Kore extends DX Project life of mine, raises financial return after converting resources

Article republished to show improved projected financial return from DX Project.

KORE Potash, a London- and Johannesburg-listed potash development firm, had increased the mine life of its Dougou Extension Project (DX Project) in Republic of Congo (RoC) by two-thirds after converting indicated reserves and inferred resources in an updated pre-feasibility study.

The increase in mine life results in lower overall production, but an increase in the financial returns of the project.

Kore CEO, Brad Sampson, said the firm was progressing a definitive feasibility study (DFS) into the project. The company received the go-ahead for the DFS from the RoC in October.

Incorporating the additional reserves means the pre-feasibility study is now working on total production of muriate of potash of some 7.4 million tons (Mt) which compares to a May assessment in the study of 12.1Mt in total production.

The estimated net present value of the project was increased to $421m from $391m previously, the company said. This translated into an internal rate of return of 23.4% from 22.9% estimated previously.

The company had initially scoped out Kola, a tier-1 project that is part of the Sinotoukola Potash Project (of which DX is also a part). Developing Kola, however, comes with a hefty pre-production cost of $2.1bn compared to the May estimate of $286m for DX Project.

Increasingly, the specialised resources sector has been turning its attention to the prospects offered by mineral fertiliser production.

In January, Anglo American bought Sirius Minerals for £405m for its Woodside polyhalite project, another source of fertiliser aimed at the food security market.