(Sharecast News) - Kore Potash announced a significant milestone in its potash development on Friday, with the recent delivery of an engineering, procurement and construction (EPC) proposal and draft contract by PowerChina International Group.
The AIM-traded firm said it aligned with its expectations, describing it as a crucial step forward in advancing the Kola and DX potash projects in the Republic of the Congo's Sintoukola Basin.
In April 2021, Kore Potash inked a memorandum of understanding (MoU) with the Summit Consortium for optimisation and EPC services, accompanied by a comprehensive financing proposal for the Kola project.
Subsequent to the release of the optimisation study results in June 2022, which supported progressing to the next developmental phase of Kola, Kore entered into a heads of agreement (HoA) with Sepco Electric Power Construction.
Given the scale, duration, and financial requirements of Kola, Kore said it sought assurances customary in EPC contracts from Sepco's parent company PowerChina, including performance and retention bonds.
After reaching a revised agreement in August last year, Kore and Sepco collaborated closely with PowerChina over the last five months to complete additional design and engineering work, covering critical areas such as underground mining, mineral processing, energy infrastructure, and material handling.
It said Sepco's sustained presence in the Republic of the Congo over the last 24 months facilitated ongoing dialogue with local service providers and numerous site visits to gather essential information for the study and subsequent works.
Furthermore, a dedicated team was mobilised to the Kola site for an extended period in 2023 to gather additional data to finalise the works, including route planning and geomechanical assessments.
With the delivery of the EPC proposal and draft EPC contract by PowerChina, Kore said it was now poised to enter negotiations with Sepco and PowerChina to finalise the EPC documentation.
The initial contract price aligned with expectations, the board said, and reaffirmed the capital cost outlined in the study.
It said it was aiming to conclude negotiations and sign the full EPC contract by the end of April.
At the same time, the Summit Consortium was expected to provide a financing proposal for the total construction cost of the Kola Project within six weeks of finalising the EPC documentation terms.
At 0900 GMT, shares in Kore Potash were down 1.67% at 0.59p.
Reporting by Josh White for Sharecast.com.
Kore Potash (KP2)