade of these seams at Kola. API values of >300 API in hole Maf-1 provide support for the presence of high-grade sylvinite. As at Kola South, the 10th and 80th percentiles of grade data in the supporting intersections was used to guide the minimum and maximum stated grade of the Exploration Target.
Figure 1. Map showing the Kola and Dougou Deposits and the adjacent South and DX North Exploration Target areas, along with important controlling features (see www.korepotash.com)
Further Exploration Work
No immediate follow up exploration activity is currently planned while the Company is focused on the review of the Kola Definitive Feasibility Study. The following provides an indication of what work that would typically be required to advance the Exploration Targets.
· Acquire additional 2D seismic survey data on wide-spaced lines (1-3 km apart) to improve the geological model and understanding of the Salt Member.
· Drill 3-5 holes in each target area. At Kola South, holes would be expected to have final depths of between 300 and 400 m; at DX North holes up to a depth of 700 m may be required.
· If this drilling is sufficiently successful, the data may support expansions of the existing Kola and Dougou Extension Mineral Resource Estimates.
· Further 'infill' drilling and seismic surveying may then be required to increase confidence.
· This programme if commenced may take approximately 12-24 months to complete from initiation.
Figure 2. Schematic section illustrating geology at the Kola Deposit. Note the TS is absent (see Kore Potash)
Table 2. Positions of the historic holes within the DX North area using UTM 32 S WGS 84 datum.
|
Easting m |
Northing m |
Elevation m |
Depth m |
K60 |
779095.96 |
9537928.9 |
16.54 |
565.0 |
MAF-1 |
761183.96 |
9560162.5 |
38.09 |
1018.6 |
TK-1 |
771596.00 |
9550234.0 |
42.60 |
1537.0 |
Yangala-1 |
783662.00 |
9533277.0 |
102.57 |
1110.6 |
Holes were drilled vertically
Table 3. Potash intersections in historic holes within the DX North area
|
Seam/s |
Depth (m) |
K60 |
None |
- |
MAF-1 |
Sylvinite US or LS of 4.1 m thick and <300 API |
293.7 to 297.8 |
TK-1 |
Carnallitite TS, HWS, US, LS |
within an interval from 507 and 625.5 |
Yangala-1 |
Partially leached sylvinite of the TS, US, LS. |
within an interval from 524 to 680 |
Figure 3. Location of Kore's projects (see www.korepotash.com)
- ENDS -
For further information, please visit www.korepotash.com or contact:
Kore Potash Brad Sampson - CEO |
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Tel: +27 11 469 9140 |
Tavistock Communications Jos Simson Edward Lee |
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Tel: +44 (0) 20 7920 3150 |
Canaccord Genuity - Nomad and Broker Martin Davison James Asensio |
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Tel: +44 (0) 20 7523 4600 |
About Kore Potash's Projects
Kore Potash is an advanced stage mineral exploration and development company whose primary asset is 97%-owned interest in the Sintoukola project, a potash project located in the Republic of Congo. The Sintoukola project comprises the Kola sylvinite and carnallite Deposits, the Dougou Extension sylvinite Deposit and the Dougou carnallite Deposit. These deposits are within the Kola and Dougou Mining Licenses. The Sintoukola project also includes the Sintoukola 2 Exploration License.
Sintoukola is located approximately 80 km to the north of the city of Pointe Noire which has a major port facility, and within 30 km of the Atlantic coast. Sintoukola has the potential to be among the world's lowest-cost potash producers and its location near the coast offers a transport cost advantage to global fertilizer markets.
The Kola sylvinite Deposit has a Measured and Indicated sylvinite Mineral Resource Estimate of 508 million tonnes grading 35.4 % KCl. A Definitive Feasibility Study ("DFS") is being conducted by a consortium of French engineering and construction companies. The deposit is 'open' laterally; drill-holes completed in 2017 intersected high-grade sylvinite several km southeast of the Deposit. It is shallow relative to most potash mines; the proposed shaft bottom will be 270 m below surface.
The Dougou Extension sylvinite Deposit contains a total sylvinite Mineral Resource estimate of 232 Mt grading 38.1% KCl, hosted by two seams. The Mineral Resource includes 67 Mt grading 60.1 % KCl. Dougou Extension is located 15 km southwest of Kola. A large zone that is considered prospective for sylvinite extends a further 25 km northwards, within the Dougou Mining License and the 'Sintoukola 2' Exploration License.
The Kola and Dougou Extension sylvinite Deposits are considered high grade relative to most potash deposits globally and have the advantage of having very low content of insoluble material, less than 0.3% which provides a further processing advantage.
The Dougou carnallite Deposit has a Measured and Indicated Potash Mineral Resource of 1.1 billion tonnes grading 20.6% KCl (at a depth of between 400 and 600 metres) hosted by 35-40 metres of carnallitite within 4 flat-lying seams. A Scoping Study was completed in February 2015. This Study indicated that a Life of Mine operating cost of US$68 per tonne MoP was achievable.
· Muriate of Potash (MoP) is the saleable form of potassium chloride (KCl), comprising of a minimum 95% KCl.
· Sylvinite is a rock type comprised predominantly of the potash mineral sylvite (KCl) and halite (NaCl).
· Carnallitite is a rock type comprised predominantly of the potash mineral carnallite (KMgCl3·6H2O) and halite (NaCl).
Kore's Potash Mineral Resources, provided as Gross and Net Attributable (to Kore's 97% holding), prepared and reported according to the JORC Code, 2012 edition.
SYLVINITE DEPOSITS
KOLA SYLVINITE DEPOSIT |
|
|
|
|
|
Gross |
Net Attributable |
Mineral Resource Category |
Million Tonnes |
Grade KCl % |
Contained KCl million tonnes |
Million Tonnes |
Grade KCl % |
Contained KCl million tonnes |
Measured |
216 |
34.9 |
75 |
209 |
34.9 |
73 |
Indicated |
292 |
35.7 |
104 |
283 |
35.7 |
101 |
Sub-Total Measured + Indicated |
508 |
35.4 |
180 |
492 |
35.4 |
174 |
Inferred |
340 |
34.0 |
116 |
330 |
34.0 |
112 |
TOTAL |
848 |
34.8 |
295 |
822 |
34.8 |
286 |
|
|
|
|
|
|
|
DOUGOU EXTENSION SYLVINITE DEPOSIT |
|
|
|
|
Gross |
Net Attributable |
Mineral Resource Category |
Million Tonnes |
Grade KCl % |
Contained KCl million tonnes |
Million Tonnes |
Grade KCl % |
Contained KCl million tonnes |
Measured |
- |
- |
- |
- |
- |
- |
Indicated |
111 |
37.2 |
41 |
108 |
37.2 |
40 |
Sub-Total Measured + Indicated |
111 |
37.2 |
41 |
108 |
37.2 |
40 |
Inferred |
121 |
38.9 |
47 |
117 |
38.9 |
46 |
TOTAL |
232 |
38.1 |
88 |
225 |
38.1 |
85 |
|
|
|
|
|
|
|
TOTAL SYLVINITE, KOLA & DOUGOU EXTENSION DEPOSITS COMBINED |
|
|
|
Measured + Indicated + Inferred |
1,080 |
35.5 |
384 |
1,048 |
35.5 |
372 |
|
|
|
|
|
|
|
CARNALLITE DEPOSITS DOUGOU CARNALLITE DEPOSIT |
|
|
|
|
|
Gross |
Net Attributable |
Mineral Resource Category |
Million Tonnes |
Grade KCl % |
Contained KCl million tonnes |
Million Tonnes |
Grade KCl % |
Contained KCl million tonnes |
Measured |
148 |
20.1 |
30 |
144 |
20.1 |
29 |
Indicated |
920 |
20.7 |
190 |
892 |
20.7 |
185 |
Sub-Total Measured + Indicated |
1,068 |
20.6 |
220 |
1,036 |
20.6 |
214 |
Inferred |
1,988 |
20.8 |
414 |
1,928 |
20.8 |
401 |
TOTAL |
3,056 |
20.7 |
634 |
2,964 |
20.7 |
615 |
|
|
|
|
|
|
|
KOLA CARNALLITE DEPOSIT |
|
|
|
|
|
Gross |
Net Attributable |
Mineral Resource Category |
Million Tonnes |
Grade KCl % |
Contained KCl million tonnes |
Million Tonnes |
Grade KCl % |
Contained KCl million tonnes |
Measured |
341 |
17.4 |
59 |
331 |
17.4 |
58 |
Indicated |
441 |
18.7 |
83 |
428 |
18.7 |
80 |
Sub-Total Measured + Indicated |
783 |
18.1 |
142 |
760 |
18.1 |
138 |
Inferred |
1,266 |
18.7 |
236 |
1,228 |
18.7 |
229 |
TOTAL |
2,049 |
18.5 |
378 |
1,988 |
18.5 |
367 |
Note: Table entries are rounded to the appropriate significant figure.
Competent Persons Statement
All information in this report that relates to the Exploration Targets for Kola South and DX North is based on information compiled by Mr. Andrew Pedley, the Chief Geologist for Kore Potash and a full-time employee of the Company. Mr Pedley is a registered scientist (Pr. Sci. Nat) with the South African Council for Natural Scientific Professions (reg No. 400311/13) and is a member of the Geological Society of South Africa. Mr. Pedley has sufficient experience that is relevant to the style of mineralisation and type of Deposit under consideration and to the activity he is undertaking to qualify as a Competent Person, as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" (the JORC Code). Mr. Pedley consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
The information relating to previous Exploration Results, Mineral Resources or Ore Reserves in this report is based on, or extracted from previous reports referred to herein, and available to view on the Company's website www.korepotash.com The Kola Mineral Resource Estimate was reported 6 July 2017 in an announcement titled 'Updated Mineral Resource for the High Grade Kola Deposit'. It was prepared by Competent Person Mr. Garth Kirkham, P.Geo., of Met-Chem division of DRA Americas Inc., a subsidiary of the DRA Group, and a member of the Association of Professional Engineers and Geoscientists of British Columbia. The Dougou carnallite Mineral Resource estimate was reported on 9 February 2015 in an announcement titled 'Elemental Minerals Announces Large Mineral Resource Expansion and Upgrade for the Dougou Potash Deposit'. It was prepared by Competent Persons Dr. Sebastiaan van der Klauw and Ms. Jana Neubert, senior geologists and employees of ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH and members of good standing of the European Federation of Geologists. The Dougou Extension sylvinite Mineral Resource Estimate was reported 20 August 2018 in an announcement titled 'Maiden Sylvinite Mineral Resource at Dougou Extension'. It was prepared by Competent Person Mr. Andrew Pedley a full-time employee of Kore Potash, a registered professional natural scientist with the South African Council for Natural Scientific Professions and member of the Geological Society of South Africa. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and, in the case of estimates of Mineral Resources or Ore Reserves that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.
Forward-Looking Statements
This report contains statements that are "forward-looking". Generally, the words "expect," "potential", "intend," "estimate," "will" and similar expressions identify forward-looking statements. By their very nature and whilst there is a reasonable basis for making such statements regarding the proposed placement described herein; forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results, performance or achievements, to differ materially from those expressed or implied in any of our forward-looking statements, which are not guarantees of future performance. Statements in this report regarding the Company's business or proposed business, which are not historical facts, are "forward looking" statements that involve risks and uncertainties, such as resource estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.
Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made.