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Kore Potash Plc (JSE:KP2) News - Extracts from financial results for the year ended 31 December 2021
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” or the “Group”)
Extracts from financial results for the year ended 31 December 2021
Kore Potash, the potash development company with 97%-ownership of the Kola and DX Potash
Projects in the Sintoukola Basin, located within the Republic of Congo (“RoC”), today reports its
audited financial results and operational highlights for the year ended 31 December 2021 (“Period”).
The full financial report including its Corporate Governance Statement is available online at the
Company's website at https://korepotash.com/wp-content/uploads/2022/03/Kore-Annual-Report-
2021.pdf The financial statements contained within this announcement should be read in conjunction
with the notes contained within the full financial report.
Highlights
• On 6 April 2021, the Company signed a non-binding Memorandum of Understanding (“MoU”)
with Summit on behalf of a consortium of investors and engineering firms, to arrange the total
financing required for the construction of the Kola Potash Project (“Kola”).
o The MoU outlines a roadmap to optimise the capital design to fully finance and
construct Kola via a mix of debt and royalty financing.
o The MoU was signed in the Brazzaville’s Minister of Mines offices, with the Minister
and his key staff present. Under the proposed financing arrangements, the RoC
Government will retain their 10% shareholding in Kola.
o During the Period, Summit and their technical partners SEPCO Electric Power
Construction Corporation (“SEPCO”), signed the Optimisation Agreement to
undertake a study (“Optimisation Study”) to reduce Kola’s capital cost with a target
of less than USD 1.65 billion (“Target Capex”). A team of representatives from Kore
Potash, China ENFI Engineering Corporation (“ENFI”) (a key subcontractor to SEPCO)
and the RoC Minister of Mines completed a Kola site visit and data handover.
o Under the Summit Consortium’s proposed financing structure, the Company will not
contribute to the capital needed to build the Kola project and will retain a 90% equity
interest in Kola. A Financing proposal is expected to be received after the EPC proposal
is presented by the Consortium to the Company.
o On 10 November 2021, the Company announced it had received the Interim
Optimisation report on the Kola Project from SEPCO. The report covered 53 capital
reduction opportunities for Kore Potash to evaluate for inclusion in the Optimisation
Study Report.
• During the Period, the Company successfully raised USD 14,026,563 through equity funding.
o On 8 April 2021, the Company completed an oversubscribed fundraising. A total of
823,475,618 New Ordinary Shares were issued at the Placing Price of 1.1 pence (2.0
Australian cents) for a total value of USD 12.6 million, exceeding the initial USD 11.0
million target.
o Following the fundraising, Oman Investment Authority, Kore Potash’s largest
shareholder, in line with its rights under their investment agreement with the
Company, subscribed for 92,226,613 New Ordinary Shares in the Company at the
Placing Price of 1.1 pence for a total cash consideration of USD 1.4 million.
• The Dougou Extension (“DX”) Definitive Feasibility Study (“DFS”) Phase 1 results were
published on 27 May 2021 with the following highlights and subsequent work:
o The Phase 1 work program for the DFS was completed on budget, including the drilling
of seven diamond drill holes and geochemical testing.
o Key technical studies and laboratory test work for Phase 1 of the completed DX DFS.
o An improved geological model for the DX deposit incorporating all recent drilling
information was completed in Quarter 4 2021. It improves confidence in the
geological modelling of the DX deposit and improves the understanding of the
Sylvinite / Carnallite boundaries in the Top Seams and Hanging Wall Seams.
o The Company is assessing the most appropriate next steps for developing the DX
deposit.
• As a result of the COVID-19 Pandemic, two long term Congolese consultants to the Group
sadly passed away during the Period. The Group expresses its deepest sympathy to their
families, friends, and colleagues. The Group has provided support to the families in line with
best practices in the Congo. The Group’s Pointe Noire office was temporarily closed in October
2021 to reduce potential staff exposures to COVID-19, and our staff worked from home. The
office reopened in November 2021. Although COVID-19 is ongoing, it has not had a material
impact on the Group’s operations during the Period.
• During the Period, the Company did not renew the Sintoukola 2 exploration permit. The Group
had not undertaken any exploration work on the Sintoukola 2 permit area and continues its
focus on developing the Kola and Dougou projects.
Brad Sampson, Chief Executive of Kore Potash, commented: "We have made good progress during
2021. Despite the difficult circumstances facing the global economy, Kore Potash has been able to
advance the Kola project.
Rising food prices and the growing global demand highlight the importance of fertilisers, including
potash, a vital agri-nutrient required for quality plant growth and crop yield to the global economy.
With high grades, significant resources and a beneficial location, the Sintoukola Basin is one of the
most promising potash deposits in the world. It has the potential to produce MoP needed by farmers
around the world for generations.
Key milestones were delivered in 2021 to progress the Kola Project. We expect to inform shareholders
of our progress on the Kola Project Optimisation Study shortly and to provide an update on the EPC
and Financing proposals we expect to receive later in 2022."
Summary of financials
• During the Period, the Group’s Total Comprehensive Loss was USD 13,470,876 (2020: Gain
USD 8,177,582), and the Group experienced net cash outflows from operating and investing
activities of USD 7,499,811 (2020: USD 9,271,039 million). Cash and cash equivalents totalled
USD 11,092,509 as at 31 December 2021 (2020: USD 5,555,000).
• Group net assets decreased in the year to USD 177,419,886 (2020: USD 177,661,602). This
was primarily driven by an increase in funds of USD 5,537,509 as a result of the fund raise, a
USD 6,581,097 increase in exploration expenditure capitalised offset by a USD 11,992,945
reduction in the capitalised exploration costs due to the strengthening of the USD against the
currency of the RoC.
• The Directors prepared a cash flow forecast for the period ending 31 December 2023, which
indicates that the Group will have sufficient liquidity to meet its working capital requirements
to the end of the going concern period (March 2023). Please refer to Note 1 to the financial
statements for more detail on the going concern statement.
• The Company will be required to raise funds after the going concern period to meet its
ongoing contracted and committed expenditure. The Directors
have considered various mitigating actions, which include raising additional capital to enable
the Group to continue to fund its working capital requirements. The Directors have identified
a number of funding options available to the Group.
Salient consolidated financials required to be disclosed under the JSE Listings Requirements
31 December 2021 31 December 2020 Change
USD USD USD
Interest Income 14,709 30,116 15,407
Loss for the year (1,941,196) (3,144,172) 1,202,976
Headline loss per share (0.06) (0.17) (0.11)
Basic loss per share (0.06) (0.17) (0.11)
Diluted loss per share (0.06) (0.17) (0.11)
Short-form announcement
This short-form announcement is the responsibility of the board of directors of Kore Potash and is a
summarised version of the group’s full announcement and financial results and as such, it does not
contain full or complete details pertaining to the group’s results for the financial year ended 31
December 2021. Any investment decision should be made after taking into consideration the full
annual results for the financial year ended 31 December 2021. The full announcement and the annual
results for the financial year ended 31 December 2021 is available on the JSE’s website at
https://senspdf.jse.co.za/documents/2022/jse/isse/kp2e/FY2021.pdf and on the group’s website at
https://korepotash.com/wp-content/uploads/2022/03/Kore-Annual-Report-2021.pdf
The full announcement and annual report for the financial year ended 31 December 2021 can be
requested via direct message under the contact section on the company website at
http://www.korepotash.com/contacts/
END
31 March 2022
For further information, please visit www.korepotash.com or contact:
Kore Potash Tel: +27 84 603 6238
Brad Sampson – CEO
Tavistock Communications Tel: +44 (0) 20 7920 3150
Jos Simson
Oliver Lamb
SP Angel Corporate Finance – Nomad and Joint Tel: +44 (0) 20 7470 0470
Broker
Ewan Leggat
Charlie Bouverat
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: 31-03-2022 08:00:00
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