Dual-listed Kore Potash has signed a heads of agreement (HoA) with Sepco Electric Power Construction Corporation to build the Kola potash project, in Congo-Brazzaville.
Sepco is an engineering partner of the Summit Consortium, which, in turn, has a memorandum of understanding in place with Kore to jointly develop the project.
Kore announced just yesterday that an optimisation study conducted by Sepco envisions a much lower capital cost to build Kola at $1.83-billion, instead of the $2.35-billion estimated in the project’s definitive feasibility study.
The HoA confirms that the project will be built over a span of 40 months and will produce 2.2-million tonnes of granular muriate of potash a year over an initial 31-year mine life.
The capital cost of the underground works component of Kola may be reviewed following completion of additional investigations by Sepco during the pre-construction engineering design phase.
Meanwhile, Sepco continues negotiations with Kore to finalise all engineering, procurement and construction (EPC) terms and aims to present a completed construction proposal to Kore in August.
The Summit Consortium has also reaffirmed its commitment to provide Kore with a financing proposal for the full construction cost of Kola and confirmed that the financing proposal will be provided after Kore has received the EPC proposal and has agreed with Sepco on the key EPC terms.
Kore CEO Brad Sampson says the HoA with Sepco reconfirms the parties’ commitment to advance from the completed Kola optimisation phase to construction contract formation and then into construction of Kola.