KORE POTASH PLC
ANNUAL REPORT
FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2020
CONTENTS
CORPORATE DIRECTORY
GLOSSARY
REVIEW OF OPERATIONS AND STRATEGIC REPORT
DIRECTORS’ REPORT
CORPORATE GOVERNANCE REPORT
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
STATEMENTS OF FINANCIAL POSITION
STATEMENTS OF CHANGES IN EQUITY
STATEMENTS OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
ASX ADDITIONAL INFORMATION (UNAUDITED)
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4
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CORPORATE DIRECTORY
COMPANY REGISTRATION NUMBER
United Kingdom 10933682
NON-EXECUTIVE CHAIRMAN
David Hathorn
CHIEF EXECUTIVE OFFICER
Brad Sampson
JOINT COMPANY SECRETARY
Henko Vos
St James’s Corporate Services Limited
PRINCIPAL & REGISTERED OFFICE (UK)
25 Moorgate, London,
United Kingdom EC2R 6AY
Telephone: +44 (0) 20 7131 4000
SHARE REGISTRY (UK)
Computershare Investor Services Plc
The Pavilions, Bridgwater Road
Bristol BS99 6ZZ
United Kingdom
SHARE REGISTRY (JOHANNESBURG)
Computershare Investor Services (Pty) Ltd
Rosebank Towers,15 Biermann Avenue
Rosebank 2196
South Africa
JSE SPONSOR
Questco Corporate Advisory Proprietary Limited
1st Floor, Yellowwood House,
Ballywoods Office Park 33 Ballyclare Drive,
Bryanston, 2191
South Africa
SECURITIES EXCHANGE LISTINGS
London Stock Exchange (AIM)
Australian Securities Exchange (ASX)
Johannesburg Stock Exchange (JSE)
AIM, ASX and JSE Codes: KP2
ISIN: GB00BYP2QJ94
NON-EXECUTIVE DIRECTORS
Jonathan Trollip
Timothy Keating
David Netherway
José Antonio Merino (resigned with effect from
20 November 2020
Trinidad Reyes Perez (appointed with effect from
20 November 2020)
AUSTRALIAN OFFICE
Level 3, 88 William Street,
Perth WA 6000
SINTOUKOLA POTASH S.A
24 Avenue Charles de Gaulle
Immeuble Atlantic Palace
BP 662 Pointe Noire
République du Congo
Telephone: +242 222 9419
SHARE REGISTRY (AUSTRALIA)
Computershare Investor Services Pty Ltd
Level 11, 172 St George’s Terrace
Perth WA 6000
NOMINATED ADVISER AND BROKER ON AIM
Canaccord Genuity Limited
88 Wood Street
London EC2V 7QR
United Kingdom
AUDITORS
BDO LLP
United Kingdom
55 Baker St.
London, W1U 7EU
WEBSITE
https://www.korepotash.com/
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GLOSSARY
Stands For / Meaning
Definition and/or Additional Information
Acronym /
Term
$
Denotes USD or United States dollars.
The official currency of the United States of America and
its territories, as well as being the functional and
presentation currency of the Company and the Group.
The UK corporate governance code that came into effect
on 1 January 2018 and applies to accounting reference
periods commencing on and after 1 January 2019.
The mandatory yearly gathering of the Company’s
interested shareholders. The latest AGM was held on 26
June 2020.
AIM (formerly the Alternative Investment Market) is a sub-
market of the LSE.
The ASX is Australia's primary securities exchange.
The official currency of the Commonwealth of Australia.
As listed on page 23 of the Annual Report.
Carnallitite may be replaced by the word Carnallite for
simplicity.
CDIs are instruments traded on the ASX that allow non-
Australian companies to list their shares on the exchange
and use the exchange’s settlement systems. In the
Company’s case, one CDI is equivalent to one share
traded on the AIM market or on the JSE.
"Cost and Freight" means that the seller must pay the
costs and freight necessary to bring the goods to the
named port of destination but the risk of loss of or damage
to the goods, as well as any additional costs due to
events occurring after the time the goods have been
delivered on board the vessel is transferred from the
seller to the buyer when the goods pass the ship's rail in
the port of shipment.
Kore Potash PLC is public company incorporated and
registered in England and Wales (registered number
10933682).
A DFS is an evaluation of a proposed mining project to
determine whether the mineral resource can be mined
economically.
The Dougou Project (including the Dougou Extension
Project) is part of the Sintoukola Potash Project.
DPM is one of the subsidiaries of SPSA.
A DUP, or, translated as a “declaration of public utility”, is
a formal recognition in RoC law that a proposed project
has public benefits.
The Dougou Extension Sylvinite solution mining project
2018 UK Code 2018 UK Corporate Governance Code
AGM
Annual General Meeting
AIM
AIM
ASX
AUD
Board
Carnallitite
CDIs
CEO
CFO
CFR
Australian Securities Exchange
Australian dollars
The board of directors of Kore Potash plc
A rock type comprised predominantly of the
potash mineral Carnallite (KMgCl3·6H2O) and
halite (NaCl).
CHESS Depositary Interests
Chief Executive Officer
Chief Financial Officer
Cost and Freight
Company
Kore Potash PLC
COO
CRU
DFS
Chief Operating Officer
Commodity Research Unit
Definitive Feasibility Study
Dougou
Denotes the Dougou Project
DPM
DUP
Dougou Potash Mining S.A.
Déclaration d'Utilité Publique
DX
EBITDA
Dougou Extension
Earnings Before Interest, Taxes, Depreciation
and Amortization
4
GLOSSARY (CONT)
Stands For / Meaning
Definition and/or Additional Information
Acronym /
Term
EPC
Engineering, Procurement and Construction
for all
the activities
A particular form of contracting arrangement used in
some industries where the EPC contractor is made
responsible
from design,
procurement, construction, commissioning and handover
of the project to the end-user or owner.
As opposed to EPC where the Contractor is responsible
for the construction directly, not only the management of
it.
A process for predicting and assessing the potential
environmental and social impacts of a proposed project,
evaluating alternatives and designing appropriate
mitigation, management and monitoring measures.
The FC is a consortium of engineering companies who
undertook the DFS on the Kola Project. The FC consists
of TechnipFMC, VINCI Construction Grands Projects,
Egis and Louis Dreyfus Armateur.
The official currency of the United Kingdom.
A list of the controlled entities within the Group is on page
99 under Note 8.
Low insoluble content is considered advantageous.
JORC is sponsored by the Australian mining industry and
its professional organisations.
The JORC Code is one of the most accepted standards
for the reporting of a company's Mineral Resources and
Ore Reserves.
The securities exchange, licenced under the Financial
Markets Act (No 19 of 2012), as amended from time to
time, operated by JSE Limited.
to
those persons having authority and
Refers
responsibility for planning, directing and controlling the
activities of the Group, directly or indirectly, including any
director (whether executive or otherwise) of the Group.
The Kola Project is part of the Sintoukola Potash Project.
See definition for “Company” above.
KPM is one of the subsidiaries of SPSA.
The LSE is the primary stock exchange in the United
Kingdom.
The mining convention governs
the conditions of
construction, operation and mine closure of the Kola and
Dougou (including Dougou Extension) mining projects.
The saleable
comprising of a minimum 95% KCl.
Non-Executive Director of Kore Potash plc
NPV10 denotes the Net Present Value calculated at a
10% discount rate.
form of potassium chloride
(KCl),
EPCM
Engineering, Procurement and Construction
Management
ESIA
Environmental and social impact assessment
FC
The French Consortium of Engineering
Companies
GBP
Granular MoP
Group
British pound sterling
The selling description for compacted MoP.
Kore Potash plc and its controlled entities
Insoluble
material
JORC
Here refers to clays, organic material and other
insoluble components of the Sylvinite.
Australasian Joint Ore Reserves Committee
JORC Code
JSE
KCI
KMP
for Reporting of
The Australasian Code
Exploration Results, Mineral Resources and
Ore Reserves
Johannesburg Stock Exchange
Potassium Chloride
Key Management Personnel
Kola
Kore Potash
KPM
LSE
Denotes the Kola Project.
Kore Potash plc
Kola Potash Mining S.A.
London Stock Exchange
LTIP
Mt
Mining
Convention
Long Term Incentive Plan
Million tonnes
Denotes the mining convention signed by the
Group and the government of RoC.
MoP
NED
NPV
Muriate of Potash
Non-Executive Director
Net Present Value
5
Acronym /
Term
OIA
Potash
RoC
Rock-salt
SBP
Sintoukola
Potash Project
SJCS
SoP
SPSA
SQM
GLOSSARY (CONT)
Stands For / Meaning
Definition and/or Additional Information
Oman Investment Authority (formerly The
State General Reserve Fund of Oman)
Refers to potassium compounds, especially
those of potassium chloride (MoP) or sulphate
(SoP)
The Republic of Congo
In this case, a rock comprised predominantly of
the mineral halite (NaCl)
Share-Based Payment(s)
Denotes the large potash project operated by
the Group through SPSA located in the Kouilou
Province of the Republic of Congo.
St James’s Corporate Services Limited
Sulphate of Potash
Sintoukola Potash S.A.
Sociedad Quimica y Minera de Chile S.A.
OIA is a sovereign wealth fund in Oman and is one of the
Company’s substantial shareholders. Its investment in
the Company is held in the name of Princess Aurora
Company Pte.
Refer to MoP and SoP for the definitions on the two main
types of potash.
The RoC is where the Group’s exploration activities are
located.
The Sintoukola Potash Project includes the Kola Project,
the Dougou Project and the Dougou Extension Project
(previously known as the Yangala Project).
SJCS, together with Henko Vos, is the Company’s joint
company secretary.
Also called potassium sulphate, arcanite, or archaically
known as potash of sulphur. SoP is the inorganic
compound with formula K2SO4. It is a white water-
soluble solid. It is commonly used in fertilizers, providing
both potassium and a source of sulphur.
SPSA is the Company’s 97%-owned subsidiary located
in the RoC, owned through the Company.
SQM is a New York listed Chilean lithium & potash
company and is one of the Company’s substantial
shareholders.
Standard MoP The selling description for uncompacted MoP.
Short Term Incentive Plan
STIP
A rock type comprised predominantly of the
Sylvinite
potash mineral sylvite (KCl) and halite (NaCl)
United States dollars
USD
The official currency of the United States of America and
its territories, as well as being the functional and
presentation currency of the Company and the Group.
6
REVIEW OF OPERATIONS AND STRATEGIC REPORT
FOR KORE POTASH AND THE GROUP
The Board is pleased to present its review of Kore Potash PLC, the potash development company with 97%-ownership of the
Kola and DX Potash Projects in the Sintoukola Basin.
The Company is in the process of developing its globally significant potash deposits in the RoC, which are ideally located to
supply the important Brazilian agricultural market and high growth African markets. The potash deposits are high grade, at shallow
depth, and close to the coast with access to infrastructure. The Sintoukola Basin has district scale development potential with
over 6 billion tonnes of potash mineral resources located 35 kilometres from the coast.
Feeding the world’s growing population as arable land per capita declines requires increasing application of fertiliser. Potassium
(from potash) is a key nutrient, essential for high quality and high yield food production to meet this need. As a result, the
increasing demand for potash, as well the potential for the Company to be the lowest cost supplier of potash to Brazil and African
markets, puts the Company in a good position to benefit from the positive macro-economic trends over the long term.
PROJECT OVERVIEW
The Sintoukola Basin comprises the Kola Sylvinite and Carnallite deposits, the Dougou Extension Sylvinite deposit and the
Dougou Carnallite deposit. These deposits are all situated within the Kola and Dougou Mining Licences. The Sintoukola Basin
also includes the Sintoukola 2 Exploration Licence. The Company did not carry out material amount of work on the Sintoukola 2,
and the exploration permit has now expired at the end of February 2021, but the Company is considering reapplying for extension
of the permit.
The Sintoukola basin is located approximately 80 km to the north of the city of Pointe Noire which has a major port facility, and
within 35 km of the Atlantic coast. The Group’s potash projects have the potential to be among the world’s lowest-cost potash
producers and their location near the coast offers a transport cost advantage to global fertiliser markets.
The Kola Sylvinite deposit has Mineral Resources of 848 million tonnes grading 34.8% KCl at an average depth of approximately
250 metres below surface. The results of the DFS were announced on 29 January 2019, which determined Proved and Probable
Ore Reserves totalling at 152.4 Mt with an average grade of 32.5% KCl. The deposit is open laterally with an exploration target
for the southward extension of Sylvinite announced on 21 November 2018.
The Kola Carnallite deposit contains Mineral Resources of 2.049 billion tonnes grading 18.5% KCL
The Dougou Extension Sylvinite deposit contains Mineral Resources of 145 Mt grading 39.7% KCl, hosted by two seams. The
results of the PFS were announced on 13 May 2020, which determined Probable Ore Reserves of 17.7 Mt at a grade of 41.7%
KCl. An updated PFS was announced on 9 November 2020 which included an Ore Production Target of 30,6Mt at a grade of
39% KCl. Dougou Extension is located 15 km southwest of Kola. The deposit is open laterally; an exploration target for the
northward extension of Sylvinite was announced on 21 November 2018.
The Dougou Carnallite deposit has Mineral Resources of 3.056 billion tonnes grading 20.7% KCl (at a depth of between 400 and
600 metres) hosted by 35-40 metres of carnallitite within 4 flat-lying seams. A scoping study was completed in February 2015.
7
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
SUMMARY OF KEY DEVELOPMENTS
• The Company completed a Pre-Feasibility Study (PFS) on the 400 ktpa Dougou Extension (DX) Sylvinite solution mining
project and released a summary of results on 13 May 2020. On 9 November 2020 The Company further updated DX PFS
production target. This included the reporting of:
o A Maiden Probable Sylvinite Ore Reserves 17.7 Mt at a grade of 41.7% KCl.
o A revised Sylvinite Mineral Resource of 145 Mt at a grade of 39.7% KCl.
o Attractive life-of-mine cost of sales, free on board (FOB) of approximately USD 86.61/t MoP
o Mine life of approximately 30 years based on a production of 400 kt/year.
o Estimated base case initial capital cost of approximately USD 286 million (real 2020)
o Estimated 21-month construction period provides the company with near term production options
o Base case real ungeared IRR of approximately 23.4% and base case post-tax ungeared NPV10 (real) of approximately
USD 421 million on an attributable basis at life-of-mine average MoP price for granular product of USD 422/t
o Average base case annual post construction, post-tax, free cash flow of approximately USD 95 million and approximately
4.3 years post-tax payback period from first production.
o The PFS included the execution and interpretation of a 60-line km 2D seismic survey over the area that coincided with
the Indicated Mineral Resource which incorporated into the PFS geological model.
o The PFS also included the drilling and analysis of 2 new drill holes within the Inferred Mineral Resource boundary, this
data was incorporated into the PFS geological model.
Further details of the summary of the DX PFS are available on the Company’s website.
• The Company raised USD 8 million to undertake the first phase of a Definitive Feasibility study (DFS) on the DX Sylvinite
solution mining project through the placing and direct subscription of new ordinary shares in the Company which was
approved by shareholders on 26 August 2020.
• Work commenced on the DX DFS in September 2020.
• Ms Trinidad Maris Reyes Perez joined the Board of the Company on 20 November 2020, replacing Mr Jose Antonio Merino
as the nominee of Sociedad Quimica y Minera de Chine S.A.
• On 14 December 2020, the Company reported receipt of correspondence received from the Minister of Mines expressing
dissatisfaction with the pace of development of the Kola Potash project. Since then, the Company continued to communicate
constructively and openly with the Minister of Mines to ensure the parties remain fully engaged as Kore Potash progresses
the development of its projects.
• The Company released an announcement on 30 September 2020 with an update on the work commencing on the Phase 1
of the DFS for the DX Sylvinite solution mining project. This included the reporting of:
o The work to complete Phase One of the DFS on Kore’s DX Project has commenced
o A drilling programme consisting of the drilling and analysis of up to 5 new holes is planned to begin in October 2020 –
these will improve confidence in the value of DX
o Agapito Associates Inc (“Agapito”) have been appointed as the Competent Persons for both Mineral Resources (Mr Rick
Baars) and Ore Reserves (Dr Michael Hardy) in line with JORC requirements. The appointment of these consultants
covers the revision of the Mineral Resource estimate once the drilling has been completed, the design of the mine to a
DFS level and the revision of the Ore Reserves on completion of the mine design.
o Agapito will commence with the compressive strength testwork and have contracted with Institut Fur Gebirgsmechanick
GmbH (IFG) in Germany to carry out the creep testwork.
o SQM, a global scale lithium and potassium producer and one of Kore’s major shareholders, is providing technical support
for key aspects of the DX DFS
8
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
SUMMARY OF FINANCIALS
• During the year ended 31 December 2020, the Group’s Total Comprehensive Loss was USD 8.2 million (2019: USD 7.3
million) and the Group experienced net cash outflows from operating and investing activities of USD 9.3 million (2019:
USD 11.3 million). Cash and cash equivalents totalled USD 5.6 million as at 31 December 2020 (2019: USD 7.6 million).
• Group net assets increased in the year to USD 178 million from 162 million. This was primarily driven by the fund raise
of USD 7.5 million during the year.
• The Directors prepared a cash flow forecast for the period ending 31 December 2022, which indicates that the Group
will not have sufficient liquidity to meet its working capital requirements to the end of the going concern period, primarily
being corporate costs, exploration expenditure, and DFS costs related to the Kola and Dougou Projects. Please refer to
Note 1 to the financial statements for more detail on the going concern statement.
• Accordingly, the Directors resolved to undertake certain mitigating actions including a capital raise in H2 2021. The
Company has begun discussions with its major shareholders with regards to its near and mid-term funding requirements.
• The ability of the Group to continue as a going concern is dependent on achieving the matters set out above. These
conditions indicate a material uncertainty which may cast significant doubt as to the Group’s ability to continue as a
going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of
business.
CORPORATE ACTIVITIES
• On 21 January 2020, a total of 3,811,398 ordinary shares were issued to David Hathorn, David Netherway and Jonathan
Trollip in lieu of cash fees for the quarter ended 31 December 2019.
• On 7 April 2020, a total of 7,770,939 ordinary shares were issued to David Hathorn, David Netherway and Jonathan
Trollip in lieu of cash fees for the quarter ended 31 March 2020. In addition, a total of 1,250,000 ordinary shares were
issued to David Hathorn, David Netherway, Jonathan Trollip and Tim Keating following the unconditional vesting of
Performance Rights on 29 March 2020, at a subscription price of USD 0.001 per ordinary share.
• On 25 June 2020, a total of 2,258,333 ordinary shares were issued to certain current and former employees to satisfy
the conversion of vested Performance Rights in ordinary shares, at a subscription price of USD 0.001 per ordinary share.
•
In addition, 4,000,000 ordinary shares were issued to Align Research Limited as consideration for equity research
services.
• On 27 June 2020, 4,000,000 unlisted Options exercisable at GBP 0.11 each expired unexercised.
• On 21 September 2020, a total of USD 7,481,937 was raised from existing and new investors through the placing and
direct subscription of 882,688,876 ordinary shares in the Company at a placing price of GBP0.0065 per ordinary share.
• On 13 October 2020, a total of 2,755,838 ordinary shares were issued to David Hathorn, David Netherway and Jonathan
Trollip in lieu of cash fees for the quarter ended 30 June 2020.In addition, a total of 3,810,983 ordinary shares were
issued to David Hathorn, David Netherway and Jonathan Trollip in lieu of cash fees for the quarter ended 30 September
2020.
• On 24 November 2020, Trinidad Reyes Perez was appointed a non-executive director of the Company nominated by
SQM to replace Jose Antonio Merino who had resigned with effect from that date.
9
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
CORPORATE ACTIVITIES (CONT)
• Subsequent to the year-end, on 15 January 2021, a total of 2,909,381 ordinary shares were issued to David Hathorn,
David Netherway and Jonathan Trollip in lieu of cash fees for the quarter ended 31 December 2020. In addition, a total
of 3,071,251 ordinary shares were issued to certain employees and ex-employees following the vesting of Performance
Rights awarded under the Company’s Employee Performance Incentive Plans, at a subscription price of USD 0.001 per
ordinary share and 9,297,751 Performance Rights, Performance Shares and unlisted Options were cancelled.
• Subsequent to the year-end, on 10 March 2021, the Company’s Chief Financial Officer, Mr Andrey Maruta, informed the
Board of his intention to leave Kore Potash in order to accept a position at another company. Andrey will continue to
work as the Company’s Chief Financial Officer through his contractual notice period of 3 months. His last day of
employment will be 10 June 2021. During Andrey’s notice period the Company will commence the process to select his
replacement and will update shareholders on the new appointment in due course.
OPERATIONAL AND EXPLORATION ACTIVITY
Dougou Extension (DX) Pre-Feasibility Study (PFS) Status Update
The Company reports the following status of the DX definitive feasibility study:
• The planned diamond drilling was completed within the schedule and the company is awaiting assay results.
• Geo-mechanical testing of samples by Agapito Associates Inc. (“AAI”) is complete and the test report is expected in
Q2 2021.
• Creep tests at the Institut fur Gebirgsmechanik laboratory in Germany are completed and results have been received
in March 2021.
Kola Sylvinite Project
• Discussions continued with a number of potential funding partners who have indicated potential interest in financing the Kola
project.
•
In addition, the Company continued dialogue with engineering and construction companies with the capability to conduct
further optimisation of the Kola design and capital cost.
Mining Convention
• The Mining Convention covering the proposed staged development of the Kola and Dougou Mining Licences was gazetted
into law on 29 November 2018 following ratification by the Parliament of the RoC. The gazetting of the Mining Convention
provides security of title and the right to develop and operate the Kola Project as well as the adjacent Dougou and Dougou
Extension deposits. Under the Mining Convention the RoC government will be granted a 10% carried equity interest in the
project companies (DPM and KPM, which are wholly owned by SPSA). The Company currently awaits completion of
formalities by the Government to enable transfer of the 10% equity interest to the State.
• The Mining Convention concludes the framework envisaged in the 25-year renewable Kola and Dougou Mining Licences
granted in August 2013 and May 2017, respectively. The Mining Convention provides certainty and enforceability of the key
fiscal arrangements for the development and operation of Kola and Dougou Mining Licences, which amongst other items
include import duty and VAT exemptions and agreed tax rates during mine operations. See Note 7 to the financial statements
for further details on the terms and conditions of the Mining Convention.
• The Mining Convention provides strengthened legal protection of the Company’s investments in the RoC through the
settlement of disputes by international arbitration.
10
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Mining Convention (cont)
• On 14 December 2020, the Company reported receipt of correspondence received from the Minister of Mines expressing
dissatisfaction with the pace of development of the Kola Potash project. Since then, the Company continued to communicate
constructively and openly with the Minister of Mines to ensure the parties remain fully engaged as Kore Potash progresses
the development of its projects.
Authorisation obtained from RoC authorities
• The Minister of Tourism and Environment of the Republic of Congo issued certificates on 31 March 2020 granting 25-year
approvals to the ESIAs for both the Dougou and the Kola Mining Licences
• On 1 October 2020, an authorisation was obtained from the Ministry of Environment for SPSA to import and store the
chemicals needed for the drilling campaign on the DX project, a further confirmation letter was received 30 November 2020.
• Ministry of Tourism and Environment authorised the environmental management plan for the DFS drilling on Kore’s DX
Project on 14 October 2020, a further formal confirmation letter was received on 27 November 2020.
Workstreams initiated with RoC authorities
• On 21 January 2020, Kore Potash through its subsidiary SPSA submitted to the Ministry of Mines a draft Shareholders
agreement for comment.
• On 27 March 2020, Kore Potash through its subsidiary SPSA submitted to the Ministry of Mines the annual mining activity
report for information, as required by the Mining Convention.
• On 30 April 2020, Kore Potash through its subsidiary SPSA submitted to the Ministry of Mines the French translation of the
Kore quarterly report and project update for information.
• On 13 May 2020, Kore Potash through its subsidiary SPSA submitted to the Ministry of Mines the French translation of the
Kore announcement of the DX PFS results for information.
• On 23 June 2020 Kore Potash through its subsidiary SPSA sent a new set a of formal letters to the Ministry of Mines asking
for governmental actions in relation with its permits and is closely monitoring progress:
o Correction to the GPS coordinates appearing in the granting decree of Dougou exploitation permit,
o Transfer of the Dougou exploitation permit from SPSA to DPM,
o Rectify the granting decree of the Kola exploitation Licence to ensure the permit is firstly being attributed to Sintoukola
Potash and then transfer to Kola Potash
o Change to the duration of the Sintoukola 2 exploration permit as it appears on the granting decree, from 2 years to 3
years.
• On 12 November 2020 Kore Potash through its subsidiary SPSA received a response to its letter dated 23 June 2020. This
letter responded to the following:
o The GPS coordinates appearing in the granting decree of Dougou exploitation permit are regarded as correct and no
correction will be required,
o The transfer of the Dougou exploitation permit from SPSA to DPM is accepted in principle and the Government will
o
initiate the process
In order to rectify the granting decree of the Kola exploitation Licence to ensure the permit is firstly being attributed to
Sintoukola Potash and then transfer to Kola Potash, the Government has requested additional supporting documentation
o The change to the duration of the Sintoukola 2 exploration permit as it appears on the granting decree, from 2 years to
3 years, was rejected. The Sintoukola 2 exploration permit has now expired at the end of February 2021 but the Company
is considering reapplying for extension of the permit.
11
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Tenement Details and Ownership
The Company is incorporated and registered in England and Wales and wholly owns Kore Potash Limited of Australia. The
Company has a 97% shareholding in SPSA in the RoC (see Note 11(f)). SPSA is currently the 100% owner of Kola Potash Mining
S.A. which is the sole owner of the Kola Mining Lease and currently 100% owner of Dougou Potash Mining S.A. which is the sole
owner of the Dougou Mining Lease (Figure 2). SPSA also owns the Sintoukola 2 Exploration Permit. The Sintoukola 2 exploration
permit has now expired at the end of February 2021 and the Company is considering applying for extension of the permit.
Table 1: Schedule of mining tenements (Republic of Congo)
Changes to Potash Mineral Resources and Ore Reserves between 2019 and 2020
Tables 1 and 2 provide a comparison of the Company’s Mineral Resources and Ore Reserves, year-on-year between 2019 and
2020, as per ASX Listing rule 5.21.4.
The Dougou Extension Sylvinite deposit has a revised Mineral Resource Estimate which was published on the completion of the
DX PFS, released on 13 May 2020. In this revised Mineral Resource Estimate there was a reduction of 24% in the Indicated
Mineral Resource and a 42% reduction in the Inferred Mineral Resource. This change was as a result of additional information
becoming available as a result of drilling of 2 holes and completion of the 60-line km 2D seismic survey within the boundary of
Indicated Mineral Resource.
There are no changes to the other Mineral Resources as reported in 2019.
12
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Changes to Potash Mineral Resources and Ore Reserves between 2019 and 2020 (Cont)
Table 1. Comparison of Potash Mineral Resources year-on-year between 2019 and 2020.
MINERAL RESOURCES
Kola Sylvinite deposit
Dougou Extension
Sylvinite deposit
Kola Carnallite deposit
Dougou Carnallite
deposit
TOTAL MINERAL
RESOURCES
Category
Measured
Indicated
Measured + Indicated
Inferred
TOTAL
Measured
Indicated
Measured + Indicated
Inferred
TOTAL
Measured
Indicated
Measured + Indicated
Inferred
TOTAL
Measured
Indicated
Measured + Indicated
Inferred
TOTAL
Measured
Indicated
Measured + Indicated
Inferred
TOTAL
Million
Tonnes
216
292
508
2019
Grade
KCl %
34.9
35.7
35.4
Contained
KCl (Mt)
75
104
180
Million
Tonnes
216
292
508
2020
Grade
KCl %
34.9
35.7
35.4
Contained
KCl (Mt)
75
104
180
116
295
0
41
41
47
88
59
83
142
236
378
30
190
220
414
634
165
419
583
813
1,396
340
848
0
79
79
66
145
341
441
783
1,266
2,049
148
920
1,068
1,988
3,056
705
1,732
2,437
3,660
6,097
34.0
34.8
0.0
39.1
39.1
40.4
39.7
17.4
18.7
18.1
18.7
18.5
20.1
20.7
20.6
20.8
20.7
23.3
23.6
23.5
21.7
22.4
116
295
0
31
31
27
58
59
83
142
236
378
30
190
220
414
634
165
408
572
793
1,365
340
848
0
111
111
121
232
341
441
783
1,266
2,049
148
920
1,068
1,988
3,056
705
1,764
2,469
3,715
6,185
34.0
34.8
0.0
37.2
37.2
38.9
38.1
17.4
18.7
18.1
18.7
18.5
20.1
20.7
20.6
20.8
20.7
23.3
23.7
23.6
21.9
22.6
13
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Changes to Potash Mineral Resources and Ore Reserves between 2019 and 2020 (Cont)
Table 2. Comparison of Ore Reserves year-on-year between 2019 and 2020.
Ore Reserves
A maiden Ore Reserve was declared during 2020 for the Dougou Extension Sylvinite deposit on the back of the release of the
results of the Pre-feasibility study on 13 May 2020. There were no changes to the Kola Ore Reserves in 2020.
ORE RESERVES
Kola Sylvinite deposit
ORE RESERVES
Dougou Extension
Sylvinite deposit
Notes:
Category
Proved
Probable
TOTAL
Category
Proved
Probable
TOTAL
Million
Tonnes
61.8
90.6
152.4
Million
Tonnes
0
0
0
2019
Grade
KCl %
32.1
32.8
32.5
2019
Grade
KCl %
0
0
0
Contained
KCl (Mt)
19.8
29.7
49.5
Contained
KCl (Mt)
0
0
0
Million
Tonnes
61.8
90.6
152.4
Million
Tonnes
0
17.7
17.7
2020
Grade
KCl %
32.1
32.8
32.5
2020
Grade
KCl %
0
41.7
41.7
Contained
KCl (Mt)
19.8
29.7
49.5
Contained
KCl (Mt)
0
7.4
7.4
All Mineral Resource and Ore Reserves are reported in accordance with the JORC Code (2012 edition). Numbers are rounded to the appropriate decimal
place. Rounding ‘errors’ may be reflected in the “totals”.
The Kola Mineral Resource Estimate was reported 6 July 2017 in an announcement titled ‘Updated Mineral Resource for the High -Grade Kola deposit’. It
was prepared by Competent Person Mr Garth Kirkham, P.Geo., of Met-Chem division of DRA Americas Inc., a subsidiary of the DRA Group, and a member
of the Association of Professional Engineers and Geoscientists of British Columbia.
The Kola Ore Reserves are based on information compiled or reviewed by, Mo Molavi, P. Eng., who has read and understood the requirements of the 2012
Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012 Edition). Mr Molavi is a
Competent Person as defined by the JORC Code 2012 Edition, having a minimum of five years of experience that is relevant to the style of mineralization
and type of deposit described in this report, and to the activity for which he is accepting responsibility. Mr Molavi is member of good standing of Engineers
and Geoscientists of British Columbia (Registration Number 37594) which is an ASX-Recognized Professional Organization (RPO). Mr Molavi is a consultant
working as a sub-contractor to Met-Chem division of DRA Americas Inc., a subsidiary of the DRA Group and have been engaged by Met-Chem to review the
documentation for Kola deposit.
The Dougou Carnallite Mineral Resource estimate was reported on 9 February 2015 in an announcement titled ‘Elemental Minerals Announces Large Mineral
Resource Expansion and Upgrade for the Dougou Potash deposit’. It was prepared by Competent Persons Dr. Sebastiaan van der Klauw and Ms. Jana
Neubert, senior geologists and employees of ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH and members of good standing of the
European Federation of Geologists.
The Dougou Extension Sylvinite Mineral Resource Estimate is reported herein. Ms. Vanessa Santos, P.Geo. of Agapito Associates Inc., for the Exploration
Results and Mineral Resources. Ms. Santos is a licensed professional geologist in South Carolina (Member 2403) and Georgia (Member 1664), USA, and is
a registered member (RM) of the Society of Mining, Metallurgy and Exploration, Inc. (SME, Member 04058318).
The Dougou Extension Ore Reserves are based on information compiled or reviewed by, Dr. Michael Hardy, a Competent Person who is a registered member
in good standing (Member #01328850) of Society for Mining, Metallurgy and Exploration (SME) which is an RPO included in a list that is posted on the ASX
website from time to time. Dr. Michael Hardy has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration
and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves” (the JORC Code). Dr. Michael Hardy president of Agapito Associates Inc is not associated or affiliated with
Kore Potash or any of its affiliates.
The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements
and, in the case of estimates of Mineral Resources or Ore Reserves that all material assumptions and technical parameters underpinning the estimates in the
relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent
Person’s findings are presented have not been materially modified from the original market announcement.
14
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
Figure1. Location of the Sintoukola Project showing the Kola, Dougou and Dougou Extension Projects
15
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
BUSINESS MODEL
The Company’s business strategy for the financial year ahead and in the foreseeable future is to continue exploration and
development activities on the Company’s existing potash mineral projects in the RoC. The Company’s current activities do not
generate any revenues or positive operating cash flow. Future development necessary to commence production will require
significant capital expenditures.
POSITION AND PRINCIPAL RISKS
The Company’s business strategy is subject to numerous risks, some outside the Board and management’s control. These risks
can be specific to the Company, generic to the mining industry and generic to the stock market as a whole. The key risks,
expressed in summary form, affecting the Group and its future performance include but are not limited to:
•
capital requirement and ability to attract future funding;
The Group will have sizeable capital requirements as it proceeds to develop its projects. The future development of these projects
will depend on the Group’s ability to obtain additional required financing. The Group may not be able to obtain financing on
favourable terms or at all. If financing is not available, it could result in a delay or indefinite postponement of development or
production at the Group’s projects, or in a loss of project ownership or earning opportunities by the Group. The Group currently
has no source of funding for the financing of the capital needs of its business and future activities, other than by the issuance of
additional securities of the Group.
The Group continues to actively engage and develop relationships with potential lenders, export credit agencies and equity
investors. The Group also has two large long-term strategic investors, SQM and OIA, with extensive capital resources.
Factors beyond the Company’s control, including pandemic diseases such as COVID-19 (coronavirus), can affect the stock
markets and in doing so impair the Company’s ability to attract investors and lenders. This in turn could have an impact on any
fund raising or financing arrangements that the Company may require to pursue.
•
country risk in the RoC
The operations of the Group are conducted in the RoC and as such are exposed to various levels of political, economic and other
natural and man-made risks and uncertainties over which the Group has no or limited control. Changes, if any, in mining,
environmental or investment policies or shifts in political attitude in the RoC may have a material adverse effect on the Group’s
business, financial condition and results of operations.
The Group’s local management has regular consultations with the local community and actively seeks to employ locally, where
possible. Additionally, the CEO and other relevant senior management have established good relationships with the official local
and country establishments e.g. the Ministry of Mines and Geology and the Ministry of Environment with whom regular contact
and consultation is maintained. In addition, the Group benefits from the UK-Congo bilateral investment treaty, which provides
strengthened legal protection to the Group’s investments in the RoC.
On 14 December 2020, the Company reported receipt of correspondence received from the Minister of Mines expressing
dissatisfaction with the pace of development of the Kola Potash project. Since then, the Company continued to communicate
constructively and openly with the Minister of Mines to ensure the parties remain fully engaged as Kore Potash progresses the
development of its projects.
16
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
POSITION AND PRINCIPAL RISKS (CONT)
•
change in potash commodity prices and market conditions;
The operations of the Group are conducted in the ROC, and as such are exposed to various levels of political, economic and
other natural and man-made risks and uncertainties over which the Group has no or limited control. Changes, if any, in mining,
environmental or investment policies or shifts in political attitude in the ROC may have a material adverse effect on the Group’s
business, financial condition and results of operations.
• geological and technical risk posed to exploration and commercial exploitation success;
Mining complexities arising from geotechnical, hydro-geological conditions and undetected geological phenomena may adversely
impact the efficiency of the operation to the extent that the operation becomes financially unviable. Additionally, human error by
the miners, equipment failure, mistakes in planning the operations, and encountering unforeseen obstacles could each affect the
profitability of the Group.
The Group has appointed reputable third-party technical consultants with specific skills to undertake the feasibility and engineering
studies. The Group intends to appoint well regarded, highly reputable ECM contractors to develop the Group’s projects.
• environmental and occupational health and safety risks;
Environmental, safety and health incidents including pandemic diseases like COVID-19 (coronavirus) could result in harm to the
Group’s employees, contractors or local communities and adversely affect the Group’s relationship with local stakeholders.
Ensuring safety and wellbeing is critical to the Group and part of the Group’s core values. An environmental incident, poor safety
record or serious accidents could have a long-term impact on the Group’s morale, reputation, project development and production.
The Group seeks to continuously improve its health, safety and environmental risk management procedures, with particular focus
on the early identification of risks and the prevention of incidents, injuries and fatalities.
In order to maintain a COVID-19 free bubble during the drilling campaign a COVID-19 testing, and control procedure were
introduced for all people going to the exploration camp. All new employees were housed in the camp, they were placed in a
quarantine area in the camp and tested for COVID-19. They were kept in the quarantine for 7 days and only allowed to commence
work once a negative test and 7-day quarantine was completed. No one was allowed to leave the confines of the camp and work
site until there period of employment was completed. Monthly testing of all people within the camp was also implemented to
ensure ongoing maintenance of a “COVID-19 free bubble”. This procedure also dealt with the actions required to deal with positive
cases to ensure safe treatment of the affected party and to maintain a safe environment for remaining staff. The procedure
identified a separate confinement area for people that tested positive and working with the Congo Department of Health also
identified the procedure to follow with Department of health to obtain treatment for infected parties. The drilling campaign was
completed with 5 positive cases being identified, all of which were safely isolated and treated. The Group’s operations are subject
to Environmental and Social Assessment which have been granted for 25 years by the RoC government.
17
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
POSITION AND PRINCIPAL RISKS (CONT)
• government policy changes;
The mineral exploration and development activities and future operations of the Group are subject to various laws and regulations
governing mineral concession acquisition, prospecting, development, mining, production, exports, taxes, labour standards,
occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters.
New rules and regulations could be enacted, or existing rules and regulations could be applied or amended in a manner that
could have a material and adverse effect on the business, financial condition and results of operations of the Group.
The Group monitors changes in legislation for relevant jurisdictions to enable rapid and effective response. The Group also
consults with tax, legal, accounting and regulatory experts as required to ensure that any upcoming changes in legislations are
proactively accounted for.
•
retention of key staff.
The attraction and retention of persons skilled in the development, operation, exploration and acquisition of mining properties are
important factors in enabling the Group to fulfil its strategic ambitions and to build further expertise, knowledge and capabilities
within the Group. Being unable to do so would compromise the Group’s ability to deliver on its strategic objectives.
The Group’s performance management system and incentive schemes are designed to attract and retain key employees by
creating suitable reward and remuneration structures linked to key performance milestones and provide personal development
opportunities.
For more details of the financial risk management objectives and policies of the Group, please refer to Note 14 to the financial
statements.
This is not an exhaustive list of risks faced by the Company or an investment in it. There are other risks generic to the stock
market and the world economy as a whole and other risks generic to the mining industry, all of which can impact on the Company.
The management of risks is integrated into the development of the Company’s strategic and business plans and is reviewed and
monitored regularly by the Board. Further details on how the Company monitors, manages and mitigates these risks are included
as part of the Audit and Risk Committee Report contained within the Corporate Governance Report.
On 14 December 2020, the Company reported receipt of correspondence received from the Minister of Mines expressing
dissatisfaction with the pace of development of the Kola Potash project. Since then, the Company continued to communicate
constructively and openly with the Minister of Mines to ensure the parties remain fully engaged as Kore Potash progresses the
development of its projects.
DIRECTORS’ SECTION 172 STATEMENT
The following disclosure describes how the Directors have had regard to the matters set out in section 172(1)(a) to (f) and forms
the Directors’ statement required under section 414CZA of The Companies Act 2006.
The matters set out in section 172(1) (a) to (f) are that a Director must act in the way they consider, in good faith, would be most
likely to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard (amongst
other matters) to:
(a) the likely consequences of any decision in the long term;
(b) the interests of the Company’s employees;
(c) the need to foster the Company’s business relationships with suppliers, customers and others;
(d) the impact of the Company’s operations on the community and the environment;
(e) the desirability of the Company maintaining a reputation for high standards of business conduct; and
(f) the need to act fairly between members of the Company.
18
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
DIRECTORS’ SECTION 172 STATEMENT (CONT)
Stakeholder Engagement
Kore Potash adheres to sound corporate governance policies and attaches considerable importance to and strives to engage
transparently and effectively on a continuous basis with a variety of stakeholders, including shareholders, employees,
contractors, suppliers, government bodies and local communities and environment in which it operates.
Shareholders:
The Company’s 2 largest shareholders, SQM and OIA, by virtue of their respective Investment Agreements, has each appointed
a director to the board. As such they are involved in all principal decisions taken by the board, other than in cases where conflicts
of interests may arise. All other existing substantial shareholders have regular meetings throughout the year with the Chairman,
CEO and CFO, although due to the COVID-19 pandemic these have mainly been conducted by teleconference calls. Prior
consultation with significant shareholders is undertaken in respect of all issues requiring the approval of shareholders in general
meeting. In addition, all significant matters raised, or areas of concern specified by such shareholders during such meetings in
respect of the Company’s operations, strategy and other significant business matters are taken into account by the board when
taking principal decisions.
In September 2020, the Company completed an equity placing to raise approximately USD 7.5 million, in which both SQM and
OIA participated.
At the Company’s AGM held on 26 June 2020, all resolutions were passed with at least 97% of the votes cast in favour. The
CEO, CFO and non-executive directors, including the chair of each Committee, are usually available at and following general
meetings of the Company when shareholders have the opportunity to ask questions on the business of the meeting and more
generally on Company matters. However, as shareholders were unable to attend this year’s AGM in person due to COVID-19
restrictions, they were afforded the opportunity to dial-in to listen to the business of the meeting and to raise questions with the
Board in advance of the meeting by e-mail. Additionally, following the conclusion of the formal business of the AGM, the CEO
provided an update on the Company’s DX PFS.
All substantial shareholders that own more than 3% of the Company’s shares are listed on page 125 of this Report.
Further details of engagement with shareholders can be found within the Corporate Governance Report.
19
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
DIRECTORS’ SECTION 172 STATEMENT (CONT)
Employees:
Kore Potash attaches great importance to its employees and their professional development and provides fair remuneration with
incentives for its senior personnel through share option schemes that are performance related. Further details of these are
included in the Remuneration Report on pages 57 to 70. Further, the Company gives full and fair consideration to applications for
employment irrespective of age, gender, colour, ethnicity, disability, nationality, religious beliefs or sexual orientation.
The Company maintains an open line of communication between its employees, senior management and the board of directors.
Specifically, during the year the COO and CFO held weekly virtual meetings with key employees where open questioning and
sharing of concerns was encouraged. No significant issues were raised during such meetings.
The Board has had oversight on issues raised by the employees and management actions throughout the year via monthly
management reports to the Board which detail any personnel complaints or grievances and action management have committed
to in order to resolve issues.
In normal circumstances, members of the Board periodically visit all parts of the business and interact with employees. However,
due to COVID-19 restrictions this was not possible during the course of this year. It is intended that such practice will resume
once the restrictions are lifted, and it is safe to do so. Nonetheless, the COO made regular visits to the operation in the RoC
during the year and actively engaged with all RoC employees. In addition, David Hathorn visited the RoC operations in December
2020 and post year-end in February 2021.
David Netherway, a non-executive director, is the appointed designated director responsible for workplace engagement in
accordance with the 2018 Corporate Governance Code. However, no such engagement has been possible by him during the
year due to the restrictions imposed as a result of the COVID-19 pandemic.
Contractors and Suppliers:
The Group has a prompt payment policy and seeks to ensure that all liabilities are settled within each supplier’s terms. Through
fair dealings the Group aims to cultivate the goodwill of its contractors, consultants and suppliers.
Corporate and local management work closely with contractors and suppliers in the UK and the RoC to ensure they work within
the parameters of their respective terms of engagement and do not have a detrimental effect on the Company’s business and
project timeline. See pages 7 to 22 in the Review of Operations for latest progress on exploration activities.
Governmental Bodies, local communities and environment:
The Group takes significant cognisance of the importance to the communities in which it operates and is grateful for their support
and involvement in the Company’s exploration and development activities.
The Group has had ongoing engagements with the local community in order to ensure there are open lines of communication for
any concerns to be raised and to ensure there is two-way communication between the Group and the local communities. The
company has a full-time community liaison officer that has direct contact with all 11 local chiefs via company supplied cell phones
in order to facilitate quick and harmonious communications between the company and the communities. In particular, in order to
keep the local communities up to date with regards to the progress of the projects and also to maintain good communication with
the local stakeholders, a number of community meetings were held with the population of each of the 11 villages in the projects
impact zone.
20
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
DIRECTORS’ SECTION 172 STATEMENT (CONT)
Stakeholder Engagement (cont)
The CEO and the COO and other relevant senior management have established good relationships with the official local and
country establishments e.g. the Ministry of Mines and Geology and the Ministry of Environment with whom regular contact and
consultation is maintained. The restriction of travel in 2020 has meant that direct communications have been less than previous
years. However, ongoing discussions between the Company and the various Ministries has been maintained through written
communications.
The Kola DFS design had incorporated a number of value-adding design changes since the approval of the ESIA and the
Company had undertaken to amend the ESIA accordingly. The Minister of Tourism and Environment of the Republic of Congo
issued certificates on 31 March 2020 granting 25-year approvals to the ESIAs for both the Dougou and the Kola Mining Licences
Principal decisions taken by the board during the period
Principal decisions are defined as those that have long-term strategic impact and are material to the Group and those that are
significant to the Group’s key stakeholder groups. In making the principal decisions, the board considered the alignment with its
stated strategy, the outcome from its stakeholder engagement, the need to maintain a reputation for high standards of business
conduct and the need to act fairly between the members of the Company.
Details of the principal decisions taken by the board during the period in respect of the completion of the DX PFS, the raising of
approximately USD 7.5 million to complete the first phase of the DX DFS and for general working capital requirements and the
commencement of the drilling programme on the DX Project are contained under the Summary of Key Developments within the
Strategic Report.
COMPETENT PERSON STATEMENT
The information relating to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves in this report is based
on, or extracted from previous reports referred to herein, and is available to view on the Company’s website www.korepotash.com
The Kola Mineral Resource Estimate was reported on 6 July 2017 in an announcement titled ‘Updated Mineral Resource for the
High-Grade Kola deposit’. It was prepared by Competent Person Mr Garth Kirkham, P.Geo., of Met-Chem division of DRA
Americas Inc., a subsidiary of the DRA Group, and a member of the Association of Professional Engineers and Geoscientists of
British Columbia.
The Ore Reserve Estimate for Sylvinite at Kola was first reported on 29 January 2019 in an announcement titled ‘Kola Definitive
Feasibility Study’ and was prepared by Met-Chem; the Competent Person for the estimate is Mr Molavi, member of good standing
of Engineers and Geoscientists of British Columbia.
The Dougou Carnallite Mineral Resource Estimate was reported on 9 February 2015 in an announcement titled ‘Elemental
Minerals Announces Large Mineral Resource Expansion and Upgrade for the Dougou Potash deposit’. It was prepared by
Competent Persons Dr. Sebastiaan van der Klauw and Ms. Jana Neubert, senior geologists and employees of ERCOSPLAN
Ingenieurgesellschaft Geotechnik und Bergbau mbH and members of good standing of the European Federation of Geologists.
The Dougou Extension Sylvinite Mineral Resource Estimate was reported on 13 May 2020 in an announcement titled ‘Dougou
Extension (DX) Project Pre-Feasibility Study’. It was prepared by Competent Person Ms. Vanessa Santos, P.Geo. of Agapito
Associates Inc. Ms. Santos is a licensed professional geologist in South Carolina (Member 2403) and Georgia (Member 1664),
USA, and is a registered member (RM) of the Society of Mining, Metallurgy and Exploration, Inc. (SME, Member 04058318), a
Recognized Professional Organization’ (RPO) included in a list that is posted on the ASX website from time to time.
21
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
DIRECTORS’ SECTION 172 STATEMENT (CONT)
COMPETENT PERSON STATEMENT (CONT)
The Ore Reserve Estimate for Sylvinite at Dougou Extension was reported on 13 May 2020 in an announcement titled ‘Dougou
Extension (DX) Project Pre-Feasibility Study and was prepared Dr. Michael Hardy, a Competent Person who is a registered
member in good standing (Member #01328850) of Society for Mining, Metallurgy and Exploration (SME) which is an RPO included
in a list that is posted on the ASX website from time to time.
The Company confirms that it is not aware of any new information or data that materially affects the information included in the
original market announcements and, in the case of estimates of Mineral Resources or Ore Reserves that all material assumptions
and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not
materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented
have not been materially modified from the original market announcement.
FORWARD-LOOKING STATEMENTS
This report contains statements that are "forward-looking". Generally, the words "expect," “potential”, "intend," "estimate," "will"
and similar expressions identify forward-looking statements. By their very nature and whilst there is a reasonable basis for making
such statements regarding the proposed placement described herein; forward-looking statements are subject to known and
unknown risks and uncertainties that may cause our actual results, performance or achievements, to differ materially from those
expressed or implied in any of our forward-looking statements, which are not guarantees of future performance. Statements in
this report regarding the Company's business or proposed business, which are not historical facts, are "forward looking"
statements that involve risks and uncertainties, such as resource estimates and statements that describe the Company's future
plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to
occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks
and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.
Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are
made.
This Review of Operations and Strategic Report was approved by the board of directors on 30 March 2021 and is signed on its
behalf by:
____________________________
Non-Executive Chairman
David Hathorn
30 March 2021
_________________________________
Chief Executive Officer
Brad Sampson
30 March 2021
22
The Directors present their annual report on Kore Potash and the Group for the financial year ended 31 December 2020.
DIRECTORS’ REPORT
The Corporate Governance statement set out in pages 34 to 72 forms part of this Directors’ Report.
Directors
The names of directors of the Company in office at any time during or since the end of the year are:
David Hathorn
Brad Sampson
Jonathan Trollip
Timothy Keating
David Netherway
Jose Antonio Merino
Trinidad Reyes Perez
Non-Executive Chairman
Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director (resigned with effect from 24 November 2020)
Non-Executive Director (appointed with effect from 24 November 2020)
Directors have been in office of the Company since the start of the financial year to the date of this report unless otherwise stated.
Joint Company Secretary
Mr Henko Vos
St James’s Corporate Services Limited
Principal Activities and Significant Changes in Nature of Activities
The principal activity of the Group during the financial year was exploration for potash minerals prospects and project development
at the Company’s Sintoukola Potash Permit in the RoC. There were no significant changes in the nature of activities of the Group
during the year.
Operating Results
The net loss after tax of the Group for the year ended 31 December 2020 amounted to USD 3,144,172 (31 December 2019:
USD 4,202,752).
Dividends Paid or Recommended
No dividends were paid during the year and the directors do not intend to recommend the payment of a final dividend for the
financial year under review (2019: nil).
Review of Operations and Strategic Report
Please refer to pages 7 to 22 of the Annual Report.
Significant Changes in State of Affairs
Board Changes
On 20 November 2020, Trinidad Reyes Perez was appointed a non-executive director of the Company nominated by SQM to
replace Jose Antonio Merino who resigned with effect from that date.
23
Significant Changes in State of Affairs (Continued)
DIRECTORS’ REPORT (CONT)
Capital Raise
On 21 September 2020, a total of USD 7,481,937 was raised to undergo work on the Dougou Extension PFS and general working
capital requirements in connection with the AIM and JSE listings. This was raised from existing and new investors through the
placing and direct subscription of 882,688,876 new ordinary shares in the Company at a placing price and subscription price of
GBP 0.0065 per new ordinary share.
Other capital movements:
On 21 January 2020, 3,811,398 ordinary shares of USD 0.001 each were issued in lieu of cash remuneration or part remuneration
for the quarter ended 31 December 2019 to David Hathorn, David Netherway and Jonathan Trollip in line with the cost reduction
strategy announced on 29 June 2019. The par value of this issue was USD3,811.
On 7 April 2020, 7,770,939 ordinary shares of USD 0.001 each were issued to David Hathorn, David Netherway and Jonathan
Trollip in lieu of cash remuneration or part remuneration for the quarter ended 31 March 2020.
On 25 June 2020, a total of 2,258,333 ordinary shares of USD0.001 each were issued to certain current and former employees
of the Company to satisfy the conversion of vested Performance Rights in ordinary shares. Of these, 1,410,000, were issued to
Gavin Chamberlain, the Company’s Chief Operating Officer.
On 25 June 2020, Align Research Limited, an unrelated party to the Company, has initiated coverage on the Company and will
provide on-going equity research services to the Company. As consideration for these services, 4,000,000 ordinary shares of
USD0.001 each in the Company were issued to Align Research Limited at an agreed price of 0.75p per share, being the prevailing
price at the date of signing the agreement.
On 13 October 2020, the Company issued in lieu of payment, 6,566,821 ordinary shares to David Hathorn, David Netherway and
Jonathan Trollip. The par value of this issue was USD 6,567.
On 15 January 2020, the Company issued in lieu of payment, 5,980,640 ordinary shares to David Hathorn, David Netherway and
Jonathan Trollip. The par value of this issue was USD 5,981.
CDI Movement
During the year the number of CDIs quoted on the ASX increased by 41,359,992 as a result of transfers between CDIs quoted
on the ASX and ordinary shares quoted on AIM and the JSE.
Significant Events Subsequent to Reporting Date
Details of the Group’s significant events subsequent to the reporting date are included in Note 16 to the financial statements.
Political Contributions and Charitable Donations
During the current and previous years, the Group did not make any political contributions and charitable donations.
Employee Engagement
Details of how the directors have engaged with the employees and how the directors have had regard to employee interests and
the effect of that regard, including on the principal decisions taken by the company during the financial year, are included in the
Section 172 Statement contained within the Strategic Report.
24
DIRECTORS’ REPORT (CONT)
Business Relationships
Details of the how the directors have had regard to the need to foster the Company’s business relationships with suppliers,
customers and others and the effect of that regard, including on the principal decisions taken by the Company during the financial
year are included in the Section 172 Statement contained within the Strategic Report.
AGM
This report and financial statements will be presented to shareholders for their approval at the next AGM. The Notice of the AGM
will be distributed to shareholders together with the Annual Report.
Auditors
Following the appointment of BDO LLP as the Company auditors on 28 June 2019, a resolution to reappoint BDO LLP as the
Company auditors was proposed at the AGM and passed by the requisite majority. A resolution for BDO LLP’s reappointment
will be proposed at the forthcoming AGM.
The Use of Financial Instruments by the Group
The Group has exposure to the following risks from their use of financial instruments:
• market risk,
•
•
credit risk, and
liquidity risks.
For more details of the financial risk management objectives and policies of the Group, please refer to Note 14 to the financial
statements.
Employment Policies
The Group is committed to promoting policies which ensure that high calibre employees are attracted, retained and motivated, to
ensure the ongoing success for the business. Employees and those who seek to work within the Group are treated equally
regardless of gender, age, marital status, creed, colour, race or ethnic origin.
Health and Safety
The Group’s aim is to achieve and maintain a high standard of workplace safety. In order to achieve this objective, a Health,
Safety and Environmental Committee has been established to review the health and safety policy and risks of the Group and
make recommendations to the Board. The Group provides training and support to employees and sets demanding standards for
workplace safety. The Group recorded no lost time injuries in 2020 and completed the year with a LTIFR of nil.
Payment to Suppliers
The Group’s policy is to agree terms and conditions with suppliers in advance; payment is then made in accordance with the
agreement provided the supplier has met the terms and conditions. Under normal operating conditions, suppliers are paid within
30 days of receipt of invoice.
Future Developments
The Group will continue its mineral exploration activities with the objective of finding further mineralised resources, particularly
potash and the development of the Kola and the Dougou deposits. The Company will also consider the acquisition of further
prospective exploration interests.
Environmental Issues
The Group operates within the resources sector and conducts its business activities with respect for the environment while
continuing to meet the expectations of shareholders, employees and suppliers. In respect of the current year under review, the
Directors are not aware of any particular or significant environmental issues which have been raised in relation to the Group’s
operations. The Group holds exploration permits and mining licences in the RoC. The Group’s operations are subject to
environmental legislation in this jurisdiction in relation to its exploration activities.
25
DIRECTORS’ REPORT (CONT)
Unissued Shares under Options and Equity Warrants
Share options outstanding at the date of this report:
Exercise
Period
Options expiring on or before 19 July 2024
Options expiring on or before 1 January 2024
Equity warrants expiring on or before 29 March 2021
Exercise Price
GBP 0.022
GBP 0.022
AUD 0.30
Number of
Options
26,900,000
27,000,000
13,144,659
67,044,659
The holders of these options and equity warrants do not have the right, by the virtue of the option or equity warrant, to participate
in any share issue or interest issue of the Company. There was no exercise of unlisted options or equity warrants during the year.
However, 4,000,000 unlisted options exercisable at GBP 0.11 expired on 27 July 2020.
Performance Rights
Performance rights outstanding at the date of this report:
Class
Director Performance Rights
Employee Performance Shares (Long Term)
Non-Executive Director Performance Rights
Employee Performance Shares (Short Term)
Expiry
01/03/2021
31/05/2022
22/05/2022
17/03/2025
Number of Rights
4,500,000
1,760,000
1,250,000
1,466,666
8,976,666
The performance rights holders do not hold any voting rights or rights to participate in dividends unless the rights have vested
and were converted to fully paid ordinary shares. There were two exercises of performance rights during the year, with 1,250,000
exercised on 7 April 2020, and 2,258,333 exercised on 25 June 2020. During the year 11,579,107 performance rights were
cancelled. See Note 11(a) to the financial statements for further details on the performance rights issued and cancelled during
the year.
Information on Directors
David Hathorn
Non-Executive Chairman
BCom, CA
Mr Hathorn joined the Group in November 2015. Mr Hathorn retired in 2017 from the Mondi
group where he had been CEO for 17 years. The Mondi group is an international packaging
and paper group, employing around 25,000 people across more than 30 countries, listed
on the LSE and the JSE. Prior to the demerger of the Mondi group from Anglo American
plc, Mr Hathorn was a member of the Anglo-American group executive committee from
2003 and an executive director of Anglo-American plc from 2005, serving on several boards
of the group's major mining operations.
Interest in Shares and Options as
at 31 December 2020
116,177,565 Fully Paid Ordinary Shares
500,000 Performance Rights each expiring 22 May 2022
250,000 Equity warrants exercisable at AUD 0.30 each expiring 29 March 2021
Directorships held in other listed
entities
Former directorships of listed
companies in last three years
None
None
26
DIRECTORS’ REPORT (CONT)
Information on Directors (Cont)
Brad Sampson
Chief Executive Officer
B Eng (Mining) Hons, MBA, AMP,
GAICD, MAusIMM
Mr Sampson is a mining engineer and joined the Group in June 2018. He has more than
30 years’ resources industry experience across numerous locations including West and
Southern Africa. In addition to significant mine development and operating experience,
Brad has held leadership positions at several publicly listed companies.
Brad was most recently CEO of ASX listed Tiger Resources Limited, a copper producer in
the Democratic Republic of the Congo which in January 2018 entered into a binding
agreement to sell its assets to a Chinese group for USD 250 million. Prior to this, Brad held
senior positions at Newcrest Mining Ltd, one of the world’s largest gold mining companies,
including General Manager of Newcrest’s West African operations. From 2008 to 2013,
Brad was the CEO of AIM/ASX listed Discovery Metals Ltd, where he was hired to lead the
project financing, construction and subsequent production of the Company’s flagship
copper asset in Botswana. Other notable positions include General Manager at Goldfields’
operations in South Africa and Australia.
Interest in Shares and Options as
at 31 December 2020
2,464,705 Fully Paid Ordinary Shares
26,900,000 Unlisted Options exercisable at GBP 0.202 each expiring 19 July 2024
Directorships held in other listed
entities
Agrimin Limited (from 22 April 2016)
Former directorships of listed
companies in last three years
None
Jonathan Trollip
Non-Executive Director
B.A (Hons) LLM, FAICD
Mr Trollip joined the Group in April 2016 and is a globally experienced Director (both
executive and non-executive) with over 30 years of commercial, corporate, governance
and legal and transactional expertise. He is currently Non-Executive Chairman of ASX
listed Global Value Fund Ltd, Future Generation Investment Company Ltd, Plato Income
Maximiser Ltd, Spheria Emerging Companies Ltd and Antipodes Global Investment
Company Ltd and a non-executive director of Propel Funeral Partners Limited. He also
holds various private company directorships in the commercial and not-for-profit sectors.
Interest in Shares & Options as at
31 December 2020
5,116,190 Fully Paid Ordinary Shares
250,000 Performance Rights each expiring 22 May 2022
Directorships held in other listed
entities
Future Generation Investment Company Limited (from 8 October 2013)
Global Value Fund Limited (from 20 March 2014)
Antipodes Global Investment Company Limited (from 13 July 2016)
Plato Income Maximiser Limited (from 20 February 2017)
Spheria Emerging Companies Limited (from 12 September 2017)
Propel Funeral Partners Limited (from 19 September 2017)
Former directorships of listed
companies in last three years
None
27
DIRECTORS’ REPORT (CONT)
Information on Directors (Cont)
Trinidad Maria Reyes Perez
Non-Executive Director
Ms Reyes Perez joined SQM as a graduate in 2012 and is currently M&A Director, prior
to which she worked in a variety of roles across SQM. Trinidad is a qualified Civil
Engineer having graduated from Pontificia Universidad Católica de Chile.
Interest in Shares & Options as at
31 December 2020
Directorships held in other listed
entities
Former directorships of listed
companies in last three years
None
None
None
Timothy Keating
Non-Executive Director
BSc
Mr Keating joined the Group in November 2016 following the completion of the strategic
investment in the Group by OIA. Mr Keating is Head of Mining Investment Private Equity
at OIA, a sovereign wealth fund of the Sultanate of Oman. Prior to joining SGRF in 2015,
Mr Keating was CEO of African Nickel Limited, a nickel sulphide development company
where he grew the business through several acquisitions, project development and fund
raisings. He also worked at Investec Bank for the Commodities and Resource Finance
Team (2004 – 2010) and at Black Mountain Mine owned by Anglo American plc, in South
Africa. He is a Non-Executive Director of Kenmare Resources plc.
Interest in Shares & Options as at
31 December 2020
500,000 Fully Paid Ordinary Shares
250,000 Performance Rights each expiring 22 May 2022
Directorships held in other listed
entities
Kenmare Resources plc (14 October 2016 – 17 March 2021)
Former directorships of listed
companies in last three years
None
28
Information on Directors (Cont)
David Netherway
Non-Executive Director
B.Eng (Mining), CDipAF,
F.Aus.IMM, F.IoM3, C.E.
DIRECTORS’ REPORT (CONT)
Mr Netherway joined the Group in December 2017 and is a mining engineer with over 40
years of experience in the mining industry. He was involved in the construction and
development of the New Liberty, Iduapriem, Siguiri, Samira Hill and Kiniero gold mines in
West Africa and has mining experience in Africa, Australia, China, Canada, India and the
Former Soviet Union. Mr Netherway served as the CEO of Shield Mining until its takeover
by Gryphon Minerals. Prior to that, he was the CEO of Toronto listed Afcan Mining
Corporation, a China focused gold mining company that was sold to Eldorado Gold in 2005.
He was also the Chairman of Afferro Mining which was acquired by IMIC in 2013. Mr
Netherway has held senior management positions in a number of mining companies
including Golden Shamrock Mines, Ashanti Goldfields and Semafo Inc and is currently the
Chairman of AIM and TSX-V listed Altus Strategies plc, and a non-executive Director of
ASX-listed Canyon Resources Ltd. He also holds various private company directorships.
Interest in Shares & Options as at
31 December 2020
5,845,744 Fully Paid Ordinary Shares
250,000 Performance Rights each expiring 22 May 2022
Directorships held in other listed
entities
Altus Strategies plc (ALS:AIM & ALTS:TSX-V) (from 9 May 2017)
Canyon Resources Ltd (CAY:ASX) (from 17 March 2014)
Former directorships of listed
companies in last three years
Avesoro Resources Inc. (ASO: TSX & AIM) (from 1 February 2011 to 8 January 2020)
Kilo Goldmines Ltd (KGL:TSX-V) (from 7 July 2011 to 16 March 2020)
José Antonio Merino
Non-Executive Director
B.Eng Civil Engineer
(Resigned on 20 November 2020)
Mr Merino joined the Group in May 2019 and is currently the Mergers and Acquisitions
Director at SQM. He joined SQM in 2016, prior to which he worked at EPG Partners as
head of a mining private equity fund, at ASSET Chile, a Chilean boutique investment bank,
and at Santander Investment. He is a qualified Civil Engineer having graduated from
Pontificia Universidad Católica de Chile.
Interest in Shares & Options as at
date of resignation
Directorships held in other listed
entities
Former directorships of listed
companies in last three years
None
None
None
29
Joint Company Secretaries
Henko Vos
B.Compt, CA, ACIS, RCA
DIRECTORS’ REPORT (CONT)
Mr Vos is a member of the Governance Institute of Australia, the Australian Institute of
Company Directors and Chartered Accountants Australia and New Zealand with more than
20 years’ experience working within public practice, specifically within the area of corporate
and accounting services both in Australia and South Africa. He holds similar secretarial
roles in various other listed public companies in both industrial and resource sectors. Mr
Vos is an employee of Nexia Perth, a mid-tier corporate advisory and accounting practice.
St James’s Corporate Services
Limited (“SJCS”)
SJCS is operated by co-owners, Phil Dexter and Jane Kirton (ACIS), both of whom
acquired SJCS in September 2014 after having worked for SJCS since its inception in June
1998 and its former parent company in excess of 20 years.
Mr Dexter has over 40 years’ experience in the company secretarial environment and has
worked in the natural resources sector since 1977. During that time Mr Dexter has worked
with most of the leading South African mining companies and assisted on numerous
corporate transactions involving acquisitions, reorganisations and restructurings, rights
offers and fund raisings.
Ms Kirton has over 20 years’ experience in the company secretarial environment and
qualified as a Chartered Secretary in 2007. Ms Kirton has worked with most of the leading
South African mining companies and assisted on numerous corporate transactions
involving acquisitions, reorganisations and restructurings, rights offers and fund raisings.
Ms Kirton is an Associate of the Institute of Chartered Secretaries and Administrators.
30
DIRECTORS’ REPORT (CONT)
Board and Committee Meetings Attendance
Attendance of directors and committee members at board and committee meetings held during the year is set out in the table
below.
David Hathorn
Brad Sampson
Jonathan Trollip
Timothy Keating
David Netherway
José Antonio Merino (i)
Trinidad Reyes Perez
(ii)
Board Meetings
7/7
7/7
7/7
6/7
7/7
2/4
3/3
Audit and Risk
Committee
Meetings
-
3/3
-
3/3
-
-
Remuneration and
Nomination
Committee Meetings
1/1
-
1/1
-
1/1
-
-
Health, Safety and
Environment
Meetings (iii)
-
-
-
-
-
-
-
(i) Meetings attended prior to ceasing to be a director on 20 November 2020.
(ii) Meetings attended since appointment as a director on 20 November 2020.
(iii) Health, safety and environmental matters are reported on each month in management reporting to the Board and are part of each Board
meeting agenda. With limited operational activity during the feasibility study phases, creating a low-risk environment no separate Health,
Safety and Environment Committee meetings were held during the period.
Directors’ Conflicts of Interest
The Board has formal procedures to deal with Directors’ conflicts of interest. In the instance where there is a transactional conflict
of interest identified, the Director would not take part in the discussion or determination of any matter in respect of which he had
disclosed a transactional conflict of interest. There were no transactional conflicts of interest concerning any Director that arose
during the year.
Directors’ Service Contracts
The Chief Executive Officer is employed on an ongoing basis, which may be terminated by either party giving 6 months’ notice.
Each non-executive director has a letter of appointment for an initial term of 3 years. The appointment of the non-executive
director may be terminated by the Company giving 1 month notice, by the non-executive director by immediate notice and also in
accordance with the Company’s articles of association.
Indemnifying Officers and Directors and Officers Liability Insurance
The Group has agreed to indemnify the Directors of the Company, against all liabilities to another person that may arise from
their position as directors of the Company and the Group, except where the liability arises out of conduct involving a lack of good
faith.
Appropriate insurance cover is maintained by the Company in respect of its Directors and Officers. During the financial year the
Group agreed to pay an annual insurance premium of USD 96,330 (2019: USD 79,413) in respect of directors’ and officers’
liability and legal expenses’ insurance contracts, for directors, officers and employees of the Company. The insurance premium
relates to:
•
costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and whatever the
outcome; and
other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty.
•
Share Dealing Code
The Company has adopted a share dealing code for directors and applicable employees (within the meaning given in the AIM
Rules for Companies) in order to ensure compliance with Rule 21 of the AIM Rules for Companies and the provisions of the
Market Abuse Regulations relating to dealings in the Company’s securities. The Board considers that the Share Dealing Code is
appropriate for a company whose shares are admitted to trading on AIM, the ASX and the JSE.
31
DIRECTORS’ REPORT (CONT)
Proceedings on Behalf of Group
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to which
the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings.
The Group was not a party to any such proceedings during the year.
Statement of disclosure of information to auditors
As at the date of this report the serving Directors confirm that:
(a) so far as each Director is aware, there is no relevant audit information of which the Company’s auditors are unaware, and
(b) they have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant
audit information and to establish that the Company’s auditor is aware of that information.
Going Concern
During the year ended 31 December 2020, the Group incurred a loss of USD 3,144,172 (year ended 31 December 2019: USD
4,202,752) and experienced net cash outflows from operating and investing activities of USD 9,277,027 (year ended 31 December
2019: USD 11,257,647). Cash and cash equivalents totalled USD 5,555,000 at 31 December 2020 (at 31 December 2019: USD
7,578,727).
The Directors have prepared a cash flow forecast for the period ending 31 December 2022, which indicates that the Group will
not have sufficient liquidity to meet its working capital requirements to the end of the going concern period (31 March 2022),
primarily being corporate costs and some work on the 1st Phase of the Definitive Feasibility Study (“DFS”) related to the DX
Project. The Group anticipates a deficit of c.USD 1.3 million towards the end of Q1 2022.
The Directors have considered various mitigating actions, which include raising additional capital in Q2 – Q3 2021 to enable the
Group to continue to fund its working capital requirements through the going concern period. The Directors have identified a
number of funding options available to the Group. The Directors note the Group has a history of successfully raising capital on
the AIM and JSE, and in the past on the ASX. However, factors beyond the Company’s control, including pandemic diseases
such as COVID-19, which affect the stock markets, may in turn have a negative impact on any fund raising
The Directors have reviewed the Group's overall position and outlook in respect of the matters identified above and are of the
opinion that there are reasonable grounds to believe that funding will be secured and therefore that the operational and financial
plans in place are achievable and accordingly the Group will be able to continue as a going concern and meet its obligations as
and when they fall due. The Directors will continue to pursue further capital raising initiatives in order to have sufficient funds to
continue the development of the DX Project and for general corporate purposes.
The ability of the Group to continue as a going concern is dependent on achieving the matters set out above. These conditions
indicate a material uncertainty which may cast significant doubt as to the Group’s ability to continue as a going concern and
therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business.
The financial report does not include adjustments relating to the recoverability and classification of recorded asset amounts or to
the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern.
32
DIRECTORS’ REPORT (CONT)
Statement of Directors’ Responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have
prepared the Group and Company financial statements in accordance with international accounting standards in conformity with
the requirements of the Companies Act 2006. Under company law the directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs of the group and company and of the profit or loss of the
Group and Company for that period. The directors are also required to prepare financial statements in accordance with the rules
of the London Stock Exchange for companies trading securities on AIM.
In preparing these financial statements, the directors are required to:
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether they prepared in accordance with international accounting standards in conformity with the requirements of
the Companies Act 2006, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will
continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s
transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure
that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for
safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
Responsibility statement
We confirm that to the best of our knowledge:
•
•
•
the financial statements, prepared in accordance with international accounting standards in conformity with the requirements
of the Companies Act 2006, give a true and fair view of the assets, liabilities, financial position and profit or loss of the
Company and the Group and the undertakings included in the consolidation taken as a whole;
the review and operations and strategic report includes a fair review of the development and performance of the business
and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face; and
the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the
information necessary for shareholders to assess the Company’s position and performance, business model and strategy.
This responsibility statement and the Directors’ Report was approved by the Board of Directors on 30 March 2021 and is signed
on its behalf by:
____________________________
Non-Executive Chairman
David Hathorn
30 March 2021
_________________________________
Chief Executive Officer
Brad Sampson
30 March 2021
33
INTRODUCTION
CORPORATE GOVERNANCE REPORT
The Board is committed to the principles of good corporate governance and to maintaining the highest standards and best practice
of corporate governance. In this regard the Board has given consideration to the provisions set out in the 2018 UK Code and has
taken due regard of the principles of good governance set out therein in relation to the size and stage of development of the
Company. The Board has also given consideration to the ASX Corporate Governance Council’s Corporate Governance Principles
and Recommendations (4th Edition).
The Board is conscious that the corporate governance environment is constantly evolving and the charters and policies under
which it operates its business are monitored and amended as required.
The Board currently comprises one executive director and five non-executive directors, including the Chairman.
Since inception, the Company has the following appropriately constituted committees, each with formally delegated duties and
responsibilities set out in respective written Terms of Reference:
• Audit and Risk Committee
• Remuneration and Nomination Committee
• Health, Safety and Environmental Committee
The Company also has in place appropriate guidance, training, policies and procedures to ensure compliance with the Bribery
Act 2010 and Australian and South African laws governing anti-bribery and anti-corruption.
COMPLIANCE WITH THE UK CORPORATE GOVERNANCE CODE
The Board recognizes the value and importance of maintaining the highest standards of corporate governance and aims to comply
with the provisions set out in the 2018 UK Code. Although compliance with the 2018 UK Code is not compulsory for AIM
companies, the Directors intend to apply the provisions, where practicable, so as to adhere to the highest standards of
governance. Accordingly, the sections below detail how the Group has complied with the 2018 UK Code and explains the reasons
for any non-compliance.
BOARD LEADERSHIP AND COMPANY PURPOSE
Principles
A. A successful company is led by an effective and entrepreneurial board, whose role is to promote the long-term sustainable
success of the company, generating value for shareholders and contributing to wider society.
B. The board should establish the company’s purpose, values and strategy, and satisfy itself that these and its culture are
aligned. All directors must act with integrity, lead by example and promote the desired culture.
C. The board should ensure that the necessary resources are in place for the company to meet its objectives and measure
performance against them. The board should also establish a framework of prudent and effective controls, which enable
risk to be assessed and managed.
D. In order for the company to meet its responsibilities to shareholders and stakeholders, the board should ensure effective
engagement with, and encourage participation from, these parties.
E. The board should ensure that workforce policies and practices are consistent with the company’s values and support its
long-term sustainable success. The workforce should be able to raise any matters of concern.
34
CORPORATE GOVERNANCE REPORT (CONT)
BOARD LEADERSHIP AND COMPANY PURPOSE (cont)
Provisions
1. The board should assess the basis on which the company
generates and preserves value over the long-term. It
should describe in the annual report how opportunities and
risks to the future success of the business have been
considered and addressed, the sustainability of the
company’s business model and how its governance
contributes to the delivery of its strategy.
2. The board should assess and monitor culture. Where it is
not satisfied that policy, practices or behaviour throughout
the business are aligned with the company’s purpose,
values and strategy, it should seek assurance that
management has taken corrective action. The annual
report should explain the board’s activities and any action
taken. In addition, it should include an explanation of the
company’s approach to investing in and rewarding its
workforce.
3.
In addition to formal general meetings, the chair should
seek regular engagement with major shareholders in order
to understand their views on governance and performance
against the strategy. Committee chairs should seek
engagement with shareholders on significant matters
related to their areas of responsibility. The chair should
ensure that the board as a whole has a clear understanding
of the views of shareholders.
35
The Kore strategy remains to develop a cash generative
potash project in the RoC. Financing project development
relies on the ongoing support of existing shareholders and
ability to attract new equity finance.
Kore has 46 employees. In normal circumstances members
of the Board periodically visit all parts of the business and
interact with employees. However, due to COVID-19
restrictions this has not been possible during the year.
The CEO meets with all employees on a regular basis.
However, due
restrictions, no direct
engagement with the workforce has taken place since
March 2020.
to COVID-19
During the year the COO and CFO held weekly virtual
meetings with key employees where open questioning and
sharing of concerns was encouraged.
The Board has oversight on issues raised and management
actions via monthly management reports to the Board which
detail any community or personnel complaints, or
grievances and action management have committed to in
order to resolve issues.
Each employee’s performance is reviewed annually and
employee development planning within the Congolese
workforce is being developed.
requires
The Group’s
communication with shareholders and stakeholders in an
open, regular and timely manner.
communication
strategy
The Company’s 2 largest shareholders, OIA and SQM, are
represented on the Board. In addition, face-to face meetings
are usually undertaken throughout the year with some of the
major shareholders, as well as with analysts and brokers
but due to COVID-19 restrictions consultations with major
shareholders and discussions with analysts and brokers
have generally been conducted via teleconference calls.
As shareholders were this year unable to attend the
Annual General Meeting in person, a dial-in facility was
made available to shareholders to listen to business of the
meeting and shareholders were also afforded the
opportunity to submit questions to the Board in advance of
the AGM by e-mail. Following the conclusion of the formal
business of the AGM the CEO provided an update on the
Company’s DX PFS.
CORPORATE GOVERNANCE REPORT (CONT)
BOARD LEADERSHIP AND COMPANY PURPOSE (cont)
Provisions
4. When 20 per cent or more of votes have been cast against
the board recommendation for a resolution, the company
should explain, when announcing voting results, what
actions it intends to take to consult shareholders in order to
understand the reasons behind the result. An update on the
views received from shareholders and actions taken should
be published no later than six months after the shareholder
meeting. The board should then provide a final summary in
the annual report and, if applicable, in the explanatory
notes to resolutions at the next shareholder meeting, on
what impact the feedback has had on the decisions the
board has taken and any actions or resolutions now
proposed.
5. The board should understand the views of the company’s
other key stakeholders and describe in the annual report
how their interests and the matters set out in section 172 of
the Companies Act 2006 have been considered in board
discussions and decision-making. The board should keep
engagement mechanisms under review so that they remain
effective.
For engagement with the workforce, one or a combination
of the following methods should be used:
• a director appointed from the workforce;
• a formal workforce advisory panel;
• a designated non-executive director.
If the board has not chosen one or more of these methods,
it should explain what alternative arrangements are in place
and why it considers that they are effective.
o
6. There should be a means for the workforce to raise
concerns in confidence and – if they wish – anonymously.
The board should routinely review this and the reports
arising
that
arrangements are in place for the proportionate and
independent investigation of such matters and for follow-up
action.
It should ensure
its operation.
from
o
o
o
36
At the Company’s AGM held on 26 June 2020, all
resolutions were passed on a poll by more than 97% of the
votes cast.
Refer to the section 172 Statement.
director
In addition, David Netherway is the appointed designated
non-executive
for workplace
engagement. However, due to COVID-19 restrictions, no
direct engagement with the workforce has taken place
during the year.
responsible
to COVID-19
The CEO holds regular meetings with all employees where
open questioning and sharing of concerns is encouraged.
restrictions, no direct
However, due
engagement with the workforce has taken place since
March 2020 however during the year the COO and CFO
held weekly virtual meetings with key employees where
open questioning and sharing of concerns was encouraged.
In addition, a confidential Whistleblowing Policy is in force
which allows employees to raise suspected breaches of the
Code of Conduct with designated management. No
employee will be disadvantaged or prejudiced in the event
that a suspected breach is reported in good faith.
The Board, through the Audit and Risk Committee, is
informed of material incidents reported.
CORPORATE GOVERNANCE REPORT (CONT)
BOARD LEADERSHIP AND COMPANY PURPOSE (cont)
Provisions
7.
interest,
The board should take action to identify and manage
conflicts of
from
including
significant shareholdings, and ensure that the influence of
third parties does not compromise or override independent
judgement.
those resulting
Investment agreements are in place with the 2 major
shareholders, who have representatives on the board and
which address influence and conflicts of interest. In addition,
a register of directors’ interests is maintained and updated
as required. The board has formal procedures to deal with
Directors’ conflicts of interests. In any instance where a
transactional conflict of interest is identified, the Director
concerned would not take part in in the discussion or
determination of any matter in respect of which he had a
disclosed transactional conflict of interest. During the year
no transactional conflicts of interest arose.
8. Where directors have concerns about the operation of the
board or the management of the company that cannot be
resolved, their concerns should be recorded in the board
minutes. On resignation, a non-executive director should
provide a written statement to the chair, for circulation to
the board, if they have any such concerns.
o All directors have the opportunity at board meetings to raise
concerns on any issues including the operation of the board
or the management of the company and give their
independent views on all matters being discussed. All such
concerns and views are recorded in the minutes. NEDs are
also able to raise any such concerns during the annual
board and Chairman’s internal evaluation, the results of
which are disclosed in the minutes of the board meeting at
which the evaluations are discussed.
o
37
CORPORATE GOVERNANCE REPORT (CONT)
DIVISION OF RESPONSIBILITIES
Principles
F. The chair leads the board and is responsible for its overall effectiveness in directing the company. They should demonstrate
objective judgement throughout their tenure and promote a culture of openness and debate. In addition, the chair facilitates
constructive board relations and the effective contribution of all non-executive directors, and ensures that directors receive
accurate, timely and clear information.
G. The board should include an appropriate combination of executive and non-executive (and, in particular, independent non-
executive) directors, such that no one individual or small group of individuals dominates the board’s decision-making. There
should be a clear division of responsibilities between the leadership of the board and the executive leadership of the
company’s business.
H. Non-executive directors should have sufficient time to meet their board responsibilities. They should provide constructive
challenge, strategic guidance, offer specialist advice and hold management to account.
I. The board, supported by the company secretary, should ensure that it has the policies, processes, information, time and
resources it needs in order to function effectively and efficiently.
Provisions
9.
The chair should be independent on appointment when
assessed against the circumstances set out in Provision
10. The roles of chair and chief executive should not be
exercised by the same individual. A chief executive should
not become chair of the same company. If, exceptionally,
this is proposed by the board, major shareholders should
be consulted ahead of appointment. The board should set
out its reasons to all shareholders at the time of the
appointment and also publish these on the company
website.
considered
David Hathorn was
independent on
appointment and, in the Board’s view, continues to remain
independent as he is not involved in any executive capacity,
has no material business relationships with the Company
nor is associated with any such material investor and has
no close family or other business relationships with the
Company or any of its directors or senior executives.
The division of responsibilities between the Non-Executive
Chairman and the CEO is clearly defined in writing.
However, they work closely together to ensure effective
decision making and the successful delivery of the Group’s
strategy.
38
CORPORATE GOVERNANCE REPORT (CONT)
DIVISION OF RESPONSIBILITIES (cont)
The Board considers David Netherway and Jonathan
Trollip to be independent as they are not involved in any
executive capacity, have no business relationships with the
Company nor are associated with any such investor and
have no close family or other business relationships with
the Company or any of its directors or senior executives.
the small quantum of shares held by and
Given
Performance Rights and Options awarded
to each
independent non-executive director the Board is of the view
that these do not affect their independent judgement.
Provisions
10. The board should identify in the annual report each non-
executive director
independent.
it considers
Circumstances which are likely to impair, or could appear
independence
to
include, but are not limited to, whether a director:
•
impair, a non-executive director’s
to be
is or has been an employee of the company or group
within the last five years;
has, or has had within the last three years, a material
business relationship with the company, either directly
or as a partner, shareholder, director or senior
employee of a body that has such a relationship with
the company;
has received or receives additional remuneration from
the company apart from a director’s fee, participates
in the company’s share option or a performance-
related pay scheme, or is a member of the company’s
pension scheme;
has close family ties with any of the company’s
advisers, directors or senior employees;
holds cross-directorships or has significant links with
other directors
in other
companies or bodies;
represents a significant shareholder; or
has served on the board for more than nine years
from the date of their first appointment
involvement
through
•
•
•
•
•
•
Where any of these or other relevant circumstances apply,
and the board nonetheless considers that the non-
executive director is independent, a clear explanation
should be provided.
11. At least half the board, excluding the chair, should be non-
executive directors whom the board considers to be
independent.
o During the year the Board consisted of the Non-Executive
Chairman, the CEO, 2 non-executive directors and 2
independent non-executive directors. During the course of
the year, 1 non-executive director resigned and 1 non-
executive director was appointed. During the year at least
half the Board, excluding the Non-Executive Chairman,
to be
were not non-executive directors considered
independent.
o
o Due to the current stage of development of the Company’s
projects this is not considered to impair the judgement of
the Board as a whole but the matter is kept under review
and the appointment of a further independent non-
executive director will be considered when deemed
appropriate.
39
CORPORATE GOVERNANCE REPORT (CONT)
DIVISION OF RESPONSIBILITIES (cont)
Provisions
12. The board should appoint one of the independent non-
executive directors to be the senior independent director
to provide a sounding board for the chair and serve as an
intermediary for the other directors and shareholders. Led
by the senior independent director, the non-executive
directors should meet without the chair present at least
annually to appraise the chair’s performance, and on other
occasions as necessary.
13.
Non-executive directors have a prime role in appointing
and removing executive directors. Non-executive directors
should scrutinise and hold to account the performance of
management and individual executive directors against
agreed performance objectives. The chair should hold
meetings with the non-executive directors without the
executive directors present.
In terms of the Company’s Articles of Association, the
Directors may appoint a person to be a director to fill a
casual vacancy and may appoint from time to time any one
or more of their body to be the holder of an executive office
and may also remove such person from any such office.
In addition, the Remuneration and Nomination Committee,
which comprises entirely of independent non-executive
the Board
directors,
candidates to become new Directors to fill casual vacancies
as and when they arise. Further, the Committee gives full
consideration
for directors,
to succession planning
including executive directors.
identifies and recommends
to
remuneration policy
The Committee also reviews and recommends an
appropriate
for executives and
considers the performance of any executive director
against his performance objectives when considering the
executive director’s annual remuneration review.
In terms of the Company’s Articles of Association, the
Directors may appoint a person to be a director to fill a
casual vacancy and may appoint from time to time any one
or more of their body to be the holder of an executive office
and may also remove such person from any such office.
In addition, the Remuneration and Nomination Committee,
which comprises entirely of independent non-executive
directors,
the Board
candidates to become new Directors to fill casual vacancies
as and when they arise. Further, the Committee gives full
consideration
for directors,
to succession planning
including executive directors.
identifies and recommends
to
remuneration policy
The Committee also reviews and recommends an
appropriate
for executives and
considers the performance of any executive director
against his performance objectives when considering the
executive director’s annual remuneration review.
40
CORPORATE GOVERNANCE REPORT (CONT)
DIVISION OF RESPONSIBILITIES (cont)
Provisions
14. The responsibilities of the chair, chief executive, senior
independent director, board and committees should be
clear, set out in writing, agreed by the board and made
publicly available. The annual report should set out the
number of meetings of the board and its committees, and
the individual attendance by directors.
o As mentioned in Provision 9. above, the responsibilities of
the Non-Executive Chairman and the CEO are clearly
defined in writing. In addition, the CEO has entered into a
contract of employment so that he can clearly understand
the requirements of the role. Each non-executive director,
including the Senior Independent non-executive director,
has a Letter of Appointment in place to ensure they clearly
understand the requirements of their role.
o
o Details of executive directors’ service contracts and the
Chairman’s and non-executive directors appointment
letters are provided within the Directors Report, copies of
all of which are also available for inspection by request at
the Company’s registered office during normal business
hours and at the AGM.
o
The number of meetings of the Board and its committees
and the individual attendance by directors is set out within
the Directors Report.
15. When making new appointments, the board should take
into account other demands on directors’ time. Prior to
appointment, significant commitments should be disclosed
with an indication of the time involved. Additional external
appointments should not be undertaken without prior
approval of the board, with the reasons for permitting
significant appointments explained in the annual report.
Full-time executive directors should not take on more than
one non-executive directorship in a FTSE 100 company or
other significant appointment.
in a
Details of
Non-executive directors are required to disclose prior
appointments and other significant commitments and are
required to inform the Board of any changes or additional
the
timely manner.
commitments
non-executive external appointments can be found on
pages 26 to 30. Before accepting new appointments, non-
executive directors are required to obtain approval from the
Chairman and the Chairman requires approval from the
whole Board. It is essential that no appointment causes a
conflict of interest or impacts on the Non-Executive
Director’s commitment and time spent with the Group in
their existing appointment. The CEO has no other current
non-executive directorships in a listed entity.
16 All directors should have access to the advice of the
company secretary, who is responsible for advising the
board on all governance matters. Both the appointment
and removal of the company secretary should be a matter
for the whole board.
o All directors have access to the advice and services of the
joint company secretaries and each director, and each
board committee member may take obtain independent
professional advice at the Company’s expense, subject to
prior notification to the other non-executive directors and
joint company
the
secretaries are accountable directly to the Board through
the Chairman. The Company currently has two (2) joint
company secretaries, one based in London and one based
in Australia. Both the appointment and removal of the
company secretary is a matter for the whole Board.
joint company secretaries. The
41
CORPORATE GOVERNANCE REPORT (CONT)
COMPOSITION, SUCCESSION AND EVALUATION
Principles
J. Appointments to the board should be subject to a formal, rigorous and transparent procedure, and an effective succession
plan should be maintained for board and senior management. Both appointments and succession plans should be based on
merit and objective criteria and, within this context, should promote diversity of gender, social and ethnic backgrounds,
cognitive and personal strengths.
K. The board and its committees should have a combination of skills, experience and knowledge. Consideration should be given
to the length of service of the board as a whole and membership regularly refreshed.
L. Annual evaluation of the board should consider its composition, diversity and how effectively members work together to
achieve objectives. Individual evaluation should demonstrate whether each director continues to contribute effectively.
Provisions
17. The board should establish a nomination committee to
lead the process for appointments, ensure plans are in
place for orderly succession to both the board and senior
management positions, and oversee the development of
a diverse pipeline for succession. A majority of members
of the committee should be independent non-executive
directors. The chair of the board should not chair the
committee when it is dealing with the appointment of their
successor.
o The Remuneration and Nomination Committee is
comprised of Jonathan Trollip, as Chairman of the
Committee, together with David Hathorn and David
Netherway.
The Remuneration and Nomination Committee Report is on
pages 55 and 56 and details how the Company has
complied with the relevant sections of the Code or explains
the reasons for any areas of non-compliance. All newly
induction
appointed directors are provided with an
programme which is tailored to their existing skills and
experience, a legal update on directors’ duties and
responsibilities and one-on-one meetings with members of
the senior management team are undertaken.
The Board is informed of any material changes to
governance, laws and regulations affecting the Group’s
business by the Chairman in conjunction with the Group’s
joint company secretaries.
18. All directors should be subject to annual re-election. The
board should set out in the papers accompanying the
resolutions to elect each director the specific reasons why
their contribution is, and continues to be, important to the
company’s long-term sustainable success.
19. The chair should not remain in post beyond nine years
from the date of their first appointment to the board. To
facilitate effective succession planning and
the
development of a diverse board, this period can be
extended for a limited time, particularly in those cases
where the chair was an existing non-executive director on
appointment. A clear explanation should be provided.
20. Open advertising and/or an external search consultancy
should generally be used for the appointment of the chair
and non-executive directors. If an external search
consultancy is engaged, it should be identified in the
annual report alongside a statement about any other
connection it has with the company or individual directors.
o All directors are subject to annual re-election. Shareholders
are provided with all material information in the notice of
meetings to assist in informing the decision on whether or
not to elect or re-elect a director as well as reasons why
their contribution is, and continues to be, important to the
Company’s long-term sustainable success.
David Hathorn has been the Non-Executive Chairman for
approximately 2 and a half years, having been appointed a
Director and Non-Executive Chairman on 25 August 2017.
No such appointments were made during the year.
42
CORPORATE GOVERNANCE REPORT (CONT)
COMPOSITION, SUCCESSION AND EVALUATION (cont)
o Provisions
21. There should be a formal and rigorous annual evaluation
of the performance of the board, its committees, the chair
and individual directors. The chair should consider having
a regular externally facilitated board evaluation. In FTSE
350 companies this should happen at least every three
years. The external evaluator should be identified in the
annual report and a statement made about any other
connection it has with the company or individual directors.
o During the year the Company undertook an internal
evaluation of the board and its committees. In addition, an
appraisal of the Non-Executive Chairman’s performance
was led by David Netherway as the Senior Independent
Non-Executive Director.
22. The chair should act on the results of the evaluation by
recognising
strengths and addressing any
weaknesses of the board. Each director should engage
with the process and take appropriate action when
development needs have been identified.
the
Each director of the Company at the time participated in the
Board and Committee evaluations, as applicable, the
results of which were discussed at a board meeting
attended by all directors. No significant areas of
development were identified that required appropriate
action to be taken.
23. The annual report should describe the work of the
o The Remuneration and Nomination Committee Report on
pages 55 to 56 sets out, inter alia, the objectives of the
Committee, the processes that are used in relation to
appointments, its approach to succession planning, how
the board evaluation has been conducted, the policy on
diversity and inclusion and the gender balance of senior
management and their direct reports.
nomination committee, including:
• the process used in relation to appointments, its
approach to succession planning and how both support
developing a diverse pipeline;
• how the board evaluation has been conducted, the
nature and extent of an external evaluator’s contact with
the board and individual directors, the outcomes and
actions taken, and how it has or will influence board
composition;
• the policy on diversity and inclusion, its objectives and
linkage
it has been
implemented and progress on achieving the objectives;
and
• the gender balance of those in the senior management
and their direct reports.
to company strategy, how
AUDIT, RISK AND INTERNAL CONTROL
Principles
M. The board should establish formal and transparent policies and procedures to ensure the independence and effectiveness
of internal and external audit functions and satisfy itself on the integrity of financial and narrative statements.
N. The board should present a fair, balanced and understandable assessment of the company’s position and prospects.
O. The board should establish procedures to manage risk, oversee the internal control framework, and determine the nature
and extent of the principal risks the company is willing to take in order to achieve its long-term strategic objectives.
Provisions
24. The board should establish an audit committee of
independent non-executive directors, with a minimum
membership of three, or in the case of smaller companies,
two. The chair of the board should not be a member. The
board should satisfy itself that at least one member has
recent and relevant financial experience. The committee
as a whole shall have competence relevant to the sector
in which the company operates.
43
The Audit and Risk Committee comprises of 2 members,
both of whom are independent Non-Executive Directors, of
which David Netherway is considered by the Board to have
recent and relevant financial experience.
CORPORATE GOVERNANCE REPORT (CONT)
The main roles and responsibilities of the Committee are
set out in its Terms of Reference, a copy of which can be
found on the Company’s website.
AUDIT, RISK AND INTERNAL CONTROL (cont)
25. The main roles and responsibilities of the audit committee
•
the company’s
should include:
• monitoring the integrity of the financial statements of
the company and any formal announcements relating
financial performance, and
to
reviewing significant financial reporting judgements
contained in them;
providing advice (where requested by the board) on
whether the annual report and accounts, taken as a
whole, is fair, balanced and understandable, and
provides the information necessary for shareholders
to assess the company’s position and performance,
business model and strategy;
reviewing the company’s internal financial controls
and internal control and risk management systems,
unless expressly addressed by a separate board risk
committee composed of independent non-executive
directors, or by the board itself;
•
•
•
•
to
• monitoring and reviewing the effectiveness of the
company’s internal audit function or, where there is
not one, considering annually whether there is a need
for one and making a recommendation to the board;
tender process and making
conducting
the
recommendations
the
the board, about
appointment, reappointment and removal of the
external auditor, and approving the remuneration and
terms of engagement of the external auditor;
reviewing and monitoring the external auditor’s
independence and objectivity;
reviewing the effectiveness of the external audit
process,
into consideration relevant UK
professional and regulatory requirements;
the
developing and
engagement of the external auditor to supply non-
audit services, ensuring there is prior approval of non-
audit services, considering the impact this may have
on independence, taking into account the relevant
regulations and ethical guidance in this regard, and
reporting to the board on any improvement or action
required; and
reporting to the board on how it has discharged its
responsibilities.
implementing policy on
taking
•
•
44
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT, RISK AND INTERNAL CONTROL (cont)
26.
27.
28.
29.
Details of the work of the Committee during the year are set
out in the Audit and Risk Committee Report on pages 53 to
54.
The annual report should describe the work of the
audit committee, including:
o
the significant issues that the audit committee
considered relating to the financial statements,
and how these issues were addressed;
o an explanation of how it has assessed the
independence and effectiveness of the external
audit process and the approach taken to the
appointment or reappointment of the external
auditor, information on the length of tenure of the
current audit firm, when a tender was last
conducted and advance notice of any
retendering plans;
in the case of a board not accepting the audit
committee’s recommendation on the external
auditor appointment, reappointment or removal,
a statement from the audit committee explaining
its recommendation and the reasons why the
board has taken a different position (this should
also be supplied in any papers recommending
appointment or reappointment);
o
o where there is no internal audit function, an
explanation
internal
assurance is achieved, and how this affects the
work of external audit; and
the absence, how
for
o an explanation of how auditor independence and
the external
objectivity are safeguarded,
auditor provides non-audit services.
if
The directors should explain in the annual report their
responsibility for preparing the annual report and
accounts, and state that they consider the annual
report and accounts, taken as a whole, is fair,
balanced and understandable, and provides the
information necessary for shareholders to assess the
company’s position, performance, business model
and strategy.
The board should carry out a robust assessment of
the company’s emerging and principal risks. The
board should confirm in the annual report that it has
completed this assessment, including a description of
its principal risks, what procedures are in place to
identify emerging risks, and an explanation of how
these are being managed or mitigated.
The board should monitor
the company’s risk
management and internal control systems and, at
their
least annually, carry out a
effectiveness and report on that review in the annual
report. The monitoring and review should cover all
material controls, including financial, operational and
compliance controls.
review of
45
The Directors’ Responsibility Statement is set out on page
33.
The Board has carried out a robust assessment of the
Company’s emerging and principal risks, details of which
are set out within the Review of Operations and Strategic
Report.
The only emerging risk during the year was in respect of
COVID-19 and this is referred to in Strategic Report on
page 16 under the section headed capital requirement and
ability to attract funding and on page 17 under the section
headed environmental and occupational health and safety
risks.
Kore Potash has a Risk Matrix which is reviewed by the
Board on a regular basis. The Board considers the
Company’s risk management and internal control systems
to be sound and effective.
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT, RISK AND INTERNAL CONTROL (cont)
30.
In annual and half-yearly financial statements, the board
should state whether it considers it appropriate to adopt
the going concern basis of accounting in preparing them,
and identify any material uncertainties to the company’s
ability to continue to do so over a period of at least twelve
months from the date of approval of the financial
statements.
The CEO and CFO provide, at the end of each reporting
period, a formal statement to the board confirming that the
Group’s financial reports present a true and fair view, in all
material respects, and that the Group’s financial condition
and operational results have been prepared in accordance
with the relevant accounting standards. The statement also
confirms the integrity of the Group’s financial statements
and that it is founded on a sound system of risk
management and internal compliance and controls which
implemented in accordance with the policies approved by
the Board, and that the Group’s risk management and
internal compliance and control systems, to the extent they
relate to financial reporting, are operating efficiently and
effectively in all material respects.
46
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT, RISK AND INTERNAL CONTROL (cont)
31. Taking account of the company’s current position and
principal risks, the board should explain in the annual
report how it has assessed the prospects of the company,
over what period it has done so and why it considers that
period to be appropriate. The board should state whether
it has a reasonable expectation that the company will be
able to continue in operation and meet its liabilities as they
fall due over the period of their assessment, drawing
to any qualifications or assumptions as
attention
necessary.
During the year ended 31 December 2020, the Group
incurred a loss of USD 3,144,172 (year ended 31
December 2019: USD 4,202,752) and experienced net
cash outflows from operating and investing activities of
USD 9,277,027 (year ended 31 December 2019: USD
11,257,647). Cash and cash equivalents totalled USD
5,555,000 at 31 December 2020 (at 31 December 2019:
USD 7,578,727).
The Directors have prepared a cash flow forecast for the
period ending 31 December 2022, which indicates that the
Group will not have sufficient liquidity to meet its working
capital requirements to the end of the going concern period
(31 March 2022), primarily being corporate costs and some
work on the 1st Phase of the Definitive Feasibility Study
(“DFS”) related to the DX Project. The Group anticipates a
deficit of c.USD 1.3 million towards the end of Q1 2022.
The Directors have considered various mitigating actions,
which include raising additional capital in Q2 – Q3 2021 to
enable the Group to continue to fund its working capital
requirements through the going concern period. The
Directors have identified a number of funding options
available to the Group. The Directors note the Group has a
history of successfully raising capital on the AIM and JSE,
and in the past on the ASX. However, factors beyond the
Company’s control, including pandemic diseases such as
COVID-19, which affect the stock markets, may in turn have
a negative impact on any fund raising.
The Directors have reviewed the Group's overall position
and outlook in respect of the matters identified above and
are of the opinion that there are reasonable grounds to
believe that funding will be secured and therefore that the
operational and financial plans in place are achievable and
accordingly the Group will be able to continue as a going
concern and meet its obligations as and when they fall due.
The Directors will continue to pursue further capital raising
initiatives in order to have sufficient funds to continue the
development of the DX Project and for general corporate
purposes.
The ability of the Group to continue as a going concern is
dependent on achieving the matters set out above. These
conditions indicate a material uncertainty which may cast
significant doubt as to the Group’s ability to continue as a
going concern and therefore it may be unable to realise its
assets and discharge its liabilities in the normal course of
business.
47
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT, RISK AND INTERNAL CONTROL (cont)
The financial report does not include adjustments relating to
the recoverability and classification of recorded asset
amounts or to the amounts and classification of liabilities that
might be necessary should the Group not continue as a
going concern.
The Directors consider that a period of 1.5 years from the
financial statement date is appropriate as the assumptions
made in the review about market conditions are expected to
remain valid over this period. The Directors have also carried
out a robust assessment of the principal risks facing the
Group, including those that would threaten its business
liquidity, as
model,
documented in the Review of Operations and Strategic
Report on pages 7 to 22, which has informed the
assessment of viability.
future performance, solvency or
48
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION
Principles
P. Remuneration policies and practices should be designed to support strategy and promote long-term sustainable success.
Executive remuneration should be aligned to company purpose and values and be clearly linked to the successful delivery
of the company’s long-term strategy.
Q. A formal and transparent procedure for developing policy on executive remuneration and determining director and senior
management remuneration should be established. No director should be involved in deciding their own remuneration
outcome.
R. Directors should exercise independent judgement and discretion when authorising remuneration outcomes, taking account
of company and individual performance, and wider circumstances.
Provisions
32. The board should establish a remuneration committee of
independent non-executive directors, with a minimum
membership of three, or in the case of smaller companies,
two. In addition, the chair of the board can only be a
member if they were independent on appointment and
cannot chair the committee. Before appointment as chair
of the remuneration committee, the appointee should have
served on a remuneration committee for at least 12
months.
33. The remuneration committee should have delegated
responsibility for determining the policy for executive
director remuneration and setting remuneration for the
chair, executive directors and senior management. It
should review workforce remuneration and related policies
and the alignment of incentives and rewards with culture,
taking these into account when setting the policy for
executive director remuneration.
The Remuneration and Nomination Committee is comprised
of Jonathan Trollip, as Chairman, together with David
Netherway and David Hathorn, who was considered
independent on his appointment as a Director and Chairman
of the board.
Jonathan Trollip has had relevant experience of listed
company directors and senior executive remuneration in his
former capacity as chairman of ASX listed Spicers Limited
and in his current role as non-executive director of ASX listed
Propel Funeral Partners Limited
The Remuneration and Nomination met once during the year
to consider the 2019 STIP Awards and the 2020 STIP Target
Awards for key management personnel, to confirm the 1st
tranche of the 2019 LTIP Options, to consider staff salary
reviews and to consider the CEO’s 2019 STIP Award and
the 2020 STIP parameters and weightings. In relation to
these matters, it made a number of recommendations to the
Board which the Board accepted.
49
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION (Cont)
34. The remuneration of non-executive directors should be
determined in accordance with the Articles of Association
or, alternatively, by the board. Levels of remuneration for
the chair and all non-executive directors should reflect the
role.
time commitment and
Remuneration for all non-executive directors should not
include share options or other performance-related
elements.
responsibilities of
the
time
their
The remuneration of non-executive directors is determined
by the board, taking cognisance of the Company’s Articles
of Association and
commitment and
responsibilities. Additional remuneration is paid to the
Chairman of the Board and the chair of each Board
Committee in order to reflect the time commitment and
responsibilities required for those roles. No increase in non-
executive directors’ remuneration was made during the year.
In addition, at the proposal of the Chairman, his salary was
reduced to USD 100,000 per annum with effect from 1 July
2020 to reflect the current market environment and the
company’s financial position.
The Non-Executive Chairman has been awarded Share
Options, as approved by shareholders at the June 2020
AGM. The Share Options have been structured to recognise
the Company’s current state of development and the key
project milestones that are critical to the success of the
Company, which may result in the Share Options being
exercisable within three years from award. Following the
achievement of these project milestones and the expiration
and/or satisfaction of the conditions of the Share Options,
the Board intends to adopt a new incentive scheme that will
be more in line with the recommendations of the 2018 UK
Code.
Certain non-executive Directors are entitled to Performance
Rights which unconditionally vest on the first, second and
third anniversaries of the Company’s Admission to AIM i.e.
on 29 March 2019, 21 March 2020 and 29 March 2021, in
accordance with the Company’s AIM Admission Document
dated 26 March 2018. In order to subscribe for the shares in
respect of the vested Performance Rights each non-
executive director is required to subscribe USD 0.001 per
share.
An external remuneration consultant is appointed as and
when required to advise the Committee However, no such
appointment was required during the year.
35. Where a remuneration consultant is appointed, this should
be the responsibility of the remuneration committee. The
consultant should be identified in the annual report
alongside a statement about any other connection it has
with the company or individual directors. Independent
judgement should be exercised when evaluating the
advice of external third parties and when receiving views
from executive directors and senior management.
50
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION (Cont)
long-term
36. Remuneration schemes should promote
shareholdings by executive directors
that support
alignment with long-term shareholder interests. Share
awards granted for this purpose should be released for
sale on a phased basis and be subject to a total vesting
and holding period of five years or more. The remuneration
committee should develop a formal policy for post-
employment shareholding requirements encompassing
both unvested and vested shares.
37. Remuneration schemes and policies should enable the
use of discretion to override formulaic outcomes. They
should also include provisions that would enable the
company to recover and/or withhold sums or share awards
and specify the circumstances in which it would be
appropriate to do so.
38. Only basic salary should be pensionable. The pension
contribution rates for executive directors, or payments in
lieu, should be aligned with those available to the
workforce. The pension consequences and associated
costs of basic salary increases and any other changes in
rates,
pensionable
particularly for directors close to retirement, should be
carefully considered when compared with workforce
arrangements.
remuneration, or
contribution
During 2020 the Remuneration and Nomination Committee
reviewed the remuneration package of the CEO. It was
agreed to defer any recommendation with respect to the
CEO’s remuneration package, including any short-term
bonus, pending further clarification on the overall position of
the Company, including the outcome of the DX DFS and the
Company’s projected cash position.
Details of the Company’s remuneration scheme and policies
are set out within the Remuneration Report.
Details of the pension arrangements, including contribution
rates, for the CEO are set within the Remuneration Report.
39. Notice or contract periods should be one year or less. If it
is necessary to offer longer periods to new directors
recruited from outside the company, such periods should
reduce to one year or less after the initial period. The
remuneration committee should ensure compensation
commitments in directors’ terms of appointment do not
reward poor performance. They should be robust in
reducing compensation to reflect departing directors’
obligations to mitigate loss.
The CEO is employed on an ongoing basis, which may be
terminated by either party giving 6 months’ notice. Each
non-executive director has a letter of appointment for an
initial term of 3 years (with the exception of the Chairman
whose agreement continues until terminated by the Board
or in accordance with its terms). The appointment of the
non-executive director may be terminated by the Company
giving 1 month notice, by the non-executive director by
immediate notice and also in accordance with the
Company’s Articles of Association.
51
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION (Cont)
to detailed
remuneration was subject
The CEO’s
consideration by the Remuneration and Nomination when
the current CEO was employed in 2018. This was reflected
in the CEO’s employment contract and considered again in
2029. During 2020 the Remuneration and Nomination
Committee gave
the CEO’s
further consideration
remuneration and the results of those considerations are set
out in section 36 above.
to
The Remuneration and Nomination Report on pages 57 to
70 sets out, inter alia the objectives of the Committee and a
description of the work carried out during the year.
40. When determining executive director remuneration policy
remuneration committee should
the
and practices,
address the following:
•
•
•
•
•
•
clarity – remuneration arrangements should be
transparent and promote effective engagement with
shareholders and the workforce;
simplicity – remuneration structures should avoid
complexity and their rationale and operation should be
easy to understand;
risk – remuneration arrangements should ensure
reputational and other risks from excessive rewards,
and behavioural risks that can arise from target-based
incentive plans, are identified and mitigated;
• predictability – the range of possible values of
rewards to individual directors and any other limits or
discretions should be identified and explained at the
time of approving the policy;
proportionality – the link between individual awards,
the delivery of strategy and
long-term
the company should be clear.
performance of
Outcomes should not reward poor performance; and
alignment to culture – incentive schemes should drive
behaviours consistent with company purpose, values
and strategy.
the
41. There should be a description of the work of the
remuneration committee in the annual report, including:
•
an explanation of the strategic rationale for executive
directors’ remuneration policies, structures and any
performance metrics; • reasons why the remuneration
is appropriate using internal and external measures,
including pay ratios and pay gaps;
a description, with examples, of how the remuneration
committee has addressed the factors in Provision 40;
• whether the remuneration policy operated as intended
in terms of company performance and quantum, and,
if not, what changes are necessary;
•
•
• what engagement has taken place with shareholders
and the impact this has had on remuneration policy
and outcomes;
what engagement with the workforce has taken place
to explain how executive remuneration aligns with
wider company pay policy; and
to what extent discretion has been applied to
remuneration outcomes and the reasons why.
•
52
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT AND RISK COMMITTEE
The Audit and Risk Committee (“the Committee”) comprises 2 members, both of whom are independent Non-Executive Directors,
David Netherway is considered by the Board to have recent and relevant financial experience.
The Committee meets formally at least twice a year and otherwise as required and also meets with the Company’s external
auditors at least twice a year.
The Committee assists the Board in discharging its responsibilities with regard to financial reporting, including reviewing the
Group’s annual and half year financial statements, accounting policies, key judgments and estimates taken, internal and external
audit and controls, reviewing and monitoring the scope of the annual audit and the extent of the non-audit work undertaken by
external auditors and advising on the appointment of external auditors.
In addition, the Committee is responsible for ensuring the integrity of the financial information reported to shareholders and internal
control systems and ensuring effective risk management and financial control frameworks have been implemented. The
Committee also ensures that appropriate procedures, resources and controls are in place to comply with the AIM Rules for
Companies and the Market Abuse Regulations, monitors compliance thereof and seeks to ensure that the Company and its
nominated advisor are in contact on a regular basis.
The Committee also helps to address risk management, and is committed to maintain a risk management framework that seeks
to:
• Avoid the likelihood of unacceptable outcomes and costly surprises;
• Provide greater openness and transparency in decision making and ongoing management processes;
• Provide for a better understanding of issues associated with the Group’s activities;
• Comprise an effective reporting framework for meeting corporate governance requirements; and
• Allow an appropriate assessment of innovative processes to identify risks before they occur and allow informed judgement.
The Committee is also responsible for approving, reviewing and monitoring the Company’s risk management policy. The
objectives of this risk management policy are to:
• Provide a structured risk management framework that will provide Senior Management and the Board with comfort that the
risks confronting the organisation are identified and managed effectively;
• Create an integrated risk management process owned and managed by the Group’s personnel that is both continuous and
effective;
• Ensure that the management of risk is integrated into the development of strategic and business plans, and the achievement
of the Group’s vision and values; and
• Ensure that the Board is regularly updated with reports by the committee.
Management is responsible for efficient and effective risk management across the activities of the Group. This includes
ensuring the implementation of policies and procedures that address risk identification and control, training and reporting. The
CEO is responsible for ensuring the process for managing risks is integrated within business planning and management
activities.
53
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT AND RISK COMMITTEE (CONT)
The Board reviews the effectiveness of the implementation of the risk management system and internal control system annually.
When reviewing risk management policies and the internal control system the Board takes into account the Company’s legal
obligations and also considers the reasonable expectations of the Company’s stakeholders, including shareholders, employees,
customers, suppliers, creditors, consumers and the wider community.
The Group does not currently have an internal audit function. To evaluate and continually improve the effectiveness of the
Company’s risk management and internal control processes, the Board relies on ongoing reporting and discussion of the
management of material business risks with senior personnel and Directors. Once the Group is at a size and scale that warrants
an Internal Auditor, the Board will be responsible for the appointment and overseeing of the Internal Auditor.
The Group currently is not subject to any material exposure to environmental and social sustainability risks. The principal areas
of risk for the Company are detailed on pages 16 to 18 of the Annual Report.
During the year, the Committee reviewed the planning of the 2020 annual report including consideration of the financial statements
and going concern (including material uncertainty), impairment assessment of the exploration and evaluation assets, other key
judgments and estimates, value proposition and business model. The Committee received and considered memoranda from
management regarding these matters, and also took into account the views of the external auditor. The Committee concluded
that no impairment charge was necessary for the exploration and evaluation assets and that the going concern basis is the
appropriate method to prepare the annual report on.
Following the appointment of BDO LLP, as the Company’s auditors with effect from 28 June 2019, a resolution to reappoint BDO
LLP as auditors was proposed and passed by the requisite majority at the AGM held on 26 June 2020. A resolution will be
proposed at this year’s AGM to reappoint BDO for the forthcoming financial year.
The Board via the Committee is satisfied that the provision of non-audit services during the year as disclosed in note 18 is
compatible with the Financial Reporting Council’s Ethical Standard in the UK as well as other general standard of independence
for auditors. The Directors are satisfied that non-audit services did not compromise the external auditor’s independence for the
following reasons:
•
all non-audit services are reviewed and approved by the Board prior to commencement to ensure they do not adversely
affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to auditor independence under all
relevant independence rules.
•
The Committee assesses the quality of the external audit annually and considers the performance of BDO LLP and its associates
taking into account the Committee’s own assessment, feedback from senior finance personnel and views from BDO LLP and its
associates on their performance as detailed in a report of their audit findings at the year end, which they presented to the
Committee at its meeting in March 2021. Based on this review, the Committee was satisfied with the effectiveness of the audit
for the year ended 31 December 2020.
54
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION AND NOMINATION COMMITTEE
The Remuneration and Nomination Committee (“the Committee”) has three members, two of whom are independent Non-
Executive Directors, including the chair, Jonathan Trollip. The Committee also comprises David Netherway and David Hathorn.
The Committee is required to meet annually and at such other times as required. Its objectives are to
• maintain a board of directors that has an appropriate mix of skills, experience and knowledge to be an effective decision-
making body;
ensure that the Board is comprised of directors who contribute to the successful management of the Company and discharge
their duties having regard to the law and the highest standards of corporate governance;
review and recommend an appropriate remuneration policy, the objective of which shall be to attract, retain and motivate
executive directors of the quality required to successfully run the Company, without paying more than is necessary having
regard to market comparables; and
adhere to the principle that no director or senior executive shall be involved in any decisions as to their own remuneration.
•
•
•
The Committee undertakes a detailed selection process as per the Company’s recruitment and diversity policy to appoint or re-
appoint a director to the Board. Included in this process are appropriate reference checks which include but not limited to character
reference, police clearance certificate and bankruptcy to ensure that the Board remains appropriate for that of an AIM, ASX or
JSE quoted company.
In addition, the Committee is responsible for considering and recommending board candidates for election or re-election,
reviewing succession planning, determining the terms of employment and total remuneration of the executive director and
Chairman and considering the Group’s incentive schemes.
Directors’ Remuneration and Share Option Schemes
The Non-Executive Chairman and CEO have been awarded Share Options, as approved by shareholders at the June 2019 AGM.
The Share Options have been structured to recognise the Company’s current state of development and the key project milestones
that are critical to the success of the Company, which may result in the Share Options being exercisable within three years from
award. Following the achievement of these project milestones and the expiration and/or satisfaction of the conditions of the Share
Options, the Board intends to adopt a new incentive scheme that will be more in line with the recommendations of the 2018 UK
Code.
Diversity Policy
The Group is committed to an inclusive workplace that embraces and promotes diversity, while respecting International,
Sovereign, UK, South African, RoC and Australian laws.
It is the responsibility of all directors, officers, employees and contractors to comply with the Group's Diversity Policy and report
violations or suspected violations in accordance with this Diversity Policy.
The Group recognises the value of a diverse work force and believes that diversity supports all employees reaching their full
potential, improves business decisions, business results, increases stakeholder satisfaction and promotes realisation of the
Group’s vision.
Diversity may result from a range of factors including but not limited to gender, age, ethnicity and cultural backgrounds. The
Company believes the individual differences between people add to the collective skills and experience of the Group and ensure
it benefits by selecting from all available talent.
55
CORPORATE GOVERNANCE REPORT (CONT)
Directors’ Remuneration and Share Option Schemes (cont)
Given the Group's size, early stage of development and relatively small number of employees (46 average number of employees
in 2020 of which 8 are females), the Group is yet to define measurable objectives for achieving diversity targets and expects to
set in place a range of objectives that are consistent with its growth strategy in future.
Group and Individual Expectations
• Ensure diversity is incorporated into the behaviours and practises of the Group;
• Facilitate equal employment opportunities based on job requirements only using recruitment and selection processes which
ensures we select from a diverse pool;
• Engage professional search and recruitment firms when needed to enhance our selection pool;
• Help to build a safe work environment by acting with care and respect at all times, ensuring there is no discrimination,
harassment, bullying, victimisation, vilification or exploitation of individuals or groups;
• Develop flexible work practices to meet the differing needs of our employees and potential employees;
• Attract and retain a skilled and diverse workforce as an employer of choice;
• Enhance customer service and market reputation through a workforce that respects and reflects the diversity of our
stakeholders and communities that we operate in;
• Make a contribution to the economic, social and educational well-being of all of the communities it serves;
• Meet the relevant requirements of domestic and international legislation appropriate to the Group’s operations;
• Create an inclusive workplace culture; and
• Establish measurable diversity objectives and monitor and report on the achievement of those objectives annually.
Evaluation of Senior Executives
Arrangements put in place by the Board to monitor the ongoing performance of the Group’s Executives include:
• A review by the Board of the Group’s financial performance;
• Annual performance appraisal meetings incorporating analysis of key performance indicators with each individual to ensure
that the level of reward is aligned with respective responsibilities and individual contributions made to the success of the
Group;
• An analysis of the Group’s prospects and projects; and
• A review of feedback obtained from third parties, including advisors (where applicable).
Informal evaluations of the CEO and other Senior Executive’s individual performance and overall business measures are
undertaken progressively and periodically throughout the financial year.
HEALTH, SAFETY AND ENVIRONMENTAL COMMITTEE
The Health, Safety and Environmental Committee (“the Committee”) is chaired by David Netherway and comprises David
Hathorn, Brad Sampson and Gavin Chamberlain (COO) and is required under its Terms of Reference to meet formally at least
twice a year and at such other times as required. However, as health, safety and environmental matters are reported on each
month in management reporting to the Board and are part of each Board meeting agenda and with limited operational activity
during the feasibility study phases, creating a low-risk environment, no separate Committee meetings were held during the year.
The Committee is responsible for assisting the Board in fulfilling its oversight responsibilities with respect to health, safety and
environmental matters affecting the Group, including recommending various policies and policy changes in relation to these areas
to be adopted by the Group, reviewing the compliance status and any material non-compliance and, in the event of an incident,
reviewing the incident and considering the remedial actions being taken.
56
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report
This Remuneration Report sets out information about the remuneration of Kore Potash’s key management personnel for the
financial year ended 31 December 2020. The term ‘key management personnel’ refers to those persons having authority and
responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including any director (whether
executive or otherwise) of the Group. The prescribed details for each person covered by this report are detailed below under the
following headings:
•
•
•
•
•
key management personnel (KMP)
remuneration policy
relationship between the remuneration policy and company performance
key terms of employment contracts
remuneration of KMP
KMP of the Company and the Group
This report details the nature and amount of remuneration for the KMP of the Group. KMP during the financial year 2020 were:
Executive Directors
Brad Sampson
Non-Executive Directors
David Hathorn
Jonathan Trollip
Timothy Keating
David Netherway
Trinidad Maria Reyes Perez
José Antonio Merino
Executives
Henko Vos
SJCS
Andrey Maruta
Gavin Chamberlain
Chief Executive Officer (appointed on 4 June 2018)
Non-Executive Chairman (appointed on 25 August 2017)
Non-Executive Director (appointed on 17 November 2017)
Non-Executive Director (appointed on 17 November 2017)
Non-Executive Director (appointed on 12 December 2017)
Non-Executive Director (appointed on 20 November 2020)
Non-Executive Director (resigned on 20 November 2020)
Joint Company Secretary (appointed on 7 November 2017)
Joint Company Secretary (appointed on 1 October 2018)
Chief Financial Officer (appointed on 21 September 2019)
Chief Operating Officer (appointed 1 October 2017)
57
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Remuneration Policy
The remuneration policy of Kore Potash has been designed to align director and executive objectives with shareholder and
business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key
performance areas affecting the Group’s financial results. The Remuneration and Nomination makes recommendations to the
Board in relation to the composition of the Board, the appointment of the CEO and succession planning, and remuneration for
directors and senior executives. The Board endeavours with its remuneration policy to attract and retain high calibre executives
and directors to run and manage the Group within the constraints of the financial position of the Group.
The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed
by the Board. All executives receive a base salary and superannuation, where applicable. The Board reviews executive packages
annually by reference to the Group’s performance, executive performance and comparable information from industry sectors and
other listed companies in similar industries.
The Board may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to attract and
retain high calibre executives and reward them for performance that results in long-term growth in shareholder wealth. Executives
may also be entitled to participate in the employee share and option arrangements.
The Board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and
responsibilities. The Board determines payments to the non-executive directors and reviews their remuneration annually, based
on market practice, duties and accountability and the Company’s financial capacity constraints. Independent external advice is
sought when required. During the financial year, independent external advice was sought on appropriate remuneration of directors
to better reflect market practice for comparable companies listed on AIM, and this resulted during the financial year in the
implementation of revised remuneration arrangements for all non-executive directors. The maximum aggregate amount of fees
that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting. Fees for
non-executive directors are not linked to the performance of the Group, although to assist with the Company’s cash position some
non-executive directors have agreed to receive a portion of their fees by way of Company shares rather than cash. However, to
align directors’ interests with shareholder interests, the Directors are encouraged to hold shares in the Company. The Board has
adopted the Kore Potash Performance Rights Plan to establish an incentive plan aiming to create a stronger link between
employee performance and reward and increasing shareholder value by enabling the participants of the plan to have a greater
involvement with and share in the future growth and profitability of the Company.
58
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Key Terms of Employment Contracts with Executive KMPs
Key Terms of Employment Contracts for the financial year ending 31 December 2020:
Base Salary
per Annum
Name
Brad Sampson (Chief Executive Officer, appointed 4 June 2018) USD 550,000
GBP 172,500
Andrey Maruta (Chief Financial Officer, appointed 23 September
2019)
Gavin Chamberlain (Chief Operating Officer)
USD 280,500
Term of
Agreement
No fixed term 6-month notice period
No fixed Term 3-month notice period
Notice Period
No fixed term 3-month notice period
Non-Executive Director Arrangements
Non-executive directors receive a board fee and fees for chairing or participating on board committees, see table below. They do
not receive performance-based pay (except via options and performance rights under the Group’s performance rights plan) or
retirement allowances. The fees are inclusive of superannuation. The Chairman does not receive additional fees for participating
in or chairing committees.
Fees are reviewed annually by the Board taking into account comparable roles and market data provided by the Board’s
independent remuneration adviser. The current base annual fees were reviewed with effect from 1 April 2020.
Base fees
Chairman
Senior independent non-executive director
Other non-executive directors
Additional fees
Audit and risk committee – Chair
Audit and risk committee – member
Remuneration and nomination – Chair
Remuneration and nomination – member
Health, safety and environmental – Chair
Health, safety and environmental – member
Base Salary
Per Annum
USD 100,000
USD 66,500
USD 56,000
USD 7,000
-
USD 7,000
-
USD 7,000
-
All non-executive directors enter into a service agreement with the Company in the form of a letter of appointment. The letter
summarises the Board’s policies and terms, including remuneration, relevant to the office of director. Directors with special
responsibilities are disclosed within the various committee reports in the Corporate Governance Report on pages 53 to 56.
At the proposal of the Chairman, his salary was reduced to USD 100,000 from USD 156,000 per annum with effect from 1 July
2020 to reflect the current market environment and the company’s financial position.
59
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
KMP Remuneration
The remuneration for each Director and KMP of the Group during the year ended 31 December 2020 was as follows:
1 January 2020 to 31 December 2020 single figure table
Short-Term Benefits
Fees/Basic
Salary
USD
Annual
Bonus
USD
Termination
benefits
USD
Post-
Employment
Benefits
Superannuation
USD
Executive Directors
Brad Sampson
Non-Executive
Directors
David Hathorn
Jonathan Trollip
Trinidad Maria Reyes
Perez (iii)
Timothy Keating
David Netherway
José Antonio Merino
(iii)
Executives
Henko Vos (ii)
SJCS
Gavin Chamberlain
Andrey Maruta
549,557 146,693
120,300
62,685
-
13,998
80,500
13,998
-
-
-
-
-
-
841,038 146,693
12,158
77,159
280,500
172,500
542,317
-
-
-
-
-
Total
1,383,355 146,693
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Options /
Performance
Rights (i)
USD
Total
USD
208,173
904,423
202,151
38,563
-
11,360
11,360
322,451
101,248
-
25,358
91,860
13,998
471,607
1,459,338
-)
-)
187,135
116,810
303,945
12,158
77,159
467,635
289,310
846,262
775,552
2,305,600
(i) Options as share-based payment arrangements and performance rights granted under the STIP, LTIP and other schemes are expensed
over the vesting period, which includes the years to which they relate and their subsequent vesting periods.
(ii) Nexia Perth Pty Ltd has been engaged to provide accounting, administrative and company secretarial services on commercial terms.
Mr Vos is currently employed by Nexia Perth.
(iii) Trinidad Maria Perez Peres was appointed as a non-executive director on 20 November 2020, following the resignation of Jose Antonio
Merino on 20 November 2020 as non-executive director.
Brad Sampson was the highest paid Director during the 2020 year and details of his remuneration are disclosed above.
60
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
KMP Remuneration
The remuneration for each Director and KMP of the Group during the year ended 31 December 2019 was as follows:
1 January 2019 to 31 December 2019 single figure table
Short-Term Benefits
Fees/Basic
Salary
USD
Annual
Bonus
USD
Termination
benefits
USD
Post-
Employment
Benefits
Superannuation
USD
Options /
Performance
Rights
USD
Total
USD
550,000
50,397
156,000
65,113
31,500
55,992
71,750
55,992
986,347
-
-
-
-
-
-
50,397
22,486
72,257
224,473
211,871
286,110
48,171
216,627
1,081,995
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,347
47,115
-
-
-
72,462
-
442,813
1,043,210
-
3,195
-
-
-
-
3,195
-
-
-
-
-
-
-
-
171,195
42,597
87,898
23,010
22,838
-)
790,351
-)
-)
58,442
70,691
55,658
-
-
184,791
327,195
110,905
119,398
79,002
94,588
55,992
1,830,290
22,486
72,257
308,262
329,677
341,768
48,171
216,627
1,339,248
Executive Directors
Brad Sampson
Non-Executive
Directors
David Hathorn
Jonathan Trollip
Leonard Math
Timothy Keating
David Netherway
José Antonio Merino
Executives
Henko Vos
SJCS
John Crews
Julien Babey
Gavin Chamberlain
Andrey Maruta
Guy de Grandpre
Total
2,068,342
50,397
72,462
3,195
975,142
3,169,538
Brad Sampson was the highest paid Director during the 2019 year and details of his remuneration are disclosed above.
61
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Share-based payments granted as compensation to KMP
Employee Share Option Plan and Employee Performance Rights Plan
Kore Potash operates an ownership-based scheme for executives and senior employees of the Group. In accordance with the
provisions of the plans, as approved by shareholders at a previous general meeting, executives and senior employees may be
granted performance rights and/or options to purchase parcels of ordinary shares at an exercise price determined by the Board
based on a recommendation by the Remuneration and Nomination Committee.
Each employee share option converts into one ordinary share of Kore Potash on exercise. No amounts are paid or payable by
the recipient on receipt of the option, aside from when the option is exercised. The options carry neither right to dividends nor
voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry. Each employee performance
rights will be converted into one ordinary share of Kore Potash upon vesting conditions being met. No amounts are paid or payable
by the recipient on receipt of the performance rights. The performance rights carry neither right to dividends nor voting rights.
The performance rights/options granted expire as determined by the Board based on a recommendation by Remuneration and
Nomination Committee, or immediately following the resignation of the executive or senior employee, whichever is the earlier.
Summary information for Options as SBP arrangements in existence during 2020
During the financial year, the following options as SBP arrangements for KMP and other personnel were in existence:
Option Series 32 *
Option Series 33
Options Series 34**
Options Series 35**
Options Series 36**
Grant
Date
27/06/2019
19/07/2019
Vesting Date
Refer below
19/07/2022
Number of
Options
4,000,000
26,900,000
Expiry Date
27/06/2020
19/07/2024
Fair Value at
Grant Date
GBP 0.0364
GBP 0.007
Exercise
Price
GBP 0.11
GBP 0.022
15/09/2019
15/09/2022
12,000,000
01/01/2024
GBP 0.0092
GBP 0.022
15/09/2019
15/09/2022
12,000,000
01/01/2024
GBP 0.0092
GBP 0.022
15/09/2019
15/09/2022
9,000,000
01/01/2024
GBP 0.0092
GBP 0.022
* Option Series expired during the financial year.
** These options were issued to Gavin Chamberlain (Option Series 34), Andrey Maruta (Option Series 35) and Guy de Grandpre (Option
Series 36). The vesting conditions for these Options include milestones being achieved in relation to the Kola Project.
Unless otherwise indicated above, there are no performance criteria that need to be met in relation to options granted above
before the beneficial interest vests in the recipient. However, the executives and senior employees receiving the options meet
the vesting conditions only if they continue to be employed with the Company at the vesting date.
Please refer to Note 21 to the financial statements for further details of the options granted as detailed above.
Options Series 34, 35 and 36 were granted as compensation during the year. Further details of the performance conditions for
these options can also be found in Note 21 to the financial statements. Option series 32 expired in the financial year.
There was no exercise of options during the year or any further issues.
62
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Share-based payments granted as compensation to KMP
Summary information for Performance Rights as SBP arrangements in existence during 2020
During the financial year, the following performance rights as SBP arrangements for KMP and other personnel were in existence:
Rights Series 7 *
Rights Series 9 **
Rights Series 12
Rights Series 13 **
Rights Series 14 **
Rights Series 15**
Rights Series 16**
Rights Series 17**
Rights Series 19**
Rights Series 20**
Rights Series 25***
Grant Date
07/12/2015
20/11/2015
29/05/2017
31/05/2017
29/05/2017
29/05/2017
27/06/2019
27/06/2019
27/06/2019
27/06/2019
17/03/2020
Vesting Date
Refer below
Refer below
Refer below
Refer below
Refer below
None vested
Refer below
Refer below
Refer below
Refer below
Refer below
Number of
Rights
5,000,000
8,500,000
2,000,000
660,000
4,482,005
11,734,853
1,500,000
750,000
750,000
750,000
2,500,000
Expiry Date
06/12/2020
01/03/2021
31/05/2022
31/05/2022
31/05/2022
31/05/2022
22/05/2022
22/05/2022
22/05/2022
22/05/2022
17/03/2025
Fair Value at
Grant Date
AUD 0.1753
AUD 0.1867
AUD 0.1700
AUD 0.1700
AUD 0.1700
AUD 0.17 / AUD 0.104
GBP 0.0564
GBP 0.0564
GBP 0.0564
GBP 0.0564
GBP 0.0615
The above Performance Rights have nil exercise price.
* Vested, converted to fully paid ordinary shares and/or cancelled during the year – Please refer to Note 21 to the financial statements for
more details of conversions and cancellations.
** these series were partially converted or cancelled in the year.
*** Rights series 25 was issued in the period under the STIP scheme
There are various performance criteria that need to be met in relation to performance rights granted above before the beneficial
interest vests in the recipient. However, if the executives and senior employees receiving the performance rights cease to be
employed by the Company, the Board of Directors will determine if the performance rights vest immediately, are cancelled or vest
upon the vesting condition being achieved.
There was no exercise of performance rights during the year.
Further details of the performance rights, performance conditions and vesting for the above series can be found in Note 21 to the
financial statements.
63
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Share-based payments granted as compensation to KMP
Reconciliation of options as SBP arrangements and performance rights held by KMP
The table below shows a reconciliation of options as SBP arrangements and performance rights held by each KMP from the beginning to the end of the 2020 year.
The maximum value of the options yet to vest has been determined as the amount of the grant date fair value of the options that is yet to be expensed. The minimum value of options yet to vest
is nil, as the options will be forfeited or cancelled if the vesting conditions are not met.
The amount expensed during the year denotes the amount expensed over the vesting period of the options or performance rights, and the percentage indicated denotes the proportion of this
expense over the KMP’s total compensation, and therefore the proportion of the KMP’s total compensation that is linked to the Group’s performance for the 2020 year.
For further information on each option and performance rights series, please refer to Note 21 to the financial statements.
Name, option or rights series number,
grant date, amount granted on
grant date and issue date
Executive Directors
Brad Sampson (i)
Options
Series
33
02/07/2019 26,900,000 19/07/2019
Balance at the
start of the year Granted or
allocated
as compen-
sation
No
Unvested
No
Cancelle
d
or
expired
(iv)
No %
Other
changes
(ii)
No
Balance at the
end of the year
Vested
and exer
-cisable
No
Unvested
No
Max value
yet to vest
No
Expensed
in 2020
Vested
and exer-
cisable
No %
Vested
%
No
Exer-
cised
No
0 26,900,000
- 8,966,666 33.3
- 26,900,000
- 8,966,666 33.3
-
-
-
-
-
-
- 8,966,666 17,933,334 465,308 208,173
- 8,966,666 17,933,334 465,308 208,173
45
45
64
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Share-based payments granted as compensation to KMP
Reconciliation of options as SBP arrangements and performance rights held by KMP (cont)
Balance at the
Vested
and exer-
start of the year Granted or
allocated
as compe-
nsation
No
cisable Unvested
No
No
Other
Balance at the
end of the year
Vested
No %
Exer-
cised
No
Cancelled
or expired
(iv)
No %
change
s
(ii)
No
Vested
and exer-
cisable Unvested
No
No
Max value
yet to vest
USD
Expensed
in 2020
%
USD
Name, option or rights series number,
grant date, amount granted on
grant date and issue date
Non-executive directors
David Hathorn
Options
Series 32 27/06/2019
Performance Rights
4,000,000 01/08/2019
Series 16 27/06/2018
1,500,000 01/08/2018
- 4,000,000
- 1,000,000
- 5,000,000
Jonathan Trollip
Performance Rights
Series 17 27/06/2019
500,000 01/08/2019
-
500,000
Timothy Keating
Performance Rights
Series 20 27/06/2019
David Netherway
Performance Rights
Series 19 27/06/2019
750,000 01/08/2019
-
500,000
500,000 01/08/2019
-
500,000
-
-
-
-
-
-
-
-
-
-
-
-
- (4,000,000) 100
(500,000)
-
-
(500,000) (4,000,000)
80
-
-
(250,000)
-
-
-
- (250,000)
-
- (250,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
500,000
3,220 202.151
3,220 202,151
16
-)
-
250,000
25,461
38,563
12
-
250,000
1,610
11,360 20
-
250,000
1,610
11,360 20
65
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Share-based payments granted as compensation to KMP
Reconciliation of options as SBP arrangements and performance rights held by KMP (cont)
Balance at the
Name, option or rights series number,
grant date, amount granted on
grant date and issue date
Vested
and exer-
start of the year Granted or
allocated
as compen-
sation
No
cisable Unvested
No
No
Exer-
cised
No
Cancelled
or expired
(iv)
No %
Other
change
s
No
Vested
and exer-
cisable
No
Vested
%
No
Unvested
No
Max value
yet to vest
USD
Expensed
in 2020
USD %
Balance at the
end of the year
Executives
Andrey Maruta
Options
Series 35 15/09/2019
Performance rights
12,000,000
25/06/20
Series 25 17/03/2020
200,000 17/03/2020
Gavin Chamberlain
Options
Series 34
19/07/2019
12,000,00
0
25/06/2020
Performance rights
Series 15 29/05/2017 2,200,000 29/05/2017
-
-
-
-
-
- 12,000,000 4,000,000 33
-
200,000
-
- 12,200,000 4,000,000
-
-
- 12,000,000 4,000,000 33
-
-
-
-
-
-
- 4,000,000 8,000,000
19,586 116,068 86
-
-
200,000
-
- 4,000,000 8,200,000
19,586 116,810)
741) 100
)
)
-
-
- 4,000,000 8,000,000
19,586 116,068
86
-
-
-
-
-
Series 25
17/03/2020
850,000 17/03/2020
0
850,000
-
2,200,000 12,850,000 4,000,000
50,000
-
490,000
6
-
-
-
-
-
1,760,000
800,000
-
-
53,190
33)
17,877 100
- 4.000.000 10,560,000
19,856 187,135
-
2,200,000
-
-
440,000
20
-
Guy De Grandpre
Options
Series 32 15/09/2019
12,000,000
25/06/20
-
-
9,000,000 3,000,000 33
-
-
-
- 3,000,000 6,000,000
14,690
88,163
85
66
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Share-based payments granted as compensation to KMP
Options and Performance Rights granted during 2020
The following table summarises the options as share-based payments and performance rights granted and approved to KMP
during the financial year ending 31 December 2020.
Options / Rights
Series
Option Series 34
Option Series 35
Option Series 36
Number of Options /
Rights Granted at
Grant Date
Number
Value of Options /
Rights Granted at
Grant Date
USD
12,000,000
12,000,000
9,000,000
135,655
135,655
101,741
Executive Directors
Gavin Chamberlain
Andrey Maruta
Guy De Grandpre
Shares issued on exercise of options or performance rights
Shares were issued to the following non-executive directors during the financial year ended 31 December 2020 following the
vesting of the performance rights.
Non-executive Directors
David Hathorn
Jonathan Trollip
David Netherway
Timothy Keating
Options / Rights
Series
Rights Series 16
Rights Series 17
Rights Series 19
Rights Series 20
Number of shares
granted in
exchange for
performance rights
500,000
250,000
250,000
250,000
67
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Shareholdings (ordinary shares)
The numbers of ordinary shares in the Company held during the financial year by KMP, including shares held by entities they
control, are set out below.
31 December 2020
Executive Directors
Brad Samson
Non-executive directors
David Hathorn (i)
Jonathan Trollip
Timothy Keating
David Netherway
Executives
Henko Vos
Balance at
1 Jan 2020
Received as
Remuneration
Options
Exercised / Rights
Converted
Other
Movements
(i)
2,464,705
-
-
Balance at
31 Dec 2020
2,464,705
49,269,093
2,190,051
250,000
2,122,689
56,296,538
7,688,465
2,676,139
-
3,473,055
13,837,659
500,000
250,000
250,000
250,000
1,250,000
58,720,007
-)
-)
-)
58,720,007
116,177,565
5,116,190
500,000
5,845,744
130,104,204
1
1
-
-
-
-
--)
-
1
1
Total
56,296,539
13,837,659
1,250,000
58,720,007
130,104,205
(i) Shares purchased from on-market acquisitions.
31 December 2019
Executive Directors
Brad Samson (ii)
Non-executive directors
David Hathorn (ii)
Jonathan Trollip
Timothy Keating
Leonard Math (i)
David Netherway
Executives
Henko Vos
Julien Babey (i)
Balance at
1 Jan 2019
Received as
Remuneration
Options
Exercised / Rights
Converted
Other
Movements
(i) (ii)
Balance at
31 Dec 2019
-
-
-
2,464,705
2,464,705
23,186,355
791,714
-
-
350,000
24,328,069
1
1,043,914
1,043,915
5,865,095
1,148,337
-
-
1,522,689
8,536,121
-
-
-
500,000
250,000
250,000
312,500
250,000
1,562,500
-
-
-
19,717,643)
-)
-)
(312,500)
-)
21,869,848
--)
(1,043,914)
(1,043,914)
49,269,093
2,190,051
250,000
-
2,122,689
56,296,538
1
-
1
Total
25,371,984
8,536,121
1,562,500
20,825,934
56,296,539
Other than otherwise indicated above, no other KMP held any ordinary shares in the Company during the current or prior years.
68
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Options, rights and equity warrants over equity instruments granted as compensation
31 December 2020
Executive Directors
Brad Sampson
Non-executive directors
David Hathorn
Jonathan Trollip
Timothy Keating
David Netherway
Executives
Andrey Maruta
Guy De Grandpre
Gavin Chamberlain
Balance at
1 Jan 2020
Received as
Remuneration
Rights
Vested
Other
Movements
(i) to (v)
Balance at
31 Dec 2020
Vested and
exercisable
at year end
26,900,000
5,250,000
500,000
500,000
500,000
33,650,000
-
-
2,200,000
2,200,000
-
26,900,000
8,966,666
-
-
-
-
-
(500,000)
(250,000)
(250,000)
(250,000)
(1,250,000)
12,200,000
9,000,000
12,850,000
34,050,000
-
-
-
-
(4,000,000)
-)
-)
(4,000,000)
-)
-)
(490,000))
(490,000))
750,000
250,000
250,000
250,000
28,400,000
-
-
-
-
8,966,666
12,200,000
9,000,000
14,560,000
35,760,000
4,000,000
3,000,000
4,000,000
11,000,000
Total
35,850,000
34,050,000
(1,250,000)
(4,490,000)
64,160,000
19,966,666
Other than otherwise indicated above, no other KMP held any options, rights or equity warrants over ordinary shares in the
Company during the year ended 31 December 2020.
.
69
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Other transactions with KMP during the financial year ended 31 December 2020
No KMP has entered into a material contract (apart from employment) with the Company and the Group. No amount of
remuneration is outstanding at 31 December 2020.
Nexia Perth Pty Ltd are engaged to provide accounting, administrative and company secretarial services for the Group on
commercial terms. Mr Henko Vos, who is based in Perth, Australia has been appointed as joint company secretary and is also
currently an employee with Nexia Perth. During the year, the total amount paid to Nexia Perth by the Group for providing
accounting, administration and company secretarial services was USD 84,203 and USD 114,484 to Smith & Williamson LLP.
St James’s Corporate Services Limited was appointed on 1 October 2018 and engaged to provide company secretarial services
for Kore Potash plc on commercial terms. During the year, the total amounts paid to St James’s Corporate Services Limited by
the Group for providing company secretarial services were USD 59,713.
There were no other transactions with KMP and its related parties.
Voting of shareholders at last year’s AGM held on 26 June 2020
The Company received 98.23% “yes” votes on its Remuneration Report for the 2020 financial year. The Company did not
receive any specific feedback at the AGM or throughout the year on its remuneration practices.
OTHER CORPORATE GOVERNANCE MATTERS
Code of Conduct
The Board acknowledges the need for continued maintenance of the highest standard of corporate governance practice and
ethical conduct by all Directors and employees of the Group. The Board has adopted a Code of Conduct charter to promote
ethical and responsible decision-making by the directors.
The Board has approved a Code of Conduct for Directors, Officers, Employees and Contractors, which describes the standards
of ethical behaviour that are required to be maintained. The Code of Conduct was approved prior to the Company’s listing on the
AIM market and on the JSE. The Group promotes the open communication of any unethical behaviour within the organisation.
Compliance with the Code of Conduct assists the Company in effectively managing its operating risks and meeting its legal and
compliance obligations as well as enhancing the Group’s corporate reputation.
The Code of Conduct describes the Group’s requirements on matters such as confidentiality, conflicts of interest, use of Group
information, sound employment practices, compliance with laws and regulations and the protection and safeguarding of the
Group’s assets.
An employee who breaches the Code of Conduct may face disciplinary action. If an employee suspects that a breach of the Code
of Conduct has occurred or will occur, he or she must report that breach to the CEO or either of the joint company secretaries,
via the Company’s confidential “Whistle Blowing” process. No employee will be disadvantaged or prejudiced if he or she reports
in good faith a suspected breach. All reports will be investigated, acted upon and kept confidential.
Anti-Bribery and Anti-Corruption
The Group’s Anti-Bribery and Anti-Corruption policy is set out in the Code of Conduct and has been aligned with relevant UK,
Australian and South African laws governing Anti-Bribery and Anti-Corruption. The Group takes a zero-tolerance approach to
acts of bribery and corruption by any Directors, officers, employees and contractors.
The Group will not offer, give or receive bribes, or accept improper payments to obtain new business, retain existing business or
secure any advantage and will not permit others to do so on its behalf.
70
CORPORATE GOVERNANCE REPORT (CONT)
OTHER CORPORATE GOVERNANCE MATTERS (CONT)
Dealings with Company Securities
The Group’s Securities Dealing Policy is binding on all Directors, Senior Executives and Employees who are in possession of
“inside information”. All such persons are prohibited from trading in the Company’s securities if they are in possession of ‘inside
information’. Subject to this condition and trading prohibitions applying to certain periods, trading is permissible provided the
relevant individual has received the appropriate prescribed clearance. The Board considers that the Share Dealing Code is in
compliance with the MAR, AIM, ASX and JSE requirements, and continues to meet the requirements of the Board.
Primary objective
The Group’s primary objective is to leverage into resource projects to provide a solid base in the future from which the Group can
build its resource business and create wealth for shareholders. The Group’s operations are subject to various environmental laws
and regulations under the relevant government’s legislation. Full compliance with these laws and regulations is regarded as a
minimum standard for the Group to achieve.
In pursuing this objective, the Group manages its business operations consistent with its Code of Conduct.
Market Disclosure
The Company is subject to parallel obligations under the AIM Rules and the Market Abuse Regulation, in addition to the ASX
Listing Rules and the JSE Regulations, in relation to the disclosure and control of price sensitive information. The Company has
obligations under corporate and securities laws and stock exchange rules to keep the market fully informed of information which
may have a material effect on the price or value of Group’s securities and to correct any material misrepresentation, mistake or
misinformation in the market.
The Group takes its continuous disclosure obligations seriously and requires that all of its Directors, Officers, Employees and
Contractors observe and adhere to the Group’s procedures and policies governing compliance with all laws pertaining to
continuous disclosure, tipping and insider trading.
The Company has a formal Disclosure Policy ("Disclosure Policy") addressing its continuous disclosure obligations and
arrangements. The objectives of the Disclosure Policy are to ensure that:
• The communications of the Group with the public are timely, factual and accurate and broadly disseminated in accordance
with all applicable legal and regulatory requirements;
• Non-publicly disclosed information remains confidential; and
• Trading of the Group's securities by directors, officers and employees of the Company and its subsidiaries remains in
compliance with applicable securities laws.
The Disclosure Policy also provides guidance to all Directors, Officers, Employees and Contractors of the Group of their
responsibilities regarding their obligation to preserve the confidentiality of undisclosed material information while ensuring
compliance with laws respecting timely, factual, complete and accurate continuous disclosure, price sensitive or material
information, tipping and insider trading.
The Disclosure Policy further covers disclosures in documents filed with the securities regulators and stock exchanges and written
statements made in the Group’s annual and quarterly reports, news releases, letters to shareholders, presentations by Senior
Management and information contained on Kore Potash’s website and other electronic communications. It extends to oral
statements made in meetings and telephone conversations with analysts and investors, interviews with the media as well as
speeches, press conferences and conference calls.
All announcements are approved by the Board, or approved delegates, prior to release with each announcement indicating the
relevant approving party. The Board is circulated copies of announcements released to ensure they remain informed of market
releases at all times.
If there is misuse of price sensitive or material information not yet disclosed to the market by trading or breach in confidentiality,
extremely serious penalties may apply to the individual or individuals involved.
71
CORPORATE GOVERNANCE REPORT (CONT)
OTHER CORPORATE GOVERNANCE MATTERS (CONT)
Shareholders
The Group places considerable importance on effective communications with its shareholders. The Group’s communication
strategy requires communication with shareholders and other stakeholders in an open, regular and timely manner so that the
market has sufficient information to make informed investment decisions on the operations and results of the Group. The strategy
provides for the use of systems that ensure a regular and timely release of information about the Group is provided to
shareholders.
The Company’s website contains a separate section titled “Investors” which contains key documents for its investors. The website
also provides:
•
•
•
•
•
•
Information about the Company;
An overview of the Group’s current projects;
Copies of its half year reports and annual reports;
Copies of quarterly cash flow reports and review of operations;
Investors’ presentations; and
Copies of its announcements to the stock exchanges.
The Company’s share register is maintained electronically by Computershare. Their contact details are disclosed in the Corporate
Directory of the Annual Report on page 3.
The Board encourages full participation of shareholders at the Company’s AGM to ensure a high level of accountability,
transparency and understanding of the Group’s strategy and goals. The Company provides information in its notice of meeting
that is presented in a clear, concise and effective manner. With the Company listed on three exchanges, it aims, where possible,
to hold general meetings at a reasonable time for all shareholders. Shareholders are provided with the opportunity at these
meetings to ask questions in relation to each resolution before they are put to a vote and discussion is encouraged by the Board.
The Company intends to conduct all voting at general meetings via a poll, as was the case for the two shareholder meetings held
during 2020.
One of the joint company secretaries, the Company’s external auditor and the Registrars are in attendance at general meetings
of the Company to assist with any queries shareholders may have.
The Corporate Governance Report was approved by the Board of Directors on 30 March 2021 and is signed on its behalf by
___________________________
David Hathorn
Non-Executive Chairman
_______________________________
Brad Sampson
Chief Executive Officer
72
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC
Opinion on the financial statements
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the Group's and of the Parent Company's affairs as at
31 December 2020 and of the Group's loss for the year then ended;
the Group financial statements have been properly prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006;
the Parent Company financial statements have been properly prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006 and as applied in accordance with the
provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Kore Potash plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the
year ended 31 December 2020 which comprise the consolidated and parent company statements of profit or loss and other
comprehensive income, the consolidated and parent company statements of financial position, the consolidated and parent
company statements of changes in equity, and the consolidated and parent company statements of cash flows, and notes to
the financial statements, including a summary of significant accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and international accounting standards in conformity with the requirements of
the Companies Act 2006, and as regards the Parent Company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
Material uncertainty related to going concern
We draw attention to Note 1(b) to the financial statements, which indicates that the Group is reliant on future fund raisings to
fund its exploration and development activities and fulfil its working capital requirements as they fall due. As stated in Note 1(b),
these events or conditions, along with other matters as set out in Note 1(b) indicate that a material uncertainty exists that may
cast significant doubt on the Group’s and the Parent Company’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Because of the judgements made by management, and the significance of this area, we have determined Going Concern to be
a key area of focus for the audit. As described in note 1(b), management have prepared cash flow forecasts for the period to 31
December 2022, which indicate that the Group are reliant on future fundraising activity during 2021 in order to meet its liabilities
as they fall due during this period. Our evaluation of the Directors’ assessment of the Group and the Parent Company’s ability
to continue to adopt the going concern basis of accounting and in response to the key audit matter included:
• We obtained management’s cash flow forecasts for the period to 31 December 2022. We assessed the key underlying
assumptions, including forecast levels of expenditure and exploration costs used in preparing these forecasts. In doing
so, we considered factors such as actual performance against budget and third party contracted commitments.
• We performed sensitivity analysis in respect of the key assumptions underpinning the forecasts, including operational
costs, levels of exploration expenditure and assessed the level of cash required under such sensitivities.
• We have discussed and gained an understanding of Management’s plans to raise funds in the short term as well as
the longer term financing plans for the assets and considered the impact of COVID-19 (Coronavirus) on these plans.
• We assessed the appropriateness of the disclosures included in the financial statements.
73
In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors
considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report.
Overview
Coverage
Key audit matters
Materiality
100% (2019: 100%) of Group total assets
2020
a
Going concern
Carrying value of exploration and evaluation (“E&E”) assets a
Group financial statements as a whole
US$2million (2019 - $1.6million) based on 1.25% of Total Assets (2019 – 1.0% of Total
Assets)
2019
a
a
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of
internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of
management override of internal controls, including assessing whether there was evidence of bias by the Directors that may
have represented a risk of material misstatement.
The Group’s principal operations are located in the Republic of Congo. In approaching the audit, we considered how the Group
is organised and managed. We assessed there to be four significant components, being the Parent Company and the three
exploration entities in the Republic of Congo: Sintoukola Potash S.A., Dougou Potash Mining S.A. and Kola Potash Mining S.A.
The remaining components were considered non-significant to the Group audit and we performed analytical review procedures
in respect of these.
A full scope audit for Group reporting purposes was performed on the significant components based in the Republic of Congo
by a local BDO member firm. The group audit team performed a full scope audit of the Parent Company, specific procedures
over key risk areas including the Key Audit Matters and the audit of the consolidation.
Our involvement with component auditors
For the work performed by component auditors, we determined the level of involvement needed in order to be able to conclude
whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on the Group financial statements as
a whole. Our involvement with component auditors included the following:
• Detailed Group reporting instructions were sent to the component auditors, which included the significant areas to be
covered by the audits (including areas that were considered to be key audit matters), and set out the information to be
reported to the Group audit team.
• The Group audit team was actively involved in the direction of the audits performed by the component auditor for
Group reporting purposes, along with the consideration of findings and determination of conclusions drawn.
• The Group audit team reviewed the component auditor’s work papers remotely, attended clearance meetings for the
significant components and engaged with the component auditors during their fieldwork and completion phases.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. In addition to the matter described in the Material uncertainty related to going concern section above, we have
determined the matter described below to be a key audit matter:
74
Key audit matter
Carrying value of exploration and evaluation (“E&E”) assets
At 31 December 2020, the Group held E&E assets on its balance sheet as detailed in in note 7.
As detailed in notes 1(q), there are judgments and inherent uncertainties around the recoverability of exploration and
evaluation assets. Management and the Board are required to assess whether there are any potential impairment triggers,
which would indicate that the carrying value of an asset at 31 December 2020 may not be recoverable.
Given the materiality of the E&E assets in the context of the Group’s statement of financial position and the significant
judgement involved in making the assessment of whether any indicators of impairment exist we consider this to be a key
audit matter.
How our audit addressed the key audit matter
We reviewed and challenged management’s impairment assessment which was carried out in accordance with relevant
accounting standards in order to determine whether there were any indicators of impairment. Our specific audit
procedures performed in this regard included:
The verification of license status, in order to check the legal title.
• Checking that there is an ongoing plan to develop the licence areas and that the licences remain valid.
•
• Meetings with Management in order to understand the future plans for the assets.
• Reviewing exploration activity to assess whether there was any evidence from exploration results to date which
would indicate a potential impairment
• Obtaining approved budgets and minutes of Board meetings to check that the Group intends to continue to
explore specific license’s by including future expenditure.
• Obtaining an understanding of Management’s expectation of commercial viability, reviewing any available
technical documentation, including the Kola Definitive Feasibility Study and DX Scoping Study, in order to
support this expectation and discussing results and operations.
• Reviewing correspondence with the Government and holding discussions with Operational Management
regarding ongoing updates to the Group’s exploration licences.
We assessed the appropriateness of the disclosures included in the financial statements with regards to the requirements
of relevant accounting standards.
Key Observations
We found management’s assessment of the carrying value of E&E assets to be acceptable and appropriately disclosed.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Materiality
Basis for determining
materiality
Rationale for the
benchmark applied
Group financial statements
31-Dec-20
US$2million
1.25% Total Assets
31-Dec-19
US$1.6million
1.0% Total Assets
Materiality was based on 1.25% of total
assets. We consider total assets to be the
most appropriate basis for materiality given the
Materiality was based on 1.0% of total assets.
We consider total assets to be the most
appropriate basis for materiality given the
75
Performance materiality
Basis for determining
performance materiality
Materiality
Basis for determining
materiality
Rationale for the
benchmark applied
Performance materiality
Basis for determining
performance materiality
Group is in the exploration and development
stage.
US$1.5million
75% of Group Materiality
Group is in the exploration and development
stage.
US$1.0million
60% of Group Materiality
Parent company financial statements
31-Dec-20
US$1.8million
Set at 90% of Group materiality
31-Dec-19
US$1.44million
Set at 90% (2019: 90%) of Group materiality given the assessment of the components
aggregation risk.
US$1.35million
75% of parent company Materiality
US$0.864million
60% of parent company Materiality
The level of performance materiality was set after considering a number of factors including the expected value of known and
likely misstatements and managements attitude towards proposed misstatements.
Component materiality
We set materiality for each component of the Group based on a percentage of Group materiality dependent on the size and our
assessment of the risk of material misstatement of that component. Component materiality was audited to a lower level of
materiality ranging from $0.2m to $1.8m. In the audit of the components, we further applied performance materiality levels of
75% of the component materiality to our testing to ensure that the risk of errors exceeding component materiality was
appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of US$0.04m (2019
- US$0.03m). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative
grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual
report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears
to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
As the Group has voluntarily adopted the UK Corporate Governance Code 2018 we are required to review the Directors’ statement
in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Parent
Company’s compliance with the provisions of the UK Corporate Governance Statement specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit.
Going concern
and longer-
term viability
• The Directors' statement with regards the appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified (set out on page 47-48); and
• The Directors’ explanation as to its assessment of the entity’s prospects, the period this assessment
covers and why the period is appropriate (set out on page 47-48).
76
Other Code
provisions
• Directors' statement on fair, balanced and understandable set out on page 44-45;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks (set
out on pages 45
• The section of the Annual Report that describes the review of effectiveness of risk management and
internal control systems (set out on pages 53 to 54); and
• The section describing the work of the Audit Committee (set out on page 53 to 54).
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report
and Directors’
report
Matters on
which we are
required to
report by
exception
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic report and the Directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Directors’ report have been prepared in accordance with applicable legal
requirements.
•
In the light of the knowledge and understanding of the Group and Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or
the Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for
•
our audit have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and
returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
•
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the statement of Directors’ responsibilities, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below:
77
• Holding discussions with management and the audit committee to understand the laws and regulations relevant to the
Group and company. These included elements of financial reporting framework, mining regulations and environmental
regulations.
• We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might
occur by meeting with management from various parts of the business to understand where it is considered there was a
susceptibility of fraud.
• We communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, and
component audit teams, and remained alert to any indications of fraud or non-compliance with laws and regulations
throughout the audit.
• Holding discussions with management and the audit committee to consider any known or suspected instances of non-
compliance with laws and regulations or fraud identified by them;
• Testing the appropriateness of journal entries made throughout the year by applying specific criteria to select journals
which may be indicative of possible irregularities and fraud;
• Performing a detailed review of the Group’s year-end adjusting entries and testing any that appear unusual as to nature or
•
amount to supporting documentation;
Assessing the judgements made by management when making key accounting estimates and judgements, and
challenging management on the appropriateness of these judgements; and
• Reviewing minutes from board meetings of those charges with governance to identify any instances of non-compliance
with laws and regulations.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that
the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the
events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
Matt Crane
For and on behalf of BDO LLP, Statutory Auditor
London, United Kingdom
30 March 2021
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127)
78
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
Directors’ remuneration
Equity compensation benefits
Salaries, employee benefits and consultancy
expense
Credit loss provision
London listing and re-domicile expenses
Administration expenses
Fair value change in derivative financial
liability
Interest income
Interest and finance expenses
Net
realised
foreign exchange gains
and
unrealised
Parent
Note
Dec 2020
USD
Dec 2019
USD
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
)
(550,509)
(176,388)
)
(572,961)
(907,102)
(834,760)
(176,388)
(828,445)
(907,102)
(1,081,425)
(588,273)
(1,150,649)
(1,687,419)
1,792,612
(68,374)
(1,010,164)
(16,375,499)
(47,839)
(1,637,942)
-
(68,374)
(985,438)
-
(49,675)
(1,245,041)
2(a)
2(c)
5
2(b)
1,027
502,345
1,027
28,083
(6,167)
48,378
32,898
(6,216)
7,070
30,116
(10,204)
42,800
502,345
52,936
(15,393)
(682)
Loss before income tax expense
(1,022,927)
(19,593,519)
(3,151,870)
(4,178,476)
Income tax
Loss for the year
3
(1,022,927)
-)
(19,593,519)
7,698
(3,144,172)
(24,276)
(4,202,752)
Other comprehensive income/(loss)
Items that may be classified subsequent to
profit or loss
Exchange differences on translating foreign
operations
Other comprehensive income/(loss) for the
year
TOTAL COMPREHENSIVE (LOSS) /
INCOME FOR THE YEAR
Loss attributable to:
Owners of the Company
Non-controlling interest
Total comprehensive (loss)/income
attributable to:
Owners of the Company
Non-controlling interest
-
-
-)
-)
11,321,754
(3,104,632)
11,321,754
(3,104,632)
(1,022,927)
(19,593,519)
8,177,582
(7,307,384)
(1,022,927)
-
(1,022,927)
(19,593,519)
-)
(19,593,519)
(3,141,042)
(3,130)
(3,144,172)
(4,204,007)
1,255
(4,202,752)
(1,022,927)
-
(1,022,927)
(19,593,519)
-)
(19,593,519)
8,180,712
(3,130)
8,177,582
(7,308,639)
1,255
(7,307,384)
Basic and diluted loss per share (cents per
share)
22
(0.04)
(1.68)
(0.17)
(0.36)
The accompanying notes from pages 84 to 128 form part of these financial statements.
79
STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Right-of-use-asset
Parent
Consolidated Entity
Dec 2020
USD
Restated
Dec 2019
USD
Dec 2020
USD
Dec 2019
USD
5,443,551
119,085
-
7,046,089
180,388
-
5,555,000
225,044
-
7,578,727)
358,954)
42,278
Note
4
5
6(a)
TOTAL CURRENT ASSETS
5,562,636
7,226,477
5,780,044
7,979,959)
NON CURRENT ASSETS
Trade and other receivables
Property, plant and equipment
Exploration and evaluation expenditure
Investment in subsidiary
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease liability
Derivative financial liability
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity – Ordinary Shares
Reserves
Accumulated losses
EQUITY ATTRIBUTABLE TO OWNERS OF
THE COMPANY
Non-controlling interests
TOTAL EQUITY
5
6
7
8
9
6(b)
10
11
11(f)
147,741,819 141,887,553
-)
-)
69)
147,741,888 141,887,622
-
-
69
99,436
542,418
198,432)
560,711)
172,025,750 156,019,360)
-)
156,788,503
-
172,667,604
153,304,524 149,114,099
178,447,648 164,758,462)
358,841
-
26
358,867
2,894,748)
-
1,053
2,895,801
786,020
-
26
786,046
2,968,093)
55,582
1,053)
3,024,728)
358,867
2,895,801
786,046
3,024,728)
152,945,657 146,218,298
177,661,602 161,733,734)
2,451,768
1,541,253
169,598,292 163,740,876
(19,063,831)
(19,104,403)
2,451,768
1,541,253)
238,515,593 221,336,423)
(60,584,489)
(62,743,176)
152,945,657 146,218,298
-)
152,945,657 146,218,298
-
178,224,185 162,293,187)
(559,453)
177,661,602 161,733,734)
(562,583)
The accompanying notes from pages 84 to 128 form part of these financial statements.
These Financial Statements for Kore Potash plc, registered number 10933682, were approved by the Board of Directors on 30
March 2021 and were signed on its behalf by:
___________________________
David Hathorn
Non-Executive Chairman
_______________________________
Brad Sampson
Chief Executive Officer
80
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Consolidated Entity
Balance at
1 January 2019
Loss for the period
Other comprehensive loss for the year
Total comprehensive (loss)/income for
the year
Transactions with shareholders
Transfer of previously lapsed options
Share Issue
Share issue costs
Share based payments
Balance at 31 December 2019
Loss for the period
Other comprehensive loss for the year
Total comprehensive (loss)/income for
the year
Transactions with shareholders
Transfer of previously lapsed options
Conversion of performance rights
Cancellation of performance rights
Share issues
Share issue costs
Share based payments
Ordinary
Shares
USD
Note
Share-Based
Payments
Reserve
USD
Share Premium
Reserve
USD
Foreign
Currency
Translation
Reserve
USD
Merger Reserve
USD
Accumulated
Losses
USD
Equity Attributable to the
Shareholders of Kore
Potash plc
USD
NCI
USD
Total
Equity
USD
860,852
12,161,843
13,054,936
(15,310,945)
203,738,800
(59,331,800)
155,173,686
(560,708)
154,612,978
-
-
-
-
-
-
-
-
-
-
(3,104,632)
(3,104,632)
-)
-)
-)
(4,204,007)
-
(4,204,007)
(3,104,632)
1,255
(4,202,752)
-
(3,104,632)
(4,204,007)
(7,308,639)
1,255
(7,307,384)
11(a)
10
11(a)
-)
680,401)
-)
-)
1,541,253)
(2,951,318)
-)
-)
1,229,083
10,439,608
-)
12,923,250)
(404,594)
-)
25,573,592
-
-
-
-
-
-
-
-
-
-)
-)
-)
-)
(18,415,577)
-
11,321,754
11,321,754
-)
-)
-)
-)
203,738,800)
-
-
-
2,951,318
-)
-)
-)
(60,584,489)
(3,141,042)
-
(3,141,042)
-)
13,603,651
(404,594)
1,229,083
162,293,187
-)
-)
-)
-)
(559,453)
-)
13,603,651
(404,594)
1,229,083
161,733,734
(3,141,042)
11,321,754
(3,130)
-
(3,144,172)
11,321,754
8,180,712
(3,130)
8,177,582
11(a)
11(a)
11(a)
10
11(a)
3,508
-
886,217
-
20,790
(127,825)
(212,111)
(642,419)
-
-
- 6,633,407
(281,199)
-
78,280
409,283
-
-
-
-
-
-
-
-
-
-
-
-
127,825
212,111
642,419
-
-
-
-
3,508
-
7,519,624
(281,199)
508,353
-
-
-
-
-
-
-
3,508
-
7,519,624
(281,199)
508,353
Balance at 31 December 2020
2,451,768
9,866,536
32,004,080
(7,093,823)
203,738,800
(62,743,176)
178,224,185
(562,583)
177,661,602
The accompanying notes from pages 84 to 128 form part of these financial statements.
81
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Parent
Balance at 31 December 2018
Loss for the year
Total comprehensive
(loss)/income for the year
Transactions with shareholders
Transfer of previously lapsed
options
Share issue
Share issue costs
Share based payments
Balance at 31 December 2019
Loss for the year
Total comprehensive
(loss)/income for the year
Transactions with shareholders
Conversion of performance
rights
Transfer of previously lapsed
options
Cancellation of performance
rights
Share issue
Share issue costs
Share based payments
Note
Ordinary Shares
USD
Share Based
Payments
Reserve
USD
Share
Premium
Reserve
USD
Merger Reserve
USD
Reorganisation
Reserve
USD
Accumulated
Losses
USD
Total
Equity
USD
860,852)
12,161,843)
13,054,936)
203,738,800)
(76,011,124)
(2,421,631)
151,383,676)
-)
-)
-)
-)
-)
-)
11(a)
10
11(a)
-)
680,401)
-)
-)
(2,951,318)
-)
-)
1,229,083
-)
12,923,250)
(404,594)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
(19,593,518)
(19,593,518)
(19,593,518)
(19,593,518)
2,951,318
-)
-)
-
-)
13,603,651
(404,594)
1,229,083
1,541,253)
10,439,608
25,573,592
203,738,800)
(76,011,124)
(19,063,831)
146,218,298)
-
-
-
-
11(a)
11(a)
11(a)
10
11(a)
3,508
(212,111)
-
886,217
-
20,790
(127,825)
(642,419)
-
-
409,283
-
-
-
-
-
6,633,407
(281,199)
78,280
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,022,927)
(1,022,927)
(1,022,927)
(1,022,927)
212,111
3,508
127,825
642,419
-
-
7,519,624
(281,199)
508,353
-
-
Balance at 31 December 2020
2,451,768
9,866,536
32,004,080
203,738,800
(76,011,124)
(19,104,403)
152,945,657
The accompanying notes from pages 84 to 128 form part of these financial statements.
82
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
Parent
Consolidated Entity
Note
31 Dec 2020
USD
31 Dec 2019
USD
31 Dec 2020
USD
31 Dec 2019
USD
CASH FLOWS FROM OPERATING
ACTIVITIES
Payments to suppliers
Payments to employees
Income tax received/(paid)
Net cash used in operating activities
CASH FLOWS FROM INVESTING
ACTIVITIES
Payments for plant and equipment
Payments for exploration activities
Amounts advanced to related parties
Interest received
Net cash used in investing activities
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of shares
Payment for share issue costs
Repayment of lease liabilities related to
offices
Interest paid on lease liabilities
Net cash provided by financing activities
Net (decrease)/increase in cash & cash
equivalents held
Cash and cash equivalents at beginning of
financial year
Foreign currency differences
Cash and cash equivalents at end of
financial year
13
6
7
5
11
11
4
(2,410,792)
(1,262,350)
-
(3,673,142)
(1,550,846)
(1,270,441)
-)
(2,821,287)
(1,688,877)
(2,341,702)
7,691
(4,022,888)
(2,396,209)
(2,482,790)
(45,130)
(4,924,129)
-
-
(5,190,116)
28,083
(5,162,033)
-)
-)
(2,920,914)
32,898)
(2,888,016))
(15,664)
(5,262,603)
-
30,116
(5,248,151)
(18,465)
(6,371,268)
-)
56,215)
(6,333,518)
7,519,624
(281,199)
12,761,449)
(13,127))
7,519,624
(281,199)
12,761,449)
(13,127))
-
-
(12,171)
(178,216)
-
7,238,425
-
12,748,322)
(192)
7,226,062
(7,322)
12,562,784)
(1,596,750)
7,039,019)
(2,044,977)
1,305,137
7,046,089
-)
7,578,727
6,187,113)
(5,788)
7,070)
21,250
86,477)
5,443,551
7,046,089
5,555,000
7,578,727
The accompanying notes from pages 84 to 128 form part of these financial statements.
83
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company is a public company incorporated and registered in England and Wales with primary dual listing on the AIM
market and on the ASX, and a secondary listing on the JSE. The consolidated financial statements of the Company as at
and for the year ended 31 December 2020 comprise the Company and its subsidiaries which are disclosed in Note 8 (together
referred to as the “Group”). The Group is involved in mining exploration activity in the RoC. The company is limited by shares.
The registered office of Kore Potash plc’s head office in the United Kingdom is 25 Moorgate, London, United Kingdom EC2R
6AY.
Basis of Preparation
(a) Statement of Compliance
The annual financial statements of the Company and the Group have been prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act 2006. The principal accounting policies
adopted by the Group and Company are set out below.
The financial statements were authorised for issue by the Directors on 30 March 2021.
New standards, interpretations and amendments issued not yet effective
There are a number of standards, amendments to standards, and interpretations which have been issued by that are effective
in future accounting periods that the group has decided not to adopt early.
The following amendments are effective for the period beginning 1 January 2022:
• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37);
• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);
• Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41); and
• References to Conceptual Framework (Amendments to IFRS 3).
In January 2020, the IASB issued amendments to IAS 1, which clarify the criteria used to determine whether liabilities are
classified as current or non-current. These amendments clarify that current or non-current classification is based on whether
an entity has a right at the end of the reporting period to defer settlement of the liability for at least twelve months after the
reporting period. The amendments also clarify that ‘settlement’ includes the transfer of cash, goods, services, or equity
instruments unless the obligation to transfer equity instruments arises from a conversion feature classified as an equity
instrument separately from the liability component of a compound financial instrument. The amendments were originally
effective for annual reporting periods beginning on or after 1 January 2022. However, in May 2020, the effective date was
deferred to annual reporting periods beginning on or after 1 January 2023.
Kore Potash Plc is currently assessing the impact of these new accounting standards and amendments. The Group does
not believe that the amendments to IAS 1 will have a significant impact on the classification of its liabilities.
Other
The Group does not expect any other standards issued, but not yet effective, to have a material impact on the group.
84
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(b) Going Concern
During the year ended 31 December 2020, the Group incurred a loss of USD 3,144,172 (year ended 31 December 2019:
USD 4,202,752) and experienced net cash outflows from operating and investing activities of USD 9,277,027 (year ended
31 December 2019: USD 11,257,647). Cash and cash equivalents totalled USD 5,555,000 at 31 December 2020 (at 31
December 2019: USD 7,578,727).
The Directors have prepared a cash flow forecast for the period ending 31 December 2022, which indicates that the Group
will not have sufficient liquidity to meet its working capital requirements to the end of the going concern period (31 March
2022), primarily being corporate costs and some work on the 1st Phase of the Definitive Feasibility Study (“DFS”) related to
the DX Project. The Group anticipates a deficit of c.USD 1.3 million towards the end of Q1 2022.
The Directors have considered various mitigating actions, which include raising additional capital in Q2 – Q3 2021 to enable
the Group to continue to fund its working capital requirements through the going concern period. The Directors have identified
a number of funding options available to the Group. The Directors note the Group has a history of successfully raising capital
on the AIM and JSE, and in the past on the ASX. However, factors beyond the Company’s control, including pandemic
diseases such as COVID-19, which affect the stock markets, may in turn have a negative impact on any fund raising
The Directors have reviewed the Group's overall position and outlook in respect of the matters identified above and are of
the opinion that there are reasonable grounds to believe that funding will be secured and therefore that the operational and
financial plans in place are achievable and accordingly the Group will be able to continue as a going concern and meet its
obligations as and when they fall due. The Directors will continue to pursue further capital raising initiatives in order to have
sufficient funds to continue the development of the DX Project and for general corporate purposes.
The ability of the Group to continue as a going concern is dependent on achieving the matters set out above. These
conditions indicate a material uncertainty which may cast significant doubt as to the Group’s ability to continue as a going
concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business.
The financial report does not include adjustments relating to the recoverability and classification of recorded asset amounts
or to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern.
85
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
(b) Basis of Measurement
The consolidated financial statements have been prepared on the basis of historical cost, adjusted for the treatment of certain
financial instruments, as explained in the accounting policies below. Historical cost is generally based on the fair values of
the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of
whether that price is directly observable or estimated using another valuation technique.
(c) Functional and Presentation Currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates. The functional currency of the ultimate parent entity (Kore Potash plc)
is US dollars. The functional currency of the subsidiaries are:
• Kore Potash Limited – US Dollars (USD)
• Sintoukola Potash S.A. - CFA Franc BEAC (XAF)
• Dougou Potash Mining S.A. - CFA Franc BEAC (XAF)
• Kola Potash Mining S.A. - CFA Franc BEAC (XAF)
• Kore Potash South Africa (Pty) Ltd – South African RAND (ZAR)
The presentational currency of the Group is US dollars.
(d) Foreign Currency Transactions and Balances
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of
the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange
ruling at the reporting date.
All differences in the consolidated financial report are taken to the Statement of Profit or Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rate at the date the fair value was determined.
As at the reporting date, the assets and liabilities of the foreign subsidiaries are translated into the reporting currency of the
Company at the rate of exchange ruling at the reporting date and the profit or loss in the Statement of Profit or Loss and
Other Comprehensive Income are translated at the weighted average exchange rates for the period. The exchange
differences on the retranslation are taken directly to Other Comprehensive Income.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity is recognised in the profit or loss in the
Statement of Profit or Loss and Other Comprehensive Income. The functional currency for Sintoukola is expected to change
to US dollars upon the commencement of mining, as potash is priced in US dollars.
86
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(e) Basis of Consolidation
Subsidiaries are entities controlled by the Group. The financial statements of the subsidiaries are prepared for the same
reporting period as the parent company, using consistent accounting policies.
Control, under IFRS10, is achieved when the Company:
• has power over the investee;
•
• has the ability to use its power to affect its returns.
is exposed, or has rights, to variable returns from its involvement with the investee; and
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control listed above. Subsidiaries are fully consolidated from the date on which
control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the
Group, other than in the event of a Group re-organisation as occurred during the year as described below.
The acquisition of Kore Potash Limited by the Company on 20 November 2017 is considered outside the scope of IFRS 3
Business Combinations and accordingly has been accounted for as a common control transaction. The investment in Kore
Potash Limited acquired by the Company as a result of the internal reorganisation was recognised at a value consistent with
the carrying value of the equity items in the Kore Potash Limited accounts immediately prior to the Scheme. In the Parent
entity, the difference between the carrying amount of share capital and options issued by the Company under the Scheme
and the investment in Kore Potash Limited has been recognised in a Reorganisation Reserve.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and
profit and losses resulting from intra-Group transactions have been eliminated in full.
The acquisition of subsidiaries has been accounted for using the purchase method of accounting, other than in the Group
re-organisation described above. The purchase method of accounting involves allocating the cost of the business
combination to the fair value of the assets acquired and the liabilities and contingent liabilities assumed at the date of
acquisition. Accordingly, the consolidated financial statements include the results of subsidiaries for the period from their
acquisition.
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and are
presented separately in the consolidated Statement of Profit or Loss and Other Comprehensive Income and within equity in
the consolidated Statement of Financial Position.
In the Company’s financial statements, investments in subsidiaries are carried at cost. A list of controlled entities is contained
in Note 8 to the financial statements.
87
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(f) Income Tax
The charge for current income tax expenses is based on the profit for the year adjusted for any non-assessable or disallowed
items. It is calculated using tax rates that have been enacted or are substantively enacted by the reporting date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be
recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on
accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is
settled. Deferred tax is recognised in the profit or loss in the Statement of Profit or Loss and Other Comprehensive Income
except where it relates to items that are recognised directly in equity, in which case the deferred tax is adjusted directly
against equity.
Deferred income tax assets are recognised to the extent it is probable that future tax profits will be available against which
deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse
change will occur in income taxation legislation and the anticipation that the Group will derive sufficient future assessable
income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
(g) Property, Plant and Equipment
Property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment losses.
The carrying amount of property, plant and equipment is reviewed at each reporting date to ensure it is not in excess of the
recoverable amount from those assets. The recoverable amount is assessed on the basis of the expected net cash flows
which will be received from the assets employment and subsequent disposal.
Property plant and equipment includes Drill Equipment, Camp buildings, machinery, office equipment and other transport
machinery and equipment.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight-line basis over their estimated useful lives to the
Group commencing from the time the asset is held ready for use. The depreciation rates used for the plant and equipment
is in the range of 10% - 40%. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each
reporting date. Depreciation of property, plant and equipment in SPSA is included in Capitalised Exploration and Evaluation
Expenditure.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the
carrying amount. These gains or losses are included in the profit or loss in the Statement of Profit or Loss and Other
Comprehensive Income.
88
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(i) Financial Assets
Financial assets are recognised in the statement of financial position when the Group becomes party to the contractual
provisions of the instrument.
Trade are held in order to collect the contractual cash flows and are initially measured at the transaction price as defined
in IFRS 15, as the contracts of the Group do not contain significant financing components. Impairment losses are
recognised based on lifetime expected credit losses in profit or loss.
Trade and other receivables are initially measured at fair value plus any direct attributable transaction costs. Subsequent
to initial recognition, trade and other receivables are measured at amortised cost using the effective interest method,
less any impairment losses.
Other receivables are held in order to collect the contractual cash flows and accordingly are measured on initial
recognition at fair value, which ordinarily equates to cost and are subsequently measured at cost less impairment due
to their short-term nature. A provision for impairment is established based on 12-month expected credit losses unless
there has been a significant increase in credit risk when lifetime expected credit losses are recognised. The amount of
any provision or reversal is recognised in profit or loss.
(i) Financial Liabilities and Equity
Financial liabilities and equity instruments issued by the Group are classified in accordance with the substance of the
contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity
instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
(ii) Effective Interest Rate Method
The effective interest rate method is a method of calculating the amortised cost of a financial asset or liability and
allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash flows through the expected life of the financial asset or liability, or, where appropriate, a shorter
period, to the net carrying amount on initial recognition.
(iii) Impairment of Non-Financial Assets Other Than Exploration and Evaluation Assets
The carrying amounts of the Group’s non-financial assets, are reviewed at each reporting date to determine whether
there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs
to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An
impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in the profit or loss in the Statement of Profit or Loss and Other
Comprehensive Income. In respect of other assets, impairment losses recognised in prior periods are assessed at each
reporting date for any indications that the loss has decreased or no longer exist. An impairment loss is reversed if there
has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to
the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss has been recognised.
(j) Trade and Other Payables
These amounts represent liabilities for goods and services provided to the entity prior to the end of the financial year
and which are unpaid. Trade and other payables are initially recognised at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, trade and other payables are measured at amortised cost using the
effective interest rate method.
89
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(k) Cash and Cash Equivalents
For purposes of the statement of cash flows, cash includes deposits at call with financial institutions and other highly
liquid investments with short periods to maturity which are readily convertible to cash on hand and are subject to an
insignificant risk of changes in value.
(l) Capitalisation of Exploration and Evaluation Expenditure
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and
evaluation asset in the year in which they are incurred where the following conditions are satisfied:
the rights to tenure of the area of interest are current; and
•
• at least one of the following conditions is also met:
•
the exploration and evaluation expenditures are expected to be recouped through successful development and
exploration of the area of interest, or alternatively, by its sale; or
• exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active
and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies,
exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortised of
assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement
of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying
amount of an exploration and evaluation asset may exceed its recoverable amount at the reporting date. The recoverable
amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger
than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment
loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount,
but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset in previous years.
Where a decision is made to proceed with development in respect of a particular area of interest, the relevant exploration
and evaluation asset is assessed for impairment and the balance is classified as a development asset. The point at which
an area of interest is considered developmental is based on finalisation of a definitive feasibility study, a bankable feasibility
study and the finalisation of appropriate funding.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to
abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are
amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular
review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation
to that area of interest.
Depreciation of fixed assets is also capitalised; this will then be amortised over the useful economic life of the asset.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration,
there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation.
Accordingly, the costs have been determined on the basis that the restoration will be completed within one year of
abandoning the site.
90
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(m) Share Based Payments
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of
the equity instruments at the grant date. The fair value grant rate is independently determined using the different option
pricing models that takes into account the exercise price, the term of the option, the market and non-market based vesting
and performance criteria, the impact of dilution, the tradeable nature of the option, the share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis
over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding
increase in equity.
When share options and performance rights are exercised, the Company issues new shares. The proceeds received net of
any directly attributable transaction costs are credited to share capital (nominal value) and share premium.
All goods and services received in exchange for the grant of any share-based payment are measured at their fair values
(n) Employee Benefits
(i) Wages, salaries and annual leave
Liabilities for wages, salaries and annual leave are recognised in respect of employees’ services up to the reporting date
and are measured at the amounts expected to be paid when the liabilities are settled.
(ii) Pension contributions
Contributions are made by the Group to pension funds as stipulated by statutory requirements and are charged as
expenses when incurred.
(iii) Employee benefit on costs
Employee benefit on costs, including payroll tax, are recognised and included in employee benefits liabilities and costs
when the employee benefits to which they relate are recognised as liabilities.
(o) Earnings per Share
(i) Basic earnings per share
Basic earnings per share is determined by dividing the net profit after income tax attributable to members of the
Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during
the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation
to dilutive potential ordinary shares.
(p) Issued Capital
Ordinary shares and CDIs are classified as equity. CDIs are instruments traded on the ASX that allow non-Australian
companies to list their shares on the exchange and use the exchange’s settlement systems. In the Company’s case, one
CDI is equivalent to one share traded on the AIM market or on the JSE, as a result, CDI’s are considered to be equity.
Costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the
proceeds. Costs directly attributable to the issue of new shares or options incurred in connection with a business combination,
are included in the cost of the acquisition as part of the purchase consideration.
91
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(q) Critical Accounting Judgements and Estimates
In the application of the Group’s accounting policies, which are described in this note, the directors are required to make
judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical experience and other factors that are considered
to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision and future periods if the revision affects both current and
future periods.
The areas involving significant accounting judgment are set out in the tables below:
Critical
accounting
judgement
Impairment of
exploration and
evaluation assets,
recovery of parent
company
investments and
intercompany
balances
Details
The ultimate recovery of the value of exploration and evaluation assets, the Company’s investment in
subsidiaries, and loans to subsidiaries is dependent on the successful development and commercial
exploitation, or alternatively, sale, of the exploration and evaluation assets. Please see note 7 (p.98) for the
disclosure of the exploration and evaluation asset
On a regular basis, management consider whether there are indicators as to whether the asset carrying
values exceed their recoverable amounts. This consideration includes assessment of the following:
(a) expiration of the period for which the entity has the right to explore in the specific area of interest with
no plans for renewal;
(b) substantive expenditure on further exploration for and evaluation of mineral resources in the specific
area is neither budgeted nor planned;
(c) exploration for and evaluation activities have not led to the discovery of commercially viable quantities
of mineral resources and the entity has decided to discontinue such activities in the specific area; and
(d) whether sufficient data exists to indicate that, although a development in the specific area is likely to
proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full
from successful development or by sale.
Management judgement is required to determine whether the expenditures which are capitalised as
exploration and evaluation assets will be recovered by future exploitation or sale or whether they should be
impaired. In assessing this, management determines the possibility of finding recoverable ore reserves
related to a particular area of interest, which is a subject to significant uncertainties. Many of the factors,
judgements and variables involved in measuring resources are beyond the Group’s control and may prove
to be incorrect over time. Subsequent changes in resources could impact the carrying value of exploration
and evaluation assets.
Where an impairment indicator is identified, the determination of the recoverable amount requires the use
of estimates and judgement in determining the inputs and assumptions used in determining the recoverable
amounts.
The key areas of judgement include:
• Recent exploration and evaluation results and resource estimates;
• Environmental issues that may impact on the underlying tenements;
• Fundamental economic factors that have an impact on the operations and carrying values of assets and
liabilities.
Based on the information the Company has on the above, it was concluded by management that amounts
were recoverable, and that no write down of exploration and evaluation assets, the Company’s investment
in subsidiaries, and intercompany balances was recognised. This may change as new information becomes
available.
92
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(q) Critical Accounting Judgements and Estimates (Cont)
Critical
accounting
judgement
Classification of
capitalised
exploration and
evaluation costs to
date
Details
Management judgement is required as to whether the assets associated with the Kola Potash Project
represents an exploration asset to be accounted for under IFRS 6 Exploration for and Evaluation of Mineral
Resources, or a development asset to be accounted for under IAS 16 Property, Plant and Equipment. A
conclusion that consideration is required under IAS 16 or IAS 36 would mean that a full impairment test of
the assets associated with the Kola Potash Project would have been required during 2020.
In reaching the judgement that the assets associated with the Kola Potash Project should remain capitalised
as exploration and evaluation assets, management has assessed whether technical and commercial viability
of extracting mineral resources has been demonstrated. Given the ongoing negotiation with the FC over the
final construction cost, and remaining permits to be obtained from the RoC, the Group has concluded that
final technical and commercial viability of the Kola Potash Project has yet to be finalised.
(r) Assumptions and Estimation Uncertainties
Information about assumptions and estimation uncertainties at 31 December 2020 that have a significant risk of resulting in
a material adjustment to the carrying amounts of assets and liabilities are set out in the table below.
Estimation
Uncertainty
Timing of
achieving
milestones related
to share-based
payment
arrangements in
existence
Details
The share-based payments arrangements are expensed on a straight-line basis over the vesting period,
based on the Group’s estimate of shares that will eventually vest. At each reporting date, vesting
assumptions are reviewed to ensure they reflect current expectations and immediately recognises any
impact of the revision to original estimates. If fully vested share options are not exercised and expire then
the accumulated expense in respect of these is reclassified to accumulated losses.
(s) Segment Reporting
Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker has been identified as the Board of Directors, which is responsible for
allocating resources and assessing performance of the operating segments.
93
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(t) Prior error
As at 31 December 2020, Kore Potash Plc, the company, had receivables owing to it from its underlying operating
subsidiaries in the Republic of Congo amounting to USD 147,860,904 (2019: USD 142,067,941). Whilst legally these loans
are repayable of demand, given the nature of the funding is for the subsidiaries exploration activity on long term assets, it is
unlikely that these loans will be called in the next 12 months or realised within a 12 month period. For 31 December 2020
the loans have been classified to non-current assets which reflects the period in which these assets will be realised in line
with the requirements of IAS 1. The nature of these loans has not changed in the last 12 months and therefore the loans
should have also been classified as non-current in the prior financial period. The comparative for 2019 has also been
restated to reflect the loans as non-current assets. The overall impact in 2019 is a decrease in current assets of USD
142,067,941 and an increase in non-current assets of USD 142,067,941 on the Company statement of financial
position. There is no impact on comparative total assets, net assets, profit or loss or cash flow movements.
NOTE 2: LOSS FOR THE YEAR
Expenses
(a) Equity based payments
Directors, KMP and other employees (i)
(b) Administration Expenses
Accounting, company secretarial and audit fees
Insurance expenses
Legal fees
Compliance, registration and other tax fees
Marketing and investor relations
Premises and office related costs
South Africa Recharge
Professional fees
Recruitment fees
Travel and accommodation expenses
SPSA Depreciation reversal (ii)
Other expenses
Parent
Dec 2020
USD
Dec 2019
USD
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
176,388
907,102
176,388
907,102
352,984
90,737
42,710
57,317
139,814
-
106,655
99,335
2,239
42,440
-
75,933
1,010,164
331,974
61,518
67,102
217,059
96,825
-
652,310
-
30,000
164,868
-
16,286
1,637,942
354,173
91,226
42,710
67,284
146,557
(2,808)
-
99,335
2,239
61,131
-
123,591
985,438
524,378
84,784
75,865
240,253
110,002
706
-
100,171
41,928
240,205
(732,978)
559,727
1,245,041
(i)
(ii)
Details of KMP and employee share-based payments can be found in Note 21.
Kola and DX projects are in Exploration & Evaluation (E&E) phase. No amortisation and depreciation is recognised
for E&E assets. Any Property Plant & Equipment (PP&E) used in E&E phase are depreciated and depreciation
charge is capitalised in E&E assets accordingly. Some depreciation charges were expensed in prior years but
subsequently reversed in 2019.
(c) Salaries, employee benefits and consultancy
expense
Wages and Salaries
Social Security costs
Consultancy costs
673,997
37,844
369,584
1,081,425
74,340
2,775
511,158
588,273
740,184
33,650
376,815
1,150,649
952,650
81,333
653,436
1,687,419
94
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 2: LOSS FOR THE YEAR (CONT)
(d) Average number of employees
Operational
Head Office
Number
-
9
9
Number
-
5
5
Number
34
12
46
Number
21
15
36
Total staff costs for the Group in the year ended 31 December 2020 were USD 2,169,079 (2019: USD 3,452,966). The staff
costs incurred during the year at a subsidiary, SPSA, of USD 733,108 has been capitalised as Exploration and Exploration
Asset (2019: USD 1,808,187).
NOTE 3: INCOME TAX EXPENSE
The components of tax expense comprise:
Current tax – foreign tax (credit)
Deferred tax
Total income tax expense
Parent
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
Dec 2020
USD
Dec 2019
USD
-)
-)
-)
-)
-)
-)
(7,698)
-)
(7,698)
24,276)
-)
24,276)
The prima facie income tax expense on pre-tax accounting loss from operations reconciles to the income tax expense in the
financial statements as follows:
Parent
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
Dec 2020
USD
Dec 2019
USD
Loss before tax
(1,022,927)
(19,593,519)
(3,151,870)
(4,178,476)
Parent company tax on loss at the UK corporation tax
rate of 19% (2019: 19%)
Different tax rates of subsidiaries operating in different
jurisdictions
Tax effect of:
Net non-deductible expenses
Income not taxable for tax purposes
Deferred tax asset not recognised
Permanent differences
Adjustments to opening and closing deferred tax
(194,356)
(3,722,769)
(598,855)
(793,910))
-)
-
(194,356)
(3,722,769)
(41,656)
(640,511)
189,991)
(603,919)
75,480
(354,192)
535,638
-
(62,570)
194,356
4,059
3,266,158
404,915
-
47,637
3,722,769
107,572
-
540,637
-
-
648,209
174,600)
-
453,595)
-)
-)
628,195)
Income tax (credit) / expense
-
-
(7,698)
24,276)
The statutory tax rate of Kore Potash plc is 19% (2019: 19%), representing the UK corporation tax rate. The Group is subject
to varying statutory rates, primarily being Australia (30%), Congo (see Note 7 regarding corporate tax concessions applicable
under the new mining convention) and South Africa (28%). The current tax credit of USD 7,698 (2019: charge of USD 24,276)
arose on the pre-tax income generated in South Africa for intercompany management services.
No deferred tax has been recognised in respect of the Group’s tax losses of USD 17,897,914 (2019: USD 14,759,166) that
are available for offset against any future taxable profits in the companies in which the losses arose. Of these tax losses,
USD 11,896,714 arose from the Australian entity and USD 5,890,483 arose from the parent entity (2019: USD 11,880,835
from the Australian entity and USD 2,878,311 from the parent entity).
The tax losses which arose from the Australian entity can be carried forward indefinitely to be offset against future years’
profits. A deduction for prior years’ losses will be denied where the Company cannot satisfy a ‘continuity of ownership’ test
or, failing this, the alternative ‘same business test’.
95
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 3: INCOME TAX (CONT)
Deferred tax assets have not been recognised in respect of the losses arising from the Australian entity or the parent entity
due to the uncertainty around timing of generating sufficient taxable profits in future to utilise the losses. These losses may
also not be utilised to offset taxable profits elsewhere in the group.
NOTE 4: CASH AND CASH EQUIVALENTS
Cash at bank
NOTE 5: TRADE AND OTHER RECEIVABLES
Current
Advance to employees
Net GST, PAYE and VAT recoverable
Prepayments
Other receivables
Non-Current
Rental deposits
Amounts due from subsidiaries (i) (ii)
Parent
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
Dec 2020
USD
Dec 2019
USD
5,443,551
5,443,551
7,046,089)
7,046,089) 5,555,000
5,555,000 7, 7,578,727)
7,578,727)
Parent
Restated
Dec 2019
Dec 2020
USD
USD
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
-
5151,690
29,369
88,670
119,111
1,046 111bbh9,587
(9,517955- 53,273
33,119
94,564
44,088
180,388 225,044
119,085
-
141,887,553
147,741,819
141,887,553
147,741,819
-) 99,436
-
99,436
19,640)
62,333)
187,539)
89,442)
358,954)
198,432)
-
198,432)
Total Trade and Other Receivables
147,860,904
142,067,941
324,480
557,386)
(i)
(ii)
The amount due from a subsidiary is interest-free and is repayable on demand.
The increase in the year relates to the transfer of intercompany balances from Kore Potash Plc to the
Congolese entity in order to further fund the development of the exploration asset.
IFRS 9 requires the Group to recognise an allowance for ECLs for all debt instruments not held at fair value through profit
or loss. The loans to the subsidiaries, Sintoukola Potash S.A. and Kore Potash Limited, are classified as repayable on
demand. IFRS 9 requires consideration of the expected credit risk associated with the loan. As the subsidiary company
does not have any liquid assets to sell to repay the loan, should it be recalled, the conclusion reached was that the loan
should be categorised as stage 3.
As part of the assessment of expected credit losses of the intercompany loan receivable, the Directors have assessed the
cash flows associated with a number of different recovery scenarios. This included consideration of the exploration project
risk, country risk and the value of the potential reserves. The 2019 classification of the Amounts due from subsidiaries has
been changed from current to non-current. See note 1(t) for details.
EXPECTED CREDIT LOSS PROVISION
Parent
Dec 2020
USD
Dec 2019
USD
As at 1 January
Increase in the year in relation to Kore Potash Limited
Reversal in the year in relation to Kore Potash Limited
As at 31 December
As at 31 December 2020 there were no other receivables that were past due but not impaired.
-
- 16,375,499
(1,792,612)
-
14,582,887 16,375,499
16,375,499
96
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 6: PROPERTY, PLANT AND EQUIPMENT
Parent
Dec 2020
USD
Dec 2019
USD
Plant and equipment – at cost
Less accumulated depreciation
Reconciliation:
Opening balance
Additions
Depreciation capitalised under exploration and evaluation
Depreciation expensed
Disposals
Foreign exchange differences
Closing balance at period end
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
Consolidated Entity
Dec 2020
USD
-) 2,267,839
-)
(1,725,421)
-) 542,418
Dec 2019
USD
2,126,019)
(1,565,308)
560,711)
560,711
-)
20,723
-)
(105,117)
-)
(2,304)
-)
-)
(10,408)
-) 78,813
-) 542,418
302,255)
392,334)
(89,267)
(13,161)
(15,667)
(15,783)
560,711)
NOTE 6A: RIGHT-OF-USE-ASSET
Parent
Consolidated Entity
Right-of-use asset at cost
Disposal of right-of-use asset
Less accumulated depreciation
Disposal of right-of-use asset depreciation
Less: impairment
Reconciliation:
Opening balance
Adjustment for adoption (cost)
Additions
Depreciation
Impairment
Foreign exchange differences
Closing balance at period end
NOTE 6B: LEASE LIABILITIES
Current
Dec 2020
USD
Dec 2019
USD
-)
-)
-)
-)
-)
-)
-
-)
-)
-)
-)
-)
-)
Parent
Dec 2020
USD
Dec 2019
USD
-)
-)
Dec 2020
USD
234,149)
(234,149)
(234,149)
234,149
-)
-)
Dec 2019
USD
234,149
-
(184,917)
-
(6,954)
42,278
42,278
-
-
(42,355)
-
77
-
220,439
14,557
(184,917)
(6,594)
(1,207)
42,278
-
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
-)
-)
55,582
55,582
-)
-)
-)
-)
-)
-)
-
-)
-)
-)
-)
-)
-)
-)
-)
The nature and accounting of Group’s leasing activities
At 30 September 2020, all the Group leases contracts had expired. The right of use assets in existence during the year are
for property with lease terms of 12 months or less. The Group has applied the recognition exemptions for these leases.
Contracts may contain both lease and non-lease components. The Group allocates consideration between lease and non-
lease components based on the price a lessor, or similar supplier, would charge to purchase that component separately.
The lease term begins at the commencement date and includes any rent-free periods provided by the lessor. Lease terms
vary between contracts and depend on the individual facts and circumstances of the contract.
Lease liabilities are measured at the present value of the remaining lease payments, discounted using the Group’s
incremental borrowing rate as at 1 January 2019. The Group’s incremental borrowing rate is the rate at which a similar
borrowing could be obtained from an independent creditor under comparable terms and conditions. The weighted-average
rate applied was 6.172%. There were two short-term leases during the year or at year end relating to property (2019: nil). A
total charge of USD 64,256 was incurred in relation to these leases (2019: USD nil).
97
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 7: EXPLORATION AND EVALUATION
EXPENDITURE
Opening balance
Exploration and evaluation expenditure capitalised
during the year
Foreign exchange differences
Closing balance at period end
Exploration and evaluation expenditure relating to:
Kola Potash Mining project
Dougou Potash Mining project
Parent
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
Dec 2020
USD
Dec 2019
USD
-)
-)
-)
-)
-)
-)
-)
-) 156,019,360 149,863,323
8,908,236)
-)
2,835,793
-) 13,170,597
(2,752,199)
-) 172,025,750 156,019,360)
-) 142,554,630 132,153,210)
23,866,150)
-) 29,471,120
-) 172,025,750 156,019,360
On 8 June 2017, a mining convention was signed by the Group and the Government of the RoC. The convention governs
the conditions of construction, operation and mine closure of the Kola and Dougou (including Dougou Extension) mining
projects. The terms and conditions of the mining convention include key investment promotion provisions, including the
following:
• Corporate tax concessions applicable for the first 10 years of each mining permit as production capacity is extended,
which includes zero corporation tax for the first five years from profitability, and a corporation tax rate of 7.5% for
the next five years;
• An ongoing corporation tax rate of 15% for the rest of the life of mine;
• Exemptions from withholding taxes including interest, dividends and capital gains during the term of the mining
convention;
• VAT and import duty exemptions (including all subcontractors) during construction;
• Royalties of 3% payable to the RoC, which is based on an equivalent to EBITDA;
• Guarantee from the RoC that it will facilitate and support the implementation of the project, as defined in the
convention (for example, in granting the necessary consents to permit export of the final product through the use of
a dedicated jetty); and
• The RoC to be granted a 3% carried equity interest in the project companies, which are currently wholly-owned by
Kore Potash Limited’s subsidiary, SPSA.
The mining convention has a term which covers the life of the Kola and Dougou mining permits including any extension
(25 years plus 15-year extension, renewable indefinitely upon proven mineable ore resources). The Group was awarded
the Sintoukola 2 Exploration Permit dated 9 February 2018 by the government of the RoC. The Sintoukola 2 exploration
permit has now expired at the end of February 2021 but the Company is considering reapplying for extension of the
permit.
On 7 December 2018, the Mining Convention covering the proposed staged development of the Kola and Dougou Mining
Licences was gazetted into law following ratification by the Parliament of the Republic of the Congo.
The result of this law being gazetted was that the RoC government were now entitled to a 10% equity interest in Dougou
and Kola. There is currently no shareholder agreement in place for this agreement.
Further information regarding the non-controlling interest is available in Note 11 (f).
The ultimate recoupment of costs carried forward for exploration expenditure phases is dependent on the successful
development and commercial exploitation, or alternatively, the sale of the respective areas of interest.
98
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 8: CONTROLLED ENTITIES
Controlled Entities
Country of
Incorporation
Kore Potash Limited (i)
Australia
Sintoukola Potash S.A. (“SPSA”) (i)
Kore Potash South Africa (Pty) Ltd
(“KPSA”) (i)
Republic of Congo
South Africa
Percentage
Owned
Investment
31 Dec 2020 31 Dec 2020
Percentage
Owned
Investment
31 Dec 2019 31 Dec 2019
%
100
97
100
USD
67
1
1
%
100
97
100
USD
67
1
1
Held through Sintoukola Potash S.A.:
Kore Potash Mining S.A. (“KPM”)
Dougou Potash Mining S.A. (“DPM”)
Republic of Congo
Republic of Congo
100
100
18,264
18,264
100
100
18,264
18,264
The principal activity of Kore Potash Limited during the financial year was for administrational and operational support for
the exploration for potash minerals prospects. The registered office of Kore Potash Limited is Level 3, 88 William Street,
Perth WA 6000.
The principal activity of SPSA and its two subsidiaries, KPM and DPM, during the financial year was exploration for potash
minerals prospect. The registered office for the three entities is 24 Avenue Charles de Gaulle, Immeuble Atlantic Palace BP
662 Pointe Noire, République du Congo.
The principal activity of Kore Potash South Africa (Pty) Ltd during the financial year was for South African administrative
and operational support for the exploration for potash minerals prospects. The registered office is 2 Bruton Road, Block C,
Nicol Main Office Park, Bryanston, Johannesburg, South Africa.
Parent
Dec 2020
USD
Dec 2019
USD
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
NOTE 9: TRADE AND OTHER PAYABLES
Current
Trade and other creditors
Accruals
Employee benefits and related payables
Amounts due to a subsidiary
Other Payables
Total Trade and Other Payables
5,738
353,103
251,730 223,964
1,964,451
407,322
26,057 154,320
-
-
652,510
- -
2,894,748
786,020
358,841
537,471
2,119,563
172,744
- -
414 138,315
2,968,093
Trade and other creditors are non-interest bearing and are normally settled on 30-day terms.
NOTE 10: ISSUED CAPITAL
Parent
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
Dec 2020
USD
Dec 2019
USD
2,451,768,173 Fully Paid Ordinary Shares at par value of
USD 0.001 each (31 December 2019: 1,541,253,564
Fully Paid Ordinary Shares at par value of USD 0.001)
2,451,768
1,541,253)
2,451,768
1,541,253)
Fully Paid Ordinary Shares
2,451,768
1,541,253) 2,451,768
1,541,253)
99
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 10: ISSUED CAPITAL (CONT)
Details
Issue of equity and performance rights (iii)
Date
31 Dec 2018 Balance at 31 December 2018
13 Feb 2019 Conversion of Class C Performance Rights (i)
17 Jul 2019 Capital raising at GBP0.016 each (ii)
18 Oct 2019
5 Dec 2019 Drill rig share issue (iv)
31 Dec 2019 Equity issued to directors in lieu of payment (v)
31 Dec 2019 Closing balance
31 Mar 2020 Equity issued to directors in lieu of payment (vi)
7 April 2020 Conversion of performance rights (vi)
25 June 2020 Conversion of performance rights (vii)
25 June 2020 Equity research services share issue (viii)
21 Sept 2020 Capital raising at GBP 0.008515 each (ix)
6 Oct 2020 Equity issued to directors in lieu of payment (x)
31 Dec 2020 Equity issued to directors in lieu of payment (xi)
31 Dec 2020 Closing balance
No. of Shares)
860,852,693
1,886,996
646,915,254
5,787,223
22,000,000
3,811,398
1,541,253,564
7,770,939
1,250,000
2,258,333
4,000,000
882,688,876
6,566,821
5,980,681
2,451,769,214
USD)
860,852
1,887
646,915
5,788
22,000
3,811
1,541,253
7,770
1,250
2,258
4,000
882,689
6,567
5,981
2,451,768
(i) On 13 February 2019, 1,886,996 Class C Performance Rights were converted into fully paid ordinary shares. The par
value of the 1,886,996 ordinary shares was USD 1,887.
(ii) On 17 July 2019, a total of USD 13,457,784 was raised from existing and new investors through the placing and direct
subscription of 646,914,254 ordinary shares in the Company at a placing price of GBP 0.0.016 per new ordinary share.
The par value of the 646,914,254 ordinary shares was USD 646,915.
(iii) On 18 October 2019, the issue of shares to certain Non-Executive Directors in lieu of remuneration or part remuneration
in respect of four quarterly periods ending 30 June 2020 was approved by shareholders at the General Meeting of the
Company. Subsequently, on 18 October 2019, 4,224,723 shares were awarded in-lieu-of cash to David Hathorn, David
Netherway and Jonathan Trollip. In the same announcement it was announced that, further to the unconditional vesting
of the Performance Rights issued to certain Non-Executive Directors and Mr Leonard Math, a former Non-Executive
Director, on 29 March 2019, being the first anniversary of admission to trading on AIM and as announced on 15 April
2019 and 21 June 2019,1,562,500 ordinary shares were issued to satisfy the Performance Rights. Accordingly, a total
of 5,787,223 shares were issued at a par value of USD 5,788.
(iv) On 5 December 2019, the Group acquired two drill rigs with ancillary equipment; in exchange for the drill rigs, the Group
issued 22,000,000 ordinary shares at a deemed price of GBP 0.01225 to Equity Drilling Limited. The par value of
22,000,000 shares was USD 22,000.
(v) On 21 January 2020, the Company issued in lieu of payment, 3,811,398 to David Hathorn, David Netherway and
Jonathan Trollip. The par value of this issue was USD 3,811
(vi) On 7 April 2020, 7,770,939 ordinary shares of USD 0.001 each were issued to David Hathorn, David Netherway and
Jonathan Trollip in lieu of cash remuneration or part remuneration for the quarter ended 31 March 2020 in line with the
cost reduction strategy announced on 27 June 2019. In addition, 1,250,000 ordinary shares of USD 0.001 each were
issued under the Company’s performance rights plans as previously announced on 7 April 2020.
(vii) On 25 June 2020, a total of 2,258,333 ordinary shares of USD 0.001 each were issued to certain current and former
employees of the Company to satisfy the conversion of vested Performance Rights in ordinary shares. Of these,
1,410,000, were issued to Gavin Chamberlain, the Company’s Chief Operating Officer.
100
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 10: ISSUED CAPITAL (CONT)
Movement in Share Capital of Consolidated Entity
(viii) On 25 June 2020, Align Research Limited, an unrelated party to the Company, has initiated coverage on the Company
and will provide on-going equity research services to the Company. As consideration for these services, 4,000,000
ordinary shares of USD 0.001 each in the Company were issued to Align Research Limited at an agreed price of 0.75p
per share, being the prevailing price at the date of signing the agreement.
(ix) On 21 September 2020, a total of USD 7,516,096 was raised from existing and new investors through the placing and
direct subscription of 882,688,876 ordinary shares in the Company at a placing price of GBP 0.008515 per new ordinary
share. The par value of the 882,688,876 ordinary shares was USD 882,689.
(x) On 6 October 2020, the Group issued in lieu of payment, 6,566,821 ordinary shares to David Hathorn, David Netherway
and Jonathan Trollip. The par value of this issue was USD 6,567.
(xi) On 15 January 2021, the Group issued in lieu of payment, 5,980,681 ordinary shares to David Hathorn, David Netherway
and Jonathan Trollip. The par value of this issue was USD 5,981.
NOTE 11: RESERVES
Parent
Consolidated Entity
SBP reserve (a)
Share premium reserve (b)
Foreign currency translation reserve (c)
Merger reserve (d)
Reorganisation reserve (e)
Total Reserves
Dec 2020
USD
9,866,536
32,004,080
-
Dec 2019
USD
Dec 2019
USD
10,439,608)
25,573,592)
-)
10,439,608)
25,573,592)
(18,415,577))
203,738,800 203,738,800) 203,738,800 203,738,800)
-
(76,011,124)-
163,740,876) 238,515,593 221,336,423)
(76,011,124)
169,598,292
-
Dec 2020
USD
9,866,536
32,004,080
(7,093,823)
SBP Reserve
(a)
Opening balance
Value performance rights converted in ordinary share
capital
Value of performance rights cancelled in the period
Value of lapsed options transferred to
accumulated losses (i)
Share based payment vesting expense (ii)
Closing balance
10,439,608
(212,111)
(642,419)
12,161,843)
-
10,439,608
(212,111)
12,161,843)
-
-
(642,419)
-
(127,825)
409,283
9,866,536
(2,951,318)
1,229,083)
10,439,608)
(127,535)
408,993
9,866,536
(2,951,318)
1,229,083)
10,439,608)
(i) For further details, refer to Note 11(e).
(ii) For parameters used in the valuation of the above options and performance rights see Note 21.
101
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 11: RESERVES (CONT)
(a) SBP Reserve (Cont)
Movement in SBP Reserve of the Consolidated Entity
Date
31 Dec 2018
13 Feb 2019
27 June 2019
28 June 2019
19 July 2019
15 Nov 2019
31 Dec 2019
31 Dec 2019
7 Apr 2020
7 April 2020
25 June 2020
25 June 2020
25 June 2020
27 June 2020
6 Dec 2020
31 Dec 2020
31 Dec 2020
Details
Closing balance
Conversion of performance rights
Conversion and cancellation of performance rights
Cancellation of Performance rights
Issue of unlisted options
Expiry of 50,000,000 options
SBP charge
Closing balance
Conversion of performance rights (i)
Cancellation of performance rights (ii)
Conversion of performance rights (iii)
Issue of performance rights (iv)
Issue of share options (v)
Transfer of lapsed options (vi)
Expiry of performance rights
SBP charge
Closing balance
No. of Options
71,200,000)
-
-
(17,200,000)
26,900,000
(50,000,000)
-)
30,900,000
-
-
-
-
33,000,000
(4,000,000)
-
-)
59,900,000
No. of
Performance
Rights
32,070,104)
(1,886,996)
(2,000,000)
-
-
-
-)
28,183,108
(1,250,000)
(11,579,107)
(2,258,333)
2,250,000
-
-
(1,253,750)
-)
14,091,918
USD
12,161,843)
(211,690)
(104,712)
-
-
(2,634,917)
1,229,084
10,439,608
(78,833)
(642,419)
(133,278)
-
-
(127,825)
-
409,283
9,866,536
(i) On 7 April 2020, the non-executive directors, satisfied their vesting condition of their performance rights and had the
following amounts of performance rights converted into shares:
Director
David Hathorn
David Netherway
Jonathan Trollip
Timothy Keating
Vested
500,000
250,000
250,000
250,000
(ii) On 7 April 2020, 11,579,107 performance rights were cancelled, USD 642,419 has therefore been reversed out from
the SBP reserve.
(iii) On 25 June 2020, 2,258,333 performance rights and were converted into ordinary shares. A reversal of USD 133,278
from the SBP reserve was recognised in respect of this.
(iv) On 25 June 2020, 2,250,000 of performance rights were issued to employees with 850,000 being issued to Gavin
Chamberlain and 200,000 being issued to Andrey Maruta.
(v) On 19 September 2019, Board approved the grant of 33,000,000 unlisted options to certain employees on 5 September
2019 under the Company’s Long Term Incentive Plan. The options were issued on 25 June 2020 in accordance with
the Company’s Long Term Incentive Plan. Of the 33,000,000 options issued, two grants of 12,000,000 were issued to
Gavin Chamberlain and Andrey Maruta)
102
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 11: RESERVES (CONT)
(a) SBP Reserve (Cont)
(vi) On 27 June 2020, 4,000,000 share options expired and USD 127,826 has therefore been reversed out from the SBP
reserve.
The SBP reserve is used to accumulate proceeds received from the issuing of options and accumulate the value of options
and performance rights issued in consideration for services rendered and to record the fair value of options and performance
rights issued but not exercised. The reserve is transferred to accumulated losses upon expiry or recognised as share capital
if exercised.
(b) Share Premium Reserve
Movements during the period
Opening balance
Capital raising on 17 July 2019 at GBP 0.016 each
Drilling Rig equipment share issue on 6 December 2019
Equity issued in lieu of payment
Capital raising on 19 September 2020 at GBP 0.0085
each
Share based payments
Less: Capital raising costs
Closing balance
Parent
Dec 2020
USD
25,573,592
-
-
-
Parent
Dec 2019
USD
13,054,936
12,476,647
337,920
108,683
Consolidated Entity
Dec 2020
USD
25,573,592
-
-
-
Dec 2019
USD
13,054,936
12,476,647
337,920
108,683
6,633,407
78,280
(281,199)
32,004,080
-
-
(404,594)
25,573,592
6,633,407
78,280
(281,199)
32,004,080
-
-
(404,594)
25,573,592)
The share premium reserve is used to record the difference between the monies received from capital raising and the par
value of the Company’s shares, being USD 0.001 per fully paid ordinary share (see Note 10).
(c) Foreign Currency Translation Reserve
Movements during the period
Opening balance
Currency translation differences arising during the year
Closing balance
Parent
Dec 2020
USD
Parent
Dec 2019
USD
-)
-)
-)
Consolidated Entity
Dec 2020
USD
(18,415,577)
11,321,754
(7,093,823)
Dec 2019
USD
(15,310,945)
(3,104,632)
(18,415,577)
-)
-)
-)
The foreign currency translation reserve is used to record currency differences arising from the translation of the financial
statements of the foreign subsidiary.
103
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 11: RESERVES (CONT)
(d) Merger Reserve
2017,
November
In
of
USD 0.001 each in respect of the shares on Kore Potash Limited, which had issued share capital at the date of the transaction
with a value of USD 204,510,196. As a result of this transaction, a Merger Reserve of USD 203,738,800 was created in both
the Parent and Consolidated Entity.
771,395,768
Company
shares
issued
value
with
par
the
a
(e) Reorganisation Reserve
In accordance with the Scheme of Arrangement, the Company became the new parent on 20 November 2017 and Kore
Potash Limited is the wholly-owned subsidiary of the Company. The Company elected to account for the acquisition of Kore
Potash Limited as a common control transaction. As a consequence, no acquisition accounting under IFRS 3 Business
Combination has arisen. The investment in Kore Potash Limited acquired by the Company as a result of the internal
reorganisation was recognised at a value consistent with the carrying value of the equity items in the Kore Potash Limited
accounts immediately prior to the Scheme. In the Parent entity, the difference between the carrying amount of share capital
and options issued by the Company under the Scheme and the investment in Kore Potash Limited totalling USD 76,899,326
was recognised in a Reorganisation Reserve in the parent company accounts during the year ended 31 December 2017.
(f) Non-controlling interest reserve
On 7 December 2018, the Mining Convention covering the proposed staged development of the Kola and Dougou Mining
Licences was gazetted into law following ratification by the Parliament of the Republic of the Congo.
Pursuant to the Mining Convention, the Republic of the Congo Government were granted a 10% equity interest in Kola
Mining SA and Dougou Mining SA, which are wholly owned by Sintoukola Potash S.A (“SPSA”). The Group will recognise
an increase in non-controlling interest from the 3% to 10%, upon the signing of the shareholder agreement. However, this
had not occurred at the year-end date.
Movements during the period
Opening balance
Loss/(profit) for the year (i)
Other comprehensive Loss
Closing balance
Parent
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
Dec 2020
USD
Dec 2019
USD
-)
-)
-
-
-)
-)
-
-
559,453
3,130
-
562,583
560,708)
(1,255))
-)
559,453)
(i)
Because of a small loss in SPSA, USD 3,130 was transferred to the non-controlling interest reserve
from retained earnings.
104
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 12: DIVIDENDS
No dividends have been proposed or paid during the year ended 31 December 2020 (2019: Nil).
NOTE 13: NOTES TO STATEMENT OF CASH FLOWS
Parent
Dec 2020
USD
Dec 2019
USD
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
Reconciliation of cash flows from operating activities:
Loss for the year
(1,022,927)
(19,593,519)
(3,144,172)
(4,202,752)
Adjustments for:
Depreciation of property, plant and equipment and
right-of-use assets
Equity compensation benefits
South Africa cost plus recharge
Net realised and unrealised foreign exchange losses
Interest received not classified as operating activities
cash inflow
Impairment of ROU asset
Credit loss provision
Loss on disposal
Interest paid on lease liabilities
Fair value change in derivative financial liability
Operating loss before changes in working capital
-
176,388
-
(42,589)
(28,083)
-
14,303
88,267
997,915
652,310
(7,070)
176,388
-
(37,010)
997,915
-
682
(32,898)
(30,116)
(56,215)
-
(1,792,612)
-
-
(1,027)
(2,710,850)
-
16,375,499
-
-
(502,345)
(2,110,108)
-
-
165
(7,446)
(1,027)
(3,028,915)
69,594
-
28,270
7,322
(502,345)
(3,569,262)
(Increase)/Decrease in receivables
(Increase) in tax payable
(Increase) in payables
Net cash used in operating activities
(907,476)
-
(54,815)
(3,673,142)
(40,128)
-
(671,051)
(2,821,287)
(930,448)
-
(63,525)
(4,022,888)
(19,657)
(20,855)
(1,314,355)
(4,924,129)
105
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 14: FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
Overview
The Group has exposure to the following risks from their use of financial instruments:
• market risk,
•
•
credit risk, and
liquidity risks.
The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the financial performance of the business. The Group will use different methods to measure
different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign
exchange and other price risks and ageing analysis for credit risk.
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and
processes for measuring and managing risk, and the management of capital. The Board of Directors has overall responsibility
for the establishment and oversight of the risk management framework. Management monitors and manages the financial
risks relating to the operations of the Group through regular reviews of the risks.
Financial Instruments by category
Group
FINANCIAL ASSETS
Cash at bank
Trade and other receivables
Total financial assets
FINANCIAL LIABILITIES
Trade and other payables
Derivative financial liability
Total financial liabilities
Parent
FINANCIAL ASSETS
Cash at bank
Investments in subsidiaries
Trade and other receivables
Total financial assets
FINANCIAL LIABILITIES
Trade and other payables
Derivative financial liability
Total financial liabilities
Fair value through profit or
loss
Dec-20
USD
Dec-19
USD
Amortised Cost
Interest Rate
Dec-20
USD
Dec-19
USD
-
-
-
-
-
-
5,555,000
196,797
5,751,797
7,578,727
557,386
8,136,113
-
(26)
(26)
-
(1,053)
(1,053)
(631,700)
-
(631,700)
(2,795,349)
-
(2,795,349)
Fair value through profit or
loss
Dec-20
USD
Dec-19
USD
Amortised Cost
Interest Rate
Dec-20
USD
Dec-19
USD
-
-
-
-
-
-
-
-
5,443,551
7,046,089
69
69
147,967,909
153,411,529
141,948,830
148,994,988
-
(26)
(26)
-
(1,053)
(1,053)
(358,841)
-
(358,841)
(2,894,748)
-
(2,894,748)
106
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 14: FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (CONT)
(a) Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is
to manage and control market risk exposures within acceptable parameters, while optimising the return.
(i) Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and are exposed to foreign currency risk through
foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and
cashflow forecasting.
As a result of the operating activities in the RoC and the ongoing funding of overseas operations from the United Kingdom,
the Group's Statement of Financial Position can be affected by movements in the Canadian Dollar (CAD) / US Dollar (USD)
exchange rate, British Pound (GBP) / US Dollar (USD) exchange rate, Congolese Franc (XAF) / US Dollar (USD) exchange
rate, and the South African Rand (ZAR) / US Dollar (USD) exchange rate.
A substantial portion of the Group's transactions are denominated in USD, with historically, the majority of costs relating to
drilling activities also denominated in the unit's functional currency.
The summary quantitative data about the Group’s financial instruments’ exposure to significant currency risk as presented
in USD is as follows:
CAD
31 December 2020
XAF
GBP
ZAR
EUR
31 December 2019
XAF
GBP
ZAR
FINANCIAL ASSETS
Cash at bank
Trade and other
receivables
20,425
658,241
107,401
358,215
1,827,121
4,251,321
269,870
61,406
-
1,046
96,315
11,813
-)
10,689
218,051
9,302
FINANCIAL LIABILITIES
Trade and other
payables
Derivative
financial liability
Net exposure
20,425
-
(358,842)
(272,859)
-
(26)
-
-
-
(553,000)
(1,575,123)
(256,393)
(61,193)
-)
(1,053)
-)
-)
300,419
(69,143)
370,028
1,274,121
2,685,834
231,528
9,515
107
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 14: FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (CONT)
(a) Market Risk (Cont)
(j) Foreign currency risk (cont)
Sensitivity analysis (Group)
A reasonably possible strengthening (weakening) of the CAD, GBP, XAF and ZAR against USD at 31 December 2020 would
have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or
loss for the Group by the amounts shown below. This analysis assumes all other variables, in particular interest rates, remain
constant. The impact of the possible strengthening (weakening) of the AUD and any other currencies against USD is minimal
and is not analysed.
31 December 2020
CAD (5% movement)
GBP (5% movement)
XAF (5% movement)
ZAR (5% movement)
Equity
Profit or Loss
Strengthening
Gain/(Loss)
USD
Weakening
Gain/(Loss)
USD
Strengthening
(Gain)/Loss
USD
Weakening
(Gain)/Loss
USD
1,021
15,021
(3,457)
18,501
(1,021)
(15,021)
3,457
(18,501)
(1,021)
(15,021)
3,457
(18,501)
1,021
15,021
(3,457)
18,501
The summary quantitative data about the Parent’s financial instruments’ exposure to significant currency risk as presented
in USD is as follows:
EUR
31 December 2020
XAF
GBP
ZAR
EUR
31 December 2019
XAF
GBP
ZAR
FINANCIAL ASSETS
Cash at bank
Trade and other
receivables
20,425
658,241
-
1,046
FINANCIAL LIABILITIES
Trade and other
payables
Derivative
financial liability
Net exposure
-
(358,842)
-
(26)
20,425
300,419
-
-
-
-
-
354,167
1,716,362
4,251,321
-
-
-
-)
9,587
-)
(1,575,123)
-)
(1,053)
354,167
1,716,362
2,684,732
-)
-)
-)
-)
-)
-)
-)
-)
-)
Sensitivity analysis (Parent)
A reasonably possible strengthening (weakening) of the GBP against USD at 31 December 2020 would have affected the
measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss for the Parent
by the amounts shown below. This analysis assumes all other variables, in particular interest rates, remain constant.
31 December 2020
GBP (5% movement)
CAD (5% movement)
ZAR (5% movement)
Equity
Profit or Loss
Strengthening
Gain/(Loss)
USD
Weakening
Gain/(Loss)
USD
Strengthening
(Gain)/Loss
USD
Weakening
(Gain)/Loss
USD
15,021
1,021
17,708
(15,021)
(1,021)
(17,708)
(15,021)
(1,021)
(17,708)
15,021
1,021
17,708
108
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 14: FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (CONT)
(a) Market Risk (Cont)
Interest rate risk
(ii)
The Group is exposed to movements in market interest rates on short term deposits. The Group and Company’s policy is to
retain its surplus funds on the most advantageous term of deposit available. Given the Directors do not consider interest
income is significant in respect of the Group’s and Company’s operations and as the Group does not currently have any
debt, no sensitivity analysis has been performed.
The Group’s exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets
and financial liabilities is set out in the following table:
Weighted Average
Effective Interest
Rate
Dec 2020 Dec 2019
Fixed
Interest Rate
Dec 2020 Dec 2019
Floating
Interest Rate
Dec 2020 Dec 2019
%
%
USD
USD
USD
USD
Non-Interest
Bearing
Dec 2020
USD
Dec 2019
USD
FINANCIAL ASSETS
Cash at bank
Trade and other
receivables
Total financial assets
FINANCIAL LIABILITIES
Trade and other
payables
Derivative financial
liability
Total financial liabilities
0.28%
1.95%
5,443,551
4,200,000
-
5,443,551
-
4,200,000
-
-
-
-
-
-
-
-
-
3,378,727
-
3,378,727
-
-
109,174
109,174
307,315
307,315
-
-
-
631,701 2,150,056
26
1,053
631,727 2,151,109
All receivables and payables in the Parent at 31 December 2020 and at 31 December 2019 are non-interest bearing.
Financial assets carried at amortised cost
Trade receivables from other entities are carried at cost less any allowance for doubtful debts. Other receivables are carried
at cost. Interest is recorded as income using the effective interest rate method.
Financial liabilities carried at amortised cost
Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the
Group.
Net fair value of financial assets and liabilities
The carrying amount of financial assets and liabilities at 31 December 2020 and 31 December 2019 is equivalent to the fair
value.
(b) Credit risk
Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash
inflows from financial assets on hand at the reporting date.
The Group has a significant concentration of credit risk arising from its bank holdings of cash and cash equivalent. This risk
is mitigated by credit control procedures.
109
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 14: FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (CONT)
(c) Liquidity and capital risk management
The Group’s total capital is defined as the shareholders’ net equity plus any net debt. The objectives when managing the
Group’s capital is to safeguard the business as a going concern, to maximise returns to shareholders and to maintain an
optimal capital structure in order to reduce the cost of capital.
The Group does not have a target debt / equity ratio but has a policy of maintaining a flexible financing structure so as to be
able to take advantage of investment opportunities when they arise. There are no externally imposed capital requirements.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.
The table below analyses the Group’s financial liabilities into maturity groupings based on the remaining period from the
balance date to the contractual maturity date.
31 Dec 2020
Non-derivatives
Non-interest bearing
Trade and other payables
Total Financial Liabilities
31 Dec 2019
Non-derivatives
Non-interest bearing
Trade and other payables
Total Financial Liabilities
Within 1 Month
USD
1-3 Months
USD
3-12 Months
USD
631,701
631,701
-
-
Within 1 Month
USD
1-3 Months
USD
3-12 Months
USD
1,855,153
1,855,153
127,169
127,169
-
-
-
-
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s
reputation.
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and actual cash
flows.
If the Group anticipates a need to raise additional capital within 6 months to meet forecasted operational activities, then the
decision on how the Company will raise future capital will depend on market conditions existing at that time.
Please see note 1(b) Going Concern for further information on liquidity risk.
110
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 15: SEGMENT INFORMATION
Management has determined that the Company and the Group has one reporting segment being mineral exploration in
Central Africa.
As the Group is focused on mineral exploration in Central Africa, management make resource allocation decisions by
reviewing the working capital balance, comparing cash balances to committed exploration expenditure and reviewing the
current results of exploration work performed. This internal reporting framework is the most relevant to assist the Board with
making decisions regarding the Group and its ongoing exploration activities, while also taking into consideration the results
of exploration work that has been performed to date and capital available to the Company.
NOTE 16: EVENTS SUBSEQUENT TO REPORTING DATE
On 15 January 2021 a total of 2,909,381 ordinary shares of USD 0.001 each in the Company were issued to certain Non-
Executive Directors of the Company in lieu of cash fees for the quarter ended 31 December 2020, as approved at the General
Meeting of the Company held on 18 September 2020. In addition, the Company has also issued 3,071,251 ordinary shares to
certain employees and ex- employees, following the vesting of Performance Rights awarded under the Company’s
Employee Performance Incentive Plans.
Subsequent to the year-end, on 10 March 2021, the Company’s Chief Financial Officer, Mr Andrey Maruta, informed the
Board of his intention to leave Kore Potash in order to accept a position at another company. Andrey will continue to work
as the Company’s Chief Financial Officer through his contractual notice period of 3 months. His last day of employment will
be 10 June 2021. During Andrey’s notice period the Company will commence the process to select his replacement and will
update shareholders on the new appointment in due course.
There are no other significant events that have occurred since the reporting date that require separate disclosure.
111
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 17: COMMITMENTS FOR EXPENDITURE
Exploration and Evaluation Expenditure Commitments
In order to maintain current rights of tenure to exploration permits, the Group is required meet minimum expenditure
requirements by performing exploration and development work. As at year end, the minimum expenditure requirement has
not yet been determined with respect to the Group’s Sintoukola 2 exploration permit. However, when the minimum
expenditure requirement is confirmed this will need to be satisfied over a period of 3 years. The Sintoukola 2 exploration
permit has now expired at the end of February 2021 but the Company is considering reapplying for extension of the permit.
There are no minimum expenditure requirements with respect to the Group’s mining licences. One of the key investment
promotion provisions for the Mining Convention includes that the RoC is to be granted a 10% carried equity interest in the
project companies, which are currently wholly owned by the Group’s subsidiary, SPSA.
If the Group decides to relinquish certain licences and/or does not meet the obligations of the new mining convention, assets
recognised in the statement of financial position may require review to determine the appropriateness of the carrying values.
The sale, transfer or farm-out of exploration rights to third parties will reduce or extinguish these obligations.
Kola DFS Commitment
On 28 February 2017 the Company signed a contract with TechnipFMC, VINCI Construction Grands Projets, Egis and Louis
Dreyfus Armateur (the FC), for the implementation of the DFS.
At the date of this report, the Group had the following DFS commitment:
Parent
Dec 2020
USD
Parent
Dec 2019
USD
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
-
-
-
-
1,659,703
-
-
1,659,703
-
-
-
-
1,659,703
-
-
1,659,703
The commitment outstanding at 31 December 2019 was fully paid in the year, and no further commitment remained
outstanding at 31 December 2020.
112
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 18: AUDITOR’S REMUNERATION
Fees payable to the Company’s external auditor and their
associates for the audit of the Company’s annual
accounts
BDO – External Auditor.
Total audit fees
Fees payable to the Company’s auditor and their
associates for other non-audit services to the Group
Half-year review
Parent
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
Dec 2020
USD
Dec 2019
USD
70,610
70,610
59,804
59,804
108,128
108,128
93,605
93,605
20,495
19,147
20,495
19,147
Total fees payable to the Company’s external auditor
and their associates
91,105
78,951
128,623
112,752
NOTE 19: RELATED PARTY TRANSACTIONS
Directors’ remuneration
The expense of USD 834,760 recognised (2019: USD 828,445) includes directors fees paid and remuneration for the current
Chief Executive Officer.
The Company paid USD 28,665 to Jonathan Trollip as directors fees (2019: USD 46,620.00 paid to Piaster Pty Ltd as trustee
for the Trollip Family Superannuation Fund) Mr Trollip is a director of and has a beneficial interest in Piaster Pty Ltd.
During the year the Group issued to its directors in shares-in-lieu of payment of their salaries, details of these issues can be
found in notes 10 and 11. The Group also issued to certain directors’ performance rights and share options, details of these
issues can be found in notes 11 and 21.
Other transactions with the Company and the Group
Smith & Williamson LLP and Nexia Perth Pty Ltd are engaged to provide accounting, administrative and company secretarial
services for the Group on commercial terms. Mr Henko Vos, who is based in Perth, Australia has been appointed as joint
company secretary and is also currently an employee with Nexia Perth. During the year, the total amount paid to Nexia Perth
by the Group for providing accounting, administration and company secretarial services was USD 84,203 (2019: USD
141,886) and USD 118,989 (2019: USD 92,394) to Smith & Williamson LLP. There were no amounts outstanding owed in
respect of services provided by Nexia Perth or Smith & Williamson LLP at 31 December 2020 (2019: USD nil)
St James’s Corporate Services Limited was engaged to provide company secretarial services for the Company on
commercial terms. During the year, the total amount paid to St James’s Corporate Services Limited by the Group for providing
company secretarial services was USD 59,713 (2019: USD 60,830). There were no amounts outstanding owed to in respect
of services provided by St James’s Corporate Services Limited at 31 December 2020 (2019: USD nil).
There were no other transactions with KMP and its related parties.
113
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 20: KMP DISCLOSURES
The following were a KMP of the Company and the Group at any time during the reporting period and unless otherwise
indicated were a KMP for the entire period.
Executive Directors
Brad Sampson
Non-Executive Directors
David Hathorn
Jonathan Trollip
Timothy Keating
David Netherway
Trinidad Maria Reyes Perez
Joes Antonio Merino
Executives
Henko Vos
St James’s Corporate Services
Limited
Andrey Maruta
Guy de Grandpre
Gavin Chamberlain
Chief Executive Officer (appointed on 4 June 2018)
Non-Executive Chairman (appointed on 25 August 2015)
Non-Executive Director (appointed on 17 November 2017)
Non-Executive Director (appointed on 17 November 2017)
Non-Executive Director (appointed on 12 December 2017)
Non-Executive Director (appointed on 24 November 2020)
Non-Executive Director (resigned on 24 November 2020)
Joint Company Secretary (appointed on 7 November 2016)
Joint Company Secretary (appointed on 1 October 2018)
Chief Financial Officer (appointed 21 September 2019)
Country Manager - RoC (appointed 12 February 2019, dismissed 16 July 2020)
Chief Operating Officer (appointed 1 October 2017)
KMP compensation
The KMP compensation included in “Directors Remuneration”, “Equity Compensation Benefits” “Employee and Consultant
Expenses” and “Exploration Expenditure” is as follows:
Short-term employee benefits
Post-employment benefits
Termination benefits
Equity compensation benefits
Consolidated Entity
Dec 2020
USD
1,530,048
-
-
775,552
2,305,600
Dec 2019
USD
1,807,001
6,050
325,705
981,042
3,119,798
There were five directors who held office at the end of the 2020 (2019: six). Details of directors’ remuneration are provided
in the Directors’ Remuneration Report on pages 55 to 70 of this Annual Report.
Individual directors and executives’ compensation disclosures
Information regarding individual directors and executives’ compensation and equity instruments disclosures are provided in
the Remuneration Report section of the Directors’ Report. Apart from the details disclosed in this note, no Director has
entered into a material contract with the Company or the Group since the end of the previous financial year and there were
no material contracts involving directors’ interests existing at year-end.
114
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 21: SHARE-BASED PAYMENTS
Recognised share-based payments
The expense recognised for employee and consultant services during the year is shown in the table below:
Parent
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
Dec 2020
USD
Dec 2019
USD
Expense arising
payment transactions (Note 11)
from equity-settled share-based
176,388
907,102
176,388
907,102
In addition, the amounts capitalised to exploration and evaluation expenditure from share-based payment transactions for
staff whose services are directly attributable to the operational activities of the Kola and Dougou mining projects are as
follows:
Amounts capitalised
expenditure arising
payment transactions
to exploration and evaluation
from equity-settled share-based
232,895
321,982
232,895
321,982
Parent
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
Dec 2020
USD
Dec 2019
USD
Consolidated Entity
The Group granted shares rights and options to KMP and other employees as part of as an incentive for future services and
as a reward for past services. The table above shows the vesting expense recognised during the year of USD 176,388 (2019:
USD 907,102) and vesting expenses capitalised to exploration and evaluation expenditure of USD 232,895 (2019: 321,982).
Details of the share options outstanding during the year are as follows:
Outstanding at beginning at year
Granted during the year
Cancelled during the year
Lapsed during the year
Outstanding at the end of the year
2020
2019
Number of
share
options
30,900,000
33,000,000
-
(4,000,000)
59,900,000
Weighted
average
exercise
price
Number of
share
options
GBP 0.033
GBP 0.022
-
GBP 0.11
GBP 0.0242
21,200,000
26,900,000
(17,200,000)
-
30,900,000
Weighted
average
exercise
price
GBP 0.11
GBP 0.022
GBP 0.11
-
GBP 0.165
The share options outstanding at 31 December 2020 had a weighted average exercise price of GBP 0.022 and a weighted
average contractual life of 4.65 years.
115
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP
Performance
Rights
Rights Issue
7 (i)
9 (i)
12 (i) (iii)
13(i)
14 (i) (iii)
15 (i)
16-20 (iii)
25 (ii)
Number of
rights at 31
December
2019
2,255,000
5,881,250
1,405,000
660,000
3,747,003
11,734,855
2,500,000
-
28,183,108
Cancelled in
period
Exercised
Issued in
the period
Lapsed
rights
(1,001,250)
(850,000)
(700,000)
-
(52,004)
(8,975,853)
-
(11,579,107)
-
-
(100,000)
-
(2,158,333)
-
(1,250,000)
-
(3,508,333)
-
-
-
-
-
-
-
2,250,000
2,250,000
(1,253,750)
-
-
-
-
-
-
-
(1,253,750)
Number of
rights at 31
December
2020
-
5,031,250
605,000
660,000
1,536,666
2,759,002
1,250,000
2,250,000
14,091,918
Time to
expiry
(Years)
-
0.17
1.42
1.42
1.42
1.42
1.39
4.24
Performance Rights
Number of rights at
31 December 2018
Cancelled
in period
Exercised
Number of
rights at 31
December
2019
Charged in
the period
(USD)
Time to
expiry
(Years)
Rights Issue
6
7-8
10
12
13
14
15
16-20
1,886,996
2,255,000
5,881,250
1,405,000
660,000
3,747,003
11,734,855
4,500,000
32,070,104
-
-
-
-
-
-
-
(437,500)
(437,500)
(1,886,996)
-
-
-
-
-
-
(1,562,500)
(3,449,496)
-
2,255,000
5,881,250
1,405,000
660,000
3,747,003
11,734,855
2,500,000
28,183,108
-
4,092
217,767
34,746
-
23,455
212,476
230,324
722,860
-
0.93
1.17
2.42
2.42
2.42
2.42
2.39
The total charged for the year ended 2020 in respect of the above performance rights was USD 90,095.
i. Performance Rights cancelled during the period:
Following the determination by the Board that the applicable vesting conditions within each category would not be achieved, 11,579,107
Performance Rights previously issued have been cancelled as follows:
Performance Rights expiring 6 December 2020 (Employees) - Series 7-8
Performance Rights expiring 1 March 2021 (ex-Director) - Series 10
Performance Shares vesting on 31 May 2019 - Series 12
Performance Shares under Short Term Incentive Scheme Plan - Series 14
Performance Shares under Long Term Incentive Plan – Series 15
Total
1,001,250
850,000
700,000
52,004
8,975,853
11,579,107
.
116
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP (cont)
Performance Rights issued during the period:
During the period, the Company issued 2,250,000 Performance Rights to employees under its Short-Term Incentive Plan with the same
performance criteria as the performance rights currently in issue with vesting conditions based on required service periods. These
Performance Shares vests a third on award, a third after 1 year of continuous service and a third after 2 years continuous service.
Employee
Gavin Chamberlain (COO)
Andrey Maruta (CFO)
Other employees
Total
Series 25
850,000
200,000
1,200,000
2,250,000
Iii Performance Rights converted into ordinary shares during the period:
On 7 April 2020, 1,250,000 Performance Rights Series 16 – 20 for Non-Executive Directors were converted into ordinary shares
following the satisfaction of the vesting conditions of the Performance Rights, being the second anniversary of admission to trading on
AIM. The following is the breakdown of the ordinary shares issued under the Performance Rights:
David Hathorn
David Netherway
Jonathan Trollip
Timothy Keating
Total
Number of Shares
500,000
250,000
250,000
250,000
1,250,000
Option Series 33
At a Company’s General Meeting on 17 July 2019, the Company’s shareholders approved the grant of 26,900,000 unlisted
options to Brad Sampson. The vesting conditions for the unlisted options include milestones being achieved in relation to
the Kola Project, as follows:
Brad Sampson
(Option Series 33)
26,900,000
Vesting
conditions
Total
Exercise
price
Exercisable First, second and
third anniversary
of issue date
19/07/2024
GBP 0.022
Expiry
The fair value at grant date of the unlisted options issued to Brad Sampson was estimated at GBP 0.0151, using the Black
Scholes Option Pricing Model taking into account the terms and conditions as set out above. The input used in the
measurement of the fair value at grant date of the unlisted options were as follows:
These options have been treated in the accounts as a modification to Option Series 31.
Input into the model
Grant Date Share Price
Expected Volatility
Annual risk-free rate
Maturity
Grant date fair value
Option Series 33
GBP 0.01625
91.97%
0.57%
5 Years
GBP 0.0151
117
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP (cont)
Options Series 34, 35 & 36
The Board approved the grant of 33,000,000 unlisted options to certain employees on 5 September 2019 under the
Company’s Long Term Incentive Plan. The options were issued on 25 June 2020 in accordance with the Company’s Long
Term Incentive Plan. The options vest over 3 years on a one third basis per annum. These include the award of 12,000,000
options to each of Gavin Chamberlain (Chief Operating Officer) and Andrey Maruta (Chief Financial Officer ). The vesting
conditions of the options were as follows:
Vesting
conditions
Total
Exercise price
Exercisable:
Expiry
33,000,000
GBP 0.022
First, second and third
anniversary of issue
date
01/01/2024
The fair value of the options at grant date of GBP0.0092 was estimated using the Black-Scholes Option Pricing Model. The
input used in the measurement of the fair value at grant date of the options were as follows:
Input into the model
Grant date share price
Expected volatility
Annual risk-free rate
Expiry date
Grant date fair value
Series 34,35 and
36
GBP0.0145
99.7%
-0.04%
4.3 years
GBP 0.0092
There were no options in these series which were cancelled or exercised during the period.
On 29 February 2016, the Company granted 5,000,000 Performance Rights to Mr Werner Swanepoel, Project Director,
under the Group’s Employee Performance Rights Plan. The rights were contractually agreed to on 7 December 2015
pursuant to Mr Swanepoel’s employment agreement.
On 29 February 2016, 250,000 Fully Paid Ordinary Shares were issued following the vesting of the Performance Rights as
a sign on bonus for the Project Director. In addition, subsequent to year end on 3 February 2017, 250,000 Fully Paid Ordinary
Shares were issued to the Project Director following the vesting of the Performance Rights due to one year of service being
completed on 7 December 2016. On 18 December 2017, 2,245,000 Performance Rights was cancelled upon Mr Swanepoel’s
resignation.
Following the determination by the Board at the AGM on 25 June 2020, that the applicable vesting conditions within each
category would not be achieved 1,001,250 of options relating to series 7 were cancelled.
The remaining 1,253,750 of performance rights in Series 7 expired on 6 December 2020. At 30 December 2020, performance
rights series 7 had all either expired, been cancelled or converted into shares.
Rights Series 9 - Performance Rights (Previous CEO)
This series relates to Performance Rights issued to the previous CEO (for a total of 8,500,000). The Company previously
issued 1,593,750 shares on the conversion of certain Performance Rights. During the 2019 financial year the Company
cancelled 1,025,000 following determination that vesting conditions will not be met. During the 2020 financial year, an
additional 850,000 Performance Rights was cancelled for the same reason. A balance of 5,031,250 remains outstanding at
reporting date.
118
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP (cont)
Rights Series 12
On 29 May 2017, the Group granted 2,000,000 performance rights to its employees, under the Group’s Employee
Performance Rights Plan. The fair value of the performance rights was estimated at AUD 0.17 each.
During the year ended 31 December 2020, 100,000 performance rights relating to rights series 12 were converted into
ordinary share capital and on 25 June 2020, 700,000 were cancelled as the vesting conditions was not met. A balance of
605,000 remains outstanding at reporting date.
Rights Series 13
This series relates to the issue of 660,000 performance rights to the previous CEO in May 2017. The fair value of each right
was previously determined as AUD0.17 and vested in full during 2018. The Performance Rights remained on foot at reporting
date. Subsequent to reporting date, the Company issued 660,000 fully paid ordinary shares on the conversion of these rights.
Rights Series 14
On 29 May 2017, the Group announced that under an STIP the Board resolved and agreed to issue up to 4,482,005
performance rights for employees for 2017. Under the STIP, the final amount of performance rights issued may be reduced
by the Board (in its sole discretion) depending upon each employee’s performance during the 2017 year. Under the STIP, in
accordance with the Group’s remuneration strategy, the employee’s performance is assessed by the Board against a range
of objectives including delivery of the Kola DFS on time and in budget, progressing the Kola ESIA and maintaining control
of costs within the business. The performance rights vest a third on award, a third after 1 year of continuous service and a
third after 2 years continuous service, as one fully paid ordinary share for each performance right.
The fair value of the performance rights was estimated at AUD 0.17 per performance right, calculated based on the share
price at grant date using the Cox, Ross and Rubinstein Binomial Option Pricing Model.
During the 2018 year, the Board approved the allocation of 2,845,314 STIP performance rights to various KMP and other
employees. In addition, during the 2017 year, at the Board’s discretion, 735,000 was allocated to two employees which
vested immediately and were converted into fully paid ordinary shares upon their resignation.
On 7 April 2020, 2,158,333 performance rights were converted into ordinary share capital following the satisfaction of the
vesting conditions and a 52,004 were cancelled on that date. The remaining 1,536,666 remained in existence at the year
end.
Rights Series 15
On 29 May 2017, the Group announced that the Board resolved and agreed to issue up to 11,734,853 performance rights
available to employees under the LTIP. These performance rights vest as one fully paid ordinary share for each performance
right, of which the final amount issued may be reduced by the Board (in its discretion) depending upon the employee’s
performance against certain non-market and market performance conditions.
The fair value of the performance rights attached to the non-market performance conditions was estimated at AUD 0.17 per
performance right.
The fair value of the performance rights attached to the market performance condition was estimated at AUD 0.104 per
performance right at grant date
On 7 April 2020, 8,975,853 performance rights were cancelled following the determination by the Board that the vesting
conditions would not be met on that date. The remaining 2,759,000 remained in existence at the year end.
119
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP (cont)
Rights Series 16 to 20
At the Company’s AGM on 27 June 2018, the Company’s shareholders approved the grant of performance rights to the
following non-executive directors as a replacement to the previous rights held by these directors:
Series
Rights Series 16
Rights Series 17
Rights Series 18
Rights Series 19
Rights Series 20
Director
David Hathorn
Jonathan Trollip
Leonard Math
David Netherway
Timothy Keating
Number of
Performance Rights
1,500,000
750,000
750,000
750,000
750,000
The performance rights are a one-off award and will unconditionally vest in three equal tranches on the first, second and
third anniversary of the Company’s admission to the AIM market. They will vest as one fully paid ordinary share for each
performance right and will expire on 22 May 2022.
The fair value of the performance rights granted was estimated as at the grant date at GBP 0.0564 per performance right.
On 29 March 2019, 1,500,000 vested and was converted into ordinary shares. Following the resignation of Mr Math in June
2019, 62,500 of his performance rights was converted to ordinary shares, with the remaining 437,500 cancelled.
During the 2020 financial year, on the second anniversary of the Company’s AIM listing, 1,250,000 performance rights vested
and was converted into ordinary shares. 1,250,000 remained outstanding at the reporting date.
The fair value at grant date of the performance rights was estimated at GBP 0.0564 per performance right. These
performance rights remained on issue at reporting date. Subsequent to reporting date, the Company converted both series
21 and 22 into ordinary shares.
120
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP (cont)
Rights Series 25
During the period, the Company issued 2,250,000 Performance Rights to employees under its Short-Term Incentive Plan
with the same performance criteria as the performance rights currently in issue with vesting conditions based on required
service periods. These Performance Shares vests a third on award, a third after 1 year of continuous service and a third
after 2 years continuous service.
Employee
Gavin Chamberlain (COO)
Andrey Maruta (CFO)
Other employees
Total
Series 25
850,000
200,000
1,200,000
2,250,000
The fair value of the Performance Rights is estimated at GBP 0.0615 per Performance Right, calculated based on the share
price at grant date using the Cox, Ross and Rubinstein Binomial Option Pricing Model. The input used in the measurement
of the fair value at grant date were as follows:
Input into the model
Grant date spot price
Expected volatility
Life of performance right
Grant date fair value
Series 25
GBP 0.0615
99.7%
5 years
GBP 0.0615
Share based payment arrangements in existence
The following options from share-based payment arrangements were in existence during the current and prior periods:
Option Series 31 *
Option Series 32 **
Option Series 33 ***
Options Series 34,
35 and 36 ****
Grant
Date
27/06/2018
27/06/2018
17/07/2019
Vesting Date
Refer Below
Refer Below
17/07/2028
Number of
Options
17,200,000
4,000,000
26,900,000
Expiry Date
27/06/2028
27/06/2020
17/07/2024
Fair Value at
Grant Date
GBP 0.0518
GBP 0.0241
GBP 0.007
Exercise
Price
GBP 0.11
GBP 0.11
GBP 0.022
15/09/2019
15/09/2022
33,000,000
01/01/2024
GBP 0.0092
GBP 0.022
* Option Series 31 were modified and replaced by Option Series 33 in the prior year
** Option Series 32 were granted to David Hathorn. The options expired on 26 June 2020 and were not exercised.
*** Option Series 33 were issued in the year ended 30 September 2019 to Brad Sampson. All 26,900,000 remained outstanding at year
end.
**** The Board approved the grant of 33,000,000 unlisted options to certain employees on 5 September 2019 under the Company’s Long
Term Incentive Plan. The options were issued on 25 June 2020 in accordance with the Company’s Long Term Incentive Plan. The
options vest over 3 years on a one third basis per annum. These include the award of 12,000,000 options to each of Gavin
Chamberlain (Chief Operating Officer) and Andrey Maruta (Chief Financial Officer ). All 33,000,000 were outstanding at year end.
121
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
The following Performance Rights from share-based payment arrangements were in existence during the current and prior
periods:
Rights Series 7
Rights Series 9
Rights Series 12
Rights Series 13
Rights Series 14
Rights Series 15
Rights Series 16
Rights Series 17
Rights Series 18
Rights Series 19
Rights Series 20
Rights Series 21
Grant Date
07/12/2015
6/07/2016
29/05/2017
31/05/2017
29/05/2017
29/05/2017
27/06/2018
27/06/2018
27/06/2018
27/06/2018
27/06/2018
27/06/2018
Rights Series 22
27/06/2018
Rights Series 25
17/03/2020
NOTE 22: LOSS PER SHARE
Vesting Date
Refer below
Refer below
Refer below
4 June 2018
Refer below
Refer below
Refer below
Refer below
Refer below
Refer below
Refer below
Vested
Immediately
Vested
Immediately
Refer below
Number of
Rights
5,000,000
8,500,000
2,000,000
660,000
4,482,005
11,734,853
1,500,000
750,000
750,000
750,000
750,000
500,000
Expiry Date
06/12/2020
30/06/2021
31/05/2022
31/05/2022
31/05/2022
31/05/2022
22/05/2022
22/05/2022
22/05/2022
22/05/2022
22/05/2022
22/05/2022
Fair Value at
Grant Date
AUD 0.1753
AUD 0.1867
AUD 0.1700
AUD 0.1700
AUD 0.1700
AUD 0.17 / AUD 0.104
GBP 0.0564
GBP 0.0564
GBP 0.0564
GBP 0.0564
GBP 0.0564
GBP 0.0564
1,050,000
22/05/2022
GBP 0.0564
2,500,000
17/03/2025
GBP 0.0615
Classification of securities as ordinary shares
The Company has only one category of ordinary shares included in basic earnings per share.
Classification of securities as potential ordinary shares – share options and rights outstanding
The Company has granted 59,900,000 share options in respect of a total of ordinary shares at 31 December 2020 (31
December 2019: 30,900,000), equity warrants (31 December 2019: 30,900,000) and 13,809,000 performance rights (31
December 2019: 28,193,108). Options, equity warrants and rights are considered to be potential ordinary shares. However,
as the Company and Group are in a loss position they are anti-dilutive in nature, as their exercise will not result in a diluted
earnings per share that shows an inferior view of earnings performance of the Company and Group than is shown by basic
earnings per share. The options warrants and performance rights have not been included in the determination of basic
earnings per share.
Basic and diluted loss per share from continuing
operations
Earnings reconciliation
Parent
Consolidated Entity
Dec 2020
USD Cents
Dec 2019
USD Cents
Dec 2020
USD Cents
Dec 2019
USD Cents
(0.04)
(1.68)
(0.17)
(0.36)
Parent
Consolidated Entity
Dec 2020
USD
Dec 2019
USD
Dec 2020
USD
Dec 2019
USD
Loss attributable to ordinary shareholders
(1,022,927)
(19,593,519)
(3,141,042)
(4,204,007)
122
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020 (CONT)
NOTE 22: LOSS PER SHARE (CONT)
Parent
Consolidated Entity
Dec 2020
Number
Dec 2019
Number
Dec 2020
Number
Dec 2019
Number
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
1,796,239,418 1,163,030,183)
1,796,239,418 1,163,030,183
Headline earnings/loss per share
It is a JSE listing requirement to disclose headline earnings/loss per share, a non-IFRS measure. It is considered to be a
useful metric as it presents the earnings/loss per share after removing the effect of re-measurements to assets and liabilities
(for example impairment of property, plant and equipment) otherwise recognised in the profit/loss for the year. During the
current and prior year there was no difference between earnings/loss per share and headline earnings/loss per share and
therefore no reconciliation between the two measures has been presented.
NOTE 23: CONTINGENT LIABILITIES
There has been one commercial dispute settled in the Tribunal of Commerce in favour of the Company in 2015 - 2016,
however the funds arising from this of USD 33,000 have not yet been released.
There is a claim from a former Finance and Administration Manager who claims unfair dismissal. This claim may be brought
to court by the complainant as the mediation attempt at the Inspector of Labour office in Pointe Noire failed.
Former Country Manager Guy De Grandpre’s lawyer has requested that the Company settle at an amount of approximately
USD 850,000 for unfair dismissal, which the Company denies.
The Group considers that this claim has no reasonable legal basis. Should legal proceeds commence, the Group proposes
to contest the matter.
123
ASX ADDITIONAL INFORMATION (UNAUDITED)
The shareholder and CDI holder information set out below was applicable as at 28 February 2021.
Registered office and principal place of business
Principal and Registered Office (UK)
25, Moorgate, London
United Kingdom EC2R 6AY
Telephone: +44 20 3963 1776
Australian Office
Level 3, 88 William Street,
Perth WA 6000
Telephone: +61 (8) 9463 2463
Facsimile: +61 (8) 9463 2499
Sintoukola Potash S.A.
24 Avenue Charles de Gaulle
Immeuble Atlantic Palace
BP 662 Pointe Noire
République du Congo
Telephone: +242 222 9419
Registers of securities are held at the following address:
Computershare Investor Services Plc
The Pavilions, Bridgwater Road
Bristol BS99 6ZZ
United Kingdom
Telephone: +44 (0)370 707 1258
Fax: +44 (0)370 703 6101
Computershare Investor Services (Pty) Ltd
Rosebank Towers
15 Biermann Avenue
Rosebank 2196
South Africa
Telephone: +27 11 370 5000
Number of holders of ordinary shares
Computershare Investor Services Pty Ltd
Level 11, 172 St George’s Terrace
Perth WA 6000
Telephone: +61 (8) 9323 2000
Facsimile: +61 (8) 9323 2033
2,451,768,173 fully paid ordinary shares and CDIs are held by 1,726 individual shareholders.
124
ASX ADDITIONAL INFORMATION (UNAUDITED) (CONT)
Distribution of fully paid ordinary share and CDI holders
Size of Holding
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
No. of holders
346
451
178
449
302
1,726
Units
161,404
1,304,263
1,488,270
18,856,104
2,429,958,132
2,451,768,173
Percentage
%
0.01
0.05
0.06
0.77
99.11
100.00
The number of holdings comprising less than a marketable parcel was 1,174 with a given a share value of AUD 0.0160 per
share.
Substantial shareholders and CDI holders
Substantial shareholders and CDI holders listed in the Company’s share register as at 28 February 2021:
Name
Princess Aurora Company Pte Ltd (i)
Sociedad Quimica y Minera
Harlequin Investments (ii)
Dingyi Group Investment (iii)
Mr David Hathorn (iv)
Mr David Stevens (v)
No. of fully paid
ordinary shares /
CDIs
569,658,558
494,077,829
302,575,161
199,018,281
116,177,565
109,100,000
1,790,607,394
Percentage
%
23.23
20.15
12.34
8.12
4.74
4.45
73.03
No. of unlisted
options / equity
warrants held
5,000,000
3,000,000
750,000
-
250,000
-
9,000,000
(i) Includes 537,293,558 ordinary shares held by Forest Nominees Limited on behalf of Princess Aurora Company Pte Limited and
32,365,000 ordinary shares held directly.
(ii) 100% of shareholding held in Huntress (CI) Nominees Limited.
(iii) Includes 177,665,258 ordinary shares held by Golden Season International Limited and 497,499 ordinary shares held by JP Morgan
International Limited on behalf of Dingyi Group Investment Limited and 20,855,524 ordinary shares held directly.
(iv) Includes 113,177,052 ordinary shares held in The Bank of New York (Nominees) Limited and 3,000,513 ordinary shares held
directly.
(v) Includes 4,400,000 ordinary shares held by Citicorp Nominees Pty Limited and 1,200,000 ordinary shares held by The Cricket
Settlement Trust on behalf of Mr David Stevens. The remaining 103,500,000 ordinary shares are held directly.
On-market buy-back
There is no current on-market buy-back.
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ASX ADDITIONAL INFORMATION (UNAUDITED) (CONT)
Twenty largest holders of quoted equity securities (ordinary shares / CDIs)
Top 20 Shareholders and CDI holders as at 28 February 2021
Princess Aurora Company Pte Ltd
Sociedad Quimica y Minera
Harlequin Investments
Dingyi Group Investment
Mr David Hathorn
Mr David Stevens
Wadeville International
Glen Deveron Investments PTY
ADM Investor Services International (EO)
UBS Wealth Management
WH Ireland, stockbrokers
Jarvis Investment Management (EO)
Interactive Brokers (EO)
Hargreaves Lansdown, stockbrokers (EO)
J Safra Sarasin Private Banking
New Africa Developments
Equity Drilling Limited
Heriot Investments PTY
Oberon Investments
ITI Capital (EO)
Total
Number of Shares / CDIs
569,658,558
494,077,829
302,575,161
199,018,281
116,177,565
109,100,000
48,482,326
35,231,944
34,480,550
31,194,859
30,000,000
26,611,042
24,763,024
18,262,883
17,080,540
15,603,004
15,594,481
15,000,000
13,525,129
12,421,814
2,128,858,990
% Held
23.23
20.15
12.34
8.12
4.74
4.45
1.98
1.44
1.41
1.27
1.22
1.09
1.01
0.74
0.70
0.64
0.64
0.61
0.55
0.51
86.84
Unquoted equity securities
Class
Unlisted options exercisable at GBP 0.022 expiring 1 Jan 2024
Unlisted options exercisable at GBP 0.022 expiring 19 July 2024
Equity warrants exercisable at AUD 0.30 expiring 29 Mar 2021
Performance Rights expiring 1 March 2021 (Ex Director)
Performance Rights expiring 31 May 2020 (Short Term Plan)
Performance Rights expiring 31 May 2022 (Long Term Plan)
Performance Rights expiring 22 May 2022 (Non-Executive
Directors)
Number of
unquoted equity
securities
Number of
holders
27,000,000
26,900,000
13,144,659
4,500,000
1,466,666
1,760,000
1,250,000
3
1
8
1
9*
**
4
Number of holders
holding 20% or
more in the class
3
1
2
1
*
**
4
76,021,325
N/A
N/A
*These Performance Rights relate to Employee Performance Rights to be allocated following employee assessment and
Board approval. At the date of the report, the Performance Rights for 9 employees were approved by the Board.
**These Performance Rights relate to Employee Performance Rights to be allocated following employee assessment and
Board approval.
126
ASX ADDITIONAL INFORMATION (UNAUDITED) (CONT)
Unquoted equity security holdings greater than or equal to 20%
Unlisted options exercisable at GBP 0.022 expiring 19 July 2024
Gavin Chamberlain
Andrey Maruta
Guy de Grandpre
Unlisted options exercisable at GBP 0.022 expiring 19 July 2024
Brad Sampson
Equity warrants exercisable at AUD 0.30 expiring 29 March 2021
Princess Aurora Company Pte Limited
Sociedad Quimica Y Minera De Chile S.A.
All others
Performance Rights expiring 1 March 2021 (Ex Director)
Sean Bennett
Performance Rights expiring 22 May 2022 (Dir)
David Hathorn
Jonathan Trollip
David Netherway
Timothy Keating
Number of unlisted
options
12,000,000
12,000,000
3,000,000
27,000,000
Number of unlisted
options
26,900,000
Number of unlisted
options
5,000,000
3,000,000
5,144,659
13,144,659
Number of
Performance Rights
4,500,000
Number of
Performance Rights
500,000
250,000
250,000
250,000
1,250,000
Percentage
44%
44%
12%
100%
Percentage
100%
Percentage
38%
23%
39%
100%
Percentage
100%
Percentage
40%
20%
20%
20%
100%
127
ASX ADDITIONAL INFORMATION (UNAUDITED) (CONT)
Voting Rights
The voting rights attaching to ordinary shares are:
On a show of hands, every member present in person or by proxy shall have one vote, and upon a poll, each share shall
have one vote.
Options, Performance Rights and Equity Warrants do not carry any voting rights.
Securities exchange listing
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the ASX. The Company’s
ASX code is “KP2”. On the ASX they are traded as CDIs. On 29 March 2018, the Company completed secondary listings on
the AIM market operated by the London Stock Exchange and on the JSE.
Restricted securities
There are no restricted securities or securities in voluntary escrow at the date of this report.
Company Secretary
The names of the joint company secretaries are St James’s Corporate Services Limited and Henko Vos.
Tenement Details and Ownership
The Company is incorporated and registered in England and Wales and wholly owns Kore Potash Limited of Australia. The
Company also has a 97% holding in SPSA in the RoC (see Note 11(f)). SPSA is the 100% owner of Kola Potash Mining S.A.
which is the sole owner of the Kola Mining Lease and 100% owner of Dougou Potash Mining S.A. which is the sole owner
of the Dougou Mining Lease (Figure 2). SPSA also has the Sintoukola 2 Exploration Permit of which it is the sole owner. The
Sintoukola 2 exploration permit has now expired at the end of February 2021 but the Company is considering reapplying for
extension of the permit. The Kola deposit is located within the Kola Mining Lease. The Dougou Mining lease hosts the
Dougou deposit and the Dougou Extension deposit.
Schedule of Tenements
A schedule of mining tenements held at 31 December 2020 (and the date of this report) and a table showing changes to
the Potash Mineral Resources and Ore Reserves between 2019 and 2020 is included in the Review of Operations on
pages 7 to 22.
Project Overview
A project overview for the Group is included in the Review of Operations and Strategic Report on pages 7 to 22.
128