RNS29 Apr 2019 08:15
''Dougou Extension Solution Mining Project Scoping Study
Kore Potash, the potash development company whose flagship asset is the 97%-owned Sintoukola Potash Project in the Republic of Congo, is pleased to announce the results of a Scoping Study undertaken to assess the viability of producing 400 thousand tonnes per annum (ktpa) of Muriate of Potash (MoP) from a portion of the sylvinite in the Dougou Extension (DX) Deposit by a solution mining method (all together the "Scoping Study"). The Scoping Study supports a low opex and strong cash generative operation with attractive estimated base case up-front capital costs of US$327 million. The DX Deposit is located within the Company's Dougou mining permit, southwest of the Company's flagship Kola sylvinite Deposit, which would be a separate development.
Highlights
· Scoping Study demonstrates low technical risk and attractive economics for DX Project
· Utilises a highly efficient potash extraction method that is well understood and is in use across multiple potash operations globally
· Attractive life-of-mine cost of sales, free on board (FOB) of approximately US$82.74/t MoP
· Mine life of approximately 17 years based on solution mining of 52 million tonnes of Indicated Mineral Resource @ 43.1% KCl from a total Indicated Mineral Resource base of 111 million tonnes @ 37.2% KCl
· Estimated base case initial capital cost of approximately US$327 million (real 2019) to produce approximately 400 ktpa white granular MoP
· Estimated two-year construction period provides the company with near term production options
· Base case real ungeared IRR of approximately 19.3% and base case post-tax ungeared NPV10 (real) of approximately US$221 million on an attributable basis at life-of-mine average MoP price for granular product of US$360/t
· Average base case annual post construction, post-tax, free cash flow of approximately US$74 million and approximately 4.25 years post-tax payback period from first production
· Infrastructure overlaps with the Kola sylvinite and Dougou carnallite projects will have a positive impact on the future development costs and construction timeframes of those two projects
· Several areas of the Scoping Study were completed to a higher level of confidence than is normal for a scoping study. As a result, the work required to complete a PFS, once commenced, is estimated to require only 9 months, with the drilling of an additional 4 diamond drill holes being the item currently controlling the overall timeframe''
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