Kore Potash Regulatory News (KP2)

18 January 2024

Kore Potash Plc

("Kore Potash" or "the Company")

Review of Operations for the quarter ended 31 December 2023

Kore Potash (AIM: KP2, ASX: KP2, JSE:KP2), the potash development company with 97% ownership of the Kola Potash Project ("Kola" or the "Kola Project") and Dougou Extension Potash Project ("DX") in the Sintoukola Basin, located in the Republic of Congo ("RoC"), provides its quarterly update for the period ended 31 December 2023 (the "Quarter").

Quarterly Highlights

Projects

· PowerChina International Group Limited ("PowerChina") continues with the review process of the Engineering, Procurement and Construction ("EPC") proposal, announced in December 2023.

Corporate

· Resignation of Brad Sampson, the Company's Chief Executive Officer ("CEO"), on 31 October 2023. The Company does not intend to appoint a new CEO until after the receipt of the financing proposal for the construction of the Kola Potash Project.

· David Hathorn, (Chairman) has assumed the role of CEO in the interim.

· Acting Chief Financial Officer ("CFO") Amanda Farris resigned on 11 December 2023 with Andrey Maruta appointed as non-board CFO.

· Successful completion of US$2.5 million equity fundraise.

· As of 31 December 2023, the Company held c.US$1.6 million in cash.

Operational Activities

Kola EPC

Kore Potash signed a Memorandum of Understanding with the Summit Consortium ("Consortium") in April 2021 for the Optimisation of Kola, the provision of an EPC contract proposal, and a debt and royalty financing proposal for the total construction cost of Kola.

The results of the Optimisation Study ("Study") announced on 27 June 2022 supported moving to the next phase of Kola's development.

On 28 June 2022, the Company announced that it had signed a Heads of Agreement ("HoA") for the construction of Kola with SEPCO. Under the HoA, SEPCO undertook to continue negotiations with Kore Potash towards an EPC contract for the construction of Kola. Importantly, the HoA recognised that the Study's outcomes confirmed the capital cost of Kola, the construction period and related EPC contract terms.

Recognising the world-class scale of Kola, the length of the proposed construction period and the total financing requirement, Kore Potash requested that SEPCO's parent company, PowerChina, provide the typically required EPC contract guarantees, including performance and retention bonds supporting the completion of construction and the operating performance of Kola.

On 8 August 2023, Kore Potash entered into a revised agreement ("Agreement") with SEPCO to provide the Company with an EPC contract for the construction of the Kola Project. Following the completion of SEPCO's parent company, PowerChina's, review of the Kola design and construction schedule, one of the agreed outcomes was that further engineering design works must be completed before PowerChina and SEPCO jointly presenting an EPC proposal and EPC contract to the Company.

PowerChina subcontracted five technical groups who commenced additional design and engineering works. Specific design areas included the underground mine, mineral processing jetty and transhipment operations, energy transportation and storage, conveyor systems and material handling (the "Works"). PowerChina advised the Company that the Works would cost in excess of US$10 million to complete. Illustrating PowerChina's commitment to Kola, it capped Kore Potash's contribution at a maximum of US$5 million, with the balance of the costs to be paid by PowerChina.

Two payments of US$1.0 million each were made in August and November 2023 as required under the Agreement. The remaining payments are contingent upon the Company completing further fund raises and PowerChina and SEPCO's delivery of the EPC contract. The remaining payments are planned to be paid in two tranches 12 months from date of the execution of the EPC contract.

PowerChina, SEPCO and the subcontractors, in pursuit of the timeline objectives, commenced the Works before reaching an agreement with the Company on costs.

SEPCO has had personnel living in the Republic of Congo ("RoC") for the past 24 months who continue dialogue with potential in-country service providers and who have conducted several Kola site visits collecting information for both the Study and the Works. Additionally, SEPCO mobilised a larger team to Kola for four months in the second half of 2023 to source additional information to enable the Works finalisation, including the planned service corridors, conveyor route, and geomechanical information on foundation materials in the proposed processing plant and infrastructure areas. These findings were presented to PowerChina in early December 2023.

PowerChina and SEPCO have confirmed that they have received all the information relating to the Works, internal reports are being finalised, and the EPC contract is in draft form.

Regarding the Works detailed in the Agreement:

§ Additional engineering design works - Completed;

§ Finalisation of internal reports - week commencing 15 January 2024;

§ EPC Proposal and EP Contract offer - on track to be delivered to the Company by the end of January 2024;

§ Kore Potash and SEPCO/PowerChina signing the EPC contract - targeting before the end of February 2024.

Kola Financing

Kore Potash continues to work with the Consortium to provide financing for the total construction cost of Kola, which is intended to be based on royalty and debt finance.

The successful outcomes of the Study were in line with the Consortium's requirements and supported the ongoing financing discussions. The financing parties of the Consortium have again reinforced their ongoing strong interest in financing Kola and await the finalisation of the EPC contract terms.

The Consortium has advised that the financing proposal for the total construction cost of Kola will be provided to the Company within six weeks of EPC Contract terms finalisation.

Kore Potash maintains that the Consortium members can provide the required financing for Kola's construction of Kola and that pursuing this financing opportunity remains the best path forward for Kore Potash's shareholders.

Congo Government Relations

The Minister of Mines wrote a letter to Kore Potash that pledged the Ministry and the RoC's support for Kore's development of its projects at Kola and Dougou ("Projects").

The Minister acknowledged that some of the development objectives for the Projects, as outlined in the Mining Convention, have not yet been met. He also assured the Ministry's steadfast support, in the form of a moral guarantee, to assist in addressing the remaining challenges to completing the financing of Kola. The Minister reaffirmed the validity of the Company's mining tenement titles and the Mining Convention, which is the operating agreement between the Company and the Government.

He further conveyed a pledge of security reflecting the RoC's confidence in Kore Potash to support ongoing dialogue and action towards developing our projects in the RoC.

The Minister of Mines of the RoC showed further support for the Company's development of the Kola Project during a visit to the Kola Project in September.

Kore Potash held a ceremony at the intended location of the Kola processing plant in recognition of the extensive development work completed by Kore Potash. The ceremony also recognised the commencement of work on the ground at the Kola site by SEPCO.

The ceremony was held near the village of Yanga in the Kouilou province of the RoC. The Minster, members of his Ministry and local dignitaries were in attendance, along with the Chairman and Interim CEO of Kore Potash, David Hathorn, Warren Thompson from the Summit Consortium and SEPCO Vice President Zhang Quan.

DX Potash Project

At present, the Company remains focused on completing the financing of Kola and moving forward to the construction of Kola as soon as possible.

The Company is continuing to explore the strategic options available for the DX project.

Corporate

The Company successfully raised US$2.5 million through the issue of 542,250,000 new ordinary shares of US$0.001 each in the Company ("Subscription Shares") to certain eligible existing shareholders at a price of 0.38 pence per share ("Subscription Price"). The Company's Chairman has participated with US$750,000 investment.

At the Company's GM, held on 7 December 2023, all resolutions were duly passed on a poll by the requisite majority.

There were no mining production or construction activities during the Quarter.

Quarterly cashflow report

In accordance with the ASX Listing Rules, the Company will also lodge its cashflow report for the Quarter today. Included in those cashflows are Brad Sampson's salary of US$164,000 settled in cash.

The Company invested US$1,683,000 in exploration in the Quarter, which comprised US$1,667,000 related to the Kola Study and US$16,000 for the DX DFS Study. The Company ended the Quarter with c.US$1.6 million in cash.

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

Market Abuse Regulation

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

ENDS

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

Tenement Details and Ownership

The Company is incorporated and registered in England and Wales and wholly owns Kore Potash Limited of Australia. Kore Potash Limited has a 97% shareholding in Sintoukola Potash SA ("SPSA") in the RoC. SPSA has 100% ownership of Kola Potash Mining SA ("KPM"). KPM has 100% ownership of the Kola Mining Lease on which the Kola Deposit is situated. The Kola Deposit is located within the Kola Mining Lease. SPSA is also the 100% owner of the Dougou Mining Lease. The Dougou Mining lease hosts the Dougou Deposit and the DX Deposit.

Under the existing Mining Convention, the RoC Government is entitled to 10% ownership in the Kola and DX Projects. The transfer of this 10% awaits instructions from the Government and the Mineral Resources and Ore Reserves are shown below in gross and 90% attributable bases. 

Table 1: Schedule of mining tenements (Republic of Congo)

Kore Potash Mineral Resources and Ore Reserves - Gross and according to future 90% interest (10% by the RoC government)

Competent Persons Statements

All Mineral Resource and Ore Reserves are reported in accordance with the JORC Code (2012 edition). Numbers are rounded to the appropriate decimal place. Rounding 'errors' may be reflected in the "totals".

The Kola Mineral Resources were reported 6 July 2017 in an announcement titled 'Updated Mineral Resource for the High -Grade Kola Deposit'. It was prepared by Competent Person Mr. Garth Kirkham, P.Geo., of Met-Chem division of DRA Americas Inc., a subsidiary of the DRA Group, and a member of the Association of Professional Engineers and Geoscientists of British Columbia. The Ore Reserves for sylvinite at Kola was first stated on 29 January 2019 in an announcement titled "Kola Definitive Feasibility Study" and was prepared by Met-Chem. The Competent Person for the estimate was Mr Mo Molavi, member of good standing of Engineers and Geoscientists of British Columbia. The Ore Reserves were reviewed when the changes to the underlying assumptions (as detailed in the 27 June 2022 announcement "Kola Project optimisation study outcomes") were made and Mr Molavi verified that the Ore Reserves remained unchanged.

The Dougou carnallite Mineral Resources were reported on 9 February 2015 in an announcement titled 'Elemental Minerals Announces Large Mineral Resource Expansion and Upgrade for the Dougou Potash Deposit'. It was prepared by Competent Persons Dr. Sebastiaan van der Klauw and Ms. Jana Neubert, senior geologists and employees of ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH and members of good standing of the European Federation of Geologists.

The Dougou Extension sylvinite Mineral Resource Estimate and Ore Reserve Estimate were reported in an announcement titled "Updated Dougou Extension (DX) PFS and Production Target" on 24 January 2023. Dr. Douglas F. Hambley, Ph.D., P.E., P.Eng., P.G of Agapito Associates Inc., for the Exploration Results and Mineral Resources. Mr. Hambley is a licensed professional geologist in states of Illinois (Member 196-000007) and Indiana (Member 2175), USA, and is an Honorary Registered Member (HRM) of the Society of Mining, Metallurgy and Exploration, Inc. (SME, Member 1299100RM), a Recognized RPO included in a list that is posted on the ASX website from time to time and Dr. Michael Hardy was the Competent Person for the Ore Reserves, and he is a registered member in good standing (Member #01328850) of Society for Mining, Metallurgy and Exploration (SME) which is an RPO included in a list that is posted on the ASX website from time to time.

The Company confirms that, it is not aware of any new information or data that materially affects the information included in the original market announcements and, in the case of estimates of Mineral Resources or statements of Ore Reserves that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

Forward-Looking Statements

This release contains certain statements that are "forward-looking" with respect to the financial condition, results of operations, projects and business of the Company and certain plans and objectives of the management of the Company. Forward-looking statements include those containing words such as: "anticipate", "believe", "expect," "forecast", "potential", "intends," "estimate," "will", "plan", "could", "may", "project", "target", "likely" and similar expressions identify forward-looking statements. By their very nature forward-looking statements are subject to known and unknown risks and uncertainties and other factors which are subject to change without notice and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct, which may cause the Company's actual results, performance or achievements, to differ materially from those expressed or implied in any of our forward-looking statements, which are not guarantees of future performance. Neither the Company, nor any other person, gives any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statement will occur. Except as required by law, and only to the extent so required, none of the Company, its subsidiaries or its or their directors, officers, employees, advisors or agents or any other person shall in any way be liable to any person or body for any loss, claim, demand, damages, costs, or expenses of whatever nature arising in any way out of, or in connection with, the information contained in this document.