Kore Potash : Quarterly Activities & Cashflow Report

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Kore Potash plc

25 Moorgate, London EC2R 6AY

United Kingdom

18 July 2022

Kore Potash Plc

("Kore Potash" or "the Company")

Review of Operations for the Quarter ended 30 June 2022

Kore Potash (AIM: KP2, ASX: KP2, JSE:KP2), the potash development company with 97%-ownership of the Kola Potash Project ("Kola" or "the Kola Project") and Dougou Extension ("DX") Potash Project in the Sintoukola Basin, located in the Republic of Congo ("RoC"), provides the following quarterly update for the period ended 30 June 2022 (the "Quarter").

Quarterly Highlights:

Kola Potash Project

• The process to potentially finance the construction of Kola progressed in line with the Memorandum of Understanding ("MoU") signed with the Summit Consortium ("Consortium") in April 2021.
• Receipt of the Optimisation Study ("Study") on the Kola Project was announced to shareholders on 1 April 2022.
• Kore Potash completed its detailed review of the Study and announced the outcomes of the Study to shareholders on 27 June 2022.
• On 28 June 2022, the Company announced it had signed a Heads of Agreement ("HoA") for the construction of Kola.
• Engineering, Procurement and Construction ("EPC") contract proposal for the construction of Kola based on the outcomes of the Study expected in August 2022.
• Financing proposal for the complete construction of Kola is expected following Kore Potash's receipt of the EPC contract proposal and agreement on key EPC terms.

Corporate Highlights

• 550,000 new ordinary shares of US$0.001 each in the capital of the Company ("Ordinary Shares")were issued on 5 May 2022 following vesting of performance rights.
• The Company held its Annual General Meeting ("AGM") on 9 June 2022.
• 44,132,674 new Ordinary Shares were issued to Sociedad Quimica y Minera de Chile S.A. ("SQM") on 13 June 2022.
• The Kore Potash registered address changed and was announced on 14 June 2022.
• As of 30 June 2022, the Company held US$7.6 million in cash.

Brad Sampson, Chief Executive Officer of Kore Potash, commented:

"Recent global events have heightened concerns for food security and continuity of supply of fertiliser to feed the world's growing population. The dramatic increase in the potash price reinforces 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. The progress towards financing our Kola Project is exciting and we look forward to receiving the financing proposal later this year."

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Operational Activities

Kola Potash Project

The financing process for the construction of the Kola Project progressed in line with the MoU signed with the Consortium in April 2021.

Optimisation Study

The highlights of the outcomes of the Study completed by the Consortium as announced on 27 June

2022 were:

• Capital cost reduced by US$520 million to US$1.83 billion on an EPC basis compared to the Definitive Feasibility Study ("DFS") capital cost of US$2.35 billion on an equivalent EPC basis.
• Construction period reduced to 40 months from the DFS construction period of 46 months.
• Key financial metrics improved on DFS outcomes (at potash pricing averaging US$360/ tonne unchanged from the DFS):
  o Kola net present value ("NPV") NPV10 post tax improved to US$1.623 billion o Internal Rate of Return ("IRR") improved to 20% on ungeared post tax basis
• At a potash price of US$1000/t Muriate of Potash ("MoP") CFR Brazil (less than current potash price of approximately US$1100/t MoP CFR Brazil) the Kola financial metrics improve to:
  o Kola NPV10 post tax US$9.354 billion o IRR of 49% on ungeared post tax basis
• Kola designed with a nameplate production capacity of 2.2 million tonnes per annum ("Mtpa") of MoP.
• MoP production from Kola scheduled over an initial 31 year project life.
• Kola is designed as a conventional mechanised underground potash mine with shallow shaft access. Ore from underground is transported to the process plant via an overland conveyor approximately 25 km long. After processing, the MoP product is conveyor transported 11 km to the marine export facility. MoP is conveyed from the storage area onto barges via the dedicated barge loading jetty and then trans-shipped into ocean going vessels for export.

Heads of Agreement

Kore Potash signed a HoA for the construction of Kola in the presence of the Minister of State and Minister of Mining, Industry and Geology of the RoC, Mr Pierre Oba. Following the signing of the HoA the Minister of State commented that, "the Kola project is of vital international interest and congratulated Kore Potash on the successful outcome of negotiations with SEPCO".

The HoA confirms the timeline for SEPCO Electric Power Construction Corporation ("SEPCO") to complete their discussions with Kore Potash ahead of presenting the Company an EPC contract proposal for Kola. It also provides additional clarity on matters that SEPCO are required to finalise in advance of presenting Kore with the construction contract proposal.

The HoA provides for:

• Kola to be designed and constructed as a conventional underground potash mine and processing plant producing up to 2.2 mtpa of granular MoP over an initial 31 year life.
• The granular MoP produced by Kola will be at a minimum quality of 95.3% Potassium Chloride ("KCl") in line with international standards.

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• The capital cost to construct Kola will be US$1.83 billion and the construction period will be 40 months.
• During the preconstruction engineering design phase, the HoA provides SEPCO with an opportunity to adjust the costs related to the underground mine portion of the works. SEPCO's current capital cost is based in part upon information collected during the DFS Study phase, some of which SEPCO continues to review. Should the final agreed quantities of materials and labour or the underground construction period differ materially from the baseline, SEPCO will be able to adjust proportionately. The underground portion of the works (excluding equipment and infrastructure) is currently estimated as US$164 million, which represents 9% of the total Kola capital cost.
• SEPCO will also be able to adjust the capital cost if the Chinese RMB or Congolese FCFA currency exchange rates to the US dollar vary materially prior to commencement of the works. In such circumstance only the cost of affected works or components may be adjusted.

Kola EPC

The results of the Study support moving to the next phase of the Kola development. Therefore, the Consortium has advised that SEPCO will continue negotiations with Kore Potash with a view to finalising all EPC terms based on FIDIC Silver book 2017 and present the complete EPC contract proposal for the construction of Kola during August 2022. The EPC contract proposal will be based on the capital cost and construction schedule from the Study.

Kola Financing

The Summit consortium has advised that the strongly positive outcomes of the Study continue to support their financing of Kola and it intends to provide the financing proposal for the construction cost of Kola after the Company's receipt of the EPC proposal and agreement on key EPC terms.

Other Kola matters

Separate from the Consortium's activity, Kore Potash's management team also continued discussions with potential offtake partners with the capability to procure all the Kola production and who have expressed interest in partnering with the Company.

DX Potash Project

The Company's focus during the Quarter remained on the Kola Project. The Company is assessing the most appropriate next steps for developing the DX deposit and intends to update shareholders further once these steps have been confirmed.

Corporate

On 5 May 2022, a total of 550,000 new Ordinary Shares were issued to employees and ex-employees following the vesting of Performance Rights awarded under the Company's Employee Performance Incentive Plans, of which 283,333 shares were issued to Gavin Chamberlain, Chief Operating Officer.

At the Company's AGM held on 9 June 2022, all resolutions were all duly passed on a poll by the requisite majority.

On 13 June 2022, pursuant to the resolution passed at the AGM, 44,132,674 new Ordinary Shares were issued to SQM in lieu of fees payable under a Technical Services Agreement. The value of the work performed under the Technical Services Agreement by SQM on the DX DFS was US$375,470.

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On 14 June 2022, the Company announced that its registered office in the United Kingdom had changed to 45 Gresham Street, London, EC2V 7BG.

As at 30 June 2022, the Company held US$7.6 million in cash.

There were no mining production or construction activities during the Quarter.

Quarterly Cashflow Report

In accordance with the ASX Listing Rules, the Company will also lodge its cashflow report for the Quarter today. Included in those cashflows are non-executive directors' fees and the CEO 's salary of US$198,000 settled in cash.

The Company invested US$1,253,000 in Exploration and Evaluation in the Quarter on the Kola Study. The Company ended the Quarter with US$7.6 million in cash.

This announcement has been approved for release by the Board of Kore Potash.

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.

ENDS

For further information, please visit www.korepotash.com or contact:

Kore Potash	Tel: [phone]
Brad Sampson - CEO
Tavistock Communications	Tel: [phone]
Emily Moss
Adam Baynes
SP Angel Corporate Finance - Nomad and Broker	Tel: [phone]
Ewan Leggat
Charlie Bouverat
Shore Capital - Joint Broker	Tel: [phone]
Toby Gibbs
James Thomas

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Tenement Details and Ownership

The Company is incorporated and registered in England and Wales and wholly owns Kore Potash Limited of Australia. Kore Potash Limited has a 97% shareholding in Sintoukola Potash SA ("SPSA") in the RoC. SPSA has 100% ownership of Kola Potash Mining SA ("KPM"). KPM has 100% ownership of the Kola Mining Lease on which the Kola Deposit is situated. The Kola Deposit is located within the Kola Mining Lease. SPSA is also the 100% owner of the Dougou Mining Lease. The Dougou Mining lease hosts the Dougou Deposit and the DX Deposit.

Under the existing Mining Convention, the RoC Government is entitled to 10% ownership in the Kola and DX projects. The transfer of this 10% awaits instructions from the Government and the Mineral Resources and Ore Reserves are shown below in gross and 90% attributable bases

Table 1: Schedule of mining tenements (Republic of Congo)

Project & Type	Tenement Issued		Company Interest	Title Registered to
Kola	Decree 2013-412	100%	Kola Potash Mining S.A.
Mining	of 9 August 2013		potassium rights only
Dougou	Decree 2017-139		100%	Sintoukola Potash S.A.
Mining	of 9 May 2017		potassium rights only
	Revised Decree	No
	2021-389 of 2 August
	2021

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