(Alliance News) - Kore Potash PLC on Wednesday reported outcomes of the Dougou extension (DX) potash solution mining project pre-feasibility study in the Republic of Congo.
The mining company said the DX project's production target stands at 400,000 tonnes per year of potash over an initial 18-year life. Thus, the company said it expects to generate average annual earnings before interest, tax, depreciation and amortization of USD118 million.
Kore Potash said it expects project construction to take 21 months. The company estimates an initial pre-production capital cost of USD286 million, including contingency.
The company believes that combination of the modest initial capital cost and a short construction period improve attractiveness of the DX project to potential financiers.
Looking ahead, Kore Potash said planning for the definitive feasibility study is progressing well, and it will make an announcement once the detailed scope and costing is completed.
"The completion of the DX PFS confirms the district scale development potential of this world-class potash basin and the standalone commercial viability of the DX project," said Chief Executive Brad Sampson.
"Accelerating the company into production and early cashflow generation via the DX project will provide a strong platform to continue to optimise the Tier-1 Kola project and the wider potash basin, and a significantly improved commercial position to undertake its development," added Sampson.
Kore Potash shares were trading 9.7% lower in London on Wednesday at 0.70 pence each, while in Johannesburg, the stock was up 6.3% at ZAR0.17 a share.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Kore Potash (KP2)