7 December 2018
Kore Potash plc
("Kore Potash" or the "Company")
Mining Convention passed into Law in the Republic of Congo
Kore Potash plc, the potash development company whose flagship asset is the 97%-owned Sintoukola Potash Project ("Project"), is pleased to announce that the Mining Convention covering the proposed staged development of the Kola and Dougou Mining Licences has been gazetted into law following ratification by the Parliament of the Republic of the Congo ("RoC").
Highlights
· The gazetting of the Mining Convention is a critical milestone for the Company, providing security of title and the right to develop and operate the Kola mining project as well as the adjacent Dougou and Dougou Extension deposits.
· The Mining Convention concludes the framework envisaged in the 25-year renewable Kola and Dougou Mining Licences granted in August 2013 and May 2017, respectively.
· The Mining Convention provides certainty and enforceability of the key fiscal arrangements for the development and operation of Kola and Dougou Mining Licenses, which amongst other items include import duty and VAT exemptions and agreed tax rates during mine operations.
· The Mining Convention provides strengthened legal protection of the Company's investments in the RoC through the settlement of disputes by international arbitration.
Brad Sampson, CEO of Kore, commented:
"The finalisation of the Mining Convention creates certainty on the legal and fiscal regime within which Kore Potash will operate its potash projects in the Republic of the Congo. Furthermore, it demonstrates the Government of the Republic of Congo's alignment to realise the potential of the Congo potash basin and the commitment to the development of the Kola Project.
This is an exciting milestone which has been reached at an important time, as Kore Potash works to complete its review of the Kola Definitive Feasibility Study."
"The recent growth in the sylvinite mineral resources and the definition of exploration targets highlights the potential scale and strategic importance of the Sintoukola area. With the Mining Convention in place the Company is one step closer to having all necessary permits and studies in place to commence development."
The Mining Convention, signed between the RoC Government ('Government') and Kore Potash on 8 June 2017, was approved by the RoC Parliament during third quarter 2018, gazetted into Law on 29 November 2018 and printed on 6th December 2018.
The Mining Convention encompasses the areas of the Kola Mining License and the Dougou Mining License as shown in Figure 1.
Figure 1: Map showing the location of the Project and Mining Convention area (available at www.korepotash.com)
Summary of key terms of the Mining Convention
· Concessions to corporate tax rate during the initial 10 years:
o first 5 years - 0%;
o years 6-10 - 7.5%; and
o rest of mine life - 15%
· Concessional corporate tax rate may be renewed in conjunction with investment in expanded production capacity.
· Exemption from withholding taxes including interest, dividends and capital gains during the term of the mining convention.
· Exemption from VAT, import duty and export duty (for surplus construction material) during construction, applicable to Kore Potash and all contractors.
· Guarantees that the Government will facilitate and support implementation of the Project and to permit export of the final product through the use of a dedicated jetty.
· Guarantees that Kore Potash and all its subcontractors may employ foreign workers.
· Guarantees to permit creation of securities over all or part of the share capital of Kore Potash's RoC subsidiaries and the Kola and Dougou Mining Licenses.
· Settlement of any disputes through international arbitration.
· Stability of legal, fiscal, tax and customs regimes during the entire term of the Mining Convention and any extensions.
· The Government will be granted a 10% equity interest in Kola Mining SA and Dougou Mining SA on a free-carry basis for the initial phase of projects at Kola or Dougou. Post the initial phases, the Government is required to contribute to any capital expansion programme or dilute.
· The Government may appoint one director to the board of each of Kola Mining SA and Dougou Mining SA.
· A mining royalty, of 3% of the Ex-Mine Market Value.
· The Mining Convention has a term which covers the life of the mining permits including any extensions.
- ENDS -
Contacts: |
Brad Sampson |
Jos Simson / Edward Lee |
Martin Davison / James Asensio |
Chief Executive Officer |
Tavistock (UK media enquiries) |
Canaccord Genuity (Nomad and Broker) |
Tel: +27 11 469 9144 |
Tel: +44 (0) 207 920 3150 |
Tel: +44 (0) 20 7523 4600 |
[email protected] |
[email protected] |
[email protected] |
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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 Potash Project ("Sintoukola") comprises the Kola Sylvinite Deposit, Dougou Extension Sylvinite Deposit and the Dougou Carnallite Deposit. These deposits are within the Kola and Dougou Mining Licenses. Sintoukola 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 Mt 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 (announcement dated 7 December 2017). Kola is shallow relative to operating 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 (announcement dated 20 August 2018). The Mineral Resource includes 67 Mt grading 60.1 % KCl. Dougou Extension is located 15 km southwest of Kola. A large zone that is 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 hosted by 35-40 metres of carnallitite within 4 flat-lying seams at a depth of between 400 and 600 metres (announcement dated 9 February 2015). A Scoping Study indicated that a Life of Mine operating cost of US$68 per tonne MoP was achievable (announcement dated 17 February 2015).
Forward-Looking Statements
This release 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 release regarding the Company's business or proposed business, which are not historical facts, are "forward looking" statements that involve risks and uncertainties, such as Mineral 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.
