Slide 1: Sustainably feeding the world: DX PFS - May 2020
Sustainably feeding the world DX PFS - May 2020 PRIVATE & CONFIDENTIAL
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) has been prepared and issued by the directors of Kore Potash plc (“Kore” or the "Company" and, together with its subsidiaries, the “Group”). By attending (whether in person or by telephone) or reading the Presentation, you agree to be bound by the co
Slide 3: Introduction
Introduction Kore intends to be the lowest cost supplier of potash to the African and South American markets Kore has globally significant potash deposits in the Republic of Congo (RoC) District scale development potential, 12km from the coast and ideally located to supply Africa and South America P
Slide 4: What is potash?
What is potash? Rea Fconane
Slide 5: Potash is one of the key plant nutrients
Potash is one of the 3 key plant nutrients The main nutrients used in agriculture are Nitrogen (N), Phosphorous (P), and Potassium (K) Nitrogen (N) Phosphorus (P) Potassium (K) Essential to ensure plants Linked to a plant’s ability to use and Used to strengthen plants’ abilities to are healthy as th
Slide 6: Why potash is vital to crop growth?
Why potash is vital to crop growth? • Potash is the name for the group of minerals that help provide Potassium is vital to regulate a plant’s CO2 intake potassium for plant growth • It is a ‘must have’ fertiliser for crop production Is essential in the regulation of photosynthesis • 90-95% of potash
Slide 7: More potash needed to feed the world
More potash needed to feed the world The world will need to grow 50% more food by 2050 … while global arable land per person is to feed an anticipated population of 9 billion people... declining sharply 0.4 Hectares per person 0.35 0.3 0.25 0.2 0.15 0.1 2004 1960 1964 1968 1972 1976 1980 1984 1988 1
Slide 8: MoP is the dominant product in the potash market
MoP is the dominant product in the potash market Potassium sold globally in two main forms along with three minor products Sulphate of Potash (SOP) Muriate of Potash (MoP) Represents 4.6% of market Represents 93.2% of the potash volume. Used by crops where market. MoP is potassium chlorine tolerance
Slide 9: Potash supply and demand
Potash supply and demand 2019 Supply • Total annual production of potash is around Western Europe Central & Eastern Europe 65 Mtpa 3.6 mt 11.7 mt • At present this supply is largely met by Southeast Asia 0.5 mt Latin America & Caribbean existing major suppliers including: 1.1 mt • Urakali – ~12 Mtpa
Slide 10: Recent investments by mining majors
Recent investments by mining majors Globally operating mining companies have recently been investing in potash assets BHP Anglo American Jansen Project in Saskatchewan, Canada Purchase of Sirius Minerals for £405m 1000m deep Developing Woodsmith Mine in North Yorkshire Over 1,600km from the Port of
Slide 11: Globally significant potash deposits
Globally significant potash deposits 11
Slide 12: District scale development potential
District scale development potential Kore is developing its globally significant potash deposits in the Republic of Congo (RoC) District scale development potential with over 6 Bt of potash Mineral Resources located 35 km from the coast Several high grade sylvinite projects: DX – High grade solution
Slide 13: Sintoukola potash district
Sintoukola potash district 13 INVESTOR PRESENTATION 02/06/2020
Slide 14: Sintoukola is well situated for key export markets
Sintoukola is well situated for key export markets Product is planned to be predominantly sold into African and South American markets Consumption1 Region Product Specification (ktpa MoP) South Africa 371 Granular K60 MoP Nigeria 126 Granular K60 MoP Other West Africa 180 Granular K60 MoP Total Braz
Slide 15: Very low cost of supply into target markets
Very low cost of supply into target markets • Higher grade and shallower deposits than majority of existing potash producers contributes to competitive cost structure • Close proximity to deep water port at Pointe Noire, Republic of Congo means short transport distance in country as well as very sho
Slide 16: Dougou Extension (DX) Sylvinite project
Dougou Extension (DX) Sylvinite project 16
Slide 17: DX PFS Overview
DX PFS Overview Strong investment case Financing options • IRR of 22.9% (real ungeared post tax) • Modest capex and short construction period • 4.3 year payback period improves financing options • Indicative financing discussions have been Low capital cost positive • Pre-production capex of US$286m
Slide 18: DX PFS data
DX PFS data Project physicals Units Project financials Units Total MoP production kt 372 Total revenue US$M 3,113 MoP granular product grade %KCl 98.5% Average annual revenue US$M 169 Average MoP production ktpa 393 Average annual EBITDA US$M 118 Capital cost EBITDA margin % 69.8% Pre-production cap
Slide 19: Benchmarking DX – high grade, low capex
Benchmarking DX – high grade, low capex Kore Deposits Pre-production assets Selected producers 45 40 Resource Grade KCl % • DX is the highest grade 35 30 undeveloped potash deposit 25 • The closest projects in terms 20 15 of grade are both well over 10 1,000 metres deep 5 0 • High grade contributes
Slide 20: Benchmarking DX – low cost production
Benchmarking DX – low cost production SOP & MOP US$300/t Polyhalite US$250/t US$242/t2 Operating cost FOB local port • DX is highly competitive in US$200/t terms of mine gate and FOB costs US$150/t US$135/t • Lower operating costs than US$115/t US$100/t any comparable project in US$100/t US$87/t dev
Slide 21: Proven solution mining flowsheet
Proven solution mining flowsheet 21
Slide 22: Wellfield and Process Plant Location
Wellfield and Process Plant Location Highway RN5, showing typical grassland areas where wellfields will be developed 22 INVESTOR PRESENTATION 02/06/2020
Slide 23: Next steps
Next steps The DX PFS has proven that developing DX is both the fastest route to production and a low capex, high return project in its own right The Company intends to progress rapidly to undertaking a Definitive Feasibility Study (DFS) for DX A workplan for the DX DFS is currently being finalised
Slide 24: Recent newsflow
RE POTASH Recent newsflow oh giieatc etree
Slide 25: Recent newsflow
Recent newsflow • DX PFS released – 13 May 2020 • PFS for DX commenced – 5 September 2019 Low capital cost of US$286m with an IRR of 22.9%, Building on an advanced Scoping Study, the PFS for short 21 month construction period DX will be informed by seismic studies, drill core analysis, and financial
Slide 26: Summary
RE POTASH Summary FROM THE GROUND UP
Slide 27: Environment and permitting
Environment and permitting DX produces no by-product tailings The Mining Convention for Kola and Dougou mining licence area is in place DX is situated within existing Dougou mining licence Advanced permitting in place – Kore has an approved 25 year ESIA for Kola and Dougou mining licence areas and a
Slide 28: Summary
Summary Sustainably feeding Long life at globally Advantageous location the world significant scale • Fertiliser use improves crop yields • Initial life of DX of 18 years at • Close to target markets for farmers, reducing the carbon 400ktpa MoP production • Project adjacent to coast footprint of far
Slide 29: Appendices
: RE POTASH Appendices FROM THE GROUND UP
Slide 30: DX sylvinite project – geology
DX sylvinite project – geology 30
Slide 31: Solution mining illustrated
Solution mining illustrated Sump development Roof development in HWSS Solution mining in HWSS • Pump fresh water down to dissolve • Once sumps form, buoyant blanket • Hot NaCl rich brine dissolves KCl in halite fluid controls cavern formation cavern and returns to surface • Sumps develop in halite,
Slide 32: Solution mining illustrated (continued)
Solution mining illustrated (continued) Solution mining in TSS Cavern completion • After extraction of HWS, holes are plugged below TSS • Completed cavern: approximately 6 years as no sump is required • At end of cavern life caverns are left filled with solution to minimise subsidence 32 INVESTOR PR
Slide 33: Kola overview
Kola overview DFS project economics Kola Sylvinite is a Tier 1 asset with long life Average annual free cashflow US$500M production potential Average cash operating margin 75% • 2.2Mtpa MoP production over 33 year life Post-tax attributable IRR 17.2% High quality deposit: (ungeared) • Shallow, high
Slide 34: Kola configuration
Kola configuration • Targeting production of 2.2 Mtpa MoP • Shallow: shaft bottom of 270m • 35km to the coast via an overland conveyor and dedicated jetty for export to Brazil and West Africa • 90km via road to port of Pointe Noire for equipment imports 34 INVESTOR PRESENTATION 02/06/2020
Slide 35: Ore Reserves
Ore Reserves DX Sylvinite Ore Reserves (gross 100% basis) Ore Reserves KCl grade Mg Insolubles Classification (Mt) (% KCl) (% Mg) (% Insol.) Probable 17.7 41.7 0.06 0.19 Total Ore Reserves 17.7 41.7 0.06 0.19 Kola Sylvinite Ore Reserves (gross 100% basis) Ore Reserves KCl grade Mg Insolubles Classif
Slide 36: Mineral Resources — Sylvinite
Mineral Resources — Sylvinite Sylvinite deposits (gross 100% basis) Contained KCl Mineral Resource category Million Tonnes Grade KCl % Million tonnes Kola Sylvinite Measured 216 34.9 75 Indicated 292 35.7 104 Sub-total (Measured + Indicated) 508 35.4 180 Inferred 340 34.0 116 TOTAL 848 34.8 295 Doug
Slide 37: Mineral Resources — Carnallite
Mineral Resources — Carnallite Carnallite deposits (gross 100% basis) Contained KCl Mineral Resource category Million Tonnes Grade KCl % Million tonnes Dougou Carnallite Measured 148 20.1 30 Indicated 920 20.7 190 Sub-total (Measured + Indicated) 1,068 20.6 220 Inferred 1,988 20.8 414 TOTAL 3,056 20
Slide 38: Exploration Targets
Exploration Targets The potential quantity and grade of an Exploration Target is conceptual in nature and is an approximation, and is expressed as an expected range of tonnes and grade. There has been insufficient exploration at Kola South and DX North to estimate Mineral Resources and it is uncerta
Slide 39: Very low cost of supply into target markets
Very low cost of supply into target markets Global MoP export cost curve1 (FOB) US$/t MoP (2022) Kore has the potential to be: • The second lowest cost operation on an export cost basis at US$87.63/t FOB (real 2018) • The lowest cost supplier globally of potash to Brazil at US$102.47/t CFR (real 201
Slide 40: Board of Directors
Board of Directors David Hathorn Chairman Brad Sampson Chief Executive Officer David Hathorn is the ex-CEO of the Mondi Group (30 April 2017). Brad Sampson has more than 25 years resources industry The Mondi Group, is a FTSE 100 global packaging and paper listed experience building and operating lar
Slide 41: Corporate snapshot
Corporate snapshot Key shareholders1 KP2 AIM share price / volume2 Shareholder % interest Princess Aurora Company Pte Ltd (SGRF) 19.74% Sociedad Quimica y Minera (SQM) 19.26% Dingyi Group Investments Ltd 12.91% Harlequin Investments Ltd 7.07% Mr David Stevens 6.72% Kore Board and Management 3.16% Ti