REG - Kore Potash PLC - Financial Results for Half Year Ended 30 June 2024
13/09/2024 07:00
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RNS Number : 0443E Kore Potash PLC 13 September 2024
13 September 2024
Kore Potash Plc
("Kore Potash" or the "Company")
("Group" refers to Kore Potash Plc and its subsidiaries)
Financial Results for Half Year Ended 30 June 2024
Kore Potash, 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"), today reports its unaudited financial results and operational
highlights for the half year ended 30 June 2024 ("the Period").
The full financial report is available online at the Company's website at
https://korepotash.com/wp-content/uploads/2024/09/Half-Year-Report-June-2024.pdf
(https://korepotash.com/wp-content/uploads/2024/09/Half-Year-Report-June-2024.pdf)
. The financial statements contained within this announcement should be read
in conjunction with the notes contained within the full financial report.
Highlights for the Period
· Power Construction Corporation of China ("PowerChina") delivered
the Engineering Procurement Construction ("EPC") proposal and draft EPC
contract to the Company on 6 February 2024.
· Kore Potash and PowerChina commenced further detailed
negotiations on the EPC proposal and draft EPC contract. The Company met
senior PowerChina officials in Beijing in May 2024 and again in Dubai in July
2024, where both parties satisfactorily resolved all outstanding commercial
points. The agreements are now with the respective legal counsels of both
parties for finalisation. When in final agreed form, Kore Potash and
PowerChina will determine a date for a signing ceremony with the Minister of
Mines and his colleagues of the RoC in Brazzaville. Relevant details of the
agreement will be made public.
· Successful completion of US$0.53 million fundraise with a further
US$0.15m conditionally raised and subsequently approved by shareholders at a
General Meeting held on 13 May 2024.
· André Baya, appointed as Chief Executive Officer on 4 April
2024, effective from 15 April 2024.
· On 15 April 2024, the Company granted options over 35,000,000 new
Ordinary Shares to senior management.
· On 7 May 2024, the Company announced a secondary listing on the
A2X exchange with effect from 14 May 2024.
· The Company held its Annual General Meeting on 6 June 2024, at
which all resolutions were duly passed.
· Amit Mehta, nominated by OIA, was appointed as a non-executive
director on 27 June 2024.
· Successful completion of US$1.221 million fundraise on 1 July 2024
with a further US$60,000 conditionally raised and approved by shareholders at
a General Meeting held on 23 August 2024.
· Cash and cash equivalents held at 30 June 2024 was US$959,956 (31
Dec 2023: US$1,583,657).
· The exploration and evaluation assets at 30 June 2024 were
US$172,738,487, a decrease of US$3,632,770 from US$176,371,257 at 31 December
2023. During the Period the Company capitalised US$1,338,666 in exploration
and evaluation expenditure and the expenditure decreased by US$4,971,436 as a
result of the strengthening of the US$ against the currency of the RoC.
Kola Potash Project
· Kore Potash signed a Memorandum of Understanding with the Summit
Consortium in April 2021 for the Optimisation of Kola, the provision of an EPC
contract proposal and to provide a debt and royalty financing proposal for the
full construction cost of Kola.
· The results of the Optimisation 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 Electric Power
Construction Corporation ("SEPCO").
· Under the HoA, SEPCO undertook to continue negotiations with Kore
Potash towards an EPC contract for the construction of Kola. Importantly, the
HoA recognises the outcomes of the Optimisation Study, and confirmed the
capital cost of Kola, the construction period and related EPC contract terms.
· On 10 October 2022, Kore Potash announced that SEPCO had
delivered the EPC proposal for Kola. The EPC proposal was approved for
presentation to Kore Potash by the Boards of SEPCO, and its parent company,
Power Construction Corporation of China.
· The EPC proposal reflects the capital cost and construction
timeline reported in the Optimisation Study and the terms agreed to in the
HoA. The EPC proposal includes an EPC Agreement which details the contractual
terms in a format congruent with the FIDIC Silver book (2nd Edition, 2017)
conditions of contract.
· On 8 August 2023, Kore Potash entered into a revised 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 present an EPC proposal and EPC contract
to the Group.
· 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 (together
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. Of the remaining US$3 million,
US$800,000 is payable up to 6 weeks from the date of PowerChina and SEPCO
having presented to Kore a "complete contractual document capable of
finalising the financing arrangement of the Kola Project and capable of
acceptance by Kore to form a binding construction contract" and US$2.2 million
to be paid subject to Kore concluding its fund raise with a target date of no
later than 12 months from the signing of the EPC.
· 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 RoC for the past 24 months
who continue to engage in 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.
· Throughout 2023 representatives of Kore Potash have maintained
increased levels of dialogue with the Ministry of Mines, including with the
Minister of State and Minister of Geology and Mining Industry, Mr Pierre Oba.
This was done with the objective to improve the Ministry's understanding of
the Company's projects at Kola and Dougou; the capability of the intended
financiers for Kola; the intended construction partner; and the processes the
Company must work through towards securing financing for the construction of
the Kola Potash Project. This dialogue has included meetings between the
Ministry and members of the Summit Consortium who intend to provide royalty
and debt financing to cover the full construction cost of Kola and PowerChina
including SEPCO who intend to construct Kola on an Engineering, Procurement
and Construction contract basis.
· On 21 August 2023 the Minister of Mines wrote a letter to Kore
Potash that pledges the Ministry and the RoC's support for Kore's development
of its projects at Kola and Dougou. The Minister acknowledged that some of the
development objectives for the Projects, as outlined in the Mining Convention,
have not yet been met. He assured the Ministry's steadfast support, in the
form of a moral guarantee, to assist in addressing remaining challenges to
complete 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.
· PowerChina delivered an EPC proposal and draft EPC contract on 6
February 2024.
· Kore Potash and PowerChina commenced further detailed negotiation
on the EPC proposal and draft EPC contract. The Company met senior PowerChina
officials in Beijing in May 2024 and again in Dubai in July 2024, where both
parties satisfactorily resolved most of the outstanding commercial points.
Summit Consortium and UAE representatives also visited Beijing in August to
facilitate resolution of any outstanding matters and accelerate signing of the
EPC. The agreements are now, as at signing date of this half-year report, with
the respective legal counsels of both parties for finalisation. When in final
agreed form, Kore Potash and PowerChina will determine a date for a signing
ceremony with the Minister of Mines and his colleagues of the RoC in
Brazzaville. Relevant details of the agreement will be made public.
· Once the EPC agreement is signed Kore Potash will then progress
towards seeking financing proposal for the complete construction of Kola
project from the Summit Consortium. When funding is in place this will allow
Kore Potash to build Kola project and eventually produce Muriate of Potash
("MoP") product and generate revenue. As at the current date there are no
formal plans in relation to alternative arrangements based on the current
probability of the EPC contract being signed.
Dougou Extension ("DX") Sylvinite Defined Feasibility Study Phase 1
· The DX Project update of the JORC (2012) compliant Mineral
Resource, Ore Reserve, PFS information and Production Target was announced on
the 24 January 2023.
· The updated information confirms that the DX Project is a
financially attractive, low capital cost project with a shorter construction
period than Kola.
· At present, the Company remains focused on completing the
financing of Kola and moving forward to construction of Kola as soon as
possible. The Company is also exploring what strategic options are available
for the DX project, including a potential sale.
The financial statements below should be read in conjunction with the notes
contained within the full financial report which is available online at the
Company's website at
https://korepotash.com/wp-content/uploads/2024/03/Financial-Results-for-Year-Ended-31-December-2023.pdf
(https://korepotash.com/wp-content/uploads/2024/03/Financial-Results-for-Year-Ended-31-December-2023.pdf)
.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE 6 MONTHS ENDED 30 JUNE 2024
6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 Dec 2023
USD USD USD
Unaudited Unaudited Audited
Directors' remuneration (71,750) (151,769) (252,602)
Equity compensation benefits (34,560) - -
Salaries, employee benefits and consultancy expense
(134,553) (95,704) (239,615)
Administration expenses (280,780) (273,020) (644,850)
Interest income 2,894 51,348 54,107
Interest and finance expenses (1,695) (1,395) (2,991)
Net realised and unrealised foreign exchange (loss)/gain
(8,192) 5,557 (5,104)
Loss before income tax expense (528,636) (464,983) (1,091,055)
Income tax income/(expense) - - -
Loss for the period (528,636) (464,983) (1,091,055)
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss
Exchange differences gain/(loss) on translating
Operations (4,864,377) 2,540,490 5,046,256
Other comprehensive profit/(loss) for the period
(4,864,377) 2,540,490 5,046,256
Total comprehensive profit/(loss) for the period
(5,393,013) 2,075,507 3,955,201
Loss attributable to:
Owners of the Company (528,571) (464,474) (1,089,761)
Non-controlling interest (65) (509) (1,294)
(528,636) (464,983) (1,091,055)
Total comprehensive profit/(loss) attributable to:
Owners of the Company (5,392,948) 2,076,016 3,956,495
Non-controlling interest (65) (509) (1,294)
(5,393,013) 2,075,507 3,955,201
Loss per share
Basic and diluted loss per share (cents per share) (0.01) (0.01) (0.03)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2024
30 June 2024 30 June 2023 31 Dec 2023
USD USD USD
Unaudited Unaudited Audited
ASSETS
Current Assets
Cash and cash equivalents 959,956 2,555,254 1,583,657
Trade and other receivables 130,181 140,479 180,532
Total Current Assets 1,090,137 2,695,733 1,764,189
Non-Current Assets
Trade and other receivables 37,072 39,218 38,147
Property, plant and equipment 330,122 373,633 356,259
Exploration and evaluation expenditure
172,738,487 167,201,357 176,371,257
Total Non-Current Assets 173,105,681 167,614,208 176,765,663
TOTAL ASSETS 174,195,818 170,309,941 178,529,852
LIABILITIES
Current Liabilities
Trade and other payables 1,484,108 572,417 1,240,527
Derivative financial liability 26 26 26
Total Current Liabilities 1,484,134 572,443 1,240,553
Non-Current Liabilities
Design optimisation works 2,200,000 - 2,200,000
TOTAL LIABILITIES 3,684,134 572,443 3,440,553
NET ASSETS 170,511,684 169,737,498 175,089,299
EQUITY
Issued share capital - Ordinary Shares 4,260,626 3,421,937 4,119,667
Reserves 224,812,384 223,948,269 229,228,412
Accumulated losses (57,997,253) (57,069,485) (57,694,772)
Equity attributable to the shareholders of
Kore Potash plc
171,075,757 170,300,721 175,653,307
Non-controlling interests (564,073) (563,223) (564,008)
TOTAL EQUITY 170,511,684 169,737,498 175,089,299
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE 6 MONTHS ENDED
30 JUNE 2024
Ordinary Shares Share Premium Reserve Merger Reserve Accumulated Option Reserve Foreign Currency Owners of the Parent Non- controlling Interest Total Equity
USD USD USD Losses USD Translation Reserve USD USD USD
USD USD
Balance as at 1 Jan 2024 4,119,667 47,301,569 203,738,800 (57,694,772) 565,688 (22,377,645) 175,653,307 (564,008) 175,089,299
Loss for the period - - - (528,571) - - (528,571) (65) (528,636)
Other Comprehensive (loss)/gain
- - - - - (4,864,377) (4,864,377) - (4,864,377)
Total Comprehensive (loss)/gain
- - - (528,571) - (4,864,377) (5,392,948) (65) (5,393,013)
Transactions with owners:
Issue of Shares 140,959 539,041 - - - - 680,000 - 680,000
Cancellation of performance rights - - - 226,090 (226,090) - - - -
Share issue cost - (12,849) - - - (12,849) (12,849)
Share Based payments - - - - 148,247 - 148,247 - 148,247
Balance at 30 June 2024 4,260,626 47,827,761 203,738,800 (57,997,253) 487,845 (27,242,022) 171,075,757 (564,073) 170,511,684
Ordinary Shares Share Premium Reserve Merger Reserve Accumulated Option Reserve Foreign Currency Owners of the Parent Non- controlling Interest Total Equity
USD USD USD Losses USD Translation Reserve USD USD USD
USD USD
Balance as at 1 Jan 2023 3,420,177 44,537,309 203,738,800 (56,793,651) 734,259 (27,423,901) 168,212,993 (562,714) 167,650,279
Loss for the period - - - (464,474) - - (464,474) (509) (464,983)
Other Comprehensive (loss)/gain
- - - - - 2,540,490 2,540,490 - 2,540,490
Total Comprehensive (loss)/gain
- - - (464,474) - 2,540,490 2,076,016 (509) 2,075,507
Transactions with owners:
Issue of Shares 1,760 - - - - - 1,760 - 1,760
Conversion of performance rights - - - 188,640 (188,640) - - - -
Share Based payments - - - - 9,952 - 9,952 - 9,952
Balance at 30 June 2023 3,421,937 44,537,309 203,738,800 (57,069,485) 555,571 (24,883,411) 170,300,721 (563,223) 169,737,498
Ordinary Shares Share-Based Payments Reserve Share Premium Reserve Foreign Currency Translation Reserve Merger Reserve Accumulated Losses Equity Attributable to the Shareholders of Kore Potash plc Non-Controlling Interest Total
Equity
USD USD USD USD USD USD USD USD USD
Balance at 01 Jan 2023 3,420,177 734,259 44,537,309 (27,423,901) 203,738,800 (56,793,651) 168,212,993 (562,714) 167,650,279
Loss for the period - - - - - (1,089,761) (1,089,761) (1,294) (1,091,055)
Other comprehensive income for the year - - - 5,046,256 - - 5,046,256 - 5,046,256
Total comprehensive (loss)/income for the year - - - 5,046,256 - (1,089,761) 3,956,495 (1,294) 3,955,201
Transactions with shareholders
Conversion of performance rights - (188,640) - - - 188,640 - - -
Share issues 699,490 - 2,764,260 - - - 3,463,750 - 3,463,750
Share based payments - 20,069 - - - - 20,069 - 20,069
4,119,667 565,688 47,301,569 (22,377,645) 203,738,800 (57,694,772) 175,653,307 (564,008) 175,089,299
Balance at 31 Dec 2023
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 6 MONTHS ENDED 30 JUNE 2024
6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 Dec 2023
USD USD USD
Unaudited Unaudited Audited
Cash Flows from Operating Activities
Payments to suppliers and employees (185,492) (577,006) (1,256,713)
Net cash flows (used in) operating activities
(185,492) (577,006) (1,256,713)
Cash Flows from Investing Activities
Payments for plant and equipment - - (1,527)
Payments for exploration and evaluation (1,108,548) (1,984,021) (5,779,186)
Interest received 2,894 51,348 54,107
Net cash flows (used in) investing activities
(1,105,654) (1,932,673) (5,726,606)
Cash Flows from Financing Activities
Proceeds from issue of shares 680,000 1,760 3,504,618
Payment for share issue costs (12,849) - -
Net cash flows generated from financing activities
667,151 1,760 3,504,618
Net decrease in cash and cash
Equivalents (623,995) (2,507,919) (3,478,701)
Cash and cash equivalents at beginning of Period
1,583,657 5,046,629 5,046,629
Foreign currency differences 294 16,544 15,729
Cash and Cash Equivalents at Period End
959,956 2,555,254 1,583,657
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.
This announcement has been approved for release by the Board of Kore Potash.
END
For further information, please visit www.korepotash.com
(http://www.korepotash.com) or contact:
Kore Potash Tel: +44 (0) 20 3963 1776
André Baya, CEO
Andry Maruta, CFO
Tavistock Communications Tel: +44 (0) 20 7920 3150
Emily Moss
Josephine Clerkin
SP Angel Corporate Finance - Nomad and Broker Tel: +44 (0) 20 7470 0470
Ewan Leggat
Charlie Bouverat
Shore Capital - Joint Broker Tel: +44 (0) 20 7408 4050
Toby Gibbs
James Thomas
Questco Corporate Advisory - JSE Sponsor Tel: +27 (11) 011 9205
Doné Hattingh
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.
In particular, statements in this release regarding the Company's business or
proposed business, which are not historical facts, are "forward-looking"
statements that involve risks and uncertainties, such as Mineral Resource
estimates market prices of potash, capital and operating costs, changes in
project parameters as plans continue to be evaluated, continued availability
of capital and financing and general economic, market or business conditions,
and statements that describe the Company's future plans, objectives or goals,
including words to the effect that the Company or management expects a stated
condition or result to occur. Since forward-looking statements address future
events and conditions, by their very nature, they involve inherent risks and
uncertainties. Actual results in each case could differ materially from those
currently anticipated in such statements. Shareholders are cautioned not to
place undue reliance on forward-looking statements, which speak only as of the
date they are made. The forward-looking statements are based on information
available to the Company as at the date of this release. Except as required by
law or regulation (including the ASX Listing Rules), the Company is under no
obligation to provide any additional or updated information whether as a
result of new information, future events, or results or otherwise.
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