Exciting Times For KP2, page-239

Quote from the market release about funding availability for KP2:

"Project Funding

The Directors of Kore have formed the view that there is a reasonable basis to believe that requisite future funding for development of the Kola Project will be available when required. Kore shareholders should be aware of the risk that future funding for development of the Kola Project may dilute their ownership of the Company or Kore's economic interest in the Kola Project.

There are a number of grounds on which this reasonable basis is held:

· On the 6^th April 2021, in the release "Non-binding Memorandum of Understanding to arrange the full financing required for the construction of the Kola Project", Kore advised details of the Consortium that has undertaken to provide a debt and royalty financing proposal for the full construction cost of Kola. The Summit Consortium consists of Summit (an African strategic advisory and corporate finance investment group) and SEPCO (an international engineering and construction group) as its technical partner. Together they committed to a process to fully fund the construction of Kola. The first key milestone in this process, the optimisation study, has now been completed and is reported in this announcement. The next key milestone is the receipt of an EPC contract proposal from SEPCO and then is to be followed by the financing proposal from the Summit Consortium.

· Kore has two large strategic shareholders on its register: (i) SQM (15.74%): a Chilean company with a market capitalisation in excess of US$26 B that is an integrated producer and distributor of specialty plant nutrients, including having an established business in the global potash market; and (ii) OIA (19.35%): the sovereign wealth fund of Oman (formerly SGRF), which holds a range of natural resource investments, including on the African continent. These two groups invested a total of US$40 million into Kore in late 2016 and have continued to invest in the company through additional fundraises and the issue of shares in lieu of cash for technical services totalling US$19.5 million. They collectively bring a considerable and highly relevant combination of substantial financial capacity, specific potash experience, Latin American, Middle Eastern and African influence, and financing expertise.

· The Kola Project optimisation study was completed by SEPCO with their technical consultants China ENFI Engineering corporation (for mining and process) and CCC-FHDI Engineering Co Ltd (Marine facilities). This team has the technical and commercial experience in potash and African projects that supports the successful execution of the Kola project.

· The technical and financial parameters detailed in the Kola Project Optimisation study are robust and economically attractive.

· SQM and OIA hold a right of first refusal to product offtake from Kola proportionate to their shareholding interest (with each having a floor of 20% of production). The residual 60% remains uncontracted and therefore a considerable attraction to other potential strategic financiers of the Kola Project. In this respect, Kore has held, and continues to hold, discussions with respect to possible offtake and project funding/ownership via additional strategic partners.

· Kore as 90% owner of Kola retains options for raising the required equity funding including selling down part of its interest in the Kola Potash Project to a third party to form a joint venture. Introduction of a joint venture partner may also provide further comfort for potential debt project financiers and could reduce Kore's share of the equity funding requirements for the project. Kore shareholders should be aware that any sale of a joint venture interest in the project to a third party would most likely dilute Kore's economic ownership of the project.

· The Kore Board and management team is highly experienced in the broader resources industry. They have played leading roles previously in the exploration and development of several large and diverse mining projects in Africa. In this regard, key Kore personnel have a demonstrated track record of success in identifying, acquiring, defining, funding, developing and operating quality mineral assets of significant scale.

· Funding for Kola Project pre-production and initial working capital is not expected to be required until post conclusion of an EPC agreement and receipt of financing proposal. Kore has reasonable grounds to believe that obtaining requisite funding within this timeline is achievable."

Looks very promising to me. There seems to be a growing degree of confidence in the statements about funding probability. DYOR. GLTAH.


Click here for link to the full market announcement