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Kore Potash signs MoU for full financing of Kola project

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World Fertilizer,

Kore Potash has announced that it and Summit Africa Ltd, on behalf of a consortium of investors and engineering firms, have signed a non-binding Memorandum of Understanding (MoU) to arrange the total financing required for the construction of the Kola Potash Project in the Republic of Congo (RoC).

Summit and their technical partners SEPCO Electric Power Construction Corp. (SEPCO) and China ENFI Engineering Corp. (ENFI), who has been subcontracted by SEPCO, will work with Kore to undertake an optimisation study to reduce Kola’s capital cost with a target of less than US$1.65 billion, the target CAPEX.

Summit will work with potential financing partner BRP Global Ltd to, subject to completion of their due diligence and achieving the target CAPEX through the optimisation study, present a financing proposal on behalf of the Summit Consortium based on debt and royalty funding for 100% of the Kola construction capital costs.

Under the proposed financing structure, the company would not be required to contribute to the capital needed to build the project and would retain a 90% equity interest in Kola.

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

The company will contribute approximately US$900 000 to the optimisation study costs. SEPCO will cover the remaining 50% of the estimated costs of the study.

Kola is a high grade, high quality, shallow sylvinite potash deposit situated on an existing mining licence, approximately 35 km from the coast, and only 65 km north of the harbour city of Pointe Noire.

Brad Sampson, the CEO of Kore Potash, said: “We are excited to have this agreement in place with a consortium with such significant technical and financing capability and long term focus. We welcome the consortium’s innovative proposal to potentially fully finance the construction of Kola through debt and royalty financing. The DFS for Kola demonstrated that it will have large operating margins and a long project life which is ideally suited to royalty financing. This approach by the Summit Consortium to the financing of Kola would eliminate the requirement for further equity contributions by the Company’s shareholders to the capital cost of the construction of the Project. Kola and our other potash projects at Sintoukola have the potential to help feed the world’s population for many generations to come.”

“We are pleased that the financing for Kola is moving forward at a time when we see increasing potash prices and demand for potash remains strong despite challenging times in the global economy, underpinning our belief in continued potash demand growth.”

“We also appreciate the continued support from and partnership with the Government of the RoC. The construction of Kola will make an important contribution to the people of the RoC by providing employment, and contributing cash to the country via taxation, royalties and dividends. The continued support of the Ministry of Mines and Geology is an important foundation for this MoU.”

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