Congo-Brazzaville-focused miner Kore Potash has advised that the condition for conversion of five convertible loan notes (CLN) totalling $530 000 has been met, and, accordingly, these will now be converted into 109-million new ordinary shares in the company at a price of 0.38p apiece.

The company will use the proceeds to advance work on the Kola project, as well as for working capital.

Chairperson David Hathorn will subscribe for 31-million new ordinary shares on the same terms as those used for the conversion of the CLNs, for a total consideration of $150 000 through two separate trusts.

Kore’s total issued share capital now consists of 4.22-billion ordinary shares.

Meanwhile, in the year ended December 31, Kore made tangible progress towards financing the Kola project.

PowerChina delivered its engineering, procurement and construction (EPC) proposal and draft EPC contract on February 6, which the companies are working towards signing in the second quarter.

Kore expects to raise more funds in the second quarter for working capital requirements for the period up to signing full EPC documentation and the financing proposal for the construction of Kola from the Summit Consortium.

The Summit Consortium includes Abu Dhabi-based OWI Global, which will provide royalty financing in conjunction with product offtake; engineering and construction group Sepco; and China ENFI Engineering Corporation, which are both based in China.

Sepco, as a subsidiary of PowerChina, will be the EPC contractor for Kola, with China ENFI being a subcontractor.

Summit Consortium has confirmed that the financing proposal for the full capital cost of Kola will be provided within six weeks of finalisation of EPC contract terms.

Kore still envisions the Kola project to have a capital cost of $1.83-billion and for it to be built within 40 months.

The net present value of the project, after tax, is $1.62-billion, while its internal rate of return is 28%.

The conventional mechanised underground potash mine will be designed with a nameplate production capacity of 2.2-million tonnes a year of muriate of potash, over a 31-year mine life.

During the year, Kore says, it continued dialogue with the Congo-Brazzaville authorities, including the Ministry of Mines, aimed at improving government’s understanding of the company’s Kola and Dougou projects in the country.

Hathorn comments that global events continue to reinforce the importance of potash in the production of food and the need for development of new potash projects outside the traditional northern hemisphere potash-producing regions.

He maintains that the Sintoukola basin, in which Kore’s projects are based, is a promising undeveloped potash region, with significant high-quality resources and a beneficial location.