Wrap Text
EPC update
Kore Potash plc
(Incorporated in England and Wales)
Registration number 10933682
ASX share code: KP2
AIM share code: KP2
JSE share code: KP2
ISIN: GB00BYP2QJ94
("Kore Potash" or the "Company")
9 February 2024
EPC update
Kore Potash plc (AIM: KP2, ASX: KP2, JSE:KP2), the potash development company with 97%ownership
of the Kola and DX Potash Projects in the Sintoukola Basin, located in the Republic of Congo ("RoC"),
is pleased to announce that, in line with expectations, PowerChina International Group Limited
("PowerChina") delivered its Engineering, Procurement and Construction ("EPC") proposal and draft
EPC contract on the 6th of February 2024.
Kola Construction Contract
In April 2021, Kore Potash established a Memorandum of Understanding ("MoU") with the Summit
Consortium ("Consortium") for optimisation and EPC services, alongside a debt and royalty financing
proposal of the Kola Project ("Kola"). The Optimisation Study ("Study") results, released on 27 June
2022, supported advancing to Kola's next developmental phase. On 28 June 2022, Kore Potash
entered into a Heads of Agreement ("HoA") with SEPCO Electric Power Construction Corporation
("SEPCO"). The HoA acknowledged the Study's verification of Kola's capital costs and construction
timeframe and initiated further EPC contract negotiations.
Due to Kola's significant scale, lengthy construction period, and extensive financing needs, Kore Potash
sought from SEPCO's holdings company, PowerChina, the customary EPC contract assurances,
including performance and retention bonds to ensure construction and operational efficacy. On 8
August 2023, Kore Potash and SEPCO reached a revised agreement to furnish an EPC contract for the
Kola Project, contingent on completing further engineering designs resulting from PowerChina's
review, leading to a joint EPC proposal and contract presentation by PowerChina and SEPCO to Kore
Potash.
During the past five months, PowerChina led five external technical groups that completed additional
design and engineering work. Specific design areas included the underground mine, mineral
processing jetty and transhipment operations, energy transportation and storage, conveyor systems
and material handling (the "Works").
SEPCO had personnel living in the RoC for the past 24 months who continued dialogue with potential
in-country service providers and conducted several Kola site visits collecting information for both the
Study and the Works. Additionally, SEPCO mobilised a larger team to Kola for four months in the
second half of 2023 to source additional information to enable finalisation of the Works, including the
planned service corridors, conveyor route, and geomechanical information on foundation materials.
These findings were presented to PowerChina in early December 2023.
In line with the expectations PowerChina has now delivered the EPC Proposal and draft EPC contract
offer. The initial EPC contract price aligns with expectations and reconfirms the capital cost detailed
in the Study. Kore Potash and SEPCO/PowerChina will now further negotiate the EPC proposal and
draft the EPC contract, targeting signing full EPC documentation by the end of April 2024. The Summit
Consortium has advised that the financing proposal for the total construction cost of Kola will be
provided to the Company within six weeks of EPC documentation terms finalisation.
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:
Kore Potash
David Hathorn – Chairman & Interim CEO Tel: +27 84 603 6238
Andrey Maruta - CFO Tel: +44 (0) 20 3963 1776
Tavistock Communications Tel: +44 (0) 20 7920 3150
Nick Elwes
Adam Baynes
SP Angel Corporate Finance – Nomad and Broker Tel: +44 (0) 20 7470 0470
Ewan Leggat
Charlie Bouverat
Kasia Brzozowska
Shore Capital – Joint Broker Tel: +44 (0) 20 7408 4050
Toby Gibbs
James Thomas
Questco Corporate Advisory – JSE Sponsor Tel: +27 (11) 011 9205
Doné Hattingh
Date: 09-02-2024 09:00:00
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