Name and Location
Kola sylvinite potash project, Republic of Congo (RoC).

Client
Elemental Minerals.

Project Description
The Kola project has measured and indicated resources of 573-million tonnes at 20.9% potassium oxide (K₂O), and proven and probable reserves of 152-million tonnes at 20% K₂O.

The projects form part of the larger Sintoukola permit in the RoC.

In September 2012, Elemental issued a technical report, compliant with Canadian National Instrument 43-101, for a prefeasibility study (PFS) on the Kola project. The PFS presented a mineral resource and mineral reserve estimate; it also defined the mine, the process facility and infrastructure requirements, costs and economics for a production target of two-million tonnes a year of muriate of potash (MoP).

Subsequently, Elemental considered alternatives to the project configuration to reduce the initial capital requirements.

Elemental’s phased implementation update on its Kola project reconfigures the project to incorporate a phased production ramp-up and incorporates build, own, operate and maintain methods.

The changes include:
• a rescheduled mine plan, starting with a Phase 1 production of one-million tonnes a year of MoP for the first four years, whereafter Phase 2 will be completed to achieve a total nameplate capacity of two-million tonnes a year of MoP;
• a revised shaft configuration, with one 12-m-diameter main shaft and a secondary 4.5-m-diameter ventilation shaft for Phase 1;
• a refrigeration plant, installed in the secondary ventilation shaft as part of Phase 2;
• an overland conveyor for run-of-mine ore transport that will replace the dedicated mine haul road and haul trucks in the PFS;
• the construction of the process plant in two separate one-million-tonne-a-year phases subsequently resulting in phased civil works, brine dilution and disposal infrastructure;
• using containerised bulk transport solution to store and transport one-million tonnes a year of product to a commercial jetty – currently under construction, with expected completion in 2016 – during Phase 1 with the product storage facility, jetty and loading system at Tchiboula therefore moved to Phase 2;
• the dedicated natural-gas pipeline will be replaced with compressed natural gas being trucked to the process facility site; and
• the conversion of the construction camp into an operational accommodation camp for Phase 1 of operations.

Further, several RoC mining companies are pursuing the construction of an export facility at Pointe Indienne, 30 km south of the process plant area (Tchiboula), for the direct loading of bulk commodities such as potash, phosphate and iron-ore.

Net Present Value/Internal Rate of Return
The project has an unlevered, after-tax net present value, at 10%, of $1.836-billion and an internal rate of return of 24%.

Value
The phased implementation update estimates capital expenditure for Phase 1 at $907.7-million. Phase 2 is estimated at $683.5-million.

Duration
Phase 1 is scheduled to start in 2018 and Phase 2 in 2020.

Latest Developments
Elemental has launched a bankable feasibility study (BFS) at its Kola sylvinite project.

A cored borehole – EK_48 – will be drilled at the planned shaft site, for hydrological and geotechnical testwork. This data will support the shaft design for the BFS.

The shaft location is central to the deposit and will provide ease of access to the shallow high-grade, 152-million-tonne sylvinite reserve, grading 31.7% potassium chloride, hosted by the upper and lower Seams.

The hole is expected to be about 200 m deep, ending at the top of the evaporite sequence. The shaft bottom will be about 20 m beyond this, which is very shallow in comparison to potash mines globally, supporting significant cost savings and a shortened mine construction period.

The BFS for the Kola project will likely be completed by the third quarter of 2016, with construction expected to start in the second quarter of 2017.

Elemental is also progressing discussions with various interested parties regarding offtake agreements and sizeable investments in the company.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Elemental Minerals investor contact Ilja Graulich, tel +27 11 469 9140 or email ilja.graulich@elementalmineralsltd.com.