LSE-listed potash developer Kore Potash posted an interim loss of $903 210 for the six months ended June 30, an improvement on the loss of $1.29-million for the six months ended June 30, 2021.

This represents a loss of $0.03 a share for the interim period.

At periods-end, Kore held cash and cash equivalents of $7.63-million, taking its total asset value to $165.82-million.

The exploration and evaluation assets totalled $157.52-million at periods-end – a decrease of $9.09-million on December 31, 2021.

During the first half of this year, Kore capitalised $2.92-million in exploration and evaluation expenditure, while the expenditure decreased by $12.02-million as a result of the strengthening of the dollar against the Congolese franc.

Developing its 97%-owned Kola and DX potash projects in the Sintoukola basin in Congo-Brazzaville, Kore also received an enhancement study for the Kola project in June and has progressed with the process to potentially finance the construction of the project in line with the memorandum of understanding signed with the Summit Consortium in April 2021.

CE Brad Sampson says the company has made good progress during the first half of this year, having taken receipt of the Kola enhancement study and shared the outcomes with the market, including the $520-million reduction in the capital cost [to $1.83-billion on an engineering, procurement and construction basis] of Kola and a reduction in the expected construction timeline to 40 months.

“We are also proud to have signed a heads of agreement for Kola’s construction, advancing the Kola project at pace despite the difficult circumstances facing the global economy.

Kore notes that despite several negative global influences – including the on-going Russian/Ukraine conflict, the Covid-19 pandemic and increasing fuel prices – the group’s operations have not been materially impacted.

“Recent geopolitical and extreme weather events, which have led to food security concerns and a dramatic increase in the potash price, only reinforce the need for the development of new low-cost potash production from high quality potash deposits located close to customers, such as our projects in the Sintoukola basin,” he says.

Key financial metrics also improved on definitive feasibility study outcomes, which is based on potash pricing averaging $360/t. As such, Kola’s net present value (NPV) post-tax improved to $1.62-billion and its internal rate of return (IRR) improved to 20% on ungeared post tax basis.

At a potash price of $1 000/t muriate of potash, the Kola financial metrics improve to a NPV post-tax of $9.35-billion, with an IRR of 49% on ungeared post tax basis.

The results of the enhancement study support moving to the next phase of the Kola development, while the Summit Consortium has advised that the positive outcomes of the study continue to support their financing of Kola.

In this regard, the Summit Consortium intends to provide the financing proposal for the construction cost of Kola after Kore’s receipt of the engineering, procurement and construction proposal and agreement on key terms.

Meanwhile, following the completion of the drilling at the DX potash project by Kore earlier in 2021, the company’s geological consultants developed an updated geological model for the DX deposit during the period under review.

The new geological model, completed in 2021, incorporated all information from the drilling programme completed in 2021. It improves confidence in the geological modelling of the DX deposit and improves Kore’s understanding of the sylvinite/carnallite boundaries in the top seams and hanging wall seams.