(Alliance News) - Kore Potash PLC said on Tuesday it had entered into a revised agreement that will see SEPCO Electric Power Construction Corp provide the company with an engineering, procurement and construction contract by end of January 2024 for the construction of the Kola Potash project.
It said it will contribute up to USD5 million to get this contract ready for the construction of the Kola project.
Kore owns the Kola and DX potash projects in Republic of Congo. Potash is used mainly as an agricultural fertiliser.
In a separate statement, Kore said it had raised USD800,000 through a share subscription and issued convertible loans with an aggregate value of USD200,000.
Proceeds of USD1 million will be used to further advance work that is expected to lead to the delivery of an engineering, procurement and construction contract.
Under the new agreement, Kore is required to make an initial payment of USD1 million within three days of signing this agreement.
The remainder - which is contingent upon Kore completing further fund raises and SEPCO delivery of the engineering, procurement and construction contract - is planned to be paid in three tranches between October 25 and 12 months from the date that the company signs the contract.
In London, shares in Kore lost 8.0% to 0.57 pence on Tuesday morning. But they were unchanged at ZAR0.15 in Johannesburg.
Kore and SEPCO have scheduled to sign the engineering, procurement and construction contract before the end of January 2024.
The revised agreement comes after SEPCO's parent company, PowerChina International Group Ltd, reviewed the Kola design and construction schedule.
To assist in advancing engineering design works as rapidly as possible, PowerChina has subcontracted five technical groups, which have commenced additional design and engineering works.
Specific design areas include the underground mine, mineral processing jetty and transhipment operations, energy transportation and storage, conveyor systems and material handling.
PowerChina has advised Kore that these works will cost in excess of USD10 million to complete. But PowerChina has capped Kore's contribution at a maximum of USD5 million of these costs, with the balance of the cost to be paid by PowerChina, Kore said.
Kore said it had been advised that PowerChina, SEPCO and the subcontractors are well progressed with the works.
By Artwell Dlamini, Alliance News reporter
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Kore Potash (KP2)