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(Sharecast News) - Potash exploration and development company Kore Potash updated the market on the feasibility study for the Dougou Extension Project on Tuesday, reporting that the study was on track to be completed on budget in April, with potentially improved financial outcomes.
The AIM-traded firm said the technical studies completed to date had identified a number of improvements over the scoping study, with potential to reduce both the capital cost and the operating cost of the project compared to the scoping study.
It said those included the fact that circulating brine flow rates could be reduced by about 40%, the potential to reduce the electrical power requirement by up to 8%, the potential to reduce gas requirements by up to 40%, the increase of the cavern footprint by up to 27%, and the possibility to increase the life of project extraction ratio, with potential to increase the initial project life to 25 years.
Kore said processing of the 2D seismic survey data had reinforced and improved on earlier interpretations of the sylvinite boundaries within the deposit.
On the Kola project optimisation, Kore said the bill of quantities exercise had identified capital savings of more than $300m when compared to the definitive feasibility study capital cost.
It said discussions with European engineering and construction groups indicated that further optimisation activity, including design revisions, would be likely to generate additional capital cost reductions.
With its current focus on the development of the lower capital cost Dougou Extension Project, the company said it would continue to explore options to reduce the Kola capital cost, but was not currently planning further expenditure on the optimisation of Kola in the near term.
"This positive progress on the Dougou Extension pre-feasibility study is very pleasing to see - the company is progressing high quality work to improve our understanding of the deposit and the chosen processing route," said chief executive officer Brad Sampson.
"Shifting Kore's focus onto a smaller, less capital intensive project within the wider Sintoukola basin should allow the company to get to production faster and preserves optionality on the other deposits.
"We believe that DX is one of the highest grade potash deposits anywhere in the world."
That, Sampson said, was part of the reason why the firm would have "extremely competitive" operating costs, further reinforced by its proximity to the coast and "commensurately lower" shipping costs to target markets than Northern Hemisphere producers.
"Our focus continues to centre on building a project that is environmentally and economically sustainable, which is particularly important as we work on issues related to project design."
At 1202 GMT, shares in Kore Potash were down 0.43% at 1.17p.
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