Kore Potash, the potash exploration and development company whose flagship asset is the 97%-owned Sintoukola Potash Project, located within the Republic of Congo, has announced its intention to raise a minimum of US$7 million.
The company is also intending to enter into a Technical Services Agreement with Sociedad Quimica y Minera S.A. and will issue new ordinary shares to satisfy the payment of the future technical services.
Canaccord Genuity and Shore Capital Stockbrokers are acting as joint bookrunners in connection with the placing. Rencap Securities is acting as the company’s settlement agent and JSE sponsor in South Africa.
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- The Company intends to raise a minimum of US$7 million in the Proposed Fundraise.
- The conditional Placing is being conducted via an accelerated bookbuild.
- The Company has received indications from a number of its largest existing shareholders and its Chairman, David Hathorn, that they intend to participate in the Proposed Fundraise.
- The Company is currently in a “closed period” that restricts Directors and their “related parties” from acquiring the Company’s Ordinary Shares prior to the release of the Company’s interim results for the half year period ended 30 June 2020. They have indicated their intention to participate in the Proposed Fundraise once the Company is out of a closed period for trading.
The net proceeds of the Proposed Fundraise will allow the Company to complete the first phase of the DFS for the Dougou Extension Sylvenite project, which will include the following:
- Increase confidence in the mineral resource and potentially improve confidence in the ore reserve through drilling of up to 5 additional diamond drill holes
- Improve understanding of the potash carrying capacity of the production brine
- Restating the production target to include exploitation of 100% of the DX mineral resources
- Restating the DX PFS economic modelling to incorporate the updated mineral resources, ore reserves and production target
- The Company is also proposing to enter into a conditional Technical Services Agreement with its major shareholder, Sociedad Quimica y Minera de Chile S.A. for SQM to provide certain services to the Company in connection with the first phase of the DFS for a total value of US$540,000 to be satisfied by the issue and allotment of new ordinary shares at the Placing Price on completion of the relevant services.
- The company intends to enter into the Technical Services Agreement once it is out of its current closed period.
- The proposed intention to participate by certain directors and substantial shareholders as well as the entering into the proposed Technical Services Agreement is likely to constitute a related party transaction under AIM Rule 13.
- The Directors believe the net proceeds of the Proposed Fundraise will provide sufficient working capital for the Company to implement its strategy for the next 12 months.
- Completion of the Proposed Fundraise is subject to, inter alia, shareholder approval of certain resolutions to authorise the issue of new Ordinary Shares which will be sought at a general meeting of the Company to be convened for that purpose
- Certain South African investors will be participating in the Subscriptions, and South African Reserve Bank approval has been granted. Settlement of their Placing Shares, if any, will be facilitated by Renaissance.
- The New Ordinary Shares will rank equally with the Company’s existing ordinary shares.