KORE Potash failed to extract an improved proposal from a consortium of French engineering companies for the construction of the Kola project, situated in the Republic of Congo (RoC).
It had received rival proposals, but Kore’s focus may be increasingly falling on a project near Kola, known as DX (Dougou Extension) where drilling results as part of a pre-feasibility study (PFS) had improved its viability.
“Progress on the DX PFS continues gratifyingly quickly,” said Brad Sampson, CEO of Kore Potash in a December quarter update. “The more work that is undertaken at DX, the greater our confidence in the asset grows.”
Pre-production costs at Kola were scoped by the French consortium at $2.1bn and although optimisation studies have lowered the capital cost, DX comes in at a much lower $200m. Kore Potash had asked the French consortium, among other companies, for a new proposal but said today it had not received an update.
In addition to working on the PFS for DX, Kore was also working on a mining convention which includes the transfer of the mining licence for DX with the RoC government.
The DX PFS is scoping a 400,000 tons a year operation – roughly half of Africa demand – over a 17 year life of mine, and generating annual free cash flow of $74m in that time. Payback has been put at about four-and-a-half years.
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