Kore Potash Regulatory News (KP2)

24 August 2021

Kore Potash Plc

("Kore Potash" or the "Company")

Financial Report for the Half Year Ended 30 June 2021

Kore Potash plc (KP2:AIM, KP2:ASX, KP2:JSE), the potash development company with 97%-ownership of the Kola and DX Potash Projects in the Sintoukola Basin, located within the Republic of Congo ("RoC"), is pleased to provide its financial statements for the half year ended 30 June 2021 (the "Period"). The full report, with accompanying notes, is available for download on the Company's website:

https://korepotash.com/investors/results-and-reports.

HIGHLIGHTS

· On the 6 April 2021 the company signed a non-binding Memorandum of Understanding ("MoU") with Summit Africa Limited ("Summit"), on behalf of a consortium of investors and engineering firms, to arrange the total financing required for the construction of the Kola Potash Project ("Kola")

• The MoU outlines a roadmap to optimise the capital design, fully finance and construct Kola via a mix of debt and royalty financing.

• The MoU was signed in the Minister of Mines offices in Brazzaville with the Minister and his key staff present. Under the proposed financing arrangements, the RoC Government retain their 10% shareholding in the Kola project.

• During the Period, Summit and their technical partner SEPCO Electric Power Construction Corporation ("SEPCO"), signed the Optimisation Agreement to undertake a study "Optimisation Study" to reduce Kola's capital cost with a target of less than US$1.65 billion ("Target Capex"). A team of representatives from Kore, ENFI (a key subcontractor to SEPCO) and the RoC Minister of Mines completed a Kola site visit and data handover. The optimisation study work has commenced with regular updates provided to the Kore team.

• Under the Consortium's proposed financing structure, the Company will not be required to contribute to the capital needed to build the Kola project and will retain a 90% equity interest in Kola.

· During the Period the Company successfully raised US$14,024,596 through equity funding.

• On 8 April 2021, the Company successfully completed an oversubscribed fundraising. A total of 823,475,618 New Ordinary Shares were issued at the Placing Price of 1.1 pence (2.0 Australian cents) for a total value of US$12.6 million (the "Fundraise"), exceeding the initial US$11.0 million target.

• Subsequent to the fundraise, the Oman Investment Authority ("OIA"), Kore's largest shareholder, in line with its rights under their investment agreement with the Company, subscribed for 92,226,613 New Ordinary Shares in the Company at the Placing Price for a total cash consideration of $1.4 million.

· The DX DFS Phase 1 results were published on 27 May 2021 with the following highlights:

• The Phase 1 work program for the DFS was completed on budget including the drilling of seven diamond drill holes and geochemical testing.

• Key technical studies and laboratory test work for Phase 1 of the DX DFS that were completed.

• Work has commenced to develop an improved geological model for the DX deposit incorporating all recent drilling information and is expected to be completed before the end of 2021. The completion of this work may result in a re-estimation of the DX Mineral Resources.

· Cash and cash equivalents, at 30 June 2021 was US$14,163,074.

· The exploration and evaluation asset at 30 June 2021 was US$170,592,485 a decrease of US$1,433,265 from US$172,025,750 at 31 December 2020 due to the strengthening of the RoC currency. During the Period the Company capitalised US$3,957,328 in exploration and evaluation expenditure.

· The Coronavirus ("COVID-19") pandemic is ongoing and it did not have a material impact on the Company's operations during the Period.

· During the Period the Company did not renew the Sintoukola 2 exploration permit. The Company had not done any exploration work on the Sintoukola 2 permit area and continues its focus on the development of the Kola and DX projects.

OPERATIONAL ACTIVITIES

Kola Potash Project

· The Company signed a non-binding MoU with Summit, on behalf of a consortium of investors and engineering firms, to potentially arrange the total financing required for the construction of Kola in the presence of the Minister of Mines and his key staff in Brazzaville.

· The Summit Consortium includes:

• BRP Global, headquartered in Abu Dhabi, who would provide royalty financing in conjunction with product offtake;

• SEPCO, an international engineering and construction group headquartered in Jinan, China and with offices in Dubai and a wholly owned subsidiary of Power Construction Corporation of China (POWER CHINA). SEPCO will be the Engineering Procurement and Construction ("EPC") contractor for Kola within the Summit Consortium. SEPCO has significant construction experience globally across a range of industries, including power, oil and gas chemical, energy-reduction and environmental protection and infrastructure projects. SEPCO has completed major construction projects in 25 countries, including 44 EPC contracts in 11 countries with 7 of these in Africa. In addition to its construction capability, SEPCO will also assist in arranging the debt financing for Kola; and

• China ENFI Engineering Corporation ("ENFI"), subcontracted by SEPCO and headquartered in Beijing, is a significant engineering group with specific mining, processing, and potash experience. ENFI is a mining technology leader in China and has provided technical services for the design and construction of more than 400 mining operations around the world. ENFI's potash specific experience includes design and construction of an underground potash mine in southeast Asia.

· Representatives of the key engineering partner of the Summit Consortium, SEPCO and the Company met with the RoC Minister of Mines and his staff in Brazzaville. A site inspection at the Kola Project was conducted with representatives from ENFI a subcontractor to SEPCO, and delegates from the Ministry of Mines.

· The Company and the Summit Consortium signed the Optimisation Agreement for Kola on terms congruent with the MoU announced by the Company on 6 April 2021.

· SEPCO and its subcontractor ENFI commenced work on the Optimisation Study for Kola. Further Kola Project data was sent to SEPCO to facilitate the Optimisation Study. The study considers capital cost reduction initiatives in most project areas including mine design, underground access, material transportation system, processing plant design and location, key infrastructure design and marine facilities.

· The Company will contribute a maximum of US$950,000 to the Optimisation Study costs. SEPCO will cover the remaining 50% of the estimated costs of the study.

Next Steps

· The Optimisation Agreement requires the Summit Consortium to provide an interim report by the end of September 2021 and complete the Optimisation Study by 29 January 2022.

Dougou Extension (DX) Sylvinite Defined Feasibility Study Phase 1

During the half year, the Company released its update on the DX project. The Company reported the following highlights:

· The seven hole diamond drill program for Phase 1 of the DX DFS was completed, and assay results were received.

· Analysis of the drill hole logs and assay results from the drilling campaign has:

• Confirmed the locations of the targeted Hanging wall and Top potash seams.

• Improved confidence in the distribution of sylvinite within the Top Seams ("TS").

• Demonstrated that the sylvinite / carnallite boundary within the Hanging Wall Seam ("HWS") is structurally controlled and the sylvinite distribution is more complex than modelled in the Pre-Feasibility Study.

• Identified areas containing carnallite that will be excluded and not considered for extraction in future mine planning for the DX project.

• Indicated that further drill hole and seismic information may be required to have confidence in the distribution of sylvinite in the HWS.

· Key technical studies and laboratory test work for Phase 1 of the DX DFS that were completed include:

• Dissolution testwork to provide improved data for temperature brine-modelling.

• Laboratory testing of rock mechanics properties to assist in the determination of cavern stability, the possible extent of reservoir mining and expected subsidence over the project life.

• Production well design to provide specifications for future capital cost estimating.

• Cavern blanket design parameters (to control cavern formation) to provide specifications for future capital cost estimating.

· Work completed in Phase 1 of the DX DFS has been completed within the planned budget.

Next Steps

· Before proceeding further with the DX DFS, the Company plans to:

• Develop a new geological model for the DX deposit incorporating the results of the recent drilling campaign. This work has commenced with completion expected before the end of 2021.

• Determine using the new modelling whether further drill hole and seismic information may be required to further improve confidence in the distribution of Sylvinite and Carnallite within the DX Deposit.

Environmental and social impact assessment ("ESIA")

· The Minister of Tourism and Environment of the RoC issued certificates on 31 March 2020 granting a 25-year approval period for the ESIAs for both the Dougou and the Kola Mining Licences. This approval aligned with the provisions of the Mining Convention in place between the Government and Kore and eliminated the previous requirement for annual re-approvals. The Company plans in the future to seek approval for amendments to the ESIA for the Dougou Mining Licence to include the planned mining and processing of the DX sylvinite Deposit which sits within the Dougou Mining Licence.

Mining Convention and Research Convention

· The Company continues to engage with the RoC Government to implement the commitments contained within the Mining Convention. This includes the intra-group transfer of the Dougou Mining License from Sintoukola Potash S.A. to the operating entity Dougou Potash Mining S.A. and the transfer of a 10% shareholding in Kola Potash Mining S.A. and Dougou Potash Mining S.A. to the State.

Impact of COVID-19

· COVID-19 has not had a material adverse impact on the Company's activities during the Period.

· Within the RoC, the State of Health Emergency concerning COVID-19 remains in force.

· The Group's employees within the RoC have implemented social distancing, wearing of masks, temperature monitoring and hand sanitisation procedures to mitigate the risk of contracting COVID-19.

· All recruits working in-country are required to undergo a COVID-19 test before being employed and anyone visiting the operations from abroad is required to test negative for COVID-19 before travelling.

· Kore maintained full business continuity in country in Pointe Noire and at Koutou through teleworking, Company transportation for employees, and controlled access to facilities to ensure full attendance.

· Assistance to local schools in the project impact zone was provided (masks, hand washing equipment).

GOING CONCERN

The 30 June 2021 half-yearly report has been prepared on a going concern basis that contemplates the continuity of normal business activities and the realisation of assets and extinguishment of liabilities in the ordinary course of business. In determining the appropriateness of the basis of preparation, the directors have considered the impact of COVID-19 on the position of the Group at 30 June 2021 and its operations in future periods.

Cash and cash equivalents, at 30 June 2021 were US$14,163,074 (30 June 2020: US$1,839,826) the increase was driven by the successful fundraise of US$14,024,596 announced on 8 April 2021. For the Period ended 30 June 2021 the Group recorded a net loss of US$1,290,440 (30 June 2020: US$1,320,961) and at 30 June 2021 had a net working capital of US$12,910,909 (31 December 2020: US$4,993,998). The Group also recorded a net cash used in operating activities for the Period ended 30 June 2021 of US$1,036,777 (30 June 2020: US$1,367,781).

The Group's financial projections and cash flow forecasts covering a period of more than twelve months from the date of approval of these financial statements show that, as a result of the successful fundraising in the review Period, the Group will have sufficient available funds in order to meet its contracted and committed expenditure.

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE 6 MONTHS ENDED 30 JUNE 2021

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021

CONDENSED CONSOLIDATED STATEMENT OF CHANGE IN EQUITY FOR THE 6 MONTHS ENDED 30 JUNE 2021

CONDENSED CONSOLIDATED STATEMENT OF CHANGE IN EQUITY FOR THE 6 MONTHS ENDED 30 JUNE 2021

CONDENSED CONSOLIDATED STATEMENT OF CHANGE IN EQUITY FOR THE 6 MONTHS ENDED 30 JUNE 2021

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE 6 MONTHS ENDED 30 JUNE 2021

The above tables should be read in conjunction with the full half yearly report, which is available for download on the Company's website: https://korepotash.com/investors/results-and-reports/.

**END**

This announcement has been approved for release by the Board of Kore Potash plc.

For further information, please visit www.korepotash.com or contact