Wrap Text
Kola Project Optimised DFS update
Kore Potash plc
(Incorporated in England and Wales)
Registration number 10933682
ASX share code: KP2
AIM share code: KP2
JSE share code: KP2
ISIN: GB00BYP2QJ94
CDI ISIN: AU000000KP25
("Kore Potash" or the "Company")
27 February 2025
Kola Project Optimised DFS update
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"), is pleased to provide an update in relation to the optimised Kola Definitive
Feasibility Study ("Optimised DFS") for the Kola Project ("Kola" or "Kola Project") further to the announcement regarding the
signing of the Engineering, Procurement and Construction contract ("EPC") for the Kola Project with PowerChina International
Group Limited ("PowerChina") on 20 November 2024.
Prior to signing an EPC agreement, two studies have been completed by the Company: the Kola Definitive Feasibility Study
("DFS") in January 2019 and the Kola Project Optimisation Study ("Optimisation Study") in June 2022, details of both of which
have been released to AIM, JSE and ASX on 29 January 2019 and 28 June 2022 respectively. Following signing of the EPC
contract, the Company undertook an exercise to optimise the DFS to account for the EPC contract, including updating the Kola
production schedule and the forecast financial information. The Company has now completed its review of the Optimised DFS,
with the results summarised herein by way of update.
The results of the Optimised DFS incorporate the most current information available to the Company, and have been updated
from the DFS and Optimisation Study to ensure compliance with the latest applicable listing rule requirements and other
regulatory policies of the Australian Stock Exchange Limited, and therefore should be considered as superseding the results of
both the DFS and the earlier Optimisation Study.
Unlike the DFS and the Optimisation Study, the Optimised DFS is based on a production period which utilizes all Proved and
Probable Ore Reserves and only 6% of Inferred Minerals Resources, giving a Life of Mine ("LoM") of 23 years.
Kore Potash considers there is strong potential for the mine plan on which this Optimised DFS is based to be extended beyond
23 years by upgrading a portion of the 340 Mt of Inferred Mineral Resources to Measured or Indicated Resources through
further exploration during the 23 years of operations.
Highlights of the Optimised DFS
• Capital cost of US$2.07 billion (nominal basis) on a signed fixed price EPC basis, including owner's costs.
• Assumed construction start date of 1 January 2026, with construction period of 43 months.
• Kola designed with a nameplate capacity of 2.2 million tonnes per annum ("Mtpa") of Muriate of Potash ("MoP").
• Average MoP production per year of 2.2 Mtpa of MoP for total MoP production of 50Mt over a 23-year life of mine.
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• Average cost of MoP delivered to Brazil is US$128/t. Based on an independent MoP market study commissioned by
the Company, management considers Kore Potash is projected to become one of the lowest cost producers in the
global agricultural market to Brazil.
• Average annual EBITDA is approximately US$733 million. Kore Potash is projected to continue to enjoy a very high
average EBITDA margin of 74%.
• Key financial metrics, at MoP CFR Brazil pricing averaging US$449/tonne and on a 90% attributable basis (reflecting
Kore's future holding of 90% and the RoC government 10%):
o - Kola NPV10% (real) post-tax US$1.7 billion
o - IRR 18% (real) on ungeared post-tax basis
• Kola is designed as a conventional mechanised underground potash mine with shallow shaft access. Ore from
underground is transported to the processing plant via an approximately 25.5 km long overland conveyor. After
processing, the finished product is conveyed 8.5 km to the marine export facility. MoP is transferred from the storage
area onto barges via a dedicated barge loading jetty before being transhipped into ocean-going vessels for export.
Cautionary Statement:
The production target (and the forecast financial information derived from this production target) includes all of Kore Potash's
reported Ore Reserve estimates, together with a proportion of Inferred Mineral Resources. The production target includes
relative portions of ore by category of Proved and Probable Ore Reserves (94%) and Inferred Mineral Resources (6%). The
Company is satisfied that the proportion of Inferred Mineral Resources is not the determining factor in project viability as the
project demonstrates positive economic outcomes with the Inferred Mineral Resources excluded. There is a low level of
geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will
result in the determination of Indicated Mineral Resources or that the production targets will be realised.
The forecast financial information derived from the production target uses Argus Media Marketing's forecast annual MoP CFR
Brazil prices to 2047 and then an incremental increase of US$2/t annually post 2047, which annual prices imply an average
MoP CFR Brazil price of US$449/t over the 23 years of scheduled production in the Optimised DFS. As discussed in section 12
(Potash Marketing), Kore Potash has concluded it has a reasonable basis for the use of those prices, but there is no guarantee
that such prices will be realised and lower product pricing will significantly affect the financial performance of the Kola Project.
Refer to the sensitivity analysis in section 14 (Economic Evaluation) for further details, together with the Forward Looking
Statements notice below.
To achieve the range of outcomes indicated in the Optimised DFS, the Optimised DFS estimates that funding in the order of
US$2.07 billion (nominal basis) in construction capital will be required. Shareholders and investors should be aware that there
is no certainty that Kore Potash will be able to raise the required funding when needed and it is possible that such funding may
only be available on terms that may be highly dilutive or otherwise adversely affect Kore Potash shareholders' exposure to the
Kola Project economics. Whilst the Company has made progress towards financing the development of the Kola Project as
discussed further in section 15 (Project Funding) of Appendix A, those arrangements are currently non-binding and therefore
there is currently no certainty that the Company will be able to raise the funds required to develop the Kola Project, or if funding
is available, the terms of such funding.
Andre Baya, Chief Executive Officer of Kore Potash, commented:
"The Kola Project is of global significance as the security of the world's food supply is at the mercy of global disruptions to
fertilizer supply. Recent geopolitical events have highlighted this risk as potash production is concentrated among a small
number of companies and countries.
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Furthermore, to reduce the carbon footprint of our industry, new potash producers need to be geographically closer to end
users with reduced freight cost and environmental impact. In that sense, Kola's location is ideal to supply environmentally-
friendly potash to meet the growing demand of the Brazilian market.
As our operating cost, inclusive of freight, is of USD 128.19/MT (CFR Brazil), we can vie for a higher profit margin than any
existing potash mine worldwide when it comes to serving our target market. With an NPV10 of USD 1.7 Billion for our production
target, the Kola project reaches an enticing IRR of 18%.
The execution of the Kola EPC contract with PowerChina now moves Kore Potash one gigantic step closer to production and we
eagerly await financial close to start construction."
Kola Project Optimised DFS update, EPC
On 6 April 2021, Kore Potash announced the signing of a non-binding Memorandum of Understanding ("MoU") with the
Summit Consortium ("Summit") to arrange the full financing required for the construction of the Kola Project.
The Optimisation Study, which represented the first part of the financing process, was undertaken by SEPCO Electric Power
Construction Corporation ("SEPCO"). PowerChina is SEPCO's parent company. The key goals of the Optimisation Study were to
improve Kola's value through reductions in capital costs and by shortening the construction schedule.
During the Optimisation Study, SEPCO employed two key subcontractors: China ENFI Engineering Corporation to review the
mining, processing, and infrastructure aspects of the Project, and CCCC-FHDI Engineering Co Limited to optimise the marine
facilities.
The optimisations continued in 2023 and 2024 and included in-country work to better define geotechnical conditions. These
works culminated in signing a US$1.929 billion fixed-cost EPC agreement on 19 November 2024. The EPC included refined cost
estimates with a knowledge of conditions at each construction location. The Company worked with certain potential suppliers
and vendors to refine the Kola Project requirements and obtained pricing updates where necessary.
A summary of the key Kola Project parameters and assumptions adopted in the Optimised DFS update post signing EPC
agreement are summarised in Table 1 below.
Table 1: Key Project Parameters and Assumptions
Result Unit Production Target
Total MOP production Mt 50
Initial project life Years 23
Average scheduled mining rate Mtpa ore 7.0
KCl recovery in process plant % KCl 89.9%
Average MOP production per year Mtpa 2.20 Mtpa
Capital Cost EPC basis (real)* US$ billion 2.01
Sustaining capital US$/t MOP 13.06
Construction schedule months 43
Steady state operating cost (Mine gate) US$/t MOP 74.94
Operating cost (CFR Brazil) US$/t MOP 128.19
Forecast average MoP granular price (CFR Brazil)** US$/t MOP 449
Post tax, real un-geared NPV10% US$ million 1,675
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Post tax, real un-geared IRR % 18%
Average EBITDA per annum real US$ million 733
Average EBITDA margin % 74%
Notes:
* The US$2.01 billion capital cost (real) includes US$141 million for Kore's owner's costs during the EPC phase.
** US$449/t is Argus Media Group's forecast real average future potash CFR Brazil prices over the project life. Further details in Item 12 Potash Marketing below.
Key assumptions related to the ore reserves, production schedules and financial evaluation of the project have been updated
in Appendix B of this announcement.
Ore Reserves and Mineral Resources
The Kola Potash Ore Reserves (Table 2) are based on the Kola Sylvinite Mineral Resources (Table 3) as confirmed on 27 Feb
2025. Further detail on the Ore Reserve Estimate is provided in Appendix B: Summary of Information required according to
ASX Listing Rule 5.9.1 and Appendix C: JORC 2012 – Table 1, Section 4 Ore Reserves. All of the Ore Reserves and Mineral
Resources reported here for Kola are Sylvinite.
Table 2: Kola Sylvinite Ore Reserves
Ore Reserves KCl grade Mg Insolubles
Classification
(Mt) (% KCl) (% Mg) (% Insol.)
Proved 61.8 32.1 0.11 0.15
Probable 90.6 32.8 0.10 0.15
Total Ore Reserves 152.4 32.5 0.10 0.15
Table 3: Kola Sylvinite Mineral Resources (inclusive of Ore Reserves) *
Million Tonnes KCl Mg Insoluble
Classification
(Mt) (% KCl) (% Mg) (% Insol.)
Total Measured 215.7 35.0 0.08 0.13
Total Indicated 292.0 35.7 0.06 0.14
Total Inferred 340.0 34.0 0.08 0.25
Total Mineral Resources 847.7 34.9 0.08 0.18
* The Kola Mineral Resource Estimate was confirmed on 27 Feb 2025 in an announcement titled "Confirmation of Mineral Resource for Kola Deposit".
Production targets and forecast financial information derived from production targets
This release contains information that constitutes a production target for the Kola Project (and forecast financial information
derived from that production target) for the purposes of the ASX Listing Rules.
Ore Reserve and Mineral Resource estimates underpinning the production target for the Kola Project referred to in this release
were prepared by, or under the supervision of, a Competent Person in accordance with the JORC Code, 2012 Edition.
Competent Person's statements are set out on page 6. Details of those Ore Reserves and Mineral Resources are set out in this
announcement (including, in relation to the Ore Reserves, the details in Appendix B and Appendix C).
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The production target includes relative portions of ore by category of Proved and Probable Ore Reserves (94%) and Inferred
Mineral Resources (6%).
The material assumptions applied in the estimation of the production target for the Kola Project project and forecast financial
information derived from those production target are set out in the summaries of the study outcomes accompanying this
announcement.
The Company is satisfied that in each case, the proportion of Inferred Mineral Resources is not the determining factor in project
viability as the project demonstrates positive economic outcomes with the Inferred Mineral Resources excluded. There is a low
level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration
work will result in the determination of Indicated Mineral Resources or that the production target will be realised.
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.
For further information, please visit www.korepotash.com or contact:
Kore Potash
Andre Baya, CEO
Andrey Maruta, CFO Tel: +44 (0) 20 3963 1776
Tavistock Communications
Emily Moss
Nick Elwes
Tel: +44 (0) 20 7920 3150
Josephine Clerkin
SP Angel Corporate Finance - Nomad and Broker
Ewan Leggat
Charlie Bouverat Tel: +44 (0) 20 7470 0470
Grant Barker
Shore Capital - Joint Broker
Toby Gibbs Tel: +44 (0) 20 7408 4050
James Thomas
Questco Corporate Advisory - JSE Sponsor
Doné Hattingh Tel: +27 63 482 3802
END
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Competent Persons Statement
The estimated Ore Reserves and Mineral Resources underpinning the production target have been prepared by a competent
person in accordance with the requirements of the 2012 Edition of the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (JORC Code, 2012 Edition).
The information relating to Exploration Results and Mineral Resources in this announcement is based on, or extracted from
previous reports referred to herein, and available to view on the Company's website https://korepotash.com. The Kola Mineral
Resource Estimate was confirmed on 27 Feb 2025 in an announcement titled "Confirmation of Mineral Resource for Kola
Deposit". 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 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.
The information in this announcement that relates to Mineral Resources is based on information compiled or reviewed by,
Garth Kirkham, P.Geo., who has read and understood the requirements of the JORC Code, 2012 Edition. Mr. Kirkham is a
Competent Person as defined by the JORC Code, 2012 Edition, having a minimum of five years of experience that is relevant to
the style of mineralization and type of deposit described in this announcement, and to the activity for which he is accepting
responsibility. Mr. Kirkham is member in good standing of Engineers and Geoscientists of British Columbia (Registration
Number 30043) which is an ASX-Recognized Professional Organization (RPO). Mr. Kirkham is a consultant engaged by Kore
Potash Plc to review the documentation for Kola Deposit, on which this announcement is based, for the period ended 29
October 2018. Mr. Kirkham has verified that this announcement is based on and fairly and accurately reflects in the form and
context in which it appears, the information in the supporting documentation relating to preparation of the review of the
Mineral Resources.
The information in this announcement that relates to Ore Reserves is based on information compiled or reviewed by, Mo
Molavi, P. Eng., who has read and understood the requirements of the JORC Code, 2012 Edition. Mr. Molavi is a Competent
Person as defined by the JORC Code, 2012 Edition, having a minimum of five years of experience that is relevant to the style of
mineralization and type of deposit described in this announcement, and to the activity for which he is accepting responsibility.
Mr. Molavi is member good standing of Engineers and Geoscientists of British Columbia (Registration Number 37594) which
is an ASX-Recognized Professional Organization (RPO). Mr. Molavi is a consultant engaged by Kore Potash Plc to review the
documentation for Kola Deposit, on which this announcement is based, for the period ended 29 October 2018. Mr. Molavi has
verified that this announcement is based on and fairly and accurately reflects in the form and context in which it appears, the
information in the supporting documentation relating to preparation of the review of the Ore Reserves.
Forward-Looking Statements
This announcement 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. There are a number of risks, both specific to Kore Potash, and of a general
nature, which may affect the future operating and financial performance of Kore Potash, and the value of an investment in
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Kore Potash including and not limited to title risk, renewal risk, economic conditions, stock market fluctuations, commodity
demand and price movements, timing of access to infrastructure, environmental risks, regulatory risks, operational risks,
reliance on key personnel, Ore Reserve estimations, local communities risks, foreign currency fluctuations, and mining
development, construction and commissioning risks.
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 announcement 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.
Summary information
Kore Potash plc has prepared this announcement. This document contains general background information about Kore Potash
plc current at the date of this announcement. It does not constitute or form part of any offer or invitation to purchase,
otherwise acquire, issue, subscribe for, sell or otherwise dispose of any securities, nor any solicitation of any offer to purchase,
otherwise acquire, issue, subscribe for, sell, or otherwise dispose of any securities. The announcement is in summary form and
does not purport to be all-inclusive or complete. It should be read in conjunction with the Company's other periodic and
continuous disclosure announcements, which are available to view on the Company's website https://korepotash.com.
The announcement, publication or distribution of this announcement in certain jurisdictions may be restricted by law, and
therefore, persons in such jurisdictions into which this announcement is released, published or distributed should inform
themselves about and observe such restrictions.
Not financial advice
This document is for information purposes only and is not financial product or investment advice, nor a recommendation to
acquire securities in Kore Potash plc. It has been prepared without considering the objectives, financial situation or needs of
individuals. Before making any investment decision, prospective investors should consider the appropriateness of the
information having regard to their own objectives, financial situation and needs and seek legal and taxation advice appropriate
to their jurisdiction.
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Appendix A: Summary of Kola Project Optimised DFS update – December 2024
1. Project Introduction:
Kore Potash is a mineral exploration and development company that is incorporated in the United
Kingdom and listed on the AIM (a sub-market of the London Stock Exchange, as KP2), the Australian
Securities Exchange (ASX, as KP2), the Johannesburg Stock Exchange (JSE, as KP2) and A2X
Proprietory Limited (an independent stock exchange in South Africa, A2X, as KP2) Markets.
The primary asset of Kore is the Kola Project located in the RoC, held by the 97%-owned Sintoukola
Potash SA ("SPSA"). SPSA has 100% ownership of the Kola Mining Lease, on which the Kola Project
is located.
The Kola Project is situated in the Kouilou Province of the RoC, within 40 km of the Atlantic Coast
and approximately 70 km north of the port city of Pointe Noire.
The Kola DFS considers the mining of the Kola Sylvinite, and the production of approximately 2.2
Mtpa of MoP and its export to its target markets and considers all associated infrastructure. It
delivers an economic model based on life of project of 23 years that is based upon 23 production
years exploiting Ore Reserves of 152.4 Mt and 9.7 Mt of Inferred Mineral Resource.
In 2017, Kore commissioned a consortium of French companies ("FC") to conduct a DFS for the Kola
Project. The FC included: Technip France ("TPF"), Vinci Construction Grands Projets ("VCGP"), Egis
International ("EGIS") and Louis Dreyfus Armateurs ("LDA").
Met-Chem DRA Global ("MTC") and AMC Consulting ("AMC") were appointed by the FC as their
specialist subconsultants.
Kore directly contracted with MTC for the Mineral Resource Estimate ("MRE"), and SRK Consulting
(UK) Limited ("SRK") for undertaking the Environmental and Social Impact Assessment ("ESIA").
The Kola DFS was finalised in January, 2019.
On 6 April 2021, Kore Potash announced the signing of a non-binding MoU with Summit to arrange
the full financing required for the construction of the Kola Project.
The Optimisation Study, which represented the first part of the financing process, has been
undertaken by SEPCO. PowerChina is SEPCO's parent company. The key goals of the Optimisation
Study were to improve the value of Kola through reductions in the capital cost and by shortening
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the construction schedule.
During the Optimisation Study, SEPCO employed two key sub-contractors, China ENFI Engineering
Corporation to review the mining, processing and infrastructure aspects of the Project and CCCC-
FHDI Engineering Co Limited to consider the optimisation of the marine facilities.
A Deepening Design Study phase was conducted in 2023 and included in-country work to better
define geotechnical conditions. The Deepening Design Study also refined cost estimates with a
knowledge of conditions at each construction location. These works culminated in signing a
US$1.929 billion fixed-cost EPC agreement on 19 November 2024. The Company worked with
certain potential suppliers and vendors to refine the Kola Project requirements and obtained pricing
updates where necessary.
Prior to 2019, Kore directly contracted with MTC for the Mineral Resource Estimate, and SRK for
undertaking an ESIA. The ESIA received a 25-year approval from the Congolese Environmental
authorities and while still valid, it will require a minor amendment linked to the change of location
of the Process plant. The MRE has remained unchanged and has been incorporated into the
Optimisation Study update together with the ESIA recommendations.
Figure 1 shows the Location Map for the Optimised Kola Project
Figure 1: Location Map showing Optimised Kola Project
Figure available at www.korepotash.com
2. Mineral Resource
The Kola Mineral Resources are summarised in Table 4 below.
The total Measured and Indicated Mineral Resources are 508 Mt with an average grade of 35.4% KCl
and provides the basis for the Ore Reserve statement. Sections 1 to 3 of the JORC 2012 Table 1 Checklist
of Assessment and Reporting Criteria for that Mineral Resource estimate remain unchanged as
confirmed to shareholders on 27 Feb 2025, and can be found in Appendix D.
The Company confirms there has been no material change to those Mineral Resources. The Company
advises that the Mineral Resources are inclusive of Mineral Resources to which modifying factors have
been applied to be reported as Ore Reserves.
In accordance with JORC 2012, the Competent Persons ("CP") for the Kola MRE is:
o Mr. Kirkham P. Geo of MTC. Mr Kirkham is a member of good standing of the Association of
Professional Engineers and Geoscientists of British Columbia.
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Table 4 July 2017 Kola Mineral Resources for Sylvinite
July 2017 - Kola Deposit Potash Mineral Resources - SYLVINITE
Million
KCl Mg Insoluble
Tonnes
Mt % % %
Measured - - - -
Hanging wall Indicated 29.6 58.5 0.05 0.16
Seam Inferred 18.2 55.1 0.05 0.16
Total Mineral Resources 47.8 57.2 0.02 0.16
Measured 153.7 36.7 0.04 0.14
Indicated 169.9 34.6 0.04 0.14
Upper Seam
Inferred 220.7 34.3 0.04 0.15
Total Mineral Resources 544.3 35.1 0.04 0.14
Measured 62.0 30.7 0.19 0.12
Indicated 92.5 30.5 0.13 0.13
Lower Seam
Inferred 59.9 30.5 0.08 0.11
Total Mineral Resources 214.4 30.6 0.13 0.12
Measured - - - -
Indicated - - - -
Footwall Seam
Inferred 41.2 28.5 0.33 1.03
Total Mineral Resources 41.2 28.5 0.33 1.03
Total Measured + Indicated 507.7 35.4 0.07 0.14
Total Inferred 340.0 34.0 0.08 0.25
Total Mineral Resources 847.7 34.9 0.08 0.18
3. Ore Reserves
The Kola Ore Reserves are summarised in Table 5 below.
The Kola Sylvinite Ore Reserves are 152.4 Mt with average grade of 32.5% KCl. Section 4 of the JORC
2012 Table 1 as reported to shareholders on 29 January 2019 has been updated based on the Optimised
DFS and is included in this announcement in Attachment C.
The original statement of Ore Reserves was prepared by Met-Chem DRA Global and was reported in
accordance with JORC 2012.
In conjunction with the Optimised DFS the Ore Reserves have been reviewed and restated in accordance
with JORC 2012 by the CP for the Kola Ore Reserves:
o Mr. Molavi P. Eng. of AMC, for the Reserve Review ("RR"). Mr Molavi is a member of good standing
of the Association of Professional Engineers and Geoscientists of British Columbia.
There is no change to the Kola Sylvinite Ore Reserves from those previously reported.
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Table 5: Kola Sylvinite Ore Reserves
Ore Reserves
KCl Mg Insolubles
Seam Classification Tonnage
(%KCl) (%Mg) (%Insol)
(Mt)
Proved 47.3 33.43 0.08 0.15
Upper Seam
Sylvinite Probable 58.7 31.83 0.06 0.15
Total 106.0 32.54 0.07 0.15
Proved 14.5 27.88 0.20 0.13
Lower Seam
Probable 23.4 28.35 0.08 0.14
Sylvinite
Total 37.9 28.17 0.13 0.14
Proved
Hanging Wall
Seam Sylvinite Probable 8.4 52.09 0.47 0.19
Total 8.4 52.09 0.47 0.19
Proved 61.8 32.13 0.11 0.15
TOTAL Probable 90.6 32.81 0.10 0.15
Total Ore
152.4 32.54 0.10 0.15
Reserves
All Sylvinite in the Measured and Indicated Resource category was considered for Ore Reserve conversion
because of the sharp grade boundaries of the Sylvinite seams and the fact that the economic Cut- off Grade
("CoG") is below the Mineral Resources CoG of 10% KCl.
Table 6. Kore's Sylvinite Mineral Resources and Ore Reserves
KOLA SYLVINITE DEPOSIT
Gross Net Attributable (90%)
Contained
Contained
Mineral Resource Million Grade KCl Million Grade KCl KCl
KCl million
Category Tonnes % Tonnes % million
tonnes
tonnes
Measured 216 34.9 75 194 34.9 68
Indicated 292 35.7 104 263 35.7 94
Sub-Total Measured +
508 35.4 180 457 35.4 162
Indicated
Inferred 340 34.0 116 306 34.0 104
TOTAL 848 34.8 295 763 34.8 266
Gross Net Attributable (90%)
Contained
Contained
Million Grade KCl Million Grade KCl KCl
Ore Reserve Category KCl million
Tonnes % Tonnes % million
tonnes
tonnes
Proved 62 32.1 20 56 34.9 19
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Probable 91 32.8 30 82 35.7 29
TOTAL 152 32.5 50 137 35.4 49
Table provided as Gross and Net Attributable (reflecting Kore's future holding of 90% and the RoC
government 10%), prepared and reported according to the JORC Code, 2012 edition. Table entries are
rounded to the appropriate significant figure.
Ore Reserves are not in addition to Mineral Resources but are derived from them by the application
of modifying factors.
4. Mining
The Kola mine design utilised in the Optimised DFS remains materially unchanged from the design used
in the DFS and is described below:
The Kola orebody is planned to be mined using conventional underground mechanised methods,
extracting the ore within 'panels', using Continuous Miner ("CM") machines of the drum-cutting type.
This is the most widely used method of potash mining world-wide and is considered a low-risk method.
The mine design adopts a relatively typical layout including panels, comprised of rooms and pillars.
Pillars are the support rock left in place to provide stable ground support during the operation of the
mine.
The mine design is based on a minimum mining height of 2.5 m with mining being undertaken by a CM
which is capable of mining seam heights of between 2.5 m and 6 m. Each panel is accessed by 4 entries.
Each entry is 8m wide and 3m to 6m high depending on the seam height. The rooms are mined in a
chevron pattern at an angle of 65 degrees from the middle entry, each with a length of approximately
150 m.
Key geotechnical parameters evaluated in the mine design were:
o support interval between potash seams to be minimum of 3 m thick,
o 8 m wide pillar between consecutive production rooms (of 8 m each)
o 50 m wide pillar between Production Panels and between the side of the Production Panel and
the Main Haulage
o minimum thickness of 10 m to 15 m of the Salt Member between the mine openings and the floor
of the overlying Anhydrite Member (referred to as the 'salt back')
o stand-off distance of 20 m from any exploration holes
o stand-off distance of between 30 m – 60 m from significant geological anomalies
o pillar of 300 m in radius around Shafts
Mine access is provided by two vertical Shafts, each 8 m in diameter. The shafts will be sunk near the
center of the orebody. To provide access to the underground, the Intake Shaft will be equipped with a
hoist and cage system for transportation of persons and material. The Exhaust Shaft will be equipped
with a Pocket Lift conveyor system to continuously convey the mined-out ore to the surface. Both shafts
are approximately 270 m deep.
Mining equipment selected for the Kola Project Mine includes a fleet of 7 electrically powered
continuous miners. Ore haulage from the CMs to the feeder breaker apron feeder will be done using
electrically-powered Shuttle Cars, with a rated payload of 30 t and a 250 m power supply cable.
Underground conveyor belts will be used for ore transportation to the shaft. The belt conveyors are
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distributed in the haulages and into the working panels near the CM working face. The ore will be placed
on the belts from feeder breakers that are fed by the Shuttle Cars. Belt conveyors will carry the ore
loaded by the feeder breakers to the ore bins. The ore is then conveyed from the ore bins to the vertical
conveyor (Pocket Lift) system located in the Exhaust Shaft.
5. Life of Project schedule
The LoM production schedule reported in the Optimised DFS is as summarized below.
The project LoM production schedule, including tonnes of ROM, tonnes of MoP product, and the average
KCl grade of the Run-Of–Mine ("ROM") material, is summarized in Figure 2.
The Life of Ore Reserves for the Kola Project is estimated at 23 years, and full-scale production averaging
approximately 2.1 million tonnes per annum of MoP from Ore Reserves occurs for approximately 21 years
post commissioning and ramp up. During the exploitation of Ore Reserves, 9.7 Mt of Inferred Mineral
Resources are scheduled to be mined and processed. This represents approximately 6.0% of the total
amount of ROM material processed in the first 23 years. This portion of the Inferred Mineral Resources is
at the periphery of the Mineral Resources envelope and immediately adjacent to the Ore Reserves and
logically would be extracted in conjunction with the adjacent Ore Reserves.
In preparing the production target and economic evaluation, each of the modifying factors was
considered and applied and the Company considers there are reasonable grounds for the inclusion of
Inferred Mineral Resources in the production target for the Kola Project.
There is a low level of geological confidence associated with Inferred Mineral Resources and there is no
certainty that further exploration work will result in the determination of Indicated Mineral Resources
or that the production target itself will be realized.
The Ore Reserves (Proved and Probable) and Inferred Mineral Resources underpinning the production
target have been prepared by a competent person in accordance with the requirements of JORC 2012.
Details of those Ore Reserves and Mineral Resources are set out in this announcement (including, in
relation to the Ore Reserves, the details in Appendix B and Appendix C).
No Exploration Target material has been included in the economic evaluation for the Kola Project.
Figure 2 - Life-of-Mine Production Summary of the Kola Mine
Figure available at www.korepotash.com
Kore Potash believes there is a strong potential for the LoM Production to be extended beyond 23 years
by upgrading a portion of the 340Mt of Inferred Mineral Resources to Measured or Indicated resource,
through further exploration during operations.
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Page 14 of 73
6. Hydrogeology
The DFS hydrogeological investigations have been used in the Optimised DFS
and there are no changes to the information or assumptions related to
hydrogeology. The hydrogeology test work that was carried out, is summarised
below:
1. Identify sources of fresh water supply for construction and operations.
These tests concluded that process plant area water supply is available at
required rate of 150 m3/hr utilising 5 wells at a depth of 120 m. Similarly,
the required water supply at the mine site of 30 m3/hr can be supplied via 2
wells sunk to 120 m depth. Hydrogeological modelling indicates that
extraction of these quantities of water over the project life will not adversely
impact the aquifers and minor drawdown in the aquifers is expected over
the life of the project.
2. Understand the risk that aquifer system poses to mining operations and how
to mitigate this risk.
The risk of water ingress to the mining areas is a common risk in almost all salt
and potash mines. These mines are typically overlain by water-bearing
sediments. At operating potash mines in Canada and Europe, the
hydrogeological risk is considered higher in areas of disturbance of the
stratigraphy, referred to as geological or subsidence anomalies. At Kola, a
detailed understanding of the aquifers overlying the evaporite rocks, as well
as of the aquitards (or barriers to water flow), has been developed over a
number of years. The conclusions drawn following hydrogeological testing
were:
o A problematic water ingress is considered a low probability as no linear
faults have been identified and all potential subsidence features can be
accurately delineated using (proposed 50 m spaced line) 3D seismic
surveying, to add to the existing 186 km of seismic survey data over the
Deposit.
o No mining or shaft sinking is planned within areas of subsidence. In
addition, horizontal 'cover drilling' and ground penetrating radar ("GPR")
will be employed as forward-looking actions to improve understanding
of ground conditions in advance of mining and further mitigate the risk
of intersecting a structure or area of disturbance.
o The mine design incorporates a 10-15 m minimum 'salt-back' barrier
between the mining area and the anhydrite aquitard, effectively
reinforcing the anhydrite member aquitard layer.
3. Understand the impacts of groundwater composition and the aquifers on the shaft
sinking operation.
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The results of this testing confirmed:
o That ground freezing during shaft sinking will not be impacted by
hydraulic flow or high salinity in the deep aquifer. In fact, low
permeability, and low total dissolve solids ("TDS") and salinity in both
aquifers is to be expected, supporting the planned freeze-hole spacing
and comparatively low energy consumption for the ground freezing
operation.
o The presence of a thick Anhydrite Member (12 m) overlying the salt
member which acts as an aquitard and reduces risk of water inflow into
the salt member.
7. Metallurgy and Process
Ore from underground is transported to the process plant via an overland
conveyor approximately 24 kilometers long.
A conventional potash flotation plant with a maximum designed production of
2.2 million tonnes per annum of MoP has been designed for the Kola Project.
As a result of the low Insolubles content, no separate process circuit is required
to remove Insoluble material.
The final MoP product is then transported 11 km by conveyor belt from process
plant to the marine export facility at the coast.
A schematic of the full process to extract ore and produce MoP product is
shown in Figure 3.
Figure 3: Process flow from mine to ship
Figure available at www.korepotash.com
The design strategy adopted delivers a Process Plant designed to produce 2.2
Mtpa of MoP at a KCl grade of 95.3 %w and that will accommodate the variety
of ROM feedstock characteristics expected to be encountered during the Life
of the project.
The optimised process design references the DFS metallurgical test work in
2017 and 2018. The description of the test work used in the Optimised DFS is
summarised below.
Characterisation tests were performed on pure seam samples (USS, LSS and
HWS) expected to be mined as part of the mine schedule. Composite samples
of multiple seams, prepared to be as representative as possible of the expected
range of Run of Mine Ore characteristics foreseen in the mine schedule, were
prepared from the seam samples.
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The insoluble content of the samples was less than 0.5%w and close to 0.1%w
in the composite from the USS and LSS. The characterisation of both the
composite samples and the pure seam samples established that the KCl
content in the composite was 32.2%w.
A process plant KCl recovery rate of 89.9% has been used in the economic
evaluation.
8. Marine Facilities
The marine facility used in the Optimised DFS was based on the DFS design. A
summary of the design is given below.
A trans-shipment arrangement has been designed whereby MoP for export is
loaded from a dedicated Jetty into self-propelled shuttle Barges (two units),
which then travel to the Ocean-Going Vessels ("OGVs") anchored 11 nautical
miles (20 km) offshore at a dedicated transshipment zone. The MoP is
transferred from the Barges to the OGVs using a Floating Crane Transhipper
Unit ("FCTU").
Transshipping was selected over direct ship loading from the export jetty. The
ocean depth along the coastline is shallow and it was not considered feasible
to construct the length of jetty required to facilitate direct ship loading.
To ensure sufficient year-round operational availability of the Jetty, a
breakwater structure has been designed to shelter the berthing area for Barge
loading operations.
The Jetty has been widened to accommodate both a Seawater Intake ("SWI")
and a Seawater Outfall ("SWO") system.
9. Residue and Brine Disposal
The Kola Project's process residue is combined into a single waste stream
composed of the NaCl (the brine from product and salt de-brining – bulk of the
effluent) and the residue stream which originates from the insoluble de-brining
circuit within the Process Plant. The residue is collected in onshore
dissolution/dilution tanks and then discharged at sea via the SWO pipe and
diffuser. The discharge stream's dispersion characteristics comply with the
applicable environmental criteria.
Ecotoxicological test work of the expected discharge confirms that the
discharge at sea of the combined salt and insoluble tails stream does not place
undue stress on the marine environment.
No onshore tails storage facility is therefore required for the Kola Project.
10. General Infrastructure
There have been no material changes to the mining, processing, export and marine
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facility locations since the Optimisation Study in 2022.
a. Mine Site – Infrastructure
The Mine Site is located near the village of Koutou and the current KP2
Exploration Camp. It is 24 km north and inland of the Project Process Plant
Site.
The sites can be accessed from Pointe Noire through the existing National
Road (Route Nationale) RN5 which crossses Madingo Kayes and then by
driving into RN6 as from Kilounga village.
The Mine Site surface facilities and infrastructure provides access and
support facilities for the Underground Mining operations.
No permanent living accommodation is planned at the Mine Site for the
Operational phase of the Project.
b. Process Plant Site - Infrastructure
The Process Plant Site is located 11 km inland from the marine facilities, next
to the village of Tchizalamou, approximately 60 km northwest of Pointe
Noire. ROM ore is transferred from the Mine Site via the Overland Long
Conveyor ("OLC").
The Process Plant Site facilities and infrastructure produces granular MoP,
which is transferred to the Marine Facilities for export. The main
administration, control and support functions (Maintenance, Storage,
Logistics, Training, etc.) are also located within the Process Plant Site.
c. Mining Complex & Off-Site - Infrastructure
The operation of the Kola Project's Mine and Process Plant sites are
supported by ancillary sites (Accommodation Camp and Solid Waste
Management Centre) and interconnecting infrastructures (Roads, Power,
Water and Gas supply, and Communications).
The permanent accommodation camp will be located approximately 3 km
from the Process Plant and will accommodate up to 950 people.
d. Power
Operational electrical power is guaranteed from the RoC national grid. This would
require a 57 km long 220 kV transmission line to be built from the Mongo Kamba II
substation, situated north of Pointe Noire, to the Process Plant. The power demand is
estimated to be 25 MVA at the Mine Site and 50 MVA at the Process Plant.
To reduce the Kola Project's environmental footprint, the Company initiated
discussions with a new local oil and gas producer in RoC. This potential new supplier's
project includes both gas and electricity. As a result of preliminary negotiations, the
Company received competitive rates, which were used in the revised economics.
e. Natural Gas
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Initially, the natural gas needed for product drying was to be supplied by a 73-
kilometer pipeline from the M'Boundi gas treatment plant. However, a recent
marketing decision by this potential supplier has reduced availability in the country,
as the supplier now plans to export at higher prices.
In the above context, the new local oil and gas producer (cited in the Power
paragraph above) stepped in to propose gas from the oilfield they are developing.
This potential supplier plans to start production before Kola does.
f. Water
Raw water will be supplied from wells located at the Mine Site (2 wells), the
process plant site (5 wells) and at the Accommodation Camp (4 wells).
11. Environmental and Social Impact Assessment
The ESIA was prepared managed by SRK Consulting (UK) Limited's
environmental and social (E&S) team. SRK partnered with "Cabinet
Management & Etudes Environnementales S.A.R.L." ("CM2E"), which acted as
the Congolese-registered consultancy.
The Kola ESIA, initially approved on 10 October 2013, was amended to reflect
the design changes made to the Kola Project as part of the DFS and has been
amended to include the service corridors for a gas pipeline and overhead
power line. The application and terms of reference for amending the ESIA were
approved on 12 April 2018 by the Minister of Tourism and Environment.
The ESIA for the Kola Mining License was approved on 31 March 2020 granting
a 25-year approval.
The change of location of the process plant, accommodation camp and some
other minor OLC track changes which occurred prior to the 2022 Optimization
Study require an ESIA update which shall be effected in the first half of the
2025 calendar year.
There have also been conflicting reports as to whether part of the
transshipment route between the proposed jetty and the offshore
transshipment location being converted into a marine reserve. If confirmed
during the ESIA update, this might require a small diversion of the route to be
taken by barges transporting the finished product to ocean-going vessels.
The Company shall carry out their construction operations In compliance with
the environmental and social management plan as part of the approved ESIA
and will be subject to Regulator's environmental management compliance
audits.
12. Potash Marketing
Kore's potash marketing strategy recognises the supply opportunities arising
from MoP market growth in Brazil, the project's proximity to Brazil and African
markets and the cost competitiveness of the Kola Project. The DFS,
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Optimisation Study and Optimised DFS demonstrate that the Kola project can
deliver MoP into Brazilian and ports on the west coast of Africa at lower cost
than all other international suppliers. Figure 4 shows a comparison of delivered
MoP costs to Brazil.
Figure 4 – Brazil delivered MoP cost comparison
Figure available at www.korepotash.com
Source: August 2024 Argus Media Marketing Report. Kore Potash CFR Cost Brazil calculated per Table 8.
In August 2024, the Company commissioned a MoP market study and
specification marketing report ("Argus Media Marketing Report") from one of
the leading global consultancy firms, Argus Media Group. According to this
report, Kore Potash is ideally located for exports to Brazil from an inland and
seaborne freight perspective. The Argus Media Marketing Report indicates
that the Company has the shortest distance to the Paranagua port in Brazil and
that, in 2023, 59% of Brazil MoP imports entered via three key ports: Santos,
Paranagua and Rio Grande. The total estimated approximate 4,600km
transportation distance from the Kola mine is the shortest distance among all
key exporting mines globally to Paranagua, Brazil. While Canpotex is the largest
exporter to Brazil in the year 2023 and K+S fifth largest importer in 2023 via
Vancouver, Canada, to Paranagua, port total transportation distance is
approximately 12,000km, which is almost triple the distance from the Kola
Project mine.
The design of the processing plant allows Kore to produce red MoP granular
for the Brazil market.
Potash market research specialist Argus Media provided the Company with
historical and forecast pricing trends for the MoP CFR Brazil benchmarks over
the period up to 2047 (see Figure 5 below). The Argus Media Marketing
Report's estimates are provided in MoP CFR Brazil Real US$/t 2023 values for
calendar years 2024 to 2047. The Company considers that it is reasonable to
apply Argus Media's estimates over that period given Argus Media is
independent and reputable international market research group which has
deep knowledge of the current potash market and its trends. After 2047, prices
are indexed by the Company using a US$2/t incremental annual increase to the
2047 price as in the Argus Media Marketing Report. As a result, the estimated
forecast average granular MoP price is US$449/t (see Appendix A, section 12)
for the life of the mine operations (with the US$449/t being the simple average
of the forecast price in each year of production over the 23 years of scheduled
production, where the forecast price in each year to 2047 is that in the Argus
Media Marketing Report and for each year after 2047, is the forecast 2047
price with a US$2/t incremental annual increase applied in each year, as
discussed above).
Page 20 of 73
It should be noted that current red granular MoP CFR Brazil prices are around
c.US$300/t, which is less than the average of the granular MoP prices used in
the Optimised DFS (being US$449/t). There is no guarantee that the forecast
annual granular MoP prices used in the Optimised DFS will be realised and
lower realised prices will adversely affect the financial performance of the Kola
Project as demonstrated in the sensitivity analysis in section 14(b) below. The
price at which Kola Project NPV10% is greater than zero is flat c.US$271/t MoP
CFR for the life of the mine operations. Please also refer to the Cautionary
Statement on page 3 of this announcement.
Figure 5 – Historical and forecast MoP CFR Brazil Real US$/t 2023. Extract from Argus Media
Marketing Report
Figure available at www.korepotash.com
As stated in the Argus Media Marketing Report MoP prices are currently
reaching their lowest levels over the past 5 years. Short-term pricing in the next
12 months is based on the current market developments, such as weather
events, planned or unplanned plant outages and market participant sentiment.
Argus Media sees limited upside in medium-term (5 - 7 years) as the market
reaches floor around the year 2028 with the ramp-up of BHP's Jansen project
in Canada. The potash market is facing transition to supply surplus with
recovering Russian and Belarusian and new capacity in Canada and Laos. Argus
Media believes that the long-term price of MoP is dictated by the industry's
Long-Run Marginal Cost ("LRMC") for adding new potash supply.
Total LRMC is the sum of:
• Mine capital costs, adjusted for location and the weighted average cost of
capital, amortised over the mine's life span;
• Mine operating costs, including fuel, labour, materials, sustaining capital
and royalties; and
• Value-in-use considerations, crediting or debiting total cost to consider
access to target markets.
The LRMC base year is then inflated by Argus Media over the forecast period
to provide their long-term price forecast. Each LRMC element is inflated using
the appropriate inflator from Argus Media's forecasts of fuel, energy and
macro inflators. The LRMC is a long-term trend forecast, meaning Argus Media
expects short-term oscillations around the calculated LRMC, driven by factors
such as weather and supply disruptions that cannot be predicted this far in
advance. Russian MoP development is no longer included in the LRMC set. As
the war in Ukraine continues, Argus Media assumes the impact on Russia as a
destination for investment will be more prolonged and this is reflected in a
higher-risk premium. Argus Media's view is that incremental tonnage from
Canada and Israel are expected to dictate long-run LRMC.
13. Capital and Operating Costs
a. Capital Cost
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The pre-production capital cost for the Kola Project is now estimated at
US$2.07 billion (nominal basis), which includes a fixed price EPC contract of
US$1.929 billion and US$141 million owner's costs. The breakdown of the
EPC capital cost is presented in Table 7 below.
The EPC fixed price is of significant benefit to the Company, as it minimises
the risk of cost overruns. Of the total Contract Price, approximately
US$708.9 million is allocated for building transportation links and utility
pipelines, which will make the Kola Project self-reliant without depending
on state infrastructure except for the RoC national grid. The Company
considers this to be a significant advantage compared to other potash
projects worldwide. To accelerate progress during the financing process,
Kore Potash and PowerChina have committed to an Early Works Agreement
("EWA"), which forms part of the EPC and is targeted to be completed by
the end of June 2025.
The owner's costs during the 43-month construction period are projected to
be approximately US$141 million. The EPC also includes provisions for
penalties in the event of delayed completion and non-compliance to
performance metrics.
Table 7 – Breakdown of Contract Price
Description Amount (US$ million)
Underground Works (shafts and mine face preparation) 319.7
Processing plant and auxiliary facilities 609.6
Surface over land belt conveyor transportation (OLC)* 229.3
Marine Works* 223.1
Roads* 111.3
Utilities (electricity overhead line & gas pipeline) * 145.2
Administration facilities 58.9
General items 231.9
Total 1,929.0
* Total US$708.9 million for transportation and related utilities.
Sustaining Capital Costs of US$924 million have been included in the
financial analysis, which is equivalent to US$13.06/t MoP and disclosed in
Table 8 below.
Sustaining capital costs cover expenditures required to ensure the operation
can sustain the production at nameplate capacity. These costs include
overhaul parts and labour, replacement of equipment, maintenance of
infrastructures (road, jetty etc.), shut down costs, additional continuous
miner and additional underground conveyor costs, and the inspection and
maintenance of the trans-shipment vessels
b. Operating Cost
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The Operating Costs are expressed in US dollars on a real basis and are based
on average annual production of 2.2 Mtpa of MoP over the life of mine. All
costs have been prepared on an owner operated basis and are shown in
Table 8.
Table 8 – Summary of Operating Costs
Real costs
Cost Category
(US$/t MOP)
Opex
Mining Cost 25.17
Process Cost 29.08
Other Cost 20.69
Mine Gate Operating Costs 74.94
Sustaining Capex 13.06
Product Realisation Charges and Allowances 4.08
Royalties 11.74
Ex Works Cost 103.81
Logistics to FOB point 5.81
Ocean Shipping 18.58
CFR Cost (Landed in Brazil) 128.19
14. Economic Evaluation
a. Summary Economics
The economic evaluation delivers a post-tax NPV10% (real 2024) of US$1.7
billion and a real ungeared IRR of 18% on a 90% attributable basis. The
evaluation is based on a forecast average MoP granular price of US$449/t
MoP CFR Brazil (real 2024) as outlined in section 12 above.
The key assumptions underpinning the economic evaluation are as
follows:
• Construction start date: 1 January 2026.
• 23-year project life from first production based on depletion of Ore
Reserves.
• 2.2 Mtpa average production of MoP.
• Granulated MoP represents 100 % of total MOP production and
sales.
• All cashflows are on a real 2024 basis
• NPVs are ungeared and calculated after-tax applying a real discount
rate of 10%.
• NPVs are calculated at a base date of 1 January 2026 prior to the
potential dates for commencement of project construction
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• Fiscal regime assumptions are aligned with the recently finalised
Mining Convention:
o Corporate tax of 15% of taxable profit with concessions for the
first 10 years of production (0% for the first 5 years and 7.5%
for years 6 – 10).
o Mining royalty of 3% of the Ex-Mine Market Value (defined as
the value of the Product (determined by the export market
price obtained for the Product when sold) less the cost of all
Mining and Processing Operations, all costs of Transport
(including any demurrage), and all insurance costs).
o Exemption from withholding taxes during the term of the
Mining Convention.
o Exemption from VAT and import duty during construction; and
o Congo Government receives 10% of the shares in KPM which
owns the Kola Project.
The forecast project cash flow on a 90% attributable basis for 23
years of production is illustrated in Figure 6.
Figure 6 – Project Cash Flow Forecast (real 2024) on a 90% Attributable Basis
Figure available at www.korepotash.com
b. Sensitivity Analysis
Kola Project returns have been calculated on a real 10% post-tax unleveraged
basis with the key financial results and assumptions provided in Table 1. Figure
7 below shows the sensitivity to the four variables that have the most impact
on the real post-tax NPV10% and 90% attributable basis (reflecting Kore's future
holding of 90% and the RoC government 10%) of the project, in descending
order of most sensitive to least sensitive. No capital cost sensitivities were
included as the EPC is a fixed price contract. The financial outcomes of the
project are most sensitive to changes in revenue and, therefore, future MoP
prices as well as KCl recovery in the process plant.
Figure 7 – NPV real 10% post-tax US$'000 movement sensitivities*.
Figure available at www.korepotash.com
* KCl recovery sensitivities are in incremental steps of 5%, 10% and 15% increases or decreases relative to the base of
89.9%; increases are: +5% = 94.9%, +10% = 99.9%, +15% = 100% maximum. All other sensitives are % changes on the
base number.
15. Project Funding
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As announced on 6 April 2021, a non-binding memorandum of understanding was signed with
Summit to arrange the full financing required for the construction of the Kola Project
("Summit MOU").
In line with this memorandum of understanding, following signing the EPC, Summit is
expected to deliver a non-binding financing term sheet within three months. This term sheet
will be subject to the completion of detailed and definitive legal documentation.
The Company confirms its confidence in the Summit Consortium as a financier for the
construction of the Kola Project. This confidence is based on the Company having worked with
the Summit Consortium for the past 10 years and their track record in assisting with financing
for Kore Potash including sourcing the approximately US$40 million equity investment
provided by the Oman Investment Authority ("OIA") and Sociedad Quimica y Minera de Chile
S.A. ("SQM") in 2016. OIA and SQM are among top three largest shareholders of the Company
who together hold 27.58% in the issued share capital of the Company.
The material terms of the Summit MOU were set out in the 6 April 2021 announcement and
are reaffirmed as follows:
• The Summit MOU outlines a roadmap to optimise the capital design to fully finance and
construct Kola via a mix of debt and royalty financing.
• Under the proposed financing arrangements, the RoC Government will retain their 10%
shareholding in Kola.
• Under the Summit's proposed financing structure, the Company will not contribute to the
capital needed to build the Kola Project and will retain a 90% equity interest in Kola.
The Company retains the right not to accept any finance proposal presented by Summit and
there is no guarantee that any proposal or legally binding agreement will be forthcoming. The
Company provides no assurance to shareholders that the Summit Consortium will provide the
financing required on terms which are acceptable to the Company. If the Summit Consortium
does not provide an acceptable financing package leading to binding legal documents, the
Company will need to explore other debt, equity and structured finance alternatives having
regard to then prevailing capital market conditions.
The Company expects any financing provided by the Summit Consortium to be subject to the
Summit Consortium being granted full security over the Kola Project, however (as noted
above) the full terms of any financing proposal from the Summit Consortium (including any
security package) will be subject to further discussions.
As previously announced on 30 January 2025 the Summit Consortium was expected to deliver
this financial proposal by the end of February 2025. Due to delay in publication of the Kola
Project Optimised DFS update the new expected delivery date of the financial proposal is now
before the end of March 2025.
The Company confirms the Summit Consortium is not a related party of the Company.
Further details about the financing arrangements will be notified to the market in accordance
with the Company's continuous disclosure obligations
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Appendix B: Summary of Information required under ASX Listing Rule 5.9.1
(Ore Reserves), Listing Rule 5.16.1 (production target) and Listing Rule 5.17.1
(forecast financial information derived from a production target).
Pursuant to ASX Listing Rules 5.9.1, 5.16.1 and 5.17.1, and in addition to the information contained in
the body of this release, the Company provides the following summary information.
Kola Project Ore Reserves and related production target and forecast financial information derived
from the production target
Summary of Material Assumptions
Material assumptions relating to the Kola Project are summarised below:
• Production life - LoM of 23 years at an average annual production of 2.2 Mtpa MoP production.
The production life fully depletes Ore Reserves and incorporates a portion of Inferred Mineral
Resource into the production target.
• Product pricing - Potash market research specialist Argus Media provided the Company with
historical and forecast pricing trends for the MoP CFR Brazil benchmarks over the period up to
2047 (see Figure 5 above). Kola's proposed mine life covers the period from 2029 through to 2052
(23 years). The Argus Media Marketing Report's estimates are provided in MoP CFR Brazil Real
US$/t 2023 values for calendar years 2024 to 2047. After 2047, prices are indexed by the Company
using a US$2/t incremental annual increase to the 2047 price as in the Argus Media Marketing
Report. As a result, the estimated forecast average red granular MoP price is US$449/t for the life
of the mine operations. For more details on product pricing refer to Section 12.
• MoP Product – The process design is based on a single product type, Red Granular MOP. (The
MoP produced will comprise at least 95.3% KCl, with a maximum of 0.2% Mg and 0.3%
Insolubles).
• Project duration – A project execution duration of 43 months was specified in the EPC contract.
• Project Capital – The total nominal Project Capital of US$2.07 billion includes both EPC costs and
owner's cost.
• Working capital assumptions – Working capital based on 30 days Debtors and Creditors, 60 days
Stores.
• Operating cost - mine gate operating cost of US$74.94/t and CFR cost of US$128.19/t were
reported in the Kola Project Optimised DFS update.
• Shipping costs - LoM Shipping costs (trans-shipment and sea freight) of US$24.38 /MoP t were
based on updated ocean freight quotations received in 2024.
• Fiscal parameters – The mining convention between the Company and the Republic of Congo
specifies the fiscal parameters summarised below:
o Company tax rate (15%),
o Initial tax rates (5 years at 0% + 5 years at 7.5%)
o Royalties (3% of revenue) (Mining Convention)
o Government free carry (10%) (Mining Convention)
o Other minor duties and taxes (Mining Convention)
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Criteria for Mineral Resource and Ore Reserve Classification
The criteria for Mineral Resource and Ore Reserve Classification remain unchanged from the DFS.
The Ore Reserve estimate is based on the Kola Sylvinite Indicated and Measured Mineral Resources
reported by Met-Chem DRA in accordance with the JORC Code (2012 edition) and confirmed by the
Company on 27 Feb 2025.
Drill-hole and seismic data were relied upon in the geological modelling and grade estimation. Across
the deposit the reliability of the geological and grade data is high. Grade variation is small within each
domain reflecting the continuity of the depositional environment and 'all or nothing' style of Sylvinite
formation.
Drill hole data spacing determines confidence in the interpretation of the seam continuity and
therefore confidence and classification; the further away from seismic and drill-hole data the lower
the confidence in the Mineral Resource classification. In the assigning confidence category, all relevant
factors were considered, and the final assignment reflects the Competent Person's view of the
deposit.
Table B1: Summary of Criteria used for the Classification of the Kola Mineral Resource
Drill-hole required Seismic data required Classification extent
Measured Average of 1 km Within area of close spaced Not beyond the seismic
spacing 2010/2011 seismic data (100 – requirement
200 m spacing)
Indicated 1-1.5 km spacing 1 to 2.5 km spaced 2010/2011 Maximum of 1.5 km
seismic data and 1 to 2 km spaced beyond the seismic data
oil industry seismic data requirement if sufficient
drill-hole support
Inferred Few holes, none 1-3 km spaced oil industry seismic Seismic data required
more than 2 km data and maximum of 3.5 km
from another from drill-holes
The Measured and Indicated Mineral Resources for sylvinite are hosted by 3 layers (or 'seams') which
are from uppermost; the Hanging Wall Seam (HWS), the Upper Seam (US) and the Lower Seam (LS),
each separated by rock-salt (a rock-type typically comprised of >95% halite).
Magnesium and insoluble content are considered deleterious but are present in only very small
amounts in the ore (average of 0.07% and 0.14%respectively).
The Mineral Resource Estimate was delivered to the Ore Reserve consultants in the form of a standard
block model, blocks having dimensions 250 x 250 x 1 m, each block having a KCl grade, a density, and
magnesium and insoluble content.
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The Mineral Resources are inclusive of the Ore Reserves i.e. the Ore Reserves are the mineable part
of the Mineral Resources after the application of technical, economic and other modifying factors.
Areas of potential structural disturbance, referred to as geological anomalies were excluded from the
Measured and Indicated Mineral Resource. They were identified from seismic data as is standard in
potash mining districts elsewhere.
A 10% CoG was used in the Mineral Resource Estimate.
Mining Method and assumptions
The mining method and assumptions remain unchanged from the DFS.
Mining factors and assumptions have been derived from the historical information available for
mature potash mines, and the current best mining practices. The Kola orebody will be mined using
conventional underground ("UG") mining method consisting of room and pillar in a 'chevron' (or
herringbone) pattern, with Continuous Miners ("CM") mining machines of the drum-cutting type.
Most of the mining will be on one level only where only the US will be extracted. In some areas, both
the US and the LS will be mined, in which case the LS will only be mined after the US. In other areas
only the HWS will be mined.
In determining the Ore Reserves, a minimum mining height of 2.5 m was selected based on capability
of the selected CM which is also capable of mining up to 6 m. Areas of the Mineral Resource with a
seam height of less than 2.5 m were excluded from the Ore Reserves.
The mine design is typical of potash mines, having 4 entries for accessing panels. Each drive will
typically be 8 m wide and 3 m to 6 m high depending on the seam height. The typical configuration for
the chevron pattern is an angle of 65 degrees from the middle entry, and length of 150 m
approximately.
The Mine design relies on geotechnical modelling, carried out in FLAC 3D software. The modelling was
based on geotechnical test-work carried out on representative core samples from the sylvinite seams
and host rocks (rock-salt and lesser carnallitite). The geotechnical modelling established that the mine
design is stable over the LoM and includes the following geotechnical parameters:
• Where both the US and LS seams are to be mined, the support interval between the US and LS
must be at least 3 m thick.
• An 8 m wide pillar between two consecutive production rooms (of 8 m each).
• A 50 m wide pillar between two production panels. Similarly, a 50 m wide pillar will be left in place
between the side of the production panel and the main haulage access drift.
• The interval of rock-salt between the mine openings and the floor of the overlying anhydrite
member is referred to as the 'salt back'. This is typically over 30 m but is less in some areas. The
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DFS design allows that it may be a minimum of 15 m unless the Anhydrite Member is well
developed where it may be 10 m. This is based on the results of the geotechnical model.
• A stand-off distance of 20 m radius from the exploration holes.
• A stand-off distance of 30 m radius from class 2 geological anomalies and 60 m radius from class
3 geological anomalies.
• A pillar of 300 m in radius around the exhaust and intake shafts.
Based on the selected CMs, it is anticipated that a good cutting selectivity would be achieved, and that
a maximum of 0.2 m of dilution material above and/or below the potash seam is likely. Carnallitite is
present in the floor of the seam in some areas. The roof is always of rock-salt.
On average, the dilution material is equivalent to approximately 10% of the tonnage of the Ore
Reserves. Dilution material was assigned a grade of 3% KCl if rock-salt and 0% KCl if Carnallitite.
Based on the configuration of the proposed mining layout, and the anticipated fleet of mining
equipment, it is assumed that the mining recovery in the different extraction chambers will be 90%
on average (i.e. mining losses will be 10%). This considers the mining action which will lead to some
losses such as material being excavated and left in the production chamber, or mineralized material
left in the floor or roof, etc.
The Global extraction ratio is 30% (25% in the LS, 33% in the US and 28% in the HWS). This is after the
removal from Ore Reserves of all pillars (pillars around the geological anomalies, the barrier pillars,
the shaft pillar, the pillars between chevrons and main access drifts), the stand-off distance around
boreholes, mining losses and the exclusion of sylvinite <2.5 m thick.
Two vertical shafts, each of 8 m internal diameter, will be sunk at a central location in the Ore
Reserves, to provide access to the underground. The intake shaft will be equipped with a hoist and
cage system for transportation of persons and material, while the exhaust shaft will be equipped with
a vertical conveyor system to convey the mined-out ore to the surface. Both shafts are approximately
270 m deep.
Ore haulage from the CMs to the feeder breaker apron feeder will be done using electrically-powered
Shuttle Cars.
Underground conveyor belts will be used for ore transportation in all the areas of the mine. The belts
are distributed in the mains and submains and ultimately in the working panels near the CM working
face. The ore will be placed on the belts from the feeder breakers that were fed by the shuttle cars.
The belt conveyors will carry the ore loaded by the feeder breakers to the ore bins. Then the ore is
conveyed from the ore bins to the Pocket Lift system located in the exhaust shaft.
Processing Method and Assumptions
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The changes to the processing method and assumptions arising from the Optimisation Study are as
follows.
• The product will be granular MoP K60, comprising at least 95.3% KCl. The Optimisation Study
design allows for the production of a single product, red granular MOP.
• The process flow sheets were optimised to produce a maximum of 2.2 Mtpa of MoP, at 95.3%
KCl purity, with a minimum KCl recovery of 89.9% of the KCl content in the ROM fed to the
Process Plant.
• Eight key areas of process design were changed in the Optimisation Study
o The crushing circuit was changed from 3 stage crushing to 2 stage crushing
o The mixing tanks post crushing were replaced with a combination of screens and tanks
o The scrubbing capacity has been reduced
o The thickening capacity has been increased
o Column cells have been replaced with floatation cells
o Re-grind flows have been re-routed
o Tailings centrifuges has been replaced with a belt filters
o Compaction circuit has been simplified
A conventional flotation process will be utilised for potash concentration. This method is well
established and is the most widely used method in the potash industry.
The metallurgical test work campaigns were based on representative core samples of the three seams,
collected from the exploration drill hole cores. They comprised US (114.5 kg), LS (102.0 kg) and HWS
(10.3 kg). All test work was carried out at the Saskatchewan Research Council ("SRC") laboratory in
Saskatoon, Canada.
Two metallurgical test work campaigns were conducted during the DFS in 2017 and 2018. The main
philosophy of the first DFS test work campaign was to prepare representative test feedstocks for each
seam, confirm KCl liberation, characterize the feedstock, perform flotation tests, optimize the
operating conditions, optimize reagent consumption for optimum KCl recovery and grade
performance, perform a sensitivity test on flotation.
The objective of the second test work campaign was to optimize the flotation process and improve
the plant recovery from the initial flow sheet. The results of this second test work campaign
demonstrated that the new flotation process performed above the project performance minimum
target.
Magnesium and insoluble material are considered deleterious. The extremely low content of these
materials in the ore mean that their removal is relatively straightforward. Insoluble material is
removed by attrition scrubbing and magnesium removed by brine purge.
Cut-off Grades
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The cut off grades remain consistent with the original DFS Ore Reserves.
A CoG of 10% KCl has been calculated within the process to state Ore Reserves. The CoG calculation
included all operating costs associated with the extraction, processing and marketing of ore material.
The cut-offs are based on a MoP price of US$250 per tonne of MoP. Inputs to the calculation of CoG
included:
o Mining costs
o Metallurgical recoveries
o Processing costs
o Shipping costs
o General and administrative costs
All sylvinite of the Measured and Indicated Resource is above 9.9% KCl (the Ore Reserve calculated
CoG), therefore all the Measured and Indicated Sylvinite Resources have been considered for the Ore
Reserve Estimate by application of the other modifying factors.
The uniformly very low content of deleterious elements (magnesium and insoluble material) meant
that these did not require consideration in the CoG determination.
Cost Estimation Methodology
Capital Cost:
• The pre-production nominal capital cost for the Kola Project is now estimated at US$2.07 billion,
which includes a fixed price EPC contract of US$1.929 billion and US$141 million owner's costs.
Operating Cost:
• Operating Cost covering the Life of Mine (23 years) was estimated in US dollars and reported in
the Kola DFS in 2019. They include costs for Electric power, Fuel, Gas, Labour, Maintenance parts,
Operating Consumables, General and Administration costs and Contract for Employee Facilities.
• These 2019 Operating Costs were all revised to reflect current conditions, as follows:
o Exchange rates (vs US$) for Euro, British Pound, Canadian Dollar, South African Rand, and
Congolese Franc (Central African Franc) were updated;
o Production split was updated to 100% red granular MOP;
o Plant KCl recovery was reduced from 91.9% to 89.9%;
o Plant operating hours were updated according to PC's assumption of 7,920 h/y;
o Electricity costs were updated according to current budgetary pricing;
o Natural gas costs were updated according to current budgetary pricing;
o Labour costs were escalated a flat 10%, in consultation with third-party labour experts;
o All other operating costs were escalated a flat 25% to simulate US CPI.
• Transshipment costs were supplied by an experienced marine broker.
• Ocean Freight Transportation estimate produced were based on work done by the marine
brokers.
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• Mine Closure cost is estimated in accordance with the Conceptual Rehabilitation and Closure Plan
developed by SRK Consulting during the DFS, assuming a Mine Closure duration of 24 months (2
years).
• For the purpose of Operating Cost and Sustaining Capital, the quantities of equipment, materials
and works were directly assessed from the Material Take-off prepared within the framework of
the Kola DFS.
• State mineral royalties of 3% of Net Revenue were applied
• Measured Mineral Resources were used for the estimation of the Proved Ore Reserves. Indicated
Mineral Resources were used for the estimation of Probable Ore Reserves.
• The conversion of Measured and Indicated Mineral Resource to Proved and Probable Ore Reserve
reflects the Competent Person's view of the deposit.
• 40.6% of the Ore Reserves are classified in the Proved category and 59.4% of the Ore Reserves are
classified in the Probable category
Material Modifying Factors
• Status of Environmental Approvals
The Kola ESIA, initially approved on 10 October 2013, was amended to reflect the design changes
made to the Kola Project as part of the DFS and has been amended to include the service corridors
for a gas pipeline and overhead power line. The application and terms of reference for amending
the ESIA were approved on 12 April 2018 by the Minister of Tourism and Environment.
The ESIA for the Kola Mining License was approved on 31 March 2020 for 25 years.
The proposed new position of the process plant resulting from the Optimisation Study creates a
requirement to issue an addendum to the ESIA. It is intended that work on this addendum will
commence in the second half of 2025.
• Status of Mining Tenements and Approvals
Kore has a 97%-holding in SPSA, a company registered in the RoC. The remaining 3% in SPSA is
held by "Les Establissements Congolais MGM" (RoC). SPSA in turn has a 100% interest in its two
ROC subsidiaries, Kola Potash Mining SA ("KPM") and Dougou Potash Mining SA ("DPM"). The
Mining Convention includes a requirement for 10% of free-carry shares in KPM and DPM to be
assigned to the Government of the Congo. The Company is currently awaiting Government
instructions as to the share transfer process.
The Kola Deposit is within the Kola Mining Lease which is 100% owned by KPM
o In May 2008, a non-exclusive Prospecting Authorisation was granted to Sintoukola Potash
covering an area of 1,436.5 km2. On 13 August 2009, this was changed to a "Permis de
Recherches" (Exploration Permit) named 'Permis Sintoukola' under decree No. 2009-237
giving the Company exclusive rights to explore.
o On 27 November 2012, the first renewal of the permit was made, by decree No. 2012-1193
and reduced in size to 1,408 km2.
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o On the 9 August 2013, a Mining Lease for Kola issued under decree No. 2013-312, totaling
204.52 km2 falling entirely within the Exploration Permit.
• Déclaration d'Utilité Publique or "DUP"
Exclusive land acquisition rights have been granted to the Project company for plant development
through ministerial order gazetted on 30 August 2018 (the "Déclaration d'Utilité Publique" or
"DUP") valid for three years and renewable once for a two-year period.
As a result of the optimization of the processing plant and camp location, a new DUP process
needs to be initiated with the approval and support of the Government after receipt and
acceptance of the financing proposal from Summit. A subcontractor with prior experience on the
previous DUP is awaiting the greenlight of Kore to start the work.
• Other Governmental Factors
The Company entered into a mining convention with RoC government on 8 June 2017 and it was
gazetted into law on 7 December 2018. The Mining Convention provides certainty and
enforceability of the key fiscal arrangements for the development and operation of the Kola
Project. This includes clarifying import duty and VAT exemptions and agreed tax rates during mine
operations. The Mining Convention provides strengthened legal protection of the Company's
investments in the RoC through the settlement of any disputes by international arbitration.
Infrastructure Requirements for Selected Mining, Processing and Product Transportation to
Market
The project infrastructure is comprised of the mine-site (shaft and offices), the process plant 24 km
from the mine and a product and marine export facility at the coast (at Tchiboula), the 34 km
infrastructure corridor between these (including the overland conveyor, service road and power line),
the gas line from M'boundi gas field, overhead line from the MKII substation, the accommodation and
administrative camp and the transshipment facilities.
Changes to the infrastructure requirements that arise from the Optimisation Study and Optimised
DFS, and are thus different from the DFS are summarised below.
• The process plant position has been moved 11 km inland which has allowed optimisation of the
foundation design, the resultant infrastructure at the coast consists of the product storage
building and marine export facilities. The design of the barge loading jetty has also been optimised.
• Road access to the Kola Potash Project sites will be via the existing Route Nationale 5 (RN5). Two
external access roads will be built, which are respectively connected from RN5 to the mining site
and from RN5 to the mineral processing site and living quarter, with a length of 2.0 km and 4.3 km
respectively. Two maintenance roads for long-distance belt conveyors will be built. One of the
roads for RoM belt conveyor maintenance is about 24.0 km, connecting Koutou camp and the
mineral processing site. The other road is for MOP belt conveyor maintenance,
• Raw Water will be supplied from wells located at the Mine Site and at the Accommodation Camp
close to the Process Plant Site.
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• The Accommodation Camp has been sized for a capacity of 950 beds and will be located about 2
km away from the Process Plant
• Electrical Power will be sourced from the ROC national grid. A 57 km long 220 kV transmission line
will be built from the Mongo Kamba II substation north of Pointe Noire to the Process Plant Site.
A second 34 km long 220 kV transmission line will be built from the Process Plant Site to the Mine
Site and the marine facility at the coast.
• The Natural Gas needed for product drying will be supplied by a local Oil and Gas producer who
has plans to build a gas treatment plant some 35 km away from the Kore processing plant. The
same company is also planning to supply electricity to the Kola Project from the same offtake
point. This will be an interesting option to the Mongo Kamba II substation as it has a lower
environmental impact.
The infrastructure requirements that have not been modified in the Optimisation Study or Optimised
DFS, and thus remain the same as the DFS are summarised below.
• Ongoing operational labour will be a combination of permanent employees, permanent contract
services, and part-time contract services for intermittent needs. The total requirement for
permanent employees is expected to be 731. Local labour resources will be used for the majority
of labour requirements, while some selected positions are planned as expat roles.
• The Kola Potash Project intends to export up to 2.2 Mt MoP to world markets each year. A
transshipment solution has been developed, whereby MoP for export is loaded at a dedicated
jetty onto self-propelled shuttle barges (two units), which will then travel to OGVs anchored 11
nautical miles (20 km) offshore in a dedicated transshipment area. The cargo will be transferred
from the Barges to the OGVs using a Floating Crane Transhipper Unit ("FCTU").
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Appendix C: JORC 2012 – Table 1, Section 4 Ore Reserves
The Company has relied upon its previously reported information, in particular the announcement of 27 Feb 2025, in respect of the matters related to
sections 1, 2 and 3.
The Company confirms that the information in sections 1, 2 and 3 has not changed since it was last reported and has been included in Appendix D of this
announcement for compliance with ASX requirements and ease of reference.
Section 4 Estimation and Reporting of Ore Reserves
(Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section)
Criteria JORC Code explanation Commentary
Description of the Mineral The Ore Reserves are based on the Indicated and Measured Mineral Resource estimate for sylvinite carried out by
Resource estimate used as a Met-Chem DRA and reported in accordance with the JORC Code (2012 edition), confirmed by the Company on 27
basis for the conversion to Feb 2025.
an Ore Reserve. The Measured Mineral Resource is 216 Mt with an average grade of 35.0% KCl. The Indicated Mineral Resource is 292
Clear statement as to whether Mt with an average grade of 35.7% KCl.
the Mineral Resources are The total combined Measured and Indicated Mineral Resources are 508 Mt with an average grade of 35.4% KCl.
reported additional to, or
The Measured and Indicated Mineral Resources for sylvinite are hosted by 3 layers (or 'seams') which are as follows
inclusive of, the Ore
from uppermost; the Hanging Wall Seam, the Upper Seam and the Lower Seam, each separated by rock-salt (a
Mineral Resource Reserves.
estimate for rock-type typically comprised of >95% halite).
conversion to Ore Magnesium and insoluble content are considered deleterious but are present in only very small amounts in the ore
Reserves (average of 0.07% and 0.14% respectively).
The Mineral Resource Estimate was delivered to the Ore Reserve consultants in the form of a standard block model,
blocks having dimensions 250 x 250 x 1 m, each block having a KCl grade, a density, and magnesium and insoluble
content.
The Mineral Resources are inclusive of the Ore Reserves (i.e. the Ore Reserves are the mineable part of the Mineral
Resources after the application of technical, economic and other modifying factors.)
Areas of potential structural disturbance, referred to as geological anomalies were excluded from the Measured and
Indicated Mineral Resource. They were identified from seismic data as is standard in potash mining districts
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Criteria JORC Code explanation Commentary
elsewhere.)
A 10% cut-off grade was used in the Mineral Resource Estimate.
Comment on any site visits A site visit was conducted by the Competent Person for the Ore Reserve Estimate between June 26 to June 28, 2017.
undertaken by the The visit included exploration camp inspection, core viewing, site of shafts and process plant, access route from
Competent Person and the Pointe Noire. The site visit supported the findings of the Competent Person.
Site visits outcome of those visits.
If no site visits have been
undertaken indicate why this
is the case.
The type and level of study Prior to signing an EPC agreement, two studies have been completed by the Company: the Kola Definitive Feasibility
undertaken to enable Study ("DFS") in January 2019 and the Kola Project Optimisation Study ("Optimisation Study") in June 2022.
Mineral Resources to be Following signing of the EPC contract, the Company undertook an exercise to optimise the DFS to account for the
converted to Ore Reserves. EPC contract, including updating the Kola production schedule and the forecast financial information. The
The Code requires that a study to Company has now completed its review of the Optimised DFS, with the results summarised herein by way of
at least Pre-Feasibility Study update.
level has been undertaken to
convert Mineral Resources to The results of the Optimised DFS incorporate the most current information available to the Company, and have been
Study status updated from the DFS and Optimisation Study to ensure compliance with the latest applicable listing rule
Ore Reserves. Such studies
will have been carried out requirements and other regulatory policies of the Australian Stock Exchange Limited, and therefore should be
and will have determined a considered as superseding the results of both the DFS and the earlier Optimisation Study.
mine plan that is technically
achievable and economically
viable, and that material
modifying factors have been
considered.
The basis of the cut-off grade(s) A CoG of 9.9% KCl has been calculated for the Ore Reserve Estimation based on forecast revenue and estimated
or quality parameters operating costs. The cut-off calculation included all operating costs associated with the extraction, processing and
Cut-off applied. marketing of ore material. The cut-offs are based on a conservative MoP price of US$250 per tonne of MoP. Inputs
parameters to the calculation of cut-off grades included:
o Mining costs
o Metallurgical recoveries
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Criteria JORC Code explanation Commentary
o Processing costs
o Shipping costs
o General and administrative costs
All sylvinite of the Measured and Indicated Resource is present at a grade significantly above 9.9% KCl (the Ore Reserve
calculated CoG), therefore all the Measured and Indicated Sylvinite Resources have been considered for the Ore
Reserve Estimate by application of the other modifying factors.
The uniformly very low content of deleterious elements (magnesium and insoluble material) meant that these did not
require consideration in the CoG determination.
The method and assumptions Mining factors and assumptions have been derived from the historical information available for mature potash mines,
used as reported in the Pre- the current best mining practices and the outcomes of the various technical studies completed in the DFS and
Feasibility or Feasibility Optimisation Study
Study to convert the Mineral The Kola orebody will be mined using conventional UG mining method consisting of room and pillar in a 'chevron' (or
Resource to an Ore Reserve herringbone) pattern, with CMs mining machines of the drum-cutting type.
(i.e. either by application of
The mining equipment selected for the Kola Potash Project Mine are CMs.
appropriate factors by
Most of the mining will be one level only where only the US will be extracted. In some areas, both the US and the LS
optimisation or by
will be mined, in which case the LS will only be mined after the US. In other areas only the HWS will be mined.
preliminary or detailed
design). In determining the Ore Reserves, a minimum mining height of 2.5 m was selected based on capability of the selected
CM which is also capable of mining up to 6 m. Areas of the Mineral Resource with a seam height of less than 2.5
The choice, nature and
m were excluded from the Ore Reserves.
Mining factors or appropriateness of the
assumptions selected mining method(s) The mine design is typical of potash mines, having 4 entries for access drives. Each drive will typically be 8 m wide
and other mining and 3 m to 6 m high depending on the seam height. The typical configuration for the chevron pattern is an angle
parameters including of 65 degrees from the middle entry, and length of 150 m approximately.
associated design issues such
as pre-strip, access, etc. The Mine design relies on geotechnical modelling, carried out in FLAC 3D software. The modelling was based on
The assumptions made regarding geotechnical test-work carried out on representative core samples from the sylvinite seams and host rocks (rock-
geotechnical parameters salt and lesser carnallitite). The geotechnical modelling established that the mine is stable over the LoM for the
(e.g. pit slopes, stope sizes, DFS mine design which includes the following geotechnical parameters:
etc.), grade control and pre- o Where both the US and LS seams are to be mined, the support interval between the US and LS must be at least 3
production drilling. m thick.
The major assumptions made o An 8 m wide pillar between two consecutive production rooms (of 8 m each).
and Mineral Resource model
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Criteria JORC Code explanation Commentary
used for pit and stope o A 50 m wide pillar between two production panels. Similarly, a 50 m wide pillar will be left in place between the
optimisation (if appropriate). side of the production panel and the main haulage access drift.
The mining dilution factors used. o The interval of rock-salt between the mine openings and the floor of the overlying anhydrite member is referred
The mining recovery factors used. to as the 'salt back'. This is typically over 30 m but is less in some areas. The DFS design allows that it may be a
minimum of 15 m unless the Anhydrite Member is well developed where it may be 10 m. This is based on the
Any minimum mining widths
results of the geotechnical model.
used.
o A stand-off distance of 20 m radius from the exploration holes.
The manner in which Inferred
Mineral Resources are o A stand-off distance of 30 m radius from class 2 geological anomalies and 60 m radius from class 3 geological
utilised in mining studies and anomalies.
the sensitivity of the o A pillar of 300 m in radius around the exhaust and intake shafts.
outcome to their inclusion.
The infrastructure requirements Based on the selected mining equipment (CMs), it is anticipated that a good cutting selectivity would be achieved, and
of the selected mining that a maximum of 0.2 m of dilution material above and/or below the potash seam is likely. Carnallitite is present
methods. in the floor of the seam in some areas. The roof is always of rock-salt. On average, the dilution material is
equivalent to approximately 10% of the tonnage of the Ore Reserves. Dilution material was assigned a grade of
3% KCl if rock-salt and 0% KCl if Carnallitite.
Based on the configuration of the proposed mining layout, and based on the anticipated fleet of mining equipment,
it is assumed that the mining recovery in the different extraction chambers willbe 90% on average (i.e. mining
losses will be 10%). This considers the mining action which will lead to some losses such as material being
excavated and left in the production chamber, or mineralized material left in the floor or roof, etc.
The Global extraction ratio is 30% (25% in the LS, 33% in the US and 28% in the HWS). This is after excluding the
tonnage associated with removal of all pillars (pillars around the geological anomalies, the barrier pillars, the shaft
pillar, the pillars between chevrons and main access drifts), the stand-off distance around boreholes, mining
losses and the exclusion of sylvinite <2.5 m thick.
Two vertical shafts, each with 8 m internal diameter, will be sunk at a central location in the Ore Reserves, to provide
access to the underground. The intake shaft will be equipped with a hoist and cage system for transportation of
persons and material, while the exhaust shaft will be equipped with a vertical conveyor system (pocket lift
configuration) to convey the mined-out ore to the surface. Both shafts are approximately 270 m deep.
One haulage from the CMs to the feeder breaker apron feeder will be done using electrically- powered Shuttle Cars.
Underground conveyor belts will be used for materials handling (ore haulage) ore transportation in all the areas of the
mine. Conveyor belts are distributed in the mains and submains and ultimately in the working panels near the CM
Page 38 of 73
Criteria JORC Code explanation Commentary
working face. The ore will be placed on the belts from the feeder breakers that were fed by the shuttle cars. The
conveyor belts will carry the ore loaded by the feeder breakers to the ore bins. Then the ore is conveyed from the
ore bins to the Pocket Lift system located in the exhaust shaft.
The Life of Ore Reserves for the Kola Project is estimated at 23 years, and full-scale production averaging
approximately 2.1 million tonnes per annum of MoP from Ore Reserves occurs for approximately 23 years. During
the exploitation of the 152.4 Mt of Ore Reserves, 9.7 Mt of Inferred Mineral Resources are scheduled to be mined
and processed. This represents approximately 6.0% of the total amount of ROM material processed in the first 23
years. This portion of the Inferred Mineral Resources is at the periphery of the Mineral Resources envelope and
immediately adjacent to the Ore Reserves and logically would be extracted in conjunction with the adjacent Ore
Reserves. The bulk of the Inferred Mineral Resources are planned for extraction from year 10 onwards.
The metallurgical process The metallurgical factors and assumptions applying to the Kola Project were set out in the Company's announcement
proposed and the "Kola Definitive Feasibility Study" dated 29 January 2019.
appropriateness of that As noted in that announcement, the final product will be MoP K60, comprising at least 95% KCl. The DFS design allows
process to the style of for the production of this MoP in two forms, standard and granular. The optimised design simplified production
mineralization. to a single product – red granular K60 MOP.
Whether the metallurgical A conventional flotation process will be utilized for potash concentration. This method is well established, and the
process is well-tested most widely used method in the potash industry.
technology or novel in
The DFS metallurgical test work campaigns were based on representative core samples of the three seams, collected
nature.
from the exploration drill hole cores. They comprised US (114.5 kg), LS (102.0 kg) and HWS (10.3 kg). All test work
The nature, amount and was carried out at the Saskatchewan Research Council laboratory in Saskatoon, Canada. No further testing was
Metallurgical representativeness of
factors or completed during optimisation.
metallurgical test work
assumptions The process flow sheets were optimised to meet the Kola Potash Project targets of producing 2.2 Mtpa of MoP, at
undertaken, the nature of
95.3% KCl purity, with a minimum KCl recovery of 89.9%.
the metallurgical domaining
Two metallurgical test work campaigns were conducted during the DFS in 2017 and 2018. The main philosophy of the
applied and the
first DFS test work campaign was to prepare representative test feedstocks for each seam, confirm KCl liberation,
corresponding metallurgical
characterize the feedstock, perform flotation tests, optimize the operating conditions, optimize reagent
recovery factors applied.
consumption for optimum KCl recovery and grade performance, perform a sensitivity test on flotation.
Any assumptions or allowances
The objective of the second test work campaign was to optimize the flotation process and improve the plant recovery
made for deleterious
from the initial flow sheet. The results of this second test works processed in SYSCAD™ model demonstrated that
elements.
the new flotation process performed above the project performance minimum target.
The existence of any bulk sample
With a raw ore feed grade of 31.3% KCl, the material balance confirmed that the project objectives can be met with
or pilot scale test work and
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Criteria JORC Code explanation Commentary
the degree to which such a production of 2.2 Mtpa with an expected product recovery of 89.9%, and a final product grade of 95.3% KCl.
samples are considered Magnesium and insoluble material are considered deleterious. The extremely low content of these materials in the
representative of the ore mean that their removal is relatively straightforward. Insoluble material is removed by attrition scrubbing and
orebody as a whole. magnesium removed by brine purge.
For minerals that are defined by a The metallurgical test work campaigns provided a sound foundation for the development of the process design
specification, has the Ore engineering and subsequent project performance, overall engineering studies and the cost estimate.
Reserve estimation been
based on the appropriate
mineralogy to meet the
specifications?
The status of studies of potential The ESIA for the construction and operation phases of the mining project was initially prepared by the consulting
environmental impacts of company SRK in Cardiff and approved by the RoC regulator in 2013.
the mining and processing An amendment was prepared by SRK in parallel with the DFS to capture changes to the project description and was
operation. Details of waste submitted to the ROC regulator in Q4 2018; It was approved on 31 March 2020 for 25 years.
rock characterisation and
The 2022 Optimization Study having proposed new locations for the accommodation camp, process plant and small
the consideration of
concomitant changes in the route of the OLC, this has created a requirement to further amend some parts of the
potential sites, status of
2018 ESIA.
design options considered
Discussions with the RoC authorities have led to the conclusion that Kore Potash needs to make an addendum to the
and, where applicable, the
existing document to cover all recent changes. It is planned to commence the base data collection for the route
status of approvals for
and location changes once Term Sheets for financing the Kola project are finalized during the first quarter of 2025.
process residue storage and
Environmental waste dumps should be While the approved ESIA already includes a detailed an Environment and Social Management Plan ("ESMP") that is
reported. central to the construction construction, it is expected that an augmented ESMP will result from the
supplementary ESIA work to be accomplished in 2025.
It should be noted that the mine-site and a portion of the infrastructure corridor are located within the economic
development and buffer zones of the Conkouati-Douli National Park ("CDNP") while the processing plant is
located outside. Project activity in this area has been minimized and influx is led away from the park through the
siting of employee facilities outside the CDNP.
Tailings are insignificant, being only the <0.2% of insoluble material or just under 1Mt over the LoM. The bulk of the
waste is dissolved halite in the form on an NaCl brine. All waste streams will be diluted with seawater to a
concentration of 200mg/l and discharged via a diffuser into the ocean. This material has been characterised and
ecotoxicological testing has been undertaken to confirm that no adverse impacts are caused at the edge of the mixing
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Criteria JORC Code explanation Commentary
zone.
The overall conclusion of the ESIA is that negative environmental impacts identified can be reduced to acceptable
levels.
A rehabilitation and closure plan has been prepared and included in owner's costs of the project.
Biodiversity, air quality, social, archeological, water and noise baseline studies have been prepared and incorporated
into the ESIA process.
The existence of appropriate The project infrastructure is comprised of the mine-site (shaft and offices), the process plant is 24km from the mine
infrastructure: availability of site and the marine and product storage facility a further 11km from the plant site, on the coast (at Tchiboula),
land for plant development, the 34 km infrastructure corridor between these (including the overland conveyor, service road and power line),
power, water, the gas line from M'boundi gas field, overhead line from the MKII substation, the accommodation and
transportation (particularly administrative camp and the transshipment facilities.
for bulk commodities), Exclusive land acquisition rights through the DUP process will be applied for based on the new plant position.
labour, accommodation; or
Road access to the Kola Potash Project sites will be via the existing Route Nationale 5 (RN5). Two external access roads
the ease with which the
will be built, which are connected from RN5 to the mining site and from RN5 to the mineral processing site and
infrastructure can be
living quarter, with a length of 2.0km and 4.3km respectively. Two maintenance roads for long-distance belt
provided or accessed.
conveyors will be built. One of the roads for RoM belt conveyor maintenance is about 25 km, connecting Koutou
camp and the mineral processing site. The other 9 km road is for MOP belt conveyor maintenance,
Electrical Power will be sourced from the RoC national grid. A 57 km long 220 kV transmission line will be built from
Infrastructure the Mango Kamba II substation north of Pointe Noire to the Process Plant Site. A second 34 km long 220 kV
transmission line will be built from the Process Plant Site to the Mine Site from process plant to marine facility.
• The Natural Gas needed for product drying will be supplied by a local Oil and Gas producer who has plans to
build a gas treatment plant some 35 km away from the Kore processing plant. The same company is also
planning to supply electricity to the Kola Project from the same offtake point. This will be an interesting option to
the Mongo Kamba II substation as it has a lower environmental impact.
Ongoing operational labour will be a combination of permanent employees, permanent contract services, and part-
time contract services for intermittent needs. The total requirement for permanent employees is expected to be
731. Local labour resources will be used for most labour requirements, while some selected positions are planned
as expat roles.
The Accommodation Camp has been sized for a capacity of 950 beds and will be located 2km away from the process
plant.
The Kola Potash Project intends to export up to 2.2 Mt MoP to world markets each year. A transshipment solution has
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Criteria JORC Code explanation Commentary
therefore been developed, whereby the material for export is loaded at a dedicated Jetty onto self-propelled
shuttle Barges (two units), which will then travel to OGVs anchored 11 nautical miles (20 km) offshore in a
dedicated transshipment area. The cargo will be transferred from the Barges to the OGVs using a FCTU.
The derivation of, or assumptions Capital Cost:
made, regarding projected The pre-production capital cost for the Kola Project is now estimated at US$2.07 billion (nominal), which includes the
capital costs in the study. fixed price EPC contract of US$1.929 billion and US$141 million owner's costs.
The methodology used to
estimate operating costs.
Operating Cost:
Allowances made for the content
Operating costs were estimated using the detailed model in the Kola DFS, revised to reflect current cost conditions.
of deleterious elements.
The Kola DFS Operating costs were based on first principles using quoted rates, estimated consumption, forecast
The derivation of assumptions labour complements and remuneration estimates.
made of metal or commodity
Operating Cost covering the Life of Mine (23 years) was estimated in 2019 and revised to reflect current cost
price(s), for the principal
conditions. They include costs for Electric power, Fuel, Gas, Labour, Maintenance parts, Operating Consumables,
minerals and co- products.
General and Administration costs and Contract for Employee Facilities.
Costs The source of exchange rates
Mine Closure cost estimated in accordance with the Conceptual Rehabilitation and Closure Plan developed by SRK
used in the study.
Consulting.
Derivation of transportation
Mine Closure duration of 24 months (2 years), for the effective dismantling, demolition and rehabilitation works..
charges.
Quantities of equipment, materials and works directly assessed from the Material Take-off prepared within the
The basis for forecasting or framework of the DFS for the Kola Potash Project.
source of treatment and State mineral royalties of 3% of Net Revenue applies.
refining charges, penalties
Other criteria
for failure to meet
The marketed MoP will comprise at least 95% KCl, with a maximum of 0.2% Mg and 0.3% Insolubles.
specification, etc.
The allowances made for
royalties payable, both
Government and private.
The derivation of, or assumptions Head grade, recovery and product grade forecasts were based on the DFS results.
made regarding revenue Product pricing - Potash market research specialist Argus Media provided the Company with historical and forecast
Revenue factors factors including head grade, pricing trends for the MoP CFR Brazil benchmarks over the period up to 2047 (see Figure 5 above). Kola's proposed
metal or commodity price(s) mine life covers the period from 2029 through to 2052 (23 years). The Argus Media Marketing Report's estimates
exchange rates, are provided in MoP CFR Brazil Real US$/t 2023 values for calendar years 2024 to 2047. After 2047, prices are
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Criteria JORC Code explanation Commentary
transportation and indexed by the Company using a US$2/t incremental annual increase to the 2047 price as in the Argus Media
treatment charges, Marketing Report. As a result, the estimated forecast average granular MoP price is US$449/t for the life of the
penalties, net smelter mine operations. For more details on product pricing refer to Section 12.
returns, etc.
The derivation of assumptions
made of metal or commodity
price(s), for the principal
metals, minerals and co-
products.
The demand, supply and stock As stated in the Argus Media Marketing Report MoP prices are currently reaching their lowest levels over the past 5
situation for the particular years. Short-term pricing in the next 12 months is based on the current market developments, such as weather
commodity, consumption events, planned or unplanned plant outages and market participant sentiment. Argus Media sees limited upside
trends and factors likely to in medium-term (5 - 7 years) as the market reaches floor around the year 2028 with the ramp-up of BHP's Jansen
affect supply and demand project in Canada. Potash market is facing transition to supply surplus with recovering Russian and Belorussian
into the future. and new capacity in Canada and Laos. Argus Media believes that the long-term price of MoP is dictated by the
A customer and competitor industry's LRMC for adding new potash supply.
analysis along with the
identification of likely market Total LRMC is the sum of:
windows for the product.
• Mine capital costs, adjusted for location and the weighted average cost of capital, amortised over
Market Price and volume forecasts and the mine's life span
assessment the basis for these forecasts. • Mine operating costs, including fuel, labour, materials, sustaining capital and royalties
For industrial minerals the • Value-in-use considerations, crediting or debiting total cost to consider access to target markets
customer specification,
testing and acceptance
The LRMC base year is then inflated by Argus Media over the forecast period to provide their long-term price forecast.
requirements prior to a
Each LRMC element is inflated using the appropriate inflator from Argus Media's forecasts of fuel, energy and
supply contract.
macro inflators. The LRMC is a long-term trend forecast, meaning Argus Media expects short-term oscillations
around the calculated LRMC, driven by factors such as weather and supply disruptions that cannot be predicted
this far in advance. Russian MoP development is no longer included in the LRMC set. As the war in Ukraine
continues, Argus Media assumes the impact on Russia as a destination for investment will be more prolonged and
this is reflected in a higher-risk premium. Argus Media's view is that incremental tonnage from Canada and Israel
are expected to dictate long-run LRMC.
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Criteria JORC Code explanation Commentary
For more details on product pricing refer to Section 12.
The inputs to the economic
analysis to produce the net Key valuation assumptions and (sources)
present value (NPV) in the
Production - LoM of 23 years at nominal 2.2 Mtpa MoP production.
study, the source and
Single MoP product type – red MOPG (Muriate of Potash - Granular)
confidence of these
economic inputs including Average LoM CFR price of US$ 449/tMoP
estimated inflation, discount On-mine LoM average operating cost US$ 103.81/tMoP, Real
rate, etc. LoM Shipping (transshipment and sea freight) of US$ 24.38/tMoP
NPV ranges and sensitivity to Project capital period 43 months
variations in the significant
Total Nominal Project Capital US$ 2.07 billion (including Owners Capital)
Economic assumptions and inputs.
Owners Capital US$ 141 million
Sustaining Capital US$ 13.06/tMoP, Real
Fiscal parameters: Company tax rate (15%), tax holidays (5 years at 0% + 5 years at 7.5%) (Mining Convention)
Royalties 3% (Mining Convention)
Government free carry (10%) (Mining Convention)
Other minor duties and taxes (Mining Convention)
Working capital: 30 days Debtors and Creditors, 60 days Stores (Kore)
Payback period: 8.5 years from start of construction
The status of agreements with Approval of an ESIA is a prerequisite for beginning construction of any mining project in the Republic of Congo. The
key stakeholders and amended 2018 ESIA for the Kola Mining License was approved on 31 March 2020 for 25 years. It was written to
matters leading to social the applicable international standards while respecting all Congolese legislation. It is directly related to the
license to operate. Relocation Action Plan ("RAP") which was prepared by RSK Consultants back in June 2018. Notwithstanding,
socio-economic and livelihood baseline reports which were prepared and approved as part of the ESIA baseline
Social
process need to be updated with the passing of time. A RAP update is thus planned for the first half of 2025.
At the time of the RAP, a DUP process was initiated with the support and input of various Government ministries
and legal authorities to allow land acquisition and possible expropriation with compensation from the various
owners and users whose property or livelihood would be affected by the project zone. The gazetted DUP was
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Criteria JORC Code explanation Commentary
valid for 3 years but has since expired, requiring a new process to be started afresh.The company is awaiting the
new RAP/ESIA updates to refresh the DUP.
Sintoukola Potash has implemented a Stakeholder Engagement Process and is actively engaging with a wide range of
project stakeholders, including, NOE, the conservation NGO managing the adjacent National Park, the regulator
and communities.
In the RAP, three separate land take corridors were identified by RSK : the Service Corridor including the Mine Site,
the Conveyor Belt and Process Plant, an HV line and the Gas Pipeline. Physical displacement is minimal with
most actions requiring livelihood restoration. Resettlement Costs have been included in owner's costs and
timed in the implementation schedule.
There are believed to be no social related issues that do not have a reasonable likelihood of being resolved.
To the extent relevant, the impact Kola is currently compliant with all legal and regulatory requirements subject to final approval of the Kola
of the following on the Environmental and Social Impact Assessment Amendments (which was required following the project design
project and / or on the changes implemented during the optimisation study).
estimation and classification A mining convention entered into between the RoC government and the Companies on 8 June 2017 and gazetted into
of the Ore Reserves: law on 29 November 2018 concludes the framework envisaged in the 25-year renewable Kola Mining License
Any identified material naturally granted in August 2013. The Mining Convention provides certainty and enforceability of the key fiscal
occurring risks. arrangements for the development and operation of Kola Mining Licenses, which amongst other items include
The status of material legal import duty and VAT exemptions and agreed tax rates during mine operations. The Mining Convention provides
agreements and marketing strengthened legal protection of the Company's investments in the Republic of Congo through the settlement of
arrangements. disputes by international arbitration.
Other The status of governmental To the best of the Competent Person's knowledge, there is no reason to assume any government permits and licenses
agreements and approvals or statutory approvals will not be granted. There are no unresolved matters upon which extraction is contingent.
critical to the viability of the
project, such as mineral
tenement status, and
government and statutory
approvals. There must be
reasonable grounds to
expect that all necessary
Government approvals will
be received within the
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Criteria JORC Code explanation Commentary
timeframes anticipated in
the Pre-Feasibility or
Feasibility study. Highlight
and discuss the materiality of
any unresolved matter that
is dependent on a third party
on which extraction of the
reserve is contingent.
The basis for the classification of Measured Mineral Resources were used for the estimation of the Proved Ore Reserves. Indicated Mineral Resources
the Ore Reserves into varying were used for the estimation of Probable Ore Reserves.
confidence categories. The conversion of Measured and Indicated Mineral Resource to Proved and Probable Ore Reserve reflects the
Whether the result appropriately Competent Person's view of the deposit.
reflects the Competent 40.6% of the Ore Reserves are classified in the Proved category and 59.4% of the Ore Reserves are classified in the
Classification Person's view of the deposit. Probable category
The proportion of Probable Ore
Reserves that have been
derived from Measured
Mineral Resources (if any).
The results of any audits or DFS deliverables were continually reviewed by an Owner's Team consisting of an inter-discipline engineering team,
Audits or reviews reviews of Ore Reserve specialists in ESIA and economic modelling and construction experts.
estimates.
Where appropriate a statement In the Competent Person's view, the Kola DFS achieves the required level of confidence in the modifying factors to
of the relative accuracy and justify the estimation of an Ore Reserve. All relevant modifying factors were considered in the Ore Reserve
confidence level in the Ore Estimation and deemed to be modelled at a level of accuracy appropriate to the classification, that a global change
Reserve estimate using an of greater than 10% considered unlikely
Discussion of approach or procedure The DFS determined a mine plan and production schedule that is technically achievable and economically viable.
relative
deemed appropriate by the
accuracy/ The capital and operating costs are based on the fixed-price EPC contract signed in November 2024.
Competent Person. For
confidence Factors that could affect the Ore Reserves locally include; localised changes in salt-back thickness, greater dip of the
example, the application of
seam in some areas, local changes in the thickness of the rock-salt support layer between the seams, areas of
statistical or geostatistical
unexpected carnallite in floor. The Mineral Resource model attempted to model these features to a high level of
procedures to quantify the
detail and are 'passed-on' into the Ore Reserve and mine plan. The Ore Reserve is also partially reliant on the
relative accuracy of the
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Criteria JORC Code explanation Commentary
reserve within stated model for the thickness of the overlying Anhydrite Member which was not part of the Mineral Resource.
confidence limits, or, if such While local variation from the mine plan in the above are expected, is considered unlikely that these would lead to
an approach is not deemed significant negative change in the Ore Reserves, and that positive changes are equally likely.
appropriate, a qualitative
For the optimisation study, data from a potash mining operation was used to guide and check the design, productivity
discussion of the factors
assumptions, cost estimates and budgets. The input data and design are likely to be realistic and achievable in the
which could affect the
Competent Persons view.
relative accuracy and
confidence of the estimate.
The statement should specify
whether it relates to global
or local estimates, and, if
local, state the relevant
tonnages, which should be
relevant to technical and
economic evaluation.
Documentation should
include assumptions made
and the procedures used.
Accuracy and confidence
discussions should extend to
specific discussions of any
applied modifying factors
that may have a material
impact on Ore Reserve
viability, or for which there
are remaining areas of
uncertainty at the current
study stage.
It is recognized that this may not
be possible or appropriate in
all circumstances. These
statements of relative
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Criteria JORC Code explanation Commentary
accuracy and confidence of
the estimate should be
compared with production
data, where available.
APPENDIX D
Appendix D: JORC 2012 – Table 1, Sections 1 to 3[1]
[1]
Refer to ASX announcement dated 27 Feb 2025
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Section 1 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections.)
Criteria JORC Code explanation Commentary
1.1 Sampling • Nature and quality of sampling (e.g. cut channels, Sampling was carried out according to a strict quality control protocol beginning at the
techniques random chips, or specific specialised industry standard drill rig. Holes were drilled to PQ size (85 mm core diameter) core, with a small number
measurement tools appropriate to the minerals under of holes drilled HQ size (63.5 mm core diameter). Sample intervals were between 0.1
investigation, such as down hole gamma sondes, or and 2.0 metres and sampled to lithological boundaries. All were sampled as half-core
handheld XRF instruments, etc). These examples should except very recent holes (EK_49 to EK_51) which were sampled as quarter core. Core
not be taken as limiting the broad meaning of sampling. was cut using an Almonte© core cutter without water and blade and core holder
• Include reference to measures taken to ensure sample cleaned down between samples. Sampling and preparation were carried out by
representivity and the appropriate calibration of any trained geological and technical employees. Samples were individually bagged and
measurement tools or systems used. sealed.
• Aspects of the determination of mineralisation that are
Material to the Public Report. A small number of historic holes were used in the Mineral Resource model; K6, K18,
• In cases where 'industry standard' work has been done K19, K20, K21. K6 and K18 were the original holes twinned by the Company in 2010.
this would be relatively simple (eg 'reverse circulation The grade data for these holes was not used for the Mineral Resource estimate but
drilling was used to obtain 1 m samples from which 3 kg they were used to guide the seam model. The 2010 twin hole drilling exercise
was pulverised to produce a 30 g charge for fire assay'). validated the reliability of the geological data for these holes (section 1.7).
In other cases more explanation may be required, such as
where there is coarse gold that has inherent sampling KCl data for EK_49 to EK_51 was based on the conversion on calibrated API data from
problems. Unusual commodities or mineralisation types downhole geophysical logging, as is discussed in Section 6. Subsequent laboratory
(eg submarine nodules) may warrant disclosure of assay results for EK_49 and EK_51 support the API derived grades.
detailed information.
1.2 Drilling techniques • Drill type (eg core, reverse circulation, open-hole Holes were drilled by 12 and 8 inch diameter rotary Percussion through the 'cover
hammer, rotary air blast, auger, Bangka, sonic, etc) and sequence', stopping in the Anhydrite Member and cased and grouted to this depth.
details (eg core diameter, triple or standard tube, depth Holes were then advanced using diamond coring with the use of tri-salt (K, Na, Mg)
of diamond tails, face-sampling bit or other type, whether mud to ensure excellent recovery. Coring was PQ (85 mm core diameter) as standard
core is oriented and if so, by what method, etc). and HQ (64.5 mm core diameter) in a small number of the holes.
1.3 Drill sample • Method of recording and assessing core and chip sample Core recovery was recorded for all cored sections of the holes by recording the drilling
recovery recoveries and results assessed. advance against the length of core recovered. Recovery is between 95 and 100% for
• Measures taken to maximise sample recovery and ensure the evaporite and all potash intervals, except in EK_50 for the Carnallitite interval in
representative nature of the samples. that hole (as grade was determined using API data for that hole this is of no
• Whether a relationship exists between sample recovery consequence). The use of tri-salt (Mg, Na, and K) chloride brine to maximize recovery
and grade and whether sample bias may have occurred was standard. A fulltime mud engineer was recruited to maintain drilling mud
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Criteria JORC Code explanation Commentary
due to preferential loss/gain of fine/coarse material. chemistry and physical properties. Core is wrapped in cellophane sheet soon after it
is removed from the core barrel, to avoid dissolution in the atmosphere, and is then
transported at the end of each shift to a de-humidified core storage room where it is
stored permanently.
1.4 Logging • Whether core and chip samples have been geologically The entire length of each hole was logged from rotary chips in the 'cover sequence'
and geotechnically logged to a level of detail to support and core in the evaporite. Logging is qualitative and supported by quantitative
appropriate Mineral Resource estimation, mining studies downhole geophysical data including gamma, acoustic televiewer images, density and
and metallurgical studies. calliper data which correlates well with the geological logging. Due to the conformable
• Whether logging is qualitative or quantitative in nature. nature of the evaporite stratigraphy and the observed good continuity and abrupt
Core (or costean, channel, etc) photography. contacts, recognition of the potash seams is straightforward and made with a high
• The total length and percentage of the relevant degree of confidence. Core was photographed to provide an additional reference for
intersections logged. checking contacts at a later date.
1.5 Sub-sampling • If core, whether cut or sawn and whether quarter, half or Excluding QA-QC samples 2368 samples were analysed at two labs in 44 batches, each
techniques and sample all core taken. batch comprising between 20 and 250 samples. Samples were submitted in 46 batches
preparation • If non-core, whether riffled, tube sampled, rotary split, etc and are from 41 of the 47 holes drilled at Kola. The other 6 drill-holes (EK03, EK_21,
and whether sampled wet or dry. EK_25, EK_30, EK_34, EK_37) were either stopped short of the evaporite rocks or did
• For all sample types, the nature, quality and not intersect potash layers. Sample numbers were in sequence, starting with KO-DH-
appropriateness of the sample preparation technique. 0001 to KO-DH-2650 (EK_01 to EK_44) then KO-DH-2741 to KO-DH-2845 (EK_46 and
• Quality control procedures adopted for all sub-sampling EK_47).
stages to maximise representivity of samples.
• Measures taken to ensure that the sampling is The initial 298 samples (EK_01 to EK_05) were analysed at K-UTEC in Sondershausen,
representative of the in-situ material collected, including Germany and thereon samples were sent to Intertek-Genalysis in Perth. Samples were
for instance results for field duplicate/second-half crushed to nominal 2 mm then riffle split to derive a 100 g sample for analysis. K, Na,
sampling. Ca, Mg, Li and S were determined by ICP-OES. Cl is determined volumetrically.
• Whether sample sizes are appropriate to the grain size of Insolubles (INSOL) were determined by filtration of the residual solution and slurry on
the material being sampled. 0.45 micron membrane filter, washing to remove residual salts, drying and weighing.
Loss on drying by Gravimetric Determination (LOD/GR) was also competed as a check
on the mass balance. Density was measured (along with other methods described in
section 3.11) using a gas displacement Pycnometer.
1.6 Quality of assay • The nature, quality and appropriateness of the assaying For drill-holes EK_01 to EK_47, a total of 412 QAQC samples were inserted into the
data and laboratory and laboratory procedures used and whether the batches comprising 115 field duplicate samples, 84 blank samples and 213 certified
tests technique is considered partial or total. reference material (CRM) samples. Duplicate samples are the other half of the core
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Criteria JORC Code explanation Commentary
• For geophysical tools, spectrometers, handheld XRF for the exact same interval as the original sample, after it is cut into two. CRMs were
instruments, etc, the parameters used in determining the obtained from the Bureau of Reference (BCR), the reference material programme of
analysis including instrument make and model, reading the European Commission. Either river sand or later barren Rock-salt was used for
times, calibrations factors applied and their derivation, blank samples. These QA-QC samples make up 17% of the total number of samples
etc. submitted which is in line with industry norms. Sample chain of custody was secure
• Nature of quality control procedures adopted (eg from point of sampling to point of reporting.
standards, blanks, duplicates, external laboratory checks)
and whether acceptable levels of accuracy (i.e. lack of In addition two batches of 'umpire' analyses were submitted to a second lab. The first
bias) and precision have been established. batch comprised 17 samples initially analysed at K-UTEC sent to Intertek-Genalysis for
umpire. The second umpire batch comprised 23 samples from Intertek-Genalysis sent
to SRC laboratory in Saskatoon for umpire. They demonstrate excellent validation of
the primary laboratory analyses.
Potash intersections for EK_49 to EK_51 were partially sampled for geotechnical test
work and so were not available in full for chemical analysis. Gamma ray CPS data was
converted to API units which were then converted to KCl % by the application of a
conversion factor known, or K-factor. The geophysical logging was carried out by
independent downhole geophysical logging company Wireline Workshop ("WW") of
South Africa, and data was processed by WW. Data collection, data processing and
quality control and assurance followed a stringent operating procedure. API
calibration of the tool was carried out at a test-well at WW's base in South Africa to
convert raw gamma ray CPS to API using a coefficient for sonde NGRS6569 of 2.799
given a standard condition of a diameter 150mm bore in fresh water (1.00gm/cc mud
weight).
To provide a Kola-specific field based K-factor, log data were converted via a K-factor
derived from a comparison with laboratory data for drill-holes EK_13, EK_14 and
EK_24. In converting from API to KCl (%), a linear relationship is assumed (no dead
time effects are present at the count rates being considered). To remove all depth and
log resolution variables, an 'area-under-the-curve' method was used to derive the K
factor. This overcomes the effect of narrow beds not being fully resolved as well as
the shoulder effect at bed boundaries. For this, laboratory data was converted to a
wireline log and all values between ore zones were assigned zero. A block was created
that covered all data and both Wireline Gamma Ray Log ("GAMC") and laboratory data
log were summed in terms of area under the curves. From this like-for –like
comparison a K factor of 0.074 was calculated. In support if this factor, it compares
well with the theoretical K-factor derived using Schlumberger API to KCl conversion
charts which would be 0.0767 for this tool in hole of PQ diameter (125 mm from
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calliper data. As a check on instrument stability over time, EK_24 is logged frequently.
No drift in the gamma-ray data is observed.
As confirmation of the accuracy of the API-derived KCl grades for EK_49 to EK_51,
samples for the intervals that were not taken for geotechnical sampling, were sent to
Intertek-Genalysis for analysis. The results are within 5% of the API-derived KCl and
thickness, and so the latter was used unreservedly for the Mineral Resource
estimation.
1.7 Verification of • The verification of significant intersections by either 40 samples of a variety of grades and drill-holes were sent for umpire analysis and as
sampling and assaying independent or alternative company personnel. described these support the validity of the original analysis. Other validation comes
• The use of twinned holes. from the routine geophysical logging of the holes. Gamma data provides a very useful
• Documentation of primary data, data entry procedures, check on the geology and grade of the potash and for all holes a visual comparison is
data verification, data storage (physical and electronic) made in log form. API data for a selection of holes (EK_05, EK_13, EK_14, EK_24) were
protocols. formally converted to KCl grades. In all cases the API derived KCl supports the reported
• Discuss any adjustment to assay data. intersections.
As mentioned above; K6, K18, K19, K20, K21 were used in the geological modelling but
not for the grade estimate. K6 and K18 were twinned in 2010 and the comparison of
the geological data is excellent, providing validation that the geological information
for the aforementioned holes could be used with a high degree of confidence.
1.8 Location of data • Accuracy and quality of surveys used to locate drill holes A total of 50 Resource related drill-holes have been drilled by the Company: EK_01 to
points (collar and down-hole surveys), trenches, mine workings EK_52. EK_37 and EK_48 were geotechnical holes. Of the 50 Resource holes, 4 stopped
and other locations used in Mineral Resource estimation. short above the Salt Member due to drilling difficulties. Of the 46 Resource holes
• Specification of the grid system used. drilled into the Salt Member, all except 4 contained a significant Sylvinite intersection.
• Quality and adequacy of topographic control.
The collars of all drill-holes up to EK_47 including historic holes were surveyed by a
professional land surveyor using a DGPS. EK_48 to EK_52 were positioned with a
handheld GPS initially (with elevation from the LIDAR data) and later with a DGPS. All
data is in UTM zone 32 S using WGS 84 datum.
Topography for the bulk of the Mineral Resource area is provided by high resolution
airborne LIDAR (Light Detection and Ranging) data collected in 2010, giving accuracy
of the topography to <200 mm. Beyond this SRTM 90 satellite topographic data was
used. Though of relatively low resolution, it is sufficient as the deposit is an
underground mining project.
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1.9 Data spacing and • Data spacing for reporting of Exploration Results. In most cases drill-holes are 1-2 km apart. A small number of holes are much closer
distribution • Whether the data spacing and distribution is sufficient to such as EK_01 and K18, EK_04 and K6, EK_14 and EK_24 which are between 50 and
establish the degree of geological and grade continuity 200 m apart.
appropriate for the Mineral Resource and Ore Reserve
estimation procedure(s) and classifications applied.
The drill-hole data is well supported by 186 km of high frequency closely spaced
• Whether sample compositing has been applied.
seismic data acquired by the Company in 2010 and 2011 that was processed to a
higher standard in 2016. This data provides much guidance of the geometry and
indirectly the mineralogy of the potash seams between and away from the holes, as
well as allowing the delineation of discontinuities affecting the potash seams. The
combination of drill-hole data and the seismic data supports geological modelling with
a level of confidence appropriate for the classification assigned to the Measured,
Indicated and Inferred sections of the deposit. The seismic data is described in greater
detail below.
Two sources of seismic data were used to support the Mineral Resource model:
1) Historical oil industry seismic data of various vintage and acquired by several
companies, between 1989 and 2006. The data is of low frequency and as final
SEG-Y files as PreStack Time Migrated ("PreSTM") form. Data was converted
to depth by applying a velocity to best tie the top-of-salt reflector with drill-
hole data. The data allows the modelling of the top of the Salt Member (base
of the Anhydrite Member) and some guidance of the geometry of the layers
within the Salt Member.
2) The Company acquired 55 lines totalling 185.5 km of data (excluding gaps on
two lines) in 2010 and 2011. These surveys provide high frequency data
specifically to provide quality images for the relatively shallow depths
required (surface to approximately 800 m). Data was acquired on strike (tie
lines) and dip lines. Within the Measured Mineral Resource area lines are
between 100 and 200 m apart. Data was re-processed in 2016, for the 2017
Mineral Resource update, by DMT Petrologic GmbH ("DMT") of Germany.
DMT worked up the raw field data to Post Stack Migration ("PoSTM") and
PreSTM format. By an iterative process of time interpretation of known
reflectors (with reference to synthetic seismograms) the data was converted
to PreStack Depth Migrated ("PSDM") form. Finally, minor adjustments were
made to tie the data exactly with the drill-hole data.
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The Competent Person reviewed the seismic data and processing and visited DMT in
Germany for meetings around the final delivery of the data to the Company.
1.10 Orientation of • Whether the orientation of sampling achieves unbiased All exploration drill-holes were drilled vertically and holes were surveyed to check for
data in relation to sampling of possible structures and the extent to which deviation. In almost all cases tilt was less than 1 degree (from vertical). Dip of the
geological structure this is known, considering the deposit type. potash seam intersections ranges from 0 to 45 degrees with most dipping 20 degrees
• If the relationship between the drilling orientation and or less. All intersections with a dip of greater than 15 degrees were corrected to obtain
the orientation of key mineralised structures is considered the true thickness, which was used for the creation of the Mineral Resource model.
to have introduced a sampling bias, this should be
assessed and reported if material.
1.11 Sample security • The measures taken to ensure sample security. At the rig, the core is under full time care of a Company geologist and end of each
drilling shift, the core is transported by Kore Potash staff to a secure site where it is
stored within a locked room. Sampling is carried out under the fulltime watch of
Company staff; packed samples are transported directly from the site by Company
staff to DHL couriers in Pointe Noire 3 hours away. From here DHL airfreight all
samples to the laboratory. All core remaining at site is stored is wrapped in plastic film
and sealed tube bags, and within an air-conditioned room (17-18 degrees C) to
minimize deterioration.
1.12 Audits or reviews • The results of any audits or reviews of sampling The Competent Person has visited site to review core and to observe sampling
techniques and data. procedures. As part of the Mineral Resource estimation, the drill-hole data was
thoroughly checked for errors including comparison of data with the original
laboratory certificates; no errors were found.
Section 2 Reporting of Exploration Results
(Criteria listed in the preceding section also apply to this section.)
Criteria JORC Code explanation Commentary
2.1 Mineral tenement • Type, reference name/number, location and ownership The Kola deposit is within the Kola Mining Lease which is held 100% under the local
and land tenure status including agreements or material issues with third parties company Kola Mining SARL which is in turn held 100% by Sintoukola Potash SA RoC,
such as joint ventures, partnerships, overriding royalties, of which Kore Potash holds a 97% share. The lease was issued August 2013 and is valid
native title interests, historical sites, wilderness or for 25 years. There are no impediments on the security of tenure.
national park and environmental settings.
• The security of the tenure held at the time of reporting
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along with any known impediments to obtaining a licence
to operate in the area.
2.2 Exploration done • Acknowledgment and appraisal of exploration by other Potash exploration was carried out in the area in the1960's by Mines de Potasse d'
by other parties parties. Alsace S.A in the 1960's. Holes K6, K18, K19, K20, K21 are in the general area. K6 and
K18 are within the deposit itself and both intersected Sylvinite of the Upper and Lower
Seam; it was the following up of these two holes by Kore Potash (then named
Elemental Minerals) that led to the discovery of the deposit in 2012.
Oil exploration in the area has taken place intermittently from the 1950's onwards by
different workers including British Petroleum, Chevron, Morel et Prom and others.
Seismic data collected by some of these companies was used to guide the evaporite
depth and geometry within the Inferred Mineral Resource area. Some oil wells have
been drilled in the wider area such as Kola-1 and Nkoko-1.
2.3 Geology • Deposit type, geological setting and style of The potash seams are hosted by the 300-900 m thick Lower Cretaceous-aged (Aptian
mineralisation. age) Loeme Evaporite formation These sedimentary evaporite rocks belong to the
Congo (Coastal) Basin which extends from the Cabinda enclave of Angola to the south
well into Gabon to the north, and from approximately 50 km inland to some 200-300
km offshore. The evaporites were deposited between 125 and 112 million years ago,
within a post-rift 'proto Atlantic' sub-sea level basin following the break-up of
Gondwana forming the Africa and South America continents.
The evaporite is covered by a thick sequence of carbonate rocks and clastic sediments
of Cretaceous age to recent (Albian to Miocene), referred to as the 'Cover Sequence',
which is between 170 and 270 m thick over the Kola deposit. The lower portion of this
Cover Sequence is comprised of dolomitic rocks of the Sendji Formation. At the top of
the Loeme Formation, separating the Cover Sequence and the underlying Salt
Member is a layer of anhydrite and clay typically between 5 and 15 m thick and
referred to as the Anhydrite Member. At Kola, this layer rests un-conformably over
the Salt-Member, as described in more detail below.
Within the Salt Member, ten sedimentary-evaporative cycles (I to X) are recognized
with a vertical arrangement of mineralogy consistent with classical brine-evolution
models; potash being close to the top of cycles. The Salt Member and potash layers
formed by the seepage of brines into an extensive sub sea-level basin. Evaporation
resulted in precipitation of evaporite minerals over a long period of time, principally
halite (NaCl), carnallite (KMgCl3·6H2O) and bischofite (MgCl2·6H2O), which account for
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over 90% of the evaporite rocks. Sylvinite formed by the replacement of Carnallitite
within certain areas. Small amounts of gypsum, anhydrite, dolomite and insoluble
material (such as clay, quartz, organic material) is present, typically concentrated in
relatively narrow layers at the base of the cycles (interlayered with Rock-salt),
providing useful 'marker' layers. The layers making up the Salt Member are
conformable and parallel or sub-parallel and of relatively uniform thickness across the
basin, unless affected by some form of discontinuity.
There are upwards of 100 potash layers within the Salt Member ranging from 0.1 m
to over 10 m in thickness. The Kola deposit is hosted by 4 seams within cycles 7, 8 and
9, from uppermost these are; (HWS, US, LS, Footwall Seam ("FWS"). Seams are
separated by Rock-salt.
Individual potash seams are stratiform layers that can be followed across the basin
are of Carnallitite except where replaced by Sylvinite, as is described below. The
potash mineralogy is simple; no other potash rock types have been recognized and
Carnallitite and Sylvinite are not inter-mixed. The seams are consistent in their purity;
all intersections of Sylvinite are comprised of over 97.5% euhedral or subhedral halite
and sylvite of medium to very coarse grainsize (0.5 mm to >- 5 mm). Between 1.0 and
2.5% is comprised of anhydrite (CaSO4) and a lesser amount of insoluble material. At
Kola the potash layers are flat or gently dipping and at depths of between 190 and 340
m below surface.
The contact between the Anhydrite Member and the underlying salt is an
unconformity and due to the undulation of the layers within the Salt Member at Kola,
the thickness of the salt member beneath this contact varies. This is the principal
control on the extent and distribution of the seams at Kola and the reason why the
uppermost seams such as the Hangingwall Seam are sometimes absent, and the lower
seams such as the Upper and Lower Seam are preserved over most of the deposit.
The most widely distributed Sylvinite seams at Kola are the US and LS, hosted within
cycle 8 of the Salt Member. These seams have an average grade of 35.5 and 30.5 %
KCl respectively and average 3.7 and 4.0 m thick. The Sylvinite is thinned in proximity
to leached zones or where they 'pinch out' against Carnallitite. They are separated by
2.5-4.5 m thick Rock-salt layer referred to as the interburden halite ("IBH"). Sylvinite
Hangingwall Seam is extremely high grade (55-60% KCl) but is not as widely preserved
as the Upper and Lower Seam being truncated by the Anhydrite Member over most
of the deposit. Where it does occur, it is approximately 60 m above the Upper Seam
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and is typically 2.5 to 4.0 m thick. The Top Seams are a collection of narrow high grade
seams 10-15 m above the Hangingwall Seam but are not considered for extraction at
Kola as they are absent (truncated by the Anhydrite Member) over almost all the
deposit.
The Footwall Seam occurs 45 to 50 m below the Lower Seam. The mode of occurrence
is different to the other seams in that it is not a laterally extensive seam, but rather
elongate lenses with a preferred orientation, formed not by the replacement of a
seam, but by the 'accumulation' of potassium at a particular stratigraphic position. It
forms as lenses of Sylvinite up to 15 m thick and always beneath areas where the
Upper and Lower seam have been leached. It is considered a product of re-
precipitation of the leached potassium, into pre-existing Carnallitite-Bischofitite unit
at the top of cycle 7.
The insoluble content of the seams and the Rock-salt immediately above and below
them is uniformly low (<0.2%) except for the FWS which has an average insoluble
content of 1%. Minor anhydrite is present throughout the Salt Member, as 0.5-3 mm
thick laminations but comprise less than 2.5% of the rock mass of the potash layers.
Reflecting the quiescence of the original depositional environment, the Sylvinite
seams exhibit low variation in terms of grade, insoluble content, magnesium content;
individual sub-layers and mm thick laminations within the seams can be followed
across the deposit. The grade profile of the seams is consistent across the deposit
except for the FWS; the US is slightly higher grade at its base, the LS slightly higher
grade at its top. The HWS is 50 to 60% sylvite (KCl) throughout. The FWS, forming by
introduction of potassium and more variable mode of formation has a higher degree
of grade variation and thickness.
The original sedimentary layer and 'precursor' potash rock type is Carnallitite and is
preserved in an unaltered state in many holes drill-holes, especially of LS and in holes
that are lateral to the deposit. It is comprised of the minerals carnallite (KMgCl3·6H2O),
halite (NaCl) (these two minerals comprise 97.5% of the rock) and minor anhydrite
and insolubles (<2.5%). The Carnallitite is replaced by Sylvinite by a process of
'outsalting' whereby brine (rich in dissolved NaCl) resulted in the dissolution of
carnallite, and the formation of new halite (in addition to that which may already be
present) and leaving residual KCl precipitating as sylvite. This 'outsalting' process
produced a chloride brine rich in Mg and Na, which presumably continued filtering
down and laterally through the Salt Member.
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The grade of the Sylvinite is proportional to the grade of the precursor Carnallitite. For
example, in the case of the HWS when Carnallitite is 90 percent carnallite (and grades
between 24 and 25 percent KCl), if all carnallite was replaced by sylvite the resulting
Sylvinite would theoretically be 70.7 percent (by weight) sylvite. However, as
described above the inflowing brine introduced new halite into the potash layer,
reducing the grade so that the final grade of the Sylvinite of layer 3/IX is between 50
and 60 percent KCl (sylvite).
Importantly, the replacement of Carnallitite by Sylvinite advanced laterally and always
in a top-down sense within the seam. This Sylvinite-Carnallitite transition (contact) is
observed in core and is very abrupt. Above the contact the rock is completely replaced
(Sylvinite with no carnallite) and below the contact the rock is un-replaced (Carnallitite
with no sylvite). In many instances the full thickness of the seam is replaced by
Sylvinite, in others the Sylvinite replacement advanced only part-way down through
the seam. Carnallitite is reliably distinguished from Sylvinite based on any one of the
following:
• Visually: Carnallitite is orange, Sylvinite is orange-red or pinkish red in colour
and less vibrant.
• Gamma data: Carnallitite < 350 API, Sylvinite >350 API
• Magnesium data: Sylvinite at Kola does not contain more than 0.1% Mg.
Instances of up to 0.3% Mg within Sylvinite explained by 1-2 cm of Carnallitite
included in the lowermost sample where underlain by Carnallitite.
Carnallitite contains upwards to 5% Mg.
• Acoustic televeiwer and calliper data clearly identify Carnallitite from
Sylvinite.
Based on the 'stage' of replacement, 5 seam types are recognized. The replacement
process was extremely effective, no mixture of Carnallitite and Sylvinite is observed,
and within a seam, Carnallitite is not found above Sylvinite.
It is thought that over geological time groundwater and/or water released by the
dehydration of gypsum (during conversion to anhydrite in the Anhydrite Member)
infiltrated the Salt Member under gravity, centred on areas of 'relatively disturbed
stratigraphy' referred to as RDS zones (not to be confused with subsidence anomalies,
see section 3.5). In these areas the salt appears to be gently undulating over broad
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zones, or forms more discrete strike extensive gentle antiformal features. There
appears to be a correlation of these areas with small amounts undulation of the
overlying strata and the Salt Member and thickening of the Bischofitite at the top of
Cycle 7 (some 45-50 m below the LS). The cause of the undulation appears to be
related to immature salt-pillowing.
The process of sylvinite formation appears to have been very gradual and non-
destructive; where leached, the salt remains in-tact and layering is preserved. Brine
or voids are not observed. Fractures within the Salt Member appear to be restricted
to areas of localized subsidence, as observed in potash deposits mined elsewhere, and
described in more detail in section 3.5.
Within and lateral to the RDS zones, brine moved downward then laterally,
preferentially along the thicker higher porosity Carnallitite layers, replacing the
carnallite with sylvite (as described in preceding text) 10s to 100's metres laterally and
to a depth of 80-90 m below the Anhydrite Member. Beyond the zone affected by
sylvite replacement, the potash is of unaltered primary Carnallitite. In the
intermediate zone, the lower part of the layer may not be replaced supporting a lateral
then 'top-down' replacement of the seams. For the most part the US is 'full' (fully
replaced by Sylvinite), and the LS often is Carnallitite especially within synformal areas
giving rise to pockets or troughs of Carnallitite. The HWS, being close to the anhydrite
is only preserved in synformal areas where it is always Sylvinite (being close to the top
of the Salt Member), or lateral to the main deposit where it is likely to be Carnallitite,
relating to the broader control on the zone of Sylvinite formation discussed below.
Some of the longer seismic lines show that the relative disturbance of the salt over
much of Kola relates to the 'elevation' of the stratigraphy due to the formation of a
northwest-southeast orientated horst block, bound either side by half-graben. The
horst block referred to as the 'Kola High' and is approximately 8 km wide and at least
20 km in length. Lateral to this 'high' Sylvinite is rarely found except immediately
beneath (within 5-10 m of) the Anhydrite Member.
2.4 Drill hole • A summary of all information material to the All drill-hole collar information for holes relevant to the Mineral Resource estimate
Information understanding of the exploration results including a was provided in Table 5 of the announcement (dated 27 Feb 2025), including historic
tabulation of the following information for all Material holes. Hydrological drill-holes are excluded as they were drilled to a shallow depth. All
drill holes: holes except one were drilled vertically and deflection from this angle was less than 3
o easting and northing of the drill hole collar
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o elevation or RL (Reduced Level – elevation above sea degrees for almost all holes. Holes were surveyed with a gyroscope or magnetic
level in metres) of the drill hole collar deviation tool to obtain downhole survey data.
o dip and azimuth of the hole
o down hole length and interception depth
o hole length.
• If the exclusion of this information is justified on the basis
that the information is not Material and this exclusion
does not detract from the understanding of the report,
the Competent Person should clearly explain why this is
the case.
2.5 Data aggregation • In reporting Exploration Results, weighting averaging For the calculation of the grade over the full thickness of the seams, the standard
methods techniques, maximum and/or minimum grade truncations 'length-weighted' compositing method was used to combine individual results within
(eg cutting of high grades) and cut-off grades are usually each seam intersection.
Material and should be stated.
• Where aggregate intercepts incorporate short lengths of No selective cutting of high or low grade material was carried out as it is not justified
high grade results and longer lengths of low grade given the massive nature of the potash mineralization and absence of the localised
results, the procedure used for such aggregation should high/low grade areas.
be stated and some typical examples of such
aggregations should be shown in detail. Results for short lengths of high grade material included in the Mineral Resource
• The assumptions used for any reporting of metal Estimate are justifiable based on their lateral continuity. They were included in the
equivalent values should be clearly stated. full seam grade by standard 'length-weighted' compositing.
No metal equivalents were calculated.
2.6 Relationship • These relationships are particularly important in the All mineralised intersections where the dip of the seam is 15 degrees or greater were
between reporting of Exploration Results. corrected to obtain true thickness which was used in the Mineral Resource Estimate.
mineralisation widths • If the geometry of the mineralisation with respect to the
and intercept lengths drill hole angle is known, its nature should be reported.
• If it is not known and only the down hole lengths are
reported, there should be a clear statement to this effect
(eg 'down hole length, true width not known').
2.7 Diagrams • Appropriate maps and sections (with scales) and The announcement (dated 27 Feb 2025) included appropriate maps and sections.
tabulations of intercepts should be included for any
significant discovery being reported These should include,
but not be limited to a plan view of drill hole collar
locations and appropriate sectional views.
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2.8 Balanced reporting • Where comprehensive reporting of all Exploration Results Not relevant to the reporting of the Mineral Resource Estimate.
is not practicable, representative reporting of both low
and high grades and/or widths should be practiced to
avoid misleading reporting of Exploration Results.
2.9 Other substantive • Other exploration data, if meaningful and material, All substantive data has been reported herein.
exploration data should be reported including (but not limited to):
geological observations; geophysical survey results;
geochemical survey results; bulk samples – size and
method of treatment; metallurgical test results; bulk
density, groundwater, geotechnical and rock
characteristics; potential deleterious or contaminating
substances.
2.10 Further work • The nature and scale of planned further work (eg tests for The exploration database should be updated with the most recent drilling data. No
lateral extensions or depth extensions or large-scale step- other further work is necessary currently. If conversion of Indicated resources to
out drilling). Measured and Inferred to Indicated Mineral Resource is deemed important,
• Diagrams clearly highlighting the areas of possible additional seismic data would need to be acquired. Furthermore, the deposit is open
extensions, including the main geological interpretations laterally, in places to the west and east (though in the case of the latter is limited by
and future drilling areas, provided this information is not the Mining Lease boundary) and probably to the greatest extent to the southeast,
commercially sensitive. along the strike of the Kola High. Additional drilling and seismic data may allow the
delineation of additional resources in these areas if results of the work are positive.
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2, also apply to this section.)
Criteria JORC Code explanation Commentary
3.1 Database integrity • Measures taken to ensure that data has not been Geological data is collected in hardcopy then captured digitally by data entry. All
corrupted by, for example, transcription or keying errors, entries are thoroughly checked. During import into Micromine© software, an error
between its initial collection and its use for Mineral file is generated identifying any overlapping intervals, gaps and other forms of error.
Resource estimation purposes. The data is then compared visually in the form of strip logs against geophysical data.
• Data validation procedures used. Laboratory data was imported into an Access database using an SQL driven software,
to sort QA-QC samples and a check for errors is part of the import. Original laboratory
result files are kept as a secure record. For the Mineral Resource model a 'stratigraphic
file' was generated, as synthesis of key geological units, based on geological,
geophysical and assay data. The stratigraphic file was then used as a key input into the
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Mineral Resource model; every intersection and important contact was checked and
re-checked, by visual comparison with the other data types in log format. Kore Potash
is in the process of creating an updated database, to include the most recent geology
and assay data.
For the process of setting up a Mineral Resource database, Met-Chem division of DRA
Americas Inc., a subsidiary of the DRA Group underwent a rigorous exercise of
checking the database, including a comparison with the original laboratory
certificates. Once an explanation of the files had had been provided, no errors were
found with the assay or stratigraphic data, or with the other data types imported
(collar, survey, geophysics). The database is considered as having a high degree of
integrity.
3.2 Site visits • Comment on any site visits undertaken by the Competent The Competent Person visited the project from the 5-7 November 2016 to view drill-
Person and the outcome of those visits. hole sites, the core shed and sample preparation area. Explanation of all procedures
• If no site visits have been undertaken indicate why this is were provided by the Company, and a procedural document for core logging, marking
the case. and sampling reviewed. Time was spent reviewing core and hard copy geological logs.
All was found to meet or exceed the industry standards.
3.3 Geological • Confidence in (or conversely, the uncertainty of) the Recognition and correlation of potash and other important layers or contacts between
interpretation geological interpretation of the mineral deposit. holes is straightforward and did not require assumptions to be made, due the
• Nature of the data used and of any assumptions made. continuity and unique characteristics of each of the evaporite layers; each being
• The effect, if any, of alternative interpretations on distinct when thickness, grade and grade distribution, and stratigraphic position
Mineral Resource estimation. relative to other layers is considered. Further support is provided by the reliable
• The use of geology in guiding and controlling Mineral identification of 'marker' units within and at the base of the evaporite cycles.
Resource estimation. Correlation is further aided by the downhole geophysical data clearly shows changes
• The factors affecting continuity both of grade and in mineralogy of the evaporite layers and is used to validate or adjust the core logged
geology. depths of the important contacts. The abrupt nature of the contacts, particularly
between the Rock-salt, Sylvinite and Carnallitite contributes to above.
Between holes the seismic interpretation is the key control in the form and extent of
the Sylvinite, in conjunction with the application of the geological model. The controls
on the formation of the Sylvinite is well understood and the 'binary' nature of the
potash mineralization allows an interpretation with a degree of confidence that
relates to the support data spacing, which in turn is reflected in the classification. In
this regard geology was relied upon to guide and control the model, as described in
detail section 3.5. Alternative interpretations were tested as part of the modelling
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process but generated results that do not honour the drill-hole data as well as the
adopted model.
The following features affect the continuity of the Sylvinite or Carnallitite seams, all of
which are described further in Section 3.5. By using the seismic data and the drill-hole
data, the Mineral Resource model captures the discontinuities with a level of
confidence reflected in the classification.
• where the seams are truncated by the anhydrite
• where the Sylvinite pinches out becoming Carnallitite or vice versa
• areas where the seams are leached within zones of subsidence
Outside of these features, grade continuity is high reflecting the small range in
variation of grade of each seam, within each domain. Further description of grade
variation is provided in later in text.
3.4 Dimensions • The extent and variability of the Mineral Resource In its entirety, the deposit is 14 km in length (deposit scale strike) and 9 km in width.
expressed as length (along strike or otherwise), plan The shallowest point of the upper most Sylvinite (of the HWS) is approximately 190
width, and depth below surface to the upper and lower metres below surface. The depth to the deepest Sylvinite (of the FWS) is
limits of the Mineral Resource. approximately 340 metres below surface. The thickness of the seams was
summarized in Table 3 of the announcement (dated 27 Feb 2025).
3.5 Estimation and • The nature and appropriateness of the estimation Table 8 and Table 9 of the announcement (dated 27 Feb 2025) provide the Mineral
modelling techniques technique(s) applied and key assumptions, including Resource for Sylvinite and Carnallitite at Kola. This Mineral Resource replaces that
treatment of extreme grade values, domaining, dated 21 August 2012, prepared by CSA Global Pty Ltd. This update incorporates
interpolation parameters and maximum distance of reprocessed seismic data and additional drilling data. Table 10 and Table 11 of the
extrapolation from data points. If a computer assisted announcement (dated 27 Feb 2025) provide the Sylvinite and Carnallitite Mineral
estimation method was chosen include a description of Resource from 2012. The updated Measured and Indicated Mineral Resource
computer software and parameters used. categories are not materially different from the 2012 estimate and is of slightly higher
• The availability of check estimates, previous estimates grade. The Inferred category has reduced due to the reduction in the FWSS tonnage,
and/or mine production records and whether the Mineral following the updated interpretation of it being present within relatively narrow
Resource estimate takes appropriate account of such lenses that are more constrained than in the previous interpretation. There is no
data. current plan to consider the FWSS as a mining target and so the reduction in FWSS
• The assumptions made regarding recovery of by- tonnage is of no consequence to the project's viability.
products.
• Estimation of deleterious elements or other non-grade
As described in section 3.3, the spatial application of the geological model was central
variables of economic significance (eg sulphur for acid
to the creation of the Mineral Resource model. Geological controls were used in
mine drainage characterisation).
conjunction with the seismic data interpretation. The process commenced with the
• In the case of block model interpolation, the block size in
interpretation of the depth migrated drill-hole-tied seismic data in Micromine 2013 ©
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relation to the average sample spacing and the search involving the following. Table 7 of the announcement (dated 25 Feb 2025) provides
employed. an explanation of abbreviations used in text.
• Any assumptions behind modelling of selective mining
units. 1. Interpretation of the base of anhydrite surface or Salt Roof ("SALT_R") which
• Any assumptions about correlation between variables. is typically a distinct seismic event.
• Description of how the geological interpretation was used 2. Interpretation of base of salt, the 'intra-salt marker' and 'base cycle 8'
to control the resource estimates. ("BoC8") markers. Based on synthetic seismograms the latter is a negative
• Discussion of basis for using or not using grade cutting or event picking out the contrast between the top of the Cy78 and overlying
capping. Rock-salt.
• The process of validation, the checking process used, the
comparison of model data to drill hole data, and use of
reconciliation data if available. Using Leapfrog Geo 4.0 (Leapfrog) surfaces were created for the SALT_R and BoC8 . In
doing so, an assessment of directional control on the surfaces was made; following
the observation based on the sectional interpretation a WNW-ESE 'strike' is evident.
Experimental semi-variograms were calculated for the surface elevation values at 10°
azimuth increments. All experimental semi-variograms were plotted; 100° and 10°
produce good semi-variograms for the directions of most and least continuity
respectively. This directional control was adopted for the modelling of surfaces,
created in Leapfrog on a 20 by 20 m 'mesh' using a 2:1 ellipsoid ratio (as indicated by
the semi-variogram ranges).
The following steps were then carried out:
1. The BoC8 surface was projected up to the position of the Upper Seam roof
(US_R) by 'gridding' the interval between these units from drill-hole data. On
seismic lines, The US_R interpretation was then adjusted to fit reflectors at
that position, considering interference features common in the data in the
Salt Member close to the SALT_R
2. In all cases drill-hole intersections were honoured. In addition to USS and USC
intersections, the small number of leached US intersections, all within
subsidence zones) were used to guide the seam model.
3. The new US_R interpretation along seismic lines, was then 'gridded' in
Leapfrog, also into a mesh of 20 m by 20 m resolution making use of the 100°
directional control and 2:1 anisotropy, to create a new US_R surface.
The Mineral Resource model has two potash domains in order to represent the
geology i.e. Sylvinite or Carnallitite. A third non-potash domain areas of leaching
and/or subsidence as described in the following text. Using the reference horizons,
the Sylvinite and Carnallitite seam model was developed as follows:
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1. The US_R surface was fixed as the reference horizon for the modelling of the
US, LS and HWS. The US_R surface was imported into Datamine Studio 3
(Datamine), using the same 20 by 20 m cells as described above.
2. The US Sylvinite (USS) model was developed by analysing the position of the
cell in relation to the SALT_R and to the RDS zones. The latter were
interpreted from seismic data. As described in section 2.3 these attributes
are the main geological controls.
3. To a lesser extent the dip of the seam and the relative elevation of each cell,
relative to the cells within a 100 by 100 m area were also considered, to
further identify Sylvinite with the understanding that areas of very low dip
are more likely to be of Carnallitite.
4. Beyond the 2010/2011 seismic data (within the Indicated Mineral Resource
area) the influence of the distance from RDS zones was reduced and the
proximity to the SALT_R and the dip and relative elevation were assigned
greater consideration.
5. Seam thickness of the USS was determined by gridding the drill-hole data of
the full Sylvinite intersections (excluding those that have a Carnallitite basal
layer or are leached) using Inverse distance squared ("IDW2") and adjusting
it to account for the influence of 2 and 3 above. The Sylvinite thickness was
then subtracted from the elevation of the US_R to create the USS floor
("USS_F"), on the 20m by 20m mesh.
6. Only the true thickness of drill-hole intersections were used (i.e. corrections
for any dip were made) for the above. As the seam model thickness
developed in a vertical sense, areas of the model with a dip were corrected
so that the true thickness was always honoured.
7. Even if the USS has zero thickness the surface for the USS_F was created,
overlying exactly that of the US_R to facilitate the creation of DTMs for each
surface.
8. The same method (effectively the inverse) was applied to create the US
Carnallitite model ("USC") below the USS. The roof of the USC ("USC_R") is
the same surface as the USS_F.
9. A number of iterations of the model were produced and assessed. The
selected model was the one that produced a result that ties well with the
drill-hole data and honours the proportional abundance of Sylvinite as
intersected in the drill-holes.
The Lower Seam model was created in a similar manner as follows:
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1. The LS is separated by between 2 and 6 metres of barren Rock-salt, also
referred to as the Interburden-halite or IBH. This layer is an important
geotechnical consideration and so care was taken to model it. The IBH
thickness from drill-hole data was 'gridded' in Datamine using IDW2 into the
20 by 20 cells. This thickness was then subtracted from the elevation of the
US_F to obtain the LS_R elevation from which a DTM was made.
2. Unlike the USS the LSS is often underlain by a layer of Carnallitite. For the LSS
model the thickness of the LSS from drill-hole data was gridded using IDW2
into the 20 x 20 mesh without influence from distance to the SALT_R or RDS
zones. However, based on the geological understanding that LSS rarely
occurs beneath USC the LSS model was cut accordingly, based on the USC
model. Reflecting the model and based on analysis the following rule was
also applied; that if the US is 'full' then the LSS is also full but only if the LS_R
is within 30 m of the SALT_R. Finally, if the US_R is truncated by the SALT_R,
then the remaining LS is modelled as full LSS due to its proximity to the
SALT_R.
For the US and LS Inferred Resources, the distribution of Sylvinite and Carnallitite was
by manual interpretation based on available drill-hole data and plots of the distance
between the seam and the SALT_R. The thickness of the USS and LSS was determined
by gridding all USS drill-hole data. The Carnallitite was then modelled as the Inverse
of the Sylvinite model, in adherence to the geological model.
The Hangingwall seam model was created as follows
1. The distance between the US_R and HWS_R in drill-hole intersection was
gridded using IDW2 into the 20 by 20 m mesh. This data was then added
to the elevation of the US_R to create a HWS_R.
2. Being close to the SALT_R (within 30 m in all cases) there is less variation
in domain type; in all areas except for the zone labelled 'A' on Figure 24
of the announcement (dated 27 Feb 2025) the USS is full Sylvinite (not
underlain by USC). For all HWS outside of zone A the model was created
by gridding the thickness using IDW2 into the 20 x 20 mesh.
3. The HWS model was created without input from distance to the SALT_R
or RDS zones for the reasons stated above, by gridding of the drill-hole
intersections.
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4. Within the area labelled 'A' on Figure 24 of the announcement (dated 27
Feb 2025), the HWSS is underlain by HWSC and so this was incorporated
into the model.
5. Finally, the HWS was 'pinched' upwards from 4 m below the SALT_R to
reflect the geological observation that close to this surface the seam is
leached.
Modelling of the FWS
1. A different approach was adopted for the modelling of the FWS as the
mode of occurrence is different to the other seams as described in
section 2.3. Only Sylvinite FWSS was modelled as Carnallitite FWS is
poorly developed or absent, and low grade.
2. Drill-hole and seismic data was used to identify areas of leaching of the
Salt Member based on subsidence of the overlying strata signs of marked
disturbance of the salt, within which FWSS is typically developed. These
were delineated in plan view.
Where possible drill-hole data was used to guide thickness of the FWS,
in other areas the thickness was interpreted using the seismic data. The
FWS was 'constructed' from the top of the Cy7B upwards.
As is standard practice in potash mining zones of subsidence which pose a potential
risk to mining were identified using seismic and drill-hole data and classified from 1 to
3 depending on severity where 3 is highest. Several drill-holes within or adjacent to
these features show that the Salt Member is intact but has experienced some
disturbance and leaching.
The HWS, US and LS Mineral Resource models were 'cookie-cut' by these anomalies
before calculation of the Mineral Resource estimate. The FWSS model was not cut as
that Sylvinite is considered the product of potassium precipitation below the influence
of the subsidence anomalies.
Finally, all the potash seams were truncated (cut) by the SALT_R surface (base of the
Anhydrite Member) as it is an unconformity.
Traditional block modelling was employed for estimating %KCl, %Na, %Cl, %Mg, %S,
%Ca and %Insols (insolubles). No assumptions were made regarding correlation
between variables. The block model is orthogonal and rotated by 20 degrees reflecting
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Criteria JORC Code explanation Commentary
the orientation of the deposit. The block size chosen was 250m x 250m x 1m to roughly
reflect drill hole spacing, seam thickness and to adequately descretize the deposit
without injecting error.
Volumetric solids were created for the individual mineralized zones (i.e., Hangingwall
Seam, Upper Seam, Lower Seam, Footwall Seam) for both Sylvinite and Carnallitite
using drill hole data and re-processed depth migrated seismic data. The solids were
adjusted by moving the nodes of the triangulated domain surfaces to exactly honour
the drill hole intercepts. Numeric codes denoting the zones within the drill hole
database were manually adjusted to ensure the accuracy of zonal intercepts. No assay
values were edited or altered.
Once the domain solids were created, they were used to code the drill hole assays and
composites for subsequent statistical analysis. These solids or domains were then
used to constrain the interpolation procedure for the mineral resource model, the
solids zones were then used to constrain the block model by matching composites to
those within the zones in a process called geologic matching. This ensures that only
composites that lie within a particular zone are used to interpolate the blocks within
that zone.
Relative elevation interpolation methods were also employed which is helpful where
the grade is layered or banded and is stratigraphically controlled. In the case of Kola,
layering manifests itself as a relatively high-grade band at the footwall, which
gradually decreases toward the hanging wall. Due to the undulations of the deposit,
this estimation process accounts for changes in dip that are common in layered and
stratified deposits.
The estimation plan includes the following:
• Store the mineralized zone code and percentage of mineralization.
• Apply the density, based on calculated specific gravity.
• Estimate the grades for each of the metals using the relative elevation
method and an inverse distance using three passes. The three estimation
passes were used to estimate the Resource Model because a more realistic
block-by-block estimation can be achieved by using more restrictions on
those blocks that are closer to drill holes, and thus better informed.
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Criteria JORC Code explanation Commentary
• Include a minimum of one composite and a maximum of nine, with a
maximum of three from any one drill hole.
The nature and distribution of the Kola Deposit shows uniform distribution of KCl
grades without evidence of multiple populations which would require special
treatment by either grade limiting or cutting. Therefore, it was determined that no
outlier or grade capping was necessary.
The grade models have been developed using inverse distance and anisotropic search
ellipses measure 250 x 150 x 50 m and have been oriented relative to the main
direction of continuity within each domain. Anisotropic distances have been included
during interpolation; in other words, weighting of a sample is relative to the range of
the ellipse. A sample at a range of 250 m along the main axis is given the same weight
as a sample at 50 m distance located across the strike of the zone.
A full set of cross-sections, long sections, and plans were used to check the block
model on the computer screen, showing the block grades and the composite. There
was no evidence that any blocks were wrongly estimated. It appears that block grades
can be explained as a function of: the surrounding composites, the solids models used,
and the estimation plan applied. In addition, manual ballpark estimates for tonnage
to determine reasonableness was confirmed along with comparisons against the
nearest neighbor estimate.
As a check on the global tonnage, an estimate was made in Microsoft Excel by using
the average seam thickness and determining a volume based on the proportion of
holes containing Sylvinite versus the total number of holes (excluding those that did
not reach the target depth) then applying the mean density of 2.1 (t/m3) to determine
the total tonnes. This was carried out for the USS and LSS within the Measured and
Indicated categories. A deduction was made to account for loss within subsidence
anomalies. The tonnage of this estimate is within 10% of the tonnage of the reported
Mineral Resource.
3.6 Moisture • Whether the tonnages are estimated on a dry basis or Mineral Resource tonnages are reported on an insitu basis (with natural moisture
with natural moisture, and the method of determination content), Sylvinite containing almost no moisture and Carnallitite containing
of the moisture content. significant moisture within its molecular structure. Moisture content of samples was
measured using the 'Loss on Drying' ("LOD") method at Intertek Genalysis as part of
the suite of analyses carried out. Data shows that for Sylvinite the average moisture
content is 0.076 % and the maximum value was 0.6%. Representative moisture
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Criteria JORC Code explanation Commentary
analyses of Carnallitite are difficult as it is so hygroscopic. 38% of the mass of the
mineral carnallite is due to water (6 H20 groups within its structure). Using the KCl data
to work out a mean carnallite content, the Carnallitite has an average moisture
content approximately 25% insitu. It can be reliably assumed that this amount of
moisture would have been held by the Carnallitite samples at the time of analysis of
potassium, in a temperate atmosphere for the duration that they were exposed.
3.7 Cut-off parameters • The basis of the adopted cut-off grade(s) or quality For Sylvinite, a CoG of 10% was determined by an analysis of the Pre-feasibility and
parameters applied. 'Phased Implementation study' operating costs analysis and a review of current
potash pricing. The following operating costs were determined from previous studies
per activity per tonne of MoP (95% KCl) produced from a 33% KCl ore, with a recovery
of 89.5%:
• Mining US$30/t
• Process US$20/t
• Infrastructure US$20/t
• Sustaining Capex US$15/t
• Royalties US$10/t
• Shipping US$15/t
For the purpose of the CoG calculation, it was assumed that infrastructure, sustaining
capex, royalty and shipping do not change with grade (i.e. are fixed) and that mining
and processing costs vary linearly with grade. Using these assumptions of fixed costs
(US$60/t) and variable costs at 33% (US$50/t) and a potash price of US$250/t, we can
calculate a cut-off grade where the expected cost of operations equals the revenue.
This is at a grade of 8.6% KCl. To allow some margin of safety, a CoG of 10% is therefore
proposed. For Carnallitite, reference was made to the Scoping Study for Dougou which
determined similar operating costs for solution mining of Carnallitite and with the
application of a $250/t potash price a CoG of 10% KCl is determined.
3.8 Mining factors or • Assumptions made regarding possible mining methods, The Kola Sylvinite has been the subject of several scoping studies as well as a publicly
assumptions minimum mining dimensions and internal (or, if available NI43-101 compliant PFS completed in September 2012 by SRK Consulting of
applicable, external) mining dilution. It is always Denver. The study found that economic extraction of 2 to 5m thick seams with
necessary as part of the process of determining conventional underground mining machines is viable and that mining thickness as low
reasonable prospects for eventual economic extraction to as 1.8m can be supported. Globally, potash is mined in similar deposits with seams of
consider potential mining methods, but the assumptions similar geometry and form. The PFS determined an overall conversion of resources to
made regarding mining methods and parameters when reserves of 26%. A Definitive Feasibility Study is underway.
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Criteria JORC Code explanation Commentary
estimating Mineral Resources may not always be
rigorous. Where this is the case, this should be reported Mining of Carnallitite is not planned at this stage but in the form, grade and quantity
with an explanation of the basis of the mining of the Carnallitite does support reasonable ground for eventual economic extraction.
assumptions made. A Scoping Study complete in 2015 for the nearby Dougou Carnallitite deposit further
supports this.
3.9 Metallurgical • The basis for assumptions or predictions regarding The Kola Sylvinite ore represents a simple mineralogy, containing only sylvite, halite
factors or assumptions metallurgical amenability. It is always necessary as part and minor fragments of other insoluble materials. Sylvinite of this nature is well
of the process of determining reasonable prospects for understood globally and can be readily processed. Separation of the halite from sylvite
eventual economic extraction to consider potential by means of flotation has been proven in potash mining districts in Russia and
metallurgical methods, but the assumptions regarding Canadas. Furthermore, metallurgical test work was performed on all Sylvinite seams
metallurgical treatment processes and parameters made (HWSS, USS, LSS and FWSS) at the SRC which confirmed the viability of processing the
when reporting Mineral Resources may not always be Kola ore by conventional flotation.
rigorous. Where this is the case, this should be reported
with an explanation of the basis of the metallurgical
assumptions made.
3.10 Environmental • Assumptions made regarding possible waste and process The Kola deposit is located in a sensitive environmental setting in an area that abuts
factors or assumptions residue disposal options. It is always necessary as part of the CDNP. Approximately 60% of the deposit is located within the economic
the process of determining reasonable prospects for development zone of the CDNP, while the remainder is within the buffer zone around
eventual economic extraction to consider the potential the park. The economic development zone does permit mining activities if it is shown
environmental impacts of the mining and processing that impact can be minimised. For these reasons, Sintoukola Potash has focussed its
operation. While at this stage the determination of efforts on understanding the environmental baseline and the potential impacts that
potential environmental impacts, particularly for a the project will have. Social, water, hydrobiology, cultural, archaeological,
greenfields project, may not always be well advanced, the biodiversity, noise, traffic and economic baseline studies were undertaken as part of
status of early consideration of these potential the ESIA process between 2011 and 2013. This led to the preparation of an Equator
environmental impacts should be reported. Where these Principles compliant ESIA in 2013 and approval of this study by the government in the
aspects have not been considered this should be reported same year.
with an explanation of the environmental assumptions
made. Waste management for the project is simplified by the proximity to the ocean, which
acts as a viable receptor for NaCl from the process plant. Impacts on the forest and
fauna are minimised by locating the process plant and employee facilities at the coast,
outside the CDNP. Relationships with the national parks, other NGO's and community
and government stakeholders have been maintained continuously since 2011 and
engagement is continuing for the ongoing DFS. All stakeholders remain supportive of
the project.
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3.11 Bulk density • Whether assumed or determined. If assumed, the basis The separation of Carnallitite and Sylvinite (no instances of a mixed ore-type have
for the assumptions. If determined, the method used, been observed) and that these rock types each comprise over 97.5% of only two
whether wet or dry, the frequency of the measurements, minerals (Carnallitite of carnallite and halite; Sylvinite of sylvite and halite) means that
the nature, size and representativeness of the samples. density is proportional to grade. The mineral sylvite has a specific gravity of 1.99 and
• The bulk density for bulk material must have been halite of 2.17. Reflecting this, the density of Sylvinite is less if it contains more sylvite.
measured by methods that adequately account for void The same is true of Carnallitite, carnallite having a density of 1.60.
spaces (vugs, porosity, etc), moisture and differences
between rock and alteration zones within the deposit. Conventional density measurements using the weight in air and weight in water
• Discuss assumptions for bulk density estimates used in method were problematic due to the soluble nature of the core and difficulty applying
the evaluation process of the different materials. wax to salt. As an alternative, gas pycnometer analyses were carried out (71 on
Sylvinite and 37 on Carnallitite samples). Density by pycnometer was plotted against
grade for each and a regression line was plotted, the formula of which was used in the
Mineral Resource model to determine the bulk density of each block. As a check on
the pycnometer data, the theoretical bulk density (assumes a porosity of nil) was
plotted using the relationship between grade and density described above. As a
further check, a 'field density' was determined for Sylvinite and Carnallitite from
EK_49 and EK_51 on whole core, by weighing the core and measuring the volume
using a calliper, before sending samples for analysis. An average field density of 2.10
was derived from the Sylvinite samples, with an average grade of 39% KCl, and 1.70
for Carnallitite with an average grade of 21% KCl, supporting the pycnometer data.
The theoretical and field density data support the approach of determining bulk-
density.
3.12 Classification • The basis for the classification of the Mineral Resources Drill-hole and seismic data are relied upon in the geological modelling and grade
into varying confidence categories. estimation. Across the deposit the reliability of the geological and grade data is high.
• Whether appropriate account has been taken of all Grade continuity is less reliant on data spacing as within each domain grade variation
relevant factors (i.e. relative confidence in tonnage/grade is small reflecting the continuity of the depositional environment and 'all or nothing'
estimations, reliability of input data, confidence in style of Sylvinite formation.
continuity of geology and metal values, quality, quantity
and distribution of the data). It is the data spacing that is the principal consideration as it determines the confidence
• Whether the result appropriately reflects the Competent in the interpretation of the seam continuity and therefore confidence and
Person's view of the deposit. classification; the further away from seismic and drill-hole data the lower the
confidence in the Mineral Resource classification, as summarized in Table 13 of the
announcement (dated 27 Feb 2025). In the assigning confidence category, all relevant
factors were considered and the final assignment reflects the Competent Persons view
of the deposit.
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Criteria JORC Code explanation Commentary
3.13 Audits or reviews • The results of any audits or reviews of Mineral Resource No audits or reviews of the Mineral Resource have been carried out other than those
estimates. of professionals working with Met-Chem division of DRA Americas Inc., a subsidiary of
the DRA Group as part of the modelling and estimation work.
3.14 Discussion of • Where appropriate a statement of the relative accuracy The Competent Person has a very high degree of confidence in the data and the
relative accuracy/ and confidence level in the Mineral Resource estimate results of the Mineral Resource Estimate. The use of tightly spaced seismic that was
confidence using an approach or procedure deemed appropriate by reprocessed using state-of-the-art techniques combined with high quality drill data
the Competent Person. For example, the application of formed the solid basis from which to model the deposit. Industry standard best
statistical or geostatistical procedures to quantify the practices were followed throughout and rigorous quality assurance and quality
relative accuracy of the resource within stated confidence control procedures were employed at all stages. The Competent Person was
limits, or, if such an approach is not deemed appropriate, provided all information and results without exception and was involved in all
a qualitative discussion of the factors that could affect aspects of the program leading up to the estimation of resources. The estimation
the relative accuracy and confidence of the estimate. strategy and method accurately depict tonnages and grades with a high degree of
• The statement should specify whether it relates to global accuracy both locally and globally.
or local estimates, and, if local, state the relevant
tonnages, which should be relevant to technical and There is no production data from which to base an opinion with respect to accuracy
economic evaluation. Documentation should include and confidence.
assumptions made and the procedures used.
• These statements of relative accuracy and confidence of
the estimate should be compared with production data,
where available.
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Date: 27-02-2025 10:17:00
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