Kore Potash Plc · LSE:KP2
Kore Potash — Investor Presentation (October 2019)
38 slides from Kore Potash's investor presentation, October 2019
Slide 1: Sustainably feeding the world
Sustainably feeding the world October 2019 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 Brazilian and African markets Kore has globally significant potash deposits in the Republic of Congo (RoC) District scale development potential, 35km from the coast and ideally located to supply Brazil and Africa Feeding the w
Slide 4: What is potash?
‘KORE POTASH What is potash? NT FROM THE GROUND UP
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 1960 1964 1968 1972 1976 1980 1984 1988 1992 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 Muriate of Potash (MoP) Sulphate of Potash (SOP) Represents 86% of the potash Represents 9% of market volume. Used market. MoP is potassium chloride by crops where chlorine tole
Slide 9: Potash supply and demand
Potash supply and demand 2017 Supply • Total annual production of potash is around Southeast West Europe Asia 66 Mtpa 0.4 Mt 4.0 Mt East Asia 7.1 Mt • At present this supply is largely met by existing major suppliers including: North • Urakali – 12.2 Mtpa America 21.8 Mt 65.0 Mt FSU 23.5 Mt • Nutrie
Slide 10: Kore's Projects
‘KORE POTASH Kore’s Projects NT FROM THE GROUND UP
Slide 11: Kore's projects
Kore’s projects Kore is developing its globally significant potash deposits in the Republic of Congo (RoC) Focus is on two high grade sylvinite projects: Kola and Dougou Extension (DX) where Kore is: • optimising the capital cost and construction schedule for Kola; and • conducting 2D seismic, infil
Slide 12: Sintoukola potash district
Sintoukola potash district Key focus projects for the Company 12 20/10/2019
Slide 13: Sintoukola is well situated for key export markets
Sintoukola is well situated for key export markets Product is planned to be sold into Brazil and African markets Consumption1 Product Region (ktpa MoP) Specification Total Brazilian Market 9,700 Granular K60 MoP South Africa 100 Granular K60 MoP Nigeria (Estimated) 400 Granular K60 MoP Morocco 436 S
Slide 14: Disruptively low cost of supply into target markets
Disruptively 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 (
Slide 15: Recent newsflow
‘KORE POTASH Recent newsflow NT FROM THE GROUND UP
Slide 16: Recent newsflow
Recent newsflow • PFS for DX Project commenced – 5 September • DX Scoping Study completed – 29 April Building on the advanced Scoping Study, the PFS Very promising study shows that DX offers a lower will include a 2D seismic survey programme, 4-hole cost, quicker path to production than Kola diamond
Slide 17: Dougou Extension (DX) Sylvinite project
Dougou Extension (DX) Sylvinite project 17
Slide 18: Overview
Overview DX Scoping Study project economics1 Average annual free cashflow US$74M Potential to accelerate path to production • Estimated 2 year construction period Average cash operating margin 67% • Infrastructure overlaps with the Kola Sylvinite Post-tax attributable IRR and Dougou Carnallite proje
Slide 19: Benchmarking DX Mineral resources grade
Benchmarking DX Mineral resources grade Kore Deposits Pre-production assets Selected producers 50 45 Resource Grade KCl % 40 • DX is the highest grade 35 30 undeveloped potash deposit 25 20 globally 15 10 • Closest projects in terms of 5 0 grade are both well over ne n e go k -U e la a yi rd il e ki
Slide 20: Proven solution mining flowsheet
Proven solution mining flowsheet 20
Slide 21: Next steps
Next steps Kore is progressing a PFS at DX Project The PFS includes: • A 2-dimensional seismic survey campaign primarily designed to improve delineation of the sylvinite /carnallitite interface within the two seams • Diamond drill hole programme to drill 4 up to holes to improve overall understandin
Slide 22: Kola Sylvinite project
‘KORE POTASH Kola Sylvinite project NT FROM THE GROUND UP
Slide 23: Kola overview
Kola overview DFS project economics2 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 life1 Post-tax attributable IRR 17.2% High quality deposit: (ungeared) • Shallow, hig
Slide 24: 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 24 20/10/2019
Slide 25: Summary
‘KORE POTASH Summary NT FROM THE GROUND UP
Slide 26: Environment and permitting
Environment and permitting DX produces no by-product tailings, Kola produces only saltwater – no local environmental impacts Kola project close to being fully permitted – awaiting approval of the amended Environmental and Social Impact Assessment The Mining Convention for Kola and Dougou mining lice
Slide 27: Summary
Summary Sustainably feeding Long life at globally Advantageous location the world significant scale • Fertiliser use improves crop yields • Initial life of Kola of 33 years • Close to target markets for farmers, reducing carbon based on 2.2Mtpa MoP • Project adjacent to coast footprint of farming gl
Slide 28: Appendices
‘KORE POTASH Appendices NT FROM THE GROUND UP
Slide 29: DX sylvinite project – geology
DX sylvinite project – geology 29
Slide 30: Solution mining illustrated
Solution mining illustrated Sump development Solution mining in HWSS • Pump fresh water down to dissolve halite • Once sumps connect, buoyant blanket fluid controls cavern formation • Sumps develop in halite, caverns connect • Flow direction is periodically reversed to optimise cavern formation • Na
Slide 31: 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 31 20/10/2019
Slide 32: Wellfield and Process Plant Location
Wellfield and Process Plant Location Highway RN5, showing typical grassland areas where wellfields will be developed Streamline Target Area 0 1000 2000 Current Highway RN5/6 Plant Perimeter Wellfield Piping Initial Caverns Future Caverns 32 20/10/2019
Slide 33: Ore Reserves
Ore Reserves Kola Sylvinite Ore Reserves (gross 100% basis) 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 Notes: • The Kola Ore Reserves Estimate is reported in accord
Slide 34: 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 35: 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 36: 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 37: Board of Directors
Board of Directors David Hathorn Chairman Brad Sampson Chief Executive Officer David was the CEO of the Mondi Group between 2000 and May Brad, a qualified mining engineer, has more than 25 years’ 2017 having joined the group in 1991. Prior to the demerger of resources industry experience across nume
Slide 38: Corporate snapshot
Corporate snapshot Key shareholders1 KP2 AIM share price / volume2 10 25 Shareholder % interest 9 8 20 Volume (Millions) Princess Aurora Company Pte Ltd (SGRF) 20.15% Share price (p) 7 6 15 Sociedad Quimica y Minera (SQM) 19.67% 5 4 10 Dingyi Group Investments Ltd 13.18% 3 2 5 Harlequin Investments