Three sizeable potash deposits in Republic of Congo
Kola sylvanite deposit contains 508mln tonnes of ore
Dougou contains 1.1bn tonnes
DX likely to be developed first after strong numbers from scoping study
What the company does
Kore Potash PLC (LON:KP2) is focused on the development of potash assets in the Republic of Congo.
The company started exploration work back in 2010, in the days when it was known as Elemental Minerals, and has since progressed its assets steadily towards the point where major economic studies are now underway to assess viability.
Potash is used extensively around the world as a fertiliser.
What the company owns
Kore owns 97% of a company called Sintoukoula Potash SA.
This vehicle in turn, owns 100% of Kore’s two major projects.
The lead project is the Kola sylvanite deposit, which contains 508mln tonnes of ore grading 35.4% potassium chloride (KCl).
Within that is 152mln tonnes of proved and probable ore grading 32.5%.
Coming along behind is the larger Dougou carnallitite project, which contains 1.1bn tonnes of ore grading 20.6% KCl.
There is also further upside on offer from the Dougou Extension (DX) sylvanite project, which contains 232mln tonnes grading 38.1% KCl.
In April, Kore revealed it is considering developing the DX project first.
According to a scoping study, for upfront capital expenditure of US$327mln, a low-cost mine with a life of 17 years can be established at DX.
Production will be 400,000 tonnes of potash a year, which would generate revenues of US$134mln at a price of US$360 per tonne.
Kore said that it assessed all strategic options within the Sintoukola District before making the decision that a reduced-scale potash development would expedite cash flow.
Kore much larger
In January, Kore completed its review of the definitive feasibility for Kola which was completed by a French consortium.
This consortium now plans to deliver a proposal for an engineering, procurement and construction contract for Kola by the end of the first quarter of 2019.
Further optimisation of the Kola feasibility study is also taking place and discussions with regards to financing construction are continuing.
Positive scoping results for DX
Update on review of EPC (enginneering contract) for Kola flagship within next two months
Over its life, DX can produce 52Mt of high-grade sylvinite
Operating cost was forecast at just US$108/t CFR Africa.
DX’s short shipping distance and resulting low delivered cost opens the key African markets of Nigeria, South Africa and West Africa, believes broker Shore Capital.
Kore believes that a Pre-Feasibility Study (PFS) on DX could potentially be completed in only nine months as areas of the scoping study were completed to “a higher level of confidence than is normal for a scoping study.
Drilling of four additional diamond holes is the key item controlling Kore’s envisaged timeframe.
DX infrastructure would overlap with that for the Kola sylvinite project - as well as that for the Dougou carnallite project - which would lower development costs and construction timelines for all three projects.