Kore Potash to raise $7m via book-build for bankable study of Dougou Extension

Potash

KORE Potash is to raise $7m through an issue of shares in order to pay for the first phase of a definitive feasibility study on its proposed Dougou Extension Project (DX Project) in the Republic of Congo (RoC).

The share issue, which will be conducted via an accelerated book-build, will be supported by a number of the firm’s largest existing shareholders as well as its chairman, David Hathorn, the company said in an announcement today.

Funds raised from the book-build would supply the company with sufficient working capital for about 12 months, the company said.

In April, Kore prepared the ground for discussions with financial backers for its DX project which is scoped for production of 400,000 tons a year of muriate of potash. It would require 21 months of construction at a pre-production capital cost of $286m.

This was in terms of a pre-feasibility study which has planned for an 18-year life of mine for DX during which time EBITDA of $118m would be generated.

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.

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. In addition to these minerals, and Kore Potash’s proposed product, there is phosphate – a mineral that South Africa’s Kropz has been trying to mine and market.