KORE POTASH PLC
ANNUAL REPORT
FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2021
CONTENTS
CORPORATE DIRECTORY
GLOSSARY
REVIEW OF OPERATIONS AND STRATEGIC REPORT
DIRECTORS’ REPORT
CORPORATE GOVERNANCE REPORT
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC
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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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 EC2R 6AY
United Kingdom
Telephone: +44 (0) 20 7131 4000
SHARE REGISTRY (UK)
Computershare Investor Services Plc
The Pavilions, Bridgwater Road Bristol BS99 6ZZ
United Kingdom
Telephone: +44 (0) 370 702 0000
SHARE REGISTRY (AUSTRALIA)
Computershare Investor Services Pty Ltd
Level 11, 172 St George’s Terrace
Perth WA 6000
Telephone: +61 (0) 3 9415 4000
SHARE REGISTRY (JOHANNESBURG)
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue
Rosebank 2196, South Africa
Telephone: +27 (11) 370 5000
JSE SPONSOR
Questco Corporate Advisory Proprietary Limited
Ground Floor, Block C, Investment Place
10th Road Hyde Park 2196, South Africa
Telephone: +27 (11) 011 9205
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
David Netherway
Sameer Oundhakar (Appointed with effect from 1 April 2021)
Pablo Hernandez Mac-Donald (Appointed with effect from 30
November 2021)
AUSTRALIAN OFFICE
Level 3, 88 William Street,
Perth WA 6000
Telephone: +61 (8) 9463 2463
SINTOUKOLA POTASH S.A
24 Avenue Charles de Gaulle
Immeuble Atlantic Palace
BP 662 Pointe Noire
République du Congo
Telephone: +242 22 294 1924
NOMINATED ADVISER AND JOINT BROKER
SP Angel Corporate Finance LLP
Prince Frederick House, 35 - 39 Maddox Street,
London W1S 2PP
United Kingdom
Telephone: +44 (0) 20 3470 0470
JOINT BROKER
Shore Capital
Cassini House, 57 St James’s Street, London SWIA 1LD
United Kingdom
Telephone: +44 (0) 20 7408 4050
AUDITORS
BDO LLP
55 Baker St, London W1U 7EU
United Kingdom
Telephone: +44 (0) 20 7486 5888
FINANCIAL PUBLIC RELATIONS
Tavistock Communications Limited
1 Cornhill, London EC3V 3ND
United Kingdom
Telephone: +44 (0) 20 7920 3150
WEBSITE
https://www.korepotash.com/
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GLOSSARY
Stands For / Meaning
Definition and/or Additional Information
Acronym /
Term
$ or USD
Denotes USD or United States dollars
2018 UK Code 2018 UK Corporate Governance Code
AGM
Annual General Meeting
AIM
Alternative Investment Market
ASX
AUD
Board
Carnallitite/
Carnallite
CDIs
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
CEO
CFO
Company
Chief Executive Officer
Chief Financial Officer
Kore Potash plc
COO
COVID-19
Chief Operating Officer
Coronavirus 2019
DFS
Definitive Feasibility Study
Dougou
Denotes the Dougou Project
DPM
DUP
Dougou Potash Mining S.A.
Déclaration d'Utilité Publique
DX
Dougou Extension
EBITDA
ENFI
EPC
Earnings Before Interest, Taxes, Depreciation
and Amortization
China ENFI Engineering Corporation
Engineering, Procurement and Construction
4
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 9
June 2021.
AIM (formerly the Alternative Investment Market) is a
market operated by the London Stock Exchange.
The ASX is Australia's primary securities exchange.
The official Australia currency.
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.
Kore Potash plc is public company incorporated and
registered in England and Wales (registered number
10933682).
An acute disease in humans caused by a coronavirus. It
was originally identified in 2019 and became a pandemic
in 2020.
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
(DX) Project) is part of the Sintoukola Potash Project.
DPM is located in the RoC and 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.
A particular form of contracting arrangement used in
some industries where the EPC contractor is made
responsible for all the activities from design,
procurement, construction, commissioning and
handover of the project to the end-user or owner.
GLOSSARY (CONT)
Stands For / Meaning
Definition and/or Additional Information
Acronym /
Term
ESIA
Environmental and social impact assessment
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 official currency of the United Kingdom.
A list of the controlled entities within the Group is included
in 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, licensed under the Financial
Market Act (No 19 of 2012), as amended from time to
time, operated by JSE Limited.
to
Refers
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 Kola Project is part of the Sintoukola Potash Project.
See definition for “Company” above.
KPM is located in the RoC and 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.
The MoU was signed on 6 April 2021 by the Company
and Summit.
Non-Executive Director of Kore Potash plc.
form of potassium chloride
(KCl),
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.
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
KPI
KPM
Denotes the Kola Project.
Kore Potash plc
Key Performance Indicator
Kola Potash Mining S.A
LSE
London Stock Exchange
LTIP
Mining
Convention
Long Term Incentive Plan
Denotes the mining convention signed by the
Group and the government of RoC
MoP
MoU
NED
Mt
OIA
Period
Muriate of Potash
Memorandum of Understanding
Non-Executive Director
Million tonnes
Oman Investment Authority (former SGRF)
The current reporting period for the Annual
report commencing 1 January and ending 31
December.
5
Acronym /
Term
Potash
RoC
Rock-salt
SBP
SEPCO
Sintoukola
Potash Project
SJCS
SoP
SPSA
SQM
GLOSSARY (CONT)
Stands For / Meaning
Definition and/or Additional Information
Refers to potassium compounds, especially
those of potassium chloride (MoP) or sulfate
(SoP)
Republic of Congo
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.
Electric
In this case, a rock comprised predominantly of
the mineral halite (NaCl)
Share-Based Payment(s)
SEPCO
Corporation
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
Construction
Power
Sulfate of Potash
Sintoukola Potash S.A.
Sociedad Quimica y Minera de Chile S.A.
The Sintoukola Potash Project includes the Kola Project,
the Dougou Project and the DX Project (previously known
as the Yangala Project).
SJCS, together with Henko Vos, are 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
Summit Africa Limited
Summit
The Summit Consortium refers to Summit,
Summit
BRP Global Limited, SEPCO and
their
Consortium
subcontractor ENFI.
A rock type comprised predominantly of the
potash mineral sylvite (KCl) and halite (NaCl)
Sylvinite
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REVIEW OF OPERATIONS AND STRATEGIC REPORT
FOR KORE POTASH AND THE GROUP
The Board of Directors of Kore Potash is pleased to present its review of its potash development Group with 97%-ownership of
the Kola and Dougou Potash Projects in the Sintoukola Basin.
The Group is developing its globally significant potash deposits in the RoC, ideally located to supply the important Brazilian
agricultural market and the high growth African markets. The Group’s potash deposits are high grade, shallow, and close to the
coast with access to infrastructure. The Sintoukola Potash Project also has district-scale development potential with over 6 billion
tonnes of potash mineral resources located approximately 35 kilometres from the coast.
Feeding the world’s growing population as arable land per capita declines requires increasing fertiliser application. 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 and the potential for the Group to be one of the lowest-cost suppliers of potash to Brazil and African markets
puts the Group in an excellent position to increase its business value over the long term.
PROJECT OVERVIEW
The Sintoukola Potash Project comprises the Kola sylvinite and carnallite deposits, DX sylvinite deposits and Dougou carnallite
deposits. These deposits are all situated within the Kola and Dougou Mining Licenses.
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 Sintoukola Potash Project has the potential to be among the world’s lowest-cost potash
producers, and its location near the coast offers a transport cost advantage to global fertiliser markets.
The Kola sylvinite deposit has a Mineral Resource of 848 Mt with an average grade of 34.8% KCl at an average depth of
approximately 250 metres below the surface. The Kola DFS was announced on 29 January 2019, which determined Proved and
Probable Ore Reserves totalling 152.4 Mt with an average grade of 32.5% KCl. The deposit is open laterally and an exploration
target for the southward extension of sylvinite was announced on 21 November 2018. A non-binding MoU for the completion of
a capital optimisation study on Kola, presentation of an EPC proposal and financing for the construction of Kola was signed with
the Summit Consortium and announced on 6 April 2021. On the 10 November 2021 the Company announced it had received
documents forming the Interim Report on the Optimisation Study with 53 capital projects identified to reduce the construction
costs the MoU set an agreed targeted capital spend of less than USD 1.65 billion and a shortened construction schedule target
of 40 months.
The DX Deposit contains a total sylvinite Mineral Resources of 145 Mt with an average grade of 39.7% KCl, hosted by two seams.
The results of a Pre- Feasibility Study (“PFS”) were announced on 13 May 2020, which determined Ore Reserves of 17.7 Mt with
an average grade of 41.7% KCl. DX is located 15 km southwest of Kola. The DX deposit is open laterally, and an Exploration
Target for the northward extension of sylvinite at DX was announced on 21 November 2018. Additional drilling was undertaken
at DX as part of the first phase of a DFS. The drilling results were released on 27 May 2021, and subsequently, the Company
has completed an updated geological model for the DX Project.
The Kola and DX sylvinite deposits are high grade relative to most potash deposits globally. They contain less than 0.3% insoluble
material which provides a further processing advantage over other potash deposits.
The Dougou carnallite deposit has a Mineral Resource of 3.056 billion tonnes with an average grade of 20.7% KCl (at a depth of
between 400 and 600 metres) hosted by 35-40 metres of carnallite within four flat-lying seams. The Dougou deposit remains
open laterally at depth. A scoping study was completed and announced in February 2015.
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REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
SUMMARY OF KEY DEVELOPMENTS
• On 6 April 2021, the Company signed a non-binding MoU with Summit, on behalf of a consortium of investors and
engineering firms, to arrange the total financing required for the construction of the Kola Potash Project.
o The MoU outlines a roadmap to optimise the capital design to fully finance and construct Kola via a mix of debt
and royalty financing.
o The MoU was signed in the Brazzaville’s Minister of Mines offices, with the Minister and his key staff present.
Under the proposed financing arrangements, the RoC Government will retain their 10% shareholding in Kola.
o During the Period, Summit and their technical partners SEPCO, signed the Optimisation Agreement to
undertake a study “Optimisation Study” to reduce Kola’s capital cost with a target of less than USD 1.65 billion
(“Target Capex”). A team of representatives from Kore Potash, ENFI (a key subcontractor to SEPCO) and the
RoC Minister of Mines completed a Kola site visit and data handover.
o Under the Summit Consortium’s proposed financing structure, the Company will not contribute to the capital
needed to build the Kola project and will retain a 90% equity interest in Kola. A Financing proposal is expected
to be received after the EPC proposal is presented by the Consortium to the Company.
o On 10 November 2021, the Company announced it had received the Interim Optimisation report on the Kola
Project from SEPCO. The report covered 53 capital reduction opportunities for Kore Potash to evaluate for
inclusion in the Optimisation Study Report.
• During the Period, the Company successfully raised USD 14,026,563 through equity funding.
o On 8 April 2021, the Company completed an oversubscribed fundraising. A total of 823,475,618 New Ordinary
Shares were issued at the Placing Price of 1.1 pence (2.0 Australian cents) for a total value of USD 12.6 million,
exceeding the initial USD 11.0 million target.
o Following the fundraising, OIA, Kore Potash’s largest shareholder, in line with its rights under their investment
agreement with the Company, subscribed for 92,226,613 New Ordinary Shares in the Company at the Placing
Price of 1.1 pence for a total cash consideration of USD 1.4 million.
• The DX DFS Phase 1 results were published on 27 May 2021 with the following highlights and subsequent work:
o The Phase 1 work program for the DFS was completed on budget, including the drilling of seven diamond drill
holes and geochemical testing.
o Key technical studies and laboratory test work for Phase 1 of the completed DX DFS.
o An improved geological model for the DX deposit incorporating all recent drilling information was completed in
Quarter 4 2021. It improves confidence in the geological modelling of the DX deposit and improves the
understanding of the Sylvinite / Carnallite boundaries in the Top Seams and Hanging Wall Seams.
o The Company is assessing the most appropriate next steps for developing the DX deposit.
• As a result of the COVID-19 Pandemic, two long term Congolese consultants to the Group sadly passed away during
the Period. The Group expresses its deepest sympathy to their families, friends, and colleagues. The Group has provided
support to the families in line with best practices in the Congo. The Group’s Pointe Noire office was temporarily closed
in October 2021 to reduce potential staff exposures to COVID-19, and our staff worked from home. The office reopened
in November 2021. Although COVID-19 is ongoing, it has not had a material impact on the Group’s operations during
the Period.
• During the Period, the Group did not renew the Sintoukola 2 exploration permit. The Group had not undertaken any
exploration work on the Sintoukola 2 permit area and continues its focus on developing the Kola and Dougou projects.
8
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
SUMMARY OF FINANCIALS
• During the Period, the Group’s Total Comprehensive Loss was USD 13,470,876 (2020: Gain USD 8,177,582), and the
Group experienced net cash outflows from operating and investing activities of USD 7,499,811 (2020: USD 9,271,039
million). Cash and cash equivalents totalled USD 11,092,509 as at 31 December 2021 (2020: USD 5,555,000).
• Group net assets decreased in the year to USD 177,419,886 (2020: USD 177,661,602). This was primarily driven by an
increase in funds of USD 5,537,509 as a result of the fund raise, a USD 6,581,097 increase in exploration expenditure
capitalised offset by a USD 11,992,945 reduction in the capitalised exploration costs due to the strengthening of the
USD against the currency of the RoC.
• The Directors prepared a cash flow forecast for the period ending 31 December 2023, which indicates that the Group
will have sufficient liquidity to meet its working capital requirements to the end of the going concern period (March 2023).
Please refer to Note 1 to the financial statements for more detail on the going concern statement.
• The Company will be required to raise funds after the going concern period to meet its ongoing contracted and committed
expenditure. The Directors have considered various mitigating actions, which include raising additional capital to enable
the Group to continue to fund its working capital requirements. The Directors have identified a number of funding options
available to the Group.
CORPORATE ACTIVITIES
• 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
8,044,001 Performance Rights, Performance Shares and unlisted Options were cancelled.
• On 1 April 2021, Timothy Keating resigned as a NED and Sameer Oundhakar was appointed a NED of the Company
nominated by OIA in his place.
• On 9 April 2021, a total of 1,103,296 ordinary shares were issued to David Hathorn, David Netherway and Jonathan
Trollip in lieu of cash fees for the quarter ended 31 March 2021. Additionally, a total of 1,250,000 ordinary shares due
under the third and final tranche of the Company’s performance rights plan for NEDs, were issued to David Hathorn,
David Netherway, Jonathan Trollip and Timothy Keating, at a subscription price of USD 0.001 per ordinary share.
• On 8 April 2021, the Company issued 363,165,226 ordinary shares to new and existing institutional investors at the
Placing Price of 1.1p (1.0 Australian cents) per share.
• On 6 May 2021, 462,310,392 ordinary shares were issued at 1.1p (2.0 Australian cents) per share in line with the
Company’s announcements of 19 April 2021, of which 23,056,653 ordinary shares were issued to David Hathorn.
• On 11 May 2021, the company issued 92,226,613 ordinary shares to OIA as a substantial shareholder, after confirmation
of the Fundraise in April, OIA signed a subscription agreement at 1.1p for a total cash consideration of USD 1.4 million.
• On 1 June 2021, a total of 716,667 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 of which 516,667
ordinary shares were issued to Gavin Chamberlain, COO.
• On 9 June 2021, Mr Jean-Michel Bour was appointed as the Company’s CFO, replacing Mr Andrey Maruta who resigned.
• On 8 July 2021, a total of 2,954,079 ordinary shares were issued to David Hathorn, David Netherway and Jonathan
Trollip in lieu of cash fees for the quarter ended 30 June 2021.
• On 16 July 2021, Amanda Farris was appointed as the Company’s interim CFO, replacing Mr Jean-Michel Bour, who
left the Company due to personal reasons.
• On 1 September 2021, Trinidad Reyes Perez resigned as a NED and Ignacio Joaquin Majluf Caceres was appointed a
NED of the Company nominated by SQM in her place.
• On 11th October 2021 Kore Potash SA Proprietary Limited incorporated and registered in South Africa and wholly owned
by Kore Potash PLC was deregistered in term of section 82(3) of the Companies Act, 2008.
• On 30 November 2021, Ignacio Joaquin Majluf Caceres resigned as a NED and Pablo Hernandez Mac-Donald was
appointed a NED of the Company nominated by SQM in his place
• On 31 December 2021, the Company announced the appointment of SP Angel Corporate Finance LLP as the
Company's Nominated Adviser and Joint Broker, with effect from 1 January 2022.
9
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY
Kola Potash Project
• The Company signed a non-binding agreement MoU with Summit, on behalf of a consortium of investors and engineering
firms, to arrange the total financing required for the construction of Kola in the presence of the Minister of Mines and his
key staff in Brazzaville.
• As detailed in the MoU, the Summit Consortium includes:
o BRP Global, headquartered in Abu Dhabi, which will provide royalty financing;
o SEPCO, an international engineering and construction group headquartered in Jinan, China and with offices in
Dubai and a wholly owned subsidiary of Power Construction Corporation of China (POWER CHINA). SEPCO
will be the EPC contractor for Kola within the Summit Consortium. SEPCO has significant construction
experience globally across a range of industries, including power, oil and gas chemical, energy-reduction and
environmental protection and infrastructure projects. SEPCO has completed major construction projects in 25
countries, including 44 EPC contracts in 11 countries, with 7 of these in Africa. In addition to its construction
capability, SEPCO will also assist in arranging the debt financing for Kola; and
o ENFI, subcontracted by SEPCO and headquartered in Beijing, is a significant engineering group with specific
mining, processing, and potash experience. ENFI is a mining technology leader in China and has provided
technical services for the design and construction of more than 400 mining operations worldwide. ENFI’s potash
specific experience includes designing and constructing an underground potash mine in southeast Asia.
• Representatives of the key engineering partner of the Summit Consortium, SEPCO and the Company met with the RoC
Minister of Mines and his staff in Brazzaville. A site inspection at the Kola Project was conducted with representatives
from ENFI, a subcontractor to SEPCO, and delegates from the Ministry of Mines.
• The Company and the Summit Consortium signed the Optimisation Agreement for Kola on terms congruent with the
MoU announced by the Company on 6 April 2021.
• SEPCO and its subcontractor ENFI commenced work on the Optimisation Study for Kola. Further Kola Project data was
sent to SEPCO to facilitate the Optimisation Study. The study considers capital cost reduction initiatives in most project
areas, including mine design, underground access, material transportation system, processing plant design and location,
key infrastructure design and marine facilities.
• The Company will contribute a maximum of USD 950,000 to the Optimisation Study costs. SEPCO will cover the
remaining 50% of the estimated costs of the study.
• The receipt of the Interim Report for the Optimisation Study on the Kola Project was announced to shareholders on 10
November 2021. The Interim Report detailed optimisation opportunities that offer the potential to substantially reduce
the capital cost of Kola compared to the DFS capital cost and identified 53 capital cost reduction initiatives, of which 45
have been incorporated into the current optimisation of Kola. The 53 capital reduction initiatives identified in the Interim
Report focused on the following areas:
o Potential relocation of the processing plant site closer to the Mine site.
o Mining: Two initiatives related to alternate sourcing of major equipment and construction materials.
o Processing: Eight initiatives related to optimising processing layouts, major equipment selection and sourcing.
o Processing wet area: 21 initiatives related to the process design and major equipment selection.
o Processing dry areas: 12 initiatives related to the MoP product produced, processing reagent management and
MoP product storage.
Infrastructure: Three initiatives related to road design and construction and run of mine overland conveyor belt
and product conveyor belt optimisations.
o
o Utilities: Six initiatives related to electrical transmission, instrumentation designs and laboratory area cost
reductions.
• After the Interim Report, the Summit Consortium appointed Marine Engineers CCCC-FHDI Engineering Co. Ltd to
propose potential cost reduction opportunities in the marine area, including changes to the method of jetty construction
and the design of the breakwater.
10
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Kola Potash Project (Cont)
•
In advance of completion of the Optimisation Study and to facilitate the earliest possible receipt of a construction proposal
from the Summit Consortium, the Company is engaging with the Summit Consortium to agree to EPC contract terms
consistent with the 2017 2nd edition Fédération Internationale des Ingénieurs-Conseils (“FIDIC”) Silver book and
appropriate for the construction of Kola.
• Kore Potash management continued twice-weekly meetings with the Summit Consortium to remain briefed on the
progress towards forming its debt and royalty financing proposal. The Summit Consortium has also continued to keep
the Company informed on their level of offtake interest. Separate from the Summit Consortium’s activity, Kore Potash
management also continued to brief potential offtake partners with the capability to procure all the Kola production and
who have expressed interest in partnering with the Company.
Dougou Extension (DX) Sylvinite Defined Feasibility Study Phase 1
During the Period, the Company released its update on the DX project. The Company reported the following highlights:
• The seven diamond drill hole program for Phase 1 of the DX DFS was completed, and assay results were received.
• Analysis of the drill hole logs and assay results from the drilling campaign has:
o Confirmed the locations of the targeted Hanging wall and Top potash seams.
Improved confidence in the distribution of sylvinite within the Top Seams
o
o Demonstrated that the Sylvinite / Carnallite boundary within the Hanging Wall Seam is structurally controlled,
and the sylvinite distribution is more complex than modelled in the Pre-Feasibility Study.
Identified areas containing carnallite that will be excluded and not considered for extraction in future mine
planning for the DX project.
Indicated that further drill hole and seismic information may be required to have confidence in the distribution
of sylvinite in the Hanging Wall Seam.
o
o
• Key technical studies and laboratory test work for Phase 1 of the DX DFS that were completed include:
o Dissolution test work to provide improved data for temperature brine-modelling.
o Laboratory testing of rock mechanics properties to assist in determination of cavern stability, the possible extent
of reservoir mining and expected subsidence over the project life.
o Production well design to provide specifications for future capital cost estimating.
o Cavern blanket design parameters (to control cavern formation) to provide specifications for future capital cost
estimating.
• Work completed in Phase 1 of the DX DFS has been completed within the planned budget.
• Following the completion of the drilling at the DX by the Company earlier in 2021, the Company’s geological consultants
developed an updated geological model for the DX deposit. This new model incorporates all information received from
the latest drilling programme. It improves confidence in the geological modelling of the DX deposit and improves our
understanding of the Sylvinite / Carnallite boundaries in the Top Seams and Hanging Wall Seams. There has been no
update of the DX Mineral Resources or Ore Reserves. The Company is assessing the most appropriate next steps for
developing the DX Project.
11
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
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 and the adjacent Dougou and DX deposits.
Under the Mining Convention, the RoC government will be granted a 10% carried equity interest in the project companies
(DPM and KPM, which SPSA wholly owns).
• The Mining Convention concludes the framework envisaged in the 25-year renewable Kola and Dougou Mining Licences
granted in August 2013 and May 2017. The Mining Convention provides certainty and enforceability of the key fiscal
arrangements for the development and operation of Kola and Dougou Mining Licences, which including import duty and VAT
exemptions and agreed tax rates during mining 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.
• The Company continues to engage with the RoC Government to implement the Mining Convention’s commitments. This
includes the intra-group transfer of the Dougou Mining License from SPSA to the operating entity DPM and a 10%
shareholding in KPM and DPM to the State.
• 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
with the Minister of Mines on the progress of the Optimisation Study and progress toward construction.
Authorisation obtained from RoC authorities
• The Minister of Tourism and Environment of the RoC 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, 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 on 30 November 2020.
• Ministry of Tourism and Environment authorised the environmental management plan for the DFS drilling on Kore Potash’s
DX Project on 14 October 2020; a further formal confirmation letter was received on 27 November 2020.
Workstreams with RoC authorities
• Declaration of Public Utility (DUP) – this is the formal process that needs to be followed to achieve the declaration of public
utility to authorise public land use by the Group for the Kola project. The existing DUP for the Kola project issued under
`Order No. 6595/MAFDPRP-CAB on 13 August 2018 requires a revision based on the proposed optimisation changes to the
process plant layout. The Group has started a process of reapplying for the DUP. An initial land survey of the affected land
by the Department of Cadastral Survey was completed on 23 September 2021 and the surveyed co-ordinates issued to the
Company for review. Once the optimisation is completed, the design will be checked against the surveyed co-ordinates
issued to the Company and any areas of concern highlighted. The Group will, at that point, submit a formal request to have
the DUP renewed. It is not envisaged that this process will delay the commencement of the project.
• Dougou Mining Licence Correction: A revised Decree No 2021-389 dated 2 August 2021 was received, and it corrected the
error in the co-ordinates previously issued with the Dougou Mining licence. This means there is no longer any dispute
between the Group and the authorities regarding the co-ordinates of the Dougou mining permit.
12
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Impact on Climate Change
• The groups existing operations in the RoC have a minimal carbon emission impact which is driven by the use of diesel fuel
for electricity generation. To offset this impact the company has implemented a nursery onsite and in conjunction with the
local communities’ plants seedlings in the surrounding areas throughout the year.
• Kore Potash’s final product MoP is a vital agri-nutrient required for quality plant growth and crop yield and its application is
necessary to meet the growing global demand for food. Plant growth and higher yields from crops is critical to reduce the
carbon footprint and to meet the increased demand for foods that create a lower carbon footprint.
• Kore Potash’s planned operations will be adjacent to the Conkouati-Douli National Park. The Company has previously
partnered with Non-Government Organisations to provide financial assistance for rainforest guards to preserve the forest
and rainforest environments within this National Park. During 2021, a conservation focused Non-Government Organisation,
become actively involved with preserving this National Park and the Company has commenced dialogue with a view to
partnering with them to preserve the forests in this National Park.
Key Performance Indicators
The Board has set the KPIs for the Company and Group that reflect the development stage of the business:
Health and Safety
•
The Group has set a goal of zero lost time injuries. During the period the DX drilling campaign was completed with no lost
time injuries. The Company also maintained its COVID-19 measures to ensure the spread was contained. Sadly, the
company lost 2 consultants as a result of COVID-19. A total of 10 positive cases were report with the spread stopped
immediately by isolating all close contacts after each case.
Available Cash and cash equivalents
•
The Group is required to have sufficient cash to meet its obligations. At 31 December 2021 the Group held cash of USD
11,092,509 (2020: USD 5,555,000) which is sufficient to meet its obligations for at least 12 months from the date of approval
of these financial statements. The Company was required to successfully raise funds to cover costs up to the Financial close
for the Kola Project. As reported in April 2021 USD 14,026,563 was raised through equity funding.
Kola Project Optimisation
•
Advancement of the Kola Project through to optimisation reducing the project capital costs and construction schedule. The
Company successfully signed the MoU in April 2021 with delivery of the Interim Optimisation report by the Consortium during
the Period. The KPI for 2022 is to agree the scope of the Optimisation for the Kola Project.
Kola Project EPC and Financing
•
The Board has set the KPI for 2022 to formalise an EPC Contract for the construction of Kola and Financing agreement for
the complete construction of Kola based on the optimised scope.
Viability Assessment
The Directors prepared a cash flow forecast for the period ending 31 December 2023, which indicates that the Group will have
sufficient liquidity to meet its working capital requirements to the end of the going concern period (March 2023). Current
estimations are the Group will have exhausted current cash reserves in Q4 2023.
The Directors have considered the risks associated with the continuity of business and believe the assumptions of the forecast
are adequate given the controllable market conditions.
13
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Viability Assessment (Cont)
The Group’s financial projections and cash flow forecast does not include funding for the construction of the Kola project which
is subject to the successful completion of the Optimisation study and subsequent agreement to the EPC and Financing proposal
from the Summit Consortium. Under the MoU the Consortium’s Financing proposal is for the completed construction of the Kola
Project. In the event the Financing proposal is not presented or accepted by Kore Potash the Company intends to seek alternative
EPC and Financing proposals for the construction of the Kola project. Current market conditions for Potash remain strong with
the area of arable land available for crops globally reducing with very few new potash projects entering the market to meet the
increase in demand. Some producer’s exports have been stopped due to international sanctions, further reducing supply. Given
the increase in the Potash prices, the optimisation study being undertaken by the Consortium to reduce the capital costs of the
project and the increase in some supply cost driven by the current market conditions Kola remains an attractive project.
Tenement Details and Ownership
The Company is incorporated and registered in England and Wales and has a 97% holding in SPSA in the RoC. SPSA is the
100% owner of DPM, which holds the Dougou Mining Lease and KPM, which holds the Kola Mining Lease. The Dougou Mining
lease hosts the Dougou Deposit and the DX Deposit. The Kola Deposit is located within the Kola Mining Lease.
Table 1: Schedule of mining tenements (Republic of Congo)
Project & Type
Tenement Issued
Company Interest
Title Registered to
Kola
Mining
Dougou
Mining
Decree 2013-412
100%
Kola Potash Mining S.A.
of 9 August 2013
potassium rights only
Decree 2017-139
100%
Sintoukola Potash S.A.
of 9 May 2017
potassium rights only
Revised Decree No
2021-389 of 2 August
2021
Changes to Potash Mineral Resources and Ore Reserves between 2020 and 2021
Tables 1 and 2 provide a comparison of the Company’s Mineral Resources and Ore Reserves, year-on-year between 2020 and
2021, as per ASX Listing rule 5.21.4.
There are no changes to the Mineral Resources for Kola and Dougou in 2021.
14
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Changes to Potash Mineral Resources and Ore Reserves between 2020 and 2021 (Cont)
Table 1. Comparison of Potash Mineral Resources year-on-year between 2020 and 2021.
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
2020
Grade
KCl %
34.9
35.7
35.4
Contained
KCl (Mt)
75
104
180
Million
Tonnes
216
292
508
2021
Grade
KCl %
34.9
35.7
35.4
Contained
KCl (Mt)
75
104
180
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
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
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
15
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Changes to Potash Mineral Resources and Ore Reserves between 2020 and 2021 (Cont)
Table 2. Comparison of Ore Reserves year-on-year between 2020 and 2021.
Ore Reserves
There were no changes to the Kola and Dougou Ore Reserves in 2021.
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
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
Million
Tonnes
61.8
90.6
152.4
Million
Tonnes
0
17.7
17.7
2021
Grade
KCl %
32.1
32.8
32.5
2021
Grade
KCl %
0
41.7
41.7
Contained
KCl (Mt)
19.8
29.7
49.5
Contained
KCl (Mt)
0
7.4
7.4
The Mineral Resource and Ore Reserves are prepared in accordance with the JORC Code (2012 edition) by independent competent persons and the
geological models and modifying factors are reviewed by Company staff and other individuals with appropriate capability to peer review the work of the
competent persons.
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 Ore Reserve Estimate for sylvinite at Kola was first
reported 29 January 2019 in an announcement titled “Kola Definitive Feasibility Study” and was prepared by Met-Chem; the Competent Person for the
estimate was Mr Mo 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 and Ore Reserve Estimate were reported in an announcement titled “Dougou Extension
(DX) Project Pre-Feasibility Study” on 13 May 2020. 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). Dr. Michael Hardy was the Competent Person for
the Ore Reserves, and he 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.
16
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
Figure1. Location of the Sintoukola Project showing the Kola, Dougou and DX Projects
17
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
BUSINESS MODEL
The Group’s business strategy for the financial year ahead and in the foreseeable future is to continue exploration and
development activities on the Group’s existing potash mineral projects in the RoC. The Group’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 Group’s business strategy is subject to numerous risks, some outside the Board and management’s control. These risks can
be specific to the Group, 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.
The company is expecting to receive an EPC and financing proposal for the complete construction of Kola after the successful
completion of the Optimisation Study Report.
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. The Minister of Mines was present at the signing of the MoU for the optimisation and completed
construction for Kola.
18
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
POSITION AND PRINCIPAL RISKS (CONT)
• Change in potash commodity prices and market conditions;
The Group is subject to changes in the commodity price for potash due to changes in marketing conditions (political, economic
and other uncertainties) over which the Group has limited control. The Groups plans to be a low costs producer being in the first
quartile of sustainable costs to enable the Group to be profitable when commodity prices reduce.
Demand for potash continues to grow as the volume of arable land reduces with limited new projects entering the market to meet
the increase in demand, and some suppliers’ exports have been stopped due to international sanctions imposed, reducing supply
availability. The Group continues to engage with reputable Offtakers with the intention to enter contractual arrangements to sell
production prior to commercial production.
The Companies financial models take into consideration the impact of commodity pricing when evaluating projects.
• 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, EPC contractors to develop the Group’s project and highly regarded technical
consultants to verify the work undertaken by the EPC contractors.
• Environmental and occupational health and safety risks;
Environmental, safety and health incidents including pandemic diseases like COVID-19 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. There have been no reported cases
of COVID-19 on the Koutou site since the drilling campaign was completed in April 2021.
During the period all employees and consultants working on the site have been vaccinated with the only exemptions being for
medical reason. Those employees that can’t be vaccinated continue to work from home until they are medically fit to undertake
the vaccination.
The Group’s operations are subject to ESIA which have been granted for 25 years by the RoC government.
19
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
POSITION AND PRINCIPAL RISKS (CONT)
• 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.
• Climate change
The Group has considered the impact that climate change can have on the Group and our business as a result of climate change
and the impact the Group’s operations have on climate change. Areas of risks are reviewed periodically with actions put in place
to address these risks where management can exert some influence over the climate outcomes.
The Group has assessed the potential impact of climate change including severe weather changes on the Group’s existing
operations as negligible. Assessment of the potential impacts of climate change on the Kola Project have led to modifications to
the proposed processing plant location as part of the Optimisation Study in part due to the potential impact sea level and weather
changes.
The risk of impact on the goods supply chain and commodity pricing for the construction of the Kola Project linked to climate
change is assessed as minimal for the construction period of Kola.
As the Kola project moves towards construction management will re-assess the potential risk presented to planned operations
by climate change.
The key risk identified at present is planned carbon emissions from the Kola operation based on the current energy supply
methodology available to the project. The Group will continue to review options to reduce these carbon emissions.
Global climate change is potentially going to drive an increase in demand for Potash to produce fertiliser to maintain soil fertility
and improve plant health as the global arable land area per person reduces. Therefore, the risk associated with the final product
is assessed as immaterial.
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.
20
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
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.
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 NED 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 April 2021, the Company completed an equity placing to raise USD 14,024,597, in which OIA participated.
At the Company’s AGM held on 9 June 2021, all resolutions were passed with at least 95% of the votes cast in favour. The CEO,
CFO and NED, 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.
All substantial shareholders that own more than 3% of the Company’s shares are listed on page 122 of this Report.
Further details of engagement with shareholders can be found within the Corporate Governance Report.
Employees:
Kore Potash 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 56 to 69. Further, the Group
gives full and fair consideration to applications for employment irrespective of age, gender, colour, ethnicity, disability, nationality,
religious beliefs or sexual orientation.
The Group maintains an open line of communication between its employees, senior management and the board of directors. A
whistle blower procedure is in place for employees to raise concerns anonymously. 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.
21
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
DIRECTORS’ SECTION 172 STATEMENT (CONT)
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 February
2021.
David Netherway, a NED, is the appointed designated director responsible for workplace engagement in accordance with the
2018 Corporate Governance Code. However, due to the restrictions imposed as a result of the COVID-19 Pandemic where
possible meetings were held virtually. To fulfil his duties during 2022 David Netherway plans to visit to the RoC where the majority
of the employees are based.
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 any grievance are resolved to ensure they do not have a detrimental
effect on the Group’s business and project timeline.
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 Group’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. Due to COVID-19
restrictions no face to face meetings were held with the villagers in 2021.
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 2021 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 RoC 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.
22
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
DIRECTORS’ SECTION 172 STATEMENT (CONT)
Principal decisions taken by the board during the period (Cont)
Details of the principal decisions taken by the board during the year in respect of the raising of USD 14.0 million and entering of
the non-binding MoU for the construction of Kola are contained under the Summary of Key Developments within the Review of
Operations and 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.
The Ore Reserve Estimate for Sylvinite at DX 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.
23
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
DIRECTORS’ SECTION 172 STATEMENT (CONT)
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 2022 and is signed on its
behalf by:
____________________________
Non-Executive Chairman
David Hathorn
30 March 2022
_________________________________
Chief Executive Officer
Brad Sampson
30 March 2022
24
DIRECTORS’ REPORT
The Directors present their annual report on Kore Potash and the Group for the financial year ended 31 December 2021.
The Corporate Governance statement set out in pages 36 to 71 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
Sameer Oundhakar
Trinidad Reyes Perez
Ignacio Joaquin Majluf Caceres
Non-Executive Chairman
Chief Executive Officer
Independent Non-Executive Director
Non-Executive Director (Resigned with effect from 1 April 2021)
Independent Non-Executive Director
Non-Executive Director (Appointed with effect from 1 April 2021)
Non-Executive Director (Resigned with effect from 1 September 2021)
Non-Executive Director (Appointed with effect from 1 September 2021 and resigned with
effect from 30 November 2021)
Pablo Hernandez Mac-Donald Non-Executive Director (Appointed with effect from 30 November 2021)
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 Group’s Kola Mining and Dougou Mining 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 2021 amounted to USD 1,941,196 (31 December 2020:
USD 3,144,172).
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 (2020: nil).
Review of Operations and Strategic Report
Please refer to pages 7 to 24 of the Annual Report.
Significant Changes in State of Affairs
Board Changes
On 1 April 2021, Sameer Oundhakar was appointed a NED of the Company nominated by OIA to replace Timothy Keating who
resigned with effect from that date.
On 1 September 2021, Ignacio Joaquin Majluf Caceres was appointed a NED of the Company nominated by SQM to replace
Trinidad Reyes Perez who resigned with effect from that date.
On 30 November 2021, Pablo Hernandez Mac-Donald was appointed a NED of the Company nominated by SQM to replace
Ignacio Joaquin Majluf Caceres who resigned with effect from that date.
25
Significant Changes in State of Affairs (Cont)
DIRECTORS’ REPORT (CONT)
Capital Raise
In April 2021, a total of USD 14,024,597 was raised. This was raised from existing and new investors through the placing and
direct subscription of 917,702,231 new ordinary shares in the Company at a placing price and subscription price of GBP 1.1
pence (2.0 Australian cents) per new ordinary share.
Other capital movements:
On 15 January 2021, a total of 2,909,389 ordinary shares of USD 0.001 each were issued in lieu of cash remuneration or part
remuneration for the quarter ended 31 December 2020 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 USD 2,909. 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 8,044,001
Performance Rights, Performance Shares and unlisted Options were cancelled.
On 29 March 2021, 13,144,659 unexercised equity warrants expired.
On 9 April 2021, a total of 1,103,296 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 2021. The par value of this
issue was USD 1,103. Additionally, the Company issued 1,250,000 ordinary shares due under the third and final tranche of the
Company’s performance rights plan for NEDs, at a subscription price of USD 0.001 per ordinary share. In addition, 7,500,000
Performance Rights, Performance Shares and unlisted Options were cancelled.
On 24 June 2021, the company issued 12,000,000 unlisted options to Jean-Michel Bour, the Company’s CFO. These were
subsequently cancelled on 23 August 2021 as Jean-Michel Bour resigned.
On 1 June 2021, a total of 716,667 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, 516,667, were issued to Gavin
Chamberlain, the Company’s COO. In addition, 4,199,999 Performance Rights, Performance Shares and unlisted Options were
cancelled
On 8 July 2021, a total of 2,954,079 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 30 June 2021. The par value of this issue
was USD 2,954.
CDI Movement
During the year the number of CDIs quoted on the ASX increased by 464,819,436 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 Review of Operations and Strategic Report.
26
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 Review of Operations and 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. However, due to the 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, but health,
safety and environment matters are reported on each month in management reporting to the Board and are part of each Board
meeting agenda. The Group provides training and support to employees and sets demanding standards for workplace safety.
The Group recorded no lost time injuries in 2021 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 mining licences in the RoC. The Group’s operations are subject to environmental legislation in this
jurisdiction in relation to its exploration activities.
27
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
Exercise Price
GBP 0.022
GBP 0.022
Number of
Options
26,900,000
20,000,000
46,900,000
The holders of these options do not have the right, by the virtue of the option, to participate in any share issue or interest issue of
the Company. There was no exercise of unlisted options during the year. However, 25,000,000 unlisted options exercisable at
GBP 0.022 were cancelled and 13,144,659 unquoted equity warrants exercisable at AUD 0.30 expired.
Performance Rights
Performance rights outstanding at the date of this report:
Class
Employee Performance Shares (Long Term)
Employee Performance Shares (Short Term)
Expiry
31/05/2022
17/03/2025
Number of Rights
1,760,000
550,000
2,310,000
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 three exercises of performance rights during the year, with 3,071,251
exercised on 15 January 2021 1,250,000 exercised on 9 April 2021, and 716,667 exercised on 1 June 2021. During the year
6,744,000 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 2021
144,237,061 Fully Paid Ordinary Shares
Directorships held in other listed
entities
Former directorships of listed
companies in last three years
None
None
28
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 2021
2,464,705 Fully Paid Ordinary Shares
26,900,000 Unlisted Options exercisable at GBP 0.022 each expiring 19 July 2024
Directorships held in other listed
entities
Agrimin Limited (from 22 April 2016)
Metallica Minerals Limited (from 13 May 2021)
Former directorships of listed
companies in last three years
None
Jonathan Trollip
Independent Non-Executive
Director
B.A (Hons) LLM, FAICD
Interest in Shares & Options as at
31 December 2021
Directorships held in other listed
entities
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 a non-executive director of Propel
Funeral Partners Limited and BACL Diagnostics Limited. He also holds various private
company directorships in the commercial and not-for-profit sectors.
7,276,296 Fully Paid Ordinary Shares
Future Generation Investment Company Limited (from 8 October 2013)
Global Value Fund Limited (from 20 March 2014)
Plato Income Maximiser Limited (from 20 February 2017)
Spheria Emerging Companies Limited (from 12 September 2017)
Propel Funeral Partners Limited (from 19 September 2017)
BCAL Diagnostics Limited (from 23 December 2020)
Former directorships of listed
companies in last three years
Spicers Limited
Antipodes Global Investment Company Limited
29
DIRECTORS’ REPORT (CONT)
Information on Directors (Cont)
Trinidad Maria Reyes Perez
Non-Executive Director
(Resigned on 01 September
2021)
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 2021
Directorships held in other listed
entities
Former directorships of listed
companies in last three years
None
None
None
Sameer Oundhakar
Non-Executive Director
B Eng (Mechanical), BDipBbus,
MBA
Mr Oundhakar joined OIA in 2018 and holds the position of Senior Manager – Diversified
Private Equity Investments. He has extensive private equity experience across diverse
industry sectors / geographies and represents OIA on investee company boards in Europe,
Latin America and the Middle East. He has lived and worked in the Middle East (OIA,
Seera), UK (Boston Consulting Group, Columbia Threadneedle, American Express),
France and India (HSBC, Larsen & Toubro). Sameer has a Bachelor’s degree with
distinction in Mechanical Engineering from VJTI Mumbai, a Post Graduate Diploma in
Management from IIM Lucknow and an MBA from INSEAD.
Interest in Shares & Options as at
31 December 2021
Directorships held in other listed
entities
Former directorships of listed
companies in last three years
None
None
None
Ignacio Joaquin Majluf Caceres
Non-Executive Director
(Resigned on 30 November 2021)
Mr Majluf joined SQM in 2013 and reports to the CFO of SQM. Ignacio completed an
Industrial Civil Engineering degree specialising in environmental engineering having
graduated from Pontificia Universidad Católica de Chile in 2013. Ignacio also completed
the Executive MBA at the Antwerp Management School in 2021
Interest in Shares & Options as at
31 December 2021
Directorships held in other listed
entities
Former directorships of listed
companies in last three years
None
None
None
30
DIRECTORS’ REPORT (CONT)
Information on Directors (Cont)
Pablo Hernandez Mac-Donald
Non-Executive Director
Mr Hernandez joined SQM in 2013 and is the Vice President Finance Commercial Offices
within SQM reporting to the Chief Financial Officer of SQM. Pablo completed Industrial
Engineering and Master of Science in Engineering degrees having graduated from
Pontificia Universidad Catolica de Chile in 2013, and a Master’s in Business Administration
from Emory University in 2019.
Interest in Shares & Options as at
31 December 2021
Directorships held in other listed
entities
Former directorships of listed
companies in last three years
None
None
None
David Netherway
Independent Non-Executive
Director
B.Eng (Mining), CDipAF,
F.Aus.IMM, F.IoM3, C.E.
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 African 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 2021
8,536,434 Fully Paid Ordinary Shares
Directorships held in other listed
entities
Altus Strategies plc (from 9 May 2017)
Canyon Resources Ltd (from 17 March 2014)
Former directorships of listed
companies in last three years
Avesoro Resources Inc. (from 1 February 2011 to 8 January 2020)
Kilo Goldmines Ltd (from 7 July 2011 to 16 March 2020)
31
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 is operated by co-owners, Phil Dexter and Jane Kirton (ACG), 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 Chartered Governance Institute UK & Ireland.
32
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
David Netherway
Timothy Keating (i)
Sameer Oundhakar (ii)
Trinidad Reyes Perez
(iii)
Ignacio Joaquin Majluf
Caceres (iv)
Pablo Hernandez Mac-
Donald (v)
Board Meetings
10/11
11/11
11/11
11/11
6/6
5/5
7/10
1/1
-
Audit and Risk
Committee
Meetings
-
2/2
2/2
-
-
-
-
Remuneration and
Nomination
Committee Meetings
-
-
(1/1)
(1/1)
-
Health, Safety and
Environment
Meetings (vi)
-
-
-
-
-
-
-
-
-
-
-
(i) Meetings attended prior to ceasing to be a director on 01 April 2021.
(ii) Meetings attended since appointment as a director on 01 April 2021.
(iii) Meetings attended prior to ceasing to be a director on 01 September 2021
(iv) Meetings attended since appointment as a director on 1 September 2021 up to ceasing to be a director on 30 November 2021.
(v) Meetings attended since appointment as a director on 30 November 2021.
(vi) 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 CEO is employed on an ongoing basis, which may be terminated by either party giving 6 months’ notice.
Each NED has a letter of appointment for an initial term of 3 years after which the re-election will be subject to a robust review to
ensure the Board remains progressive. The appointment of the NED may be terminated by the Company giving 1 month notice,
by the NED by immediate notice and also in accordance with the Company’s articles of association.
Indemnifying Officers and Directors and Officers Liability Insurance
The company indemnifies all directors of the company named in this report and current and former executive officers of the
Company and its controlled entities against all liabilities to persons (other than the Company or the related body corporate) which
arise out of the performance of their normal duties as director or executive officer unless the liability relates to conduct involving
bad faith. The company also has a policy to indemnify the directors and executive officers against all costs and expenses incurred
in defending an action that falls within the scope of the indemnity and any resulting payments.
During the year the Company has paid a premium in respect of directors’ and executive officers’ insurance. The contract contains
a prohibition of disclosure of the amount of the premium and the nature of the liabilities under the policy.
33
Share Dealing Code
DIRECTORS’ REPORT (CONT)
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.
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
The 31 December 2021 full-year report has been prepared on a going concern basis that contemplates the continuity of normal
business activities and the realisation of assets and extinguishment of liabilities in the ordinary course of business. In determining
the appropriateness of the basis of preparation, the directors have considered the impact of COVID-19 and other global macro-
economic conditions on the position of the Group at 31 December 2021 and its operations in future periods.
Cash and cash equivalents, at 31 December 2021 were USD 11,092,509 (31 December 2020: USD 5,555,000) the increase was
driven by the successful fundraise of USD 14,024,597 announced on 8 April 2021. For the Period ended 31 December 2021 the
Group recorded a net loss of USD 1,941,196 (31 December 2020: USD 3,144,172) and at 31 December 2021 had a net working
capital of USD 10,215,877 (31 December 2020: USD 4,993,998). The Group also recorded a net cash used in operating activities
for the Period ended 31 December 2021 of USD 1,701,079 (31 December 2020: USD 4,022,888).
The Group’s financial projections and cash flow forecasts covering a period of more than twelve months from the date of approval
of these financial statements show that, as a result of the successful fundraising in the year, the Group will have sufficient available
funds in order to meet its contracted and committed expenditure. This does not include funding for the construction of the Kola
project which is subject to the successful completion of the Optimisation study and subsequent agreement to the EPC and
Financing proposal from the Summit Consortium.
The Company will be required to raise funds after the assessed going concern period to meet its ongoing contracted and
committed expenditure. The Directors have considered various mitigating actions, which include raising additional capital to
enable the Group to continue to fund its working capital requirements. 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 prepared a cash flow forecast for the period ending 31 December 2023, which indicates that the Group will have
sufficient liquidity to meet its working capital requirements to the end of the going concern period (March 2023). This period is
considered to be the same for the viability assessment of the Group.
34
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 are
required to prepare the group and Company financial statements in accordance with UK adopted international accounting
standards. 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 LSE 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 UK adopted international accounting standards subject to any material
departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and 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 UK adopted international accounting standards 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 2022 and is signed
on its behalf by:
____________________________
Non-Executive Chairman
David Hathorn
30 March 2022
_________________________________
Chief Executive Officer
Brad Sampson
30 March 2022
35
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 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 NEDs, 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.
36
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
company’s business model and how its governance
contributes to the delivery of its strategy.
the sustainability of
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.
The Company’s 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 Potash has 25 employees at the end of the reporting
period. 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 and the CEO has held Monthly video 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.
The Group’s
requires
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 AGM
in person, a dial-in
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.
facility was made available
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.
37
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.
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
At the Company’s AGM held on 09 June 2021, all
resolutions were passed on a poll by more than 95% of the
votes cast.
Refer to the section 172 Statement.
In addition, David Netherway is the appointed designated
NED responsible for workplace engagement. However, due
to COVID-19 restrictions, engagements with the workforce
were limited to virtual meetings where possible. During
2022, David Netherway plans to visit the RoC where the
majority of the employees are based.
The CEO holds monthly virtual meetings with all employees
where open questioning and sharing of concerns is
encouraged. However, due to COVID-19 restrictions, the
CEO has had no direct engagement with the workforce since
March 2020 although during the year the COO and CFO
held weekly virtual meetings with key employees and in
person when possible, 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.
38
CORPORATE GOVERNANCE REPORT (CONT)
BOARD LEADERSHIP AND COMPANY PURPOSE (Cont)
Provisions
7. 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
interest,
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 they 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.
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.
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.
39
CORPORATE GOVERNANCE REPORT (CONT)
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.
The Company sets out the matters that are reserved for the
board on its website.
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 awarded to each independent NED
the Board is of the view that these do not affect their
independent judgement.
DIVISION OF RESPONSIBILITIES (Cont)
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.
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
to
independence
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.
40
CORPORATE GOVERNANCE REPORT (CONT)
DIVISION OF RESPONSIBILITIES (Cont)
Provisions
11. At least half the board, excluding the chair, should be non-
executive directors whom the board considers to be
independent.
During the year the Board consisted of the Non-Executive
Chairman, the CEO, 2 NEDs and 2 independent NEDs.
During the course of the year, 3 NEDs resigned, and 3
NEDs were appointed. During the year less than half the
Board, excluding the Non-Executive Chairman, were NEDs
considered to be independent.
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 further independent NEDs will be
considered when deemed appropriate.
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.
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.
13.
David Netherway is the Senior Independent NED. During
the annual Directors survey discussion at a Board meeting,
each Director was given an opportunity to provide open and
honest feedback on the Chairman’s performance and no
concerns were raised. Mr Netherway was also available to
the directors and shareholders to discuss any matters and
in particular the performance of the Chairman.
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 bodies 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 NEDs, identify and
recommend to the Board candidates to become new
Directors to fill casual vacancies as and when they arise.
Further, the Committee gives appropriate consideration to
succession planning for directors, including executive
directors.
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.
41
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.
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 NED, including the
Senior Independent NED, has a Letter of Appointment in
place to ensure they clearly understand the requirements
of their role.
Details of executive directors’ service contracts and the
Chairman’s and NEDs’ 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.
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.
The number of meetings of the Board and its committees
and the individual attendance by directors is set out within
the Directors Report.
Directors are required to disclose prior appointments and
other significant commitments and are required to inform
the Board of any changes or additional commitments in a
timely manner. Details of the external appointments can be
found on pages 28 to 31. Before accepting new
appointments, 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 Director’s
commitment and time spent with the Group in their existing
appointment.
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.
All directors have access to the advice and services of the
joint company secretaries and each director, and each
board committee member may obtain
independent
professional advice at the Company’s expense, subject to
prior notification to the other NEDs and the joint company
secretaries. The joint company 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
the
appointment and removal of the company secretary is a
matter for the whole Board.
in Australia. Both
42
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.
The Remuneration and Nomination Committee is
comprised of Jonathan Trollip, as Chairman together with
David Hathorn and David Netherway.
The Remuneration and Nomination Committee Report is on
pages 54 and 55 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
appointed directors are provided with a legal update on
directors’ duties and subject to practical considerations
responsibilities and one-on-one meetings with members of
the senior management team are undertaken.
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.
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.
43
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 4 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.
During the year the Company undertook an 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.
The annual evaluation was conducted by SJCS who provide
company secretarial services.
CORPORATE GOVERNANCE REPORT (CONT)
COMPOSITION, SUCCESSION AND EVALUATION (Cont)
Provisions
22. The chair should act on the results of the evaluation by
recognising
the 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.
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
The Remuneration and Nomination Committee Report on
pages 54 to 55 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.
The Audit and Risk Committee comprises of 2 members,
David Netherway and Jonathan Trollip both of whom are
independent NEDs, of which David Netherway
is
considered by the Board to have recent and relevant
financial experience.
Due to the current size and stage of development of the
Company’s projects it is considered appropriate to have 2
Independent NEDs members this matter is kept under
review and the appointment of a further independent NED
will be considered when deemed appropriate.
44
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. The Terms of Reference
specifically cover the requirements of the UK 2018 Code.
AUDIT, RISK AND INTERNAL CONTROL (cont)
Provisions
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
to
financial performance, and
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
the
the board, about
recommendations
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;
developing and
the
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
implementing policy on
taking
•
•
reporting to the board on how it has discharged its
responsibilities.
45
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT, RISK AND INTERNAL CONTROL (Cont)
Details of the work of the Committee during the year are set
out in the Audit and Risk Committee Report on pages 52 to
53.
Provisions
26.
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
27.
28.
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 Directors’ Responsibility Statement is set out on page
35.
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 set out on pages 18 to 20.
The risk in respect of COVID-19 remains and this is referred
to in the Review of Operations and Strategic Report under
the section headed environmental and occupational health
and safety risks.
The risk in relation to Climate Change has been addressed
in the Review of Operations and Strategic Report under the
section headed climate change.
46
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT, RISK AND INTERNAL CONTROL (Cont)
Kore Potash has a Risk Matrix which is reviewed by the
Audit and Risk Committee twice a year to ensure the
controls are appropriate and in place with an open question
and answer session with management to ensure the
controls are appropriate and new risks identified are
updated and appropriate controls put in place.
The Board monitor risk management and internal control
through managements reporting on a monthly basis which
identifies new risks and appropriate controls and any
breach of the internal controls. Breaches of the company
internal controls are investigated with appropriate actions
put in place to ensure the matter doesn’t reoccur.
The Board considers the Company’s risk management and
internal control systems to be sound and effective.
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.
The Board has carried out a robust assessment of the
Company’s viability, emerging and principal risks and going
concern details of which are set out within the Review of
Operations and Strategic Report set out on pages 7-24.
29. The board should monitor
the company’s
risk
management and internal control systems and, at least
annually, carry out a review of their 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.
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.
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
attention
to any qualifications or assumptions as
necessary.
47
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.
is
The Remuneration and Nomination Committee
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 NED of ASX listed Propel Funeral
Partners Limited and BCAL Diagnostics Limited.
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. The Terms of Reference
specifically cover the requirements of the UK 2018 Code.
48
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
time commitment and responsibilities of
the role.
Remuneration for all non-executive directors should not
include share options or other performance-related
elements.
The remuneration of NEDs is determined by the board,
taking cognisance of the Company’s Articles of Association
and their time 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 NEDs’ remuneration was made during the
year.
first, second and
Certain NEDs were entitled to Performance Rights which
unconditionally vest on
third
the
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 NED was
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.
During 2021 the Remuneration and Nomination Committee
reviewed the remuneration package of the CEO. It was
agreed and subsequently approved by the board that the
CEO’s salary remains unchanged at USD 550,000 per
annum for the year ending 30 June 2022 and that he be
eligible for a short-term bonus of USD 270,000, payable
only in the event that the Kola project was optimised and
fully funded with a finance package approved by the Board.
However, should the Kola project not be optimised and fully
funded the Board may consider
the payment of a
discretionary short-term bonus, taking into account factors
such as the outcome of the optimisation and funding
process. Any such payment will be at the absolute
discretion of the Board. Further, it was recommended that
the timing of the consideration of the short term bonus be
dependent on when the outcome of the optimisation and
funding process is known.
Details of the Company’s remuneration scheme and
policies are set out within the Remuneration Report.
the
the
35. Where a remuneration consultant is appointed, this
should be
remuneration
responsibility of
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.
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
requirements
encompassing both unvested and vested shares.
post-employment
shareholding
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.
49
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION (Cont)
Details of the pension arrangements, including contribution
rates, for the CEO are set within the Remuneration Report.
The CEO is employed on an ongoing basis, which may be
terminated by either party giving 6 months’ notice. Each
NED has a letter of appointment for an initial term of 6 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 NED may be
terminated by the Company giving 1 month notice, by the
NED by immediate notice and also in accordance with the
Company’s Articles of Association.
The CEO’s
to detailed
remuneration was subject
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
2021. During 2021 the Remuneration and Nomination
further consideration
Committee gave
the CEO’s
remuneration and the results of those considerations are
set out in section 36 above.
to
Provisions
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
pensionable
rates,
particularly for directors close to retirement, should be
carefully considered when compared with workforce
arrangements.
remuneration, or
contribution
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.
40. When determining executive director remuneration policy
the remuneration committee should
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
performance of the company should be clear.
Outcomes should not reward poor performance; and
alignment to culture – incentive schemes should drive
behaviours consistent with company purpose, values
and strategy.
the
50
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION (Cont)
The Remuneration and Nomination Report on pages 56 to
69 sets out, inter alia the objectives of the Committee and
a description of the work carried out during the year.
Provisions
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;
the
a description, with examples, of how
remuneration committee has addressed the factors in
Provision 40;
the
remuneration policy operated as
intended in terms of company performance and
quantum, and, if not, what changes are necessary;
• whether
•
• 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.
51
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT AND RISK COMMITTEE
The Audit and Risk Committee (“the Committee”) comprises 2 members David Netherway and Jonathan Trollip, both of whom
are independent NEDs, 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 considered items of significant importance’s in relation to the statements for the year these included:
• Carrying value of the Exploration and Evaluation which it reviewed the compliance with IFRS6 and whether impairment
triggers have occurred. The Committee determined that no triggers or circumstances had occurred that would impair
the asset, and the external audit verified this assessment and therefore, no adjustment was made to the carrying value.
• Going Concern was reviewed by assessing the Cash forecast for the group and considering the impact of market
conditions the committee concluded the cash forecast was appropriate and the external audit verified this assessment.
In considering the appropriateness of the audit the Committee reviews the scope for each engagement and highlights any areas
of concern to be specifically addressed. The Committee meet with the external auditors at the conclusion of the engagement to
discuss the outcomes of the audit with an open question and answer session for the Committee to assess the effectiveness of
the audit and any area identified for improvement.
When appointing of reappointing the external audit firm the company takes into consideration the appropriateness of the firm in
comparison to the companies’ size and operations, the number of partners available for rotation, the firms understanding of the
exchanges and compliance regulations for these exchanges and other service the firm provides to the Group.
The current external auditors BDO have been in place for 3 years they were appointed in 2019 through a tender process.
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.
52
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT AND RISK COMMITTEE (CONT)
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.
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 18 to 20 of the Annual Report.
During the year, the Committee reviewed the planning of the 2021 Annual Report including consideration of the financial
statements and going concern, 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 9 June 2021. 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 2022. Based on this review, the Committee was satisfied with the effectiveness of the audit
for the year ended 31 December 2021.
53
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION AND NOMINATION COMMITTEE
The Remuneration and Nomination Committee (“the Committee”) has three members, two of whom are independent NEDs,
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.
•
•
•
Due to Covid-19 travel restrictions it was not possible to hold any physical meetings during the year and time zone differences
between the countries where members of the committee reside made it difficult to arrange virtual meetings. Accordingly, all
matters that were required to be dealt with by the committee were handled by way of bilateral and multilateral discussions among
Committee members and other directors as co-ordinated by the Chairman, and decisions of the Committee were effected by
written resolution.
Other than for directors who are nominated by a major shareholder in accordance with the relevant investment agreement
between the Company and the relevant shareholder, 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 six 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.
54
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 (29 average number of employees
in 2021 of which 9 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
• 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.
being of all of the communities it serves;
‐
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.
55
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report
This Remuneration Report sets out information about the remuneration of Kore Potash’s KMP for the financial year ended 31
December 2021. The term ‘KMP’ 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 2021 were:
Executive Directors
Brad Sampson
Non-Executive Directors
David Hathorn
Jonathan Trollip
David Netherway
Timothy Keating
Trinidad Maria Reyes Perez
Sameer Oundhakar
Ignacio Joaquin Majluf Caceres
Pablo Hernandez Mac-Donald
Executives
Henko Vos
SJCS
Andrey Maruta
Jean-Michel Bour
Amanda Farris
Gavin Chamberlain
Chief Executive Officer (appointed on 4 June 2018)
Non-Executive Chairman (appointed on 25 August 2017)
Independent Non-Executive Director (appointed on 17 November 2017)
Independent Non-Executive Director (appointed on 12 December 2017)
Non-Executive Director (resigned on 1 April 2021)
Non-Executive Director (resigned on 1 September 2021)
Non-Executive Director (appointed on 1 April 2021)
Non-Executive Director (appointed on 1 September 2021 and resigned 30 November 2021)
Non-Executive Director (appointed on 30 November 2021)
Joint Company Secretary (appointed on 7 November 2017)
Joint Company Secretary (appointed on 1 October 2018)
Chief Financial Officer (resigned on 10 June 2021)
Chief Financial Officer (appointed on 9 June 2021 resigned on 15 August 2021)
Interim Chief Financial Officer (appointed on 16 July 2021)
Chief Operating Officer (appointed on 1 October 2017)
56
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 NEDs at market rates for comparable companies for time, commitment and responsibilities.
The Board determines payments to the NEDs 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 2020 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 in the implementation of revised remuneration arrangements
for all NEDs. The maximum aggregate amount of fees that can be paid to NEDs is subject to approval by shareholders at the
AGM. Fees for NEDs are not linked to the performance of the Group, although to assist with the Company’s cash position some
NEDs 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.
Key Terms of Employment Contracts with Executive KMPs
Key Terms of Employment Contracts for the financial year ending 31 December 2021:
Name
Base Salary
per Annum
Term of
Agreement
Notice Period
Brad Sampson (CEO, appointed 4 June 2018)
USD 550,000
No fixed Term
6-month notice period
Andrey Maruta (CFO, resigned 10 June 2021)
GBP 172,500
No fixed Term
3-month notice period
Jean-Michel Bour (CFO, appointed on 9 June 2021
resigned on 15 August 2021)
GBP 170,000
No fixed Term
14 Day - notice period
Amanda Farris (Interim CFO, appointed 16 July 2021)
AUD 288,000
Fixed Term
3-month notice period
Gavin Chamberlain (COO, appointed 23 September
2019)
USD 306,124
No fixed Term
3-month notice period
57
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Non-Executive Director Arrangements
NEDs receive a board fee and fees for chairing or participating on board committees, as detailed in the 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 Chairman does not receive additional fees for participating in or chairing board 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 and remained unchanged with effect from 1 July
2021.
Base fees
Chairman
Senior independent non-executive director
Other independent 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 NEDs 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 52 to 55.
58
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 2021 was as follows:
1 January 2021 to 31 December 2021
Short-Term Benefits
Annual
Bonus
USD
Fees/Basic
Salary
USD
Termination
benefits
USD
Executive Directors
Brad Sampson
Non-Executive Directors
David Hathorn
Jonathan Trollip
Trinidad Maria Reyes
Perez (ii)
Timothy Keating (iii)
David Netherway
Sameer Oundhakar (iv)
Ignacio Joaquin Majluf
Caceres (v)
Pablo Hernandez Mac-
Donald (vi)
Executives
Henko Vos (vii)
SJCS
Gavin Chamberlain
Andrey Maruta
Jean-Michel Bour
Amanda Farris
550,000
83,333
63,000
-
-
80,500
-
-
-
776,833
42,377
67,718
302,356
107,372
48,616
134,946
703,385
Total
1,480,218
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Post-
Employment
Benefits
Superannuation
USD
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Options /
Performance
Rights (i)
USD
Total
USD
62,193
612,193
-
-
-
-
-
-
-
-
83,333
63,000
-
-
80,500
-
-
-
62,193
839,026
-)
-)
)31,484
637
90,418
-)
122,539
42,377
67,718
333,840
108,009
139,034
134,946
825,924
184,732
1,664,950
(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) Trinidad Maria Perez Peres resigned as a NED on 1 September 2021 and Ignacio Joaquin Majluf Caceres was appointed as her
replacement.
(iii) Timothy Keating resigned as a NED on 1 April 2021 and Sameer Oundhakar was appointed as his replacement.
(iv) Sameer Oundhakar was appointed as a NED on 1 April 2021, following the resignation of Timothy Keating.
(v)
Ignacio Joaquin Majluf Caceres was appointed as a NED on 01 September 2021 and resigned as a NED on 30 November 2021 and
Pablo Hernandez Mac-Donald was appointed as his replacement.
(vi) Pablo Hernandez Mac-Donald was appointed as a NED on 30 November 2021, following the resignation of Ignacio Joaquin Majluf
Caceres.
(vii) 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.
Brad Sampson was the highest paid Director during the 2021 year and details of his remuneration are disclosed above.
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
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
Timothy Keating
David Netherway
José Antonio Merino
Executives
Henko Vos
SJCS
Gavin Chamberlain
Andrey Maruta
549,557
146,693
120,300
62,685
-
13,998
80,500
13,998
841,038
12,158
77,159
280,500
172,500
542,317
-
-
-
-
-
-
146,693
-
-
-
-
-
Total
1,383,355
146,693
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Options /
Performance
Rights (i)
USD
Total
USD
208,173
904,423
202,151
38,563
322,451
101,248
-
11,360
11,360
471,607
-)
-)
187,135
116,810
303,945
-
25,358
91,860
13,998
1,459,338
12,158
77,159
467,635
289,310
846,262
775,552
2,305,600
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)
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 2021
During the financial year, the following options as SBP arrangements for KMP and other personnel were in existence:
Option Series 33
Options Series 34*
Options Series 35*
Options Series 36*
Options Series 37*
Grant
Date
19/07/2019
Vesting Date
19/07/2022
Number of
Options
26,900,000
Expiry Date
19/07/2024
Fair Value at
Grant Date
GBP 0.007
Exercise
Price
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
01/06/2021
31/05/2024
12.000.000
01/06/2026
GBP 0.0053
GBP 0.022
* These options were issued to Gavin Chamberlain (Option Series 34), Andrey Maruta (Option Series 35) of which 4,000,000 were cancelled
in the period and Guy de Grandpre (Option Series 36) all of these were cancelled in the period, Jean-Michel Bour (Options Series 37) all
of these were cancelled in the period.
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 37 were granted as compensation during the year. Further details of the performance conditions for Option Series
34-37 can also be found in Note 21 to the financial statements.
There was no exercise of options during the year or any further issues.
61
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 2021
During the financial year, the following performance rights as SBP arrangements for KMP and other personnel were in existence:
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
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
None vested
Refer below
Refer below
Refer below
Refer below
Refer below
Number of
Rights
5,031,250
605,000
660,000
1,536,666
2,759,002
500,000
250,000
250,000
250,000
2,250,000
Expiry Date
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 0.1867
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.
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.
Further details of the performance rights, performance conditions and vesting for the above series can be found in Note 21 to the
financial statements.
62
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 2021 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 2021 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
Balance at the
start of the year Granted or
allocated
as compen-
sation
No
Vested
and exer
-cisable Unvested
No
No
Cancelle
d
or
expired
(iv)
No %
Other
changes
(ii)
No
Vested
%
No
Exer-
cised
No
Balance at the
end of the year
Vested
and exer
-cisable
No
Unvested
No
Max value
yet to vest
No
Expensed
in 2021
USD %
Executive Directors
Brad Sampson (i)
Options
Series
33
02/07/2019 26,900,000 19/07/2019 8,966,666 17,933,334
- 8,966,666 33.3
8,966,666 17,933,334
- 8,966,666 33.3
-
-
-
-
-
-
- 17,933,334
8,966,666 102,752
62,193
- 17,933,334
8,966,666 102,752
62,193
20
20
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 (cont)
Balance at the
Vested
and exer-
start of the year Granted or
allocated
as compe-
nsation
No
cisable Unvested
No
No
Vested
%
No
Exer-
cised
No
Other
Balance at the
end of the year
Cancelled
or expired
(iv)
No %
chan
ges
(ii)
No
Vested
and exer-
cisable Unvested
No
No
Max value
yet to vest
USD
Expensed
in 2021
USD %
Name, option or rights series number,
grant date, amount granted on
grant date and issue date
Non-executive directors
David Hathorn
Performance Rights
Series 16 27/06/2018
1,500,000 01/08/2018
-
500,000
Jonathan Trollip
Performance Rights
Series 17 27/06/2019
500,000 01/08/2019
-
250,000
Timothy Keating
Performance Rights
Series 20 27/06/2019
David Netherway
Performance Rights
Series 19 27/06/2019
750,000 01/08/2019
-
250,000
500,000 01/08/2019
-
250,000
-
-
-
-
-
-
- (500,000)
-
-
-
- (250,000)
-
-
-
-
- (250,000)
-
-
-
- (250,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
start of the year
Vested
and exer-
cisable
No
Unvest
ed
No
Granted or
allocated
as compen-
sation
No
Balance at the
end of the year
Vested
%
No
Exer-
cised
No
Cancelled
or expired
(iv)
No %
Other
chan
ges
No
Vested
and ex
er-
cisable
No
Unvested
No
Max value
yet to vest
USD
Expensed
in 2021
USD %
Name, option or rights series number,
grant date, amount granted on
grant date and issue date
Executives
Andrey Maruta
Options
8,000,000 66
-
4,000,000
33
-
8,000,000
133,334
66,666
33
-
133,334
- 8,133,334
- 8,133,334
-
-
-
-
-
-
-
-
93
-
544 32)
637
---)
Series 35 15/09/2019
12,000,000 25/06/2020 4,000,000 8,000,000
Performance rights
Series 25 17/03/2020
200,000 17/03/2020
-
4,000,000 8,200,000
200,000
Gavin Chamberlain
Options
Series 34 19/07/2019 12,000,000 25/06/2020 4,000,000 8,000,000
Performance rights
Series 15 29/05/2017
2,200,000 29/05/2017
- 1,760,000
Series 25
17/03/2020
850,000 17/03/2020
850,000
-
-
-
-
-
- 4,000,000 33
-
-
566,667
66
566,667
4,850,000 9,760,000
- 4,566,667
-
566,667
Guy De Grandpre
Options
Series 32 15/09/2019
Jean-Michel Bour
Options
Series 37 01/06/2021
12,000,000 25/06/2020 3,000,000 6,000,000
-
-
-
-
9,000,000
12,000,000 01/06/2021
-
- 12,000,000
-
-
- 12,000,000
65
-
-
-
-
4,066,666
-
-
-
-
-
-
-
-
-
-
-
- 8,000,000 4,000,000
45,218
19,553 14
-
-
-
-
1,760,000
262,900
8,428
3)
283,333
2,359
3,503 49
- 8.000.000
6,043,333
310,477
31,484
-
-
-
-
-
-
-
-
-
-
-
4,398-
-
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Share-based payments granted as compensation to KMP
Options and Performance Rights granted during 2021
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 2021.
Options / Rights
Series
Number of Options /
Rights Granted at
Grant Date
Number
Value of Options /
Rights Granted at
Grant Date
USD
Option Series 37
12,000,000
90,418
Executive Directors
Jean-Michel Bour
Shares issued on exercise of options or performance rights
Shares were issued to the following NEDs during the financial year ended 31 December 2021 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
66
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 2021
Executive Directors
Brad Sampson
Non-executive directors
David Hathorn (i)
Jonathan Trollip
Timothy Keating
David Netherway
Executives
Henko Vos
Gavin Chamberlain
Balance at
1 Jan 2021
Received as
Remuneration
Options
Exercised / Rights
Converted
Other
Movements
(i)
Balance at
31 Dec 2021
2,464,705
-
-
-
2,464,705
116,177,565
5,116,190
500,000
5,845,744
130,104,204
1
-
1
2,615,968
1,910,106
-
2,440,690
6,966,764
-
-
500,000
250,000
250,000
250,000
1,250,000
-
-
-
-
24,943,528
-)
-)
-)
24,943,528
144,237,061
7,276,296
750,000
8,536,434
163,264,496
--)
516,667
516,667
1
516,667
516,668
Total
130,104,205
6,966,764
1,250,000
25,460,195
163,781,164
(i) Shares purchased from off-market acquisitions 1,886,875 and shares purchases as part of Fundraise on 8th April 2021 23,056,653.
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)
Balance at
31 Dec 2020
2,464,705
-
-
-
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 off-market acquisitions.
Other than otherwise indicated above, no other KMP held any ordinary shares in the Company during the current or prior years.
67
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Options, rights and equity warrants over equity instruments granted as compensation
31 December 2021
Executive Directors
Brad Sampson
Non-executive directors
David Hathorn
Jonathan Trollip
Timothy Keating
David Netherway
Executives
Andrey Maruta
Guy de Grandpe
Jean-Michel Bour
Amanda Farris
Gavin Chamberlain
Balance at
1 Jan 2021
Received as
Remuneration
Rights
Exercised
Other
Movements
(i) to (v)
Balance at
31 Dec 2021
Vested and
exercisable
at year end
26,900,000
500,000
250,000
250,000
250,000
28,150,000
12,200,000
9,000,000
-
-
14,560,000
35,760,000
-
-
-
-
-
-
-
(500,000)
(250,000)
(250,000)
(250,000)
(1,250,000)
-
-
-
-
-
-
-
-
12,000,000
-
-
12,000,000
-
-
-
-
(516,667)
(516,667)
(4,066,666)
(9,000,000)
(12,000,000)
-
-
(25,066,666)
26,900,000
17,933,333
-
-
-
-
26,900,000
8,133,334
-
-
-
14,043,333
22,176,667
-
-
-
-
17,933,333
8,133,334
-
-
-
8,000,000
16,133,334
Total
63,910,000
12,000,000
(1,766,667)
(25,066,666)
49,076,667
34,066,667
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 2021.
.
68
CORPORATE GOVERNANCE REPORT (CONT)
Remuneration Report (Cont)
Other transactions with KMP during the financial year ended 31 December 2021
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 2021.
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 63,427 and USD 91,453 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 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 64,635.
There were no other transactions with KMP and its related parties.
Voting of shareholders at last year’s AGM held on 9 June 2021
The Company received 99.73% “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. All material breaches of the Code of Conduct including Anti-Bribery
and Anti-Corruption are reported to the Board. 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.
69
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 and are not audited by an external auditor. 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.
70
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.
Information about the Company;
The Company’s website contains a separate section titled “Investors” which contains key documents for its investors. The website
also provides:
•
• 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;
•
• Copies of its announcements to the stock exchanges.
Investors’ presentations; and
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 shareholder meetings held
during 2021.
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 2022 and is signed on its behalf by
___________________________
David Hathorn
Non-Executive Chairman
_______________________________
Brad Sampson
Chief Executive Officer
71
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 2021 and of
the Group’s and of the Parent Company’s loss for the year then ended;
have been properly prepared in accordance with UK adopted international accounting standards; and
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 2021 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, 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 UK adopted international
accounting standards.
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.
Conclusions relating to going concern
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. 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 included:
• Obtaining the Directors cash flow forecasts for the period to 31 December 2023 and assessing 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.
• Performing sensitivity analysis in respect of the key assumptions underpinning the forecasts, including operational costs
and levels of exploration expenditure and assessing the level of cash required under such sensitivities.
• Reviewing the agreement with Summit Africa and checking that the forecast included an appropriate amount of costs in
relation to completing the optimisation report.
• Corroborating the opening cash position in the forecasts to bank statements
• Assessing the appropriateness of the disclosures included in the financial statements against the requirements of the
financial reporting framework and our own understanding of the Group and consistency with the Directors assessment.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group and the Parent Company’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report.
72
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
Overview
Coverage
Key audit matter
Materiality
100% (2020: 100%) of Group total assets
99% (2020: 86%) of Loss before tax
Going concern
Carrying value of exploration and evaluation
assets
2021
×
2020
In the prior year, there was a material uncertainty in relation to
going concern and therefore it was determined to be a key
audit matter.
Group financial statements as a whole
US$2.6million (2020 - $2million) based on 1.5% of Total Assets (2020 – 1.25% of
Total Assets).
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 three significant components, being the Parent Company and the two
exploration entities in the Republic of Congo: 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 over the financial
information 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 Matter 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 risk areas to be
covered by the audits (including the area that were considered to be key audit matter), specific procedures to perform,
materiality levels to be used 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 and attended clearance meetings for the
significant components.
73
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
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.
How the scope of our audit addressed the key audit
matter
We reviewed and challenged management’s impairment
assessment, reviewed by the Board, 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:
•
Inspecting that the licences remain valid and are in
good title.
• Meetings with Management in order to understand
the future plans for the assets and to discuss the
ongoing optimisation report and agreement with
Summit Africa.
• Reviewing and corroborating
the expenditure
capitalised during the year to test that they meet the
recognition criteria of the applicable accounting
standards.
• 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.
• Reviewing the net present value included in third
party technical reports, including the Kola Definitive
Feasibility Study and DX Pre-feasibility Study
against
for evidence of
impairment.
the carrying value
• Holding discussions with Operational Management
the Group’s
regarding ongoing updates
exploration licences.
to
Key observations:
We found management’s assessment of the carrying
value of E&E assets to be acceptable.
Key audit matter
value
Carrying
of
exploration and evaluation
(“E&E”) assets
Refer to notes 1(m), 1(r) and
7
At 31 December 2021, the Group
held E&E assets on its balance
sheet as detailed in in note 7 with a
value of $166.6m (2020: $172.0m).
around
As detailed in notes 1(r), there are
inherent
and
judgments
uncertainties
the
recoverability of exploration and
evaluation assets. Management
and the Board are required to
there are any
assess whether
triggers,
potential
which would
the
that
carrying value of an asset at 31
December 2021 may not be
recoverable.
impairment
indicate
the
Given the financial significance of
the E&E assets in the context of the
financial
Group’s statement of
position
significant
and
judgement involved in making the
assessment of whether any
indicators of impairment exist we
consider this to be a key audit
matter.
74
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We
consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of
reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Group financial statements
Parent company financial
statements
2021
US$ 2.6million
1.5% Total Assets
2020
US$2million
1.25% Total Assets
2021
US$2.34million
Set at 90% of Group materiality
2020
US$1.8million
Materiality was based on
1.5% of total assets. We
consider total assets to be
the most appropriate
basis for materiality given
the
the Group
and
exploration
development stage.
in
is
Set at 90% of Group materiality
given
the
the assessment of
components aggregation risk.
Materiality was based
on 1.25% of
total
assets. We consider
total assets to be the
appropriate
most
basis
for materiality
given the Group is in
the exploration and
development stage.
of
increase
in
The
threshold
materiality
percentage reflects our
assessment
lower
detection
risk because
this is our third year of
appointment and we have
a better knowledge and
understanding
the
entity.
US$ 1.95million
75% of Materiality
In reaching our conclusion on the level of performance materiality to be applied we
considered a number of factors including the expected total value of known and likely
misstatements (based on past experience), our knowledge of the group’s and parent
company’s internal controls and management’s attitude towards proposed adjustments.
US$1.75million
US$1.35million
US$1.5million
of
for
determining
Materiality
Basis
materiality
Rationale for the benchmark
applied
Performance materiality
Basis
for
performance materiality
determining
Specific materiality
Given that the above materiality thresholds would scope out the majority of the profit and loss expenditure, a specific materiality
threshold was applied to profit and loss items. We determined materiality for these items to be $0.1m based on 5% of expenditure.
We further applied a performance materiality level of 75% of specific materiality to ensure that the risk of errors exceeding specific
materiality was appropriately mitigated.
75
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
Our application of materiality (continued)
Component materiality
We set materiality for each component of the Group based on a percentage of between 19% and 90% of Group materiality
dependent on the size and our assessment of the risk of material misstatement of that component. Component materiality ranged
from $0.487million to $2.34million. In the audit of each component, 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$0.052m (2020
- US$0.04m). 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 34); 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 13-14).
Other
Provisions
Code
• Directors' statement on fair, balanced and understandable set out on page 35;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks
(set out on page 35)
• The section of the Annual Report that describes the review of effectiveness of risk management and
internal control systems (set out on pages 52 to 54); and
• The section describing the work of the Audit Committee (set out on page 52 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.
76
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
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
to
required
by
report
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
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
Auditor’s responsibilities for the audit of the financial statements (continued)
• Holding discussions with management and the audit committee to understand the laws and regulations relevant to the
Group and Parent company. These included elements of financial reporting framework, mining regulations and
environmental regulations;
• 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;
• Reviewing minutes from board meetings to identify any instances of non-compliance with laws and regulations or fraud;
• 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 and the Audit Committee to understand where it
is considered there was a susceptibility of fraud. We identified that fraud might occur through the manual override of
controls related to journal entries and in making key accounting estimates; we responded by performing the following:
o 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 and agreeing to supporting documentation;
o 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; and
o Assessing the judgements made by management when making key accounting estimates and judgements, and
challenging management on the appropriateness of these judgements (as further described in the Key Audit
Matter section of our report).
The engagement partner has assessed that the engagement team collectively had the appropriate competence and capabilities
to identify or recognize 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.
further description of our
A
responsibilities
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
is available on
the Financial Reporting Council’s website at:
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 (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, United Kingdom
30 March 2022
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 2021
Continuing operations
Other Revenue
Directors’ remuneration
Equity compensation benefits
Salaries, employee benefits and consultancy
expense
Credit loss provision
Administration expenses
Fair value change in derivative financial
liability
Interest income
Interest and finance expenses
realised
Net
foreign exchange gains
Loss before income tax expense
and
unrealised
Parent
Note
Dec 2021
USD
Dec 2020
USD
Consolidated Entity
Dec 2021
USD
Dec 2020
USD
2(a)
2(b)
2(d)
5
2(c)
834,158
)
(743,353)
(34,596)
-
)
(550,509)
(176,388)
(1,113,966)
-
(850,424)
(1,081,425)
1,792,612
(1,078,538)
-
14,698
(4,365)
1,027
28,083
(6,167)
-
-
(440,853)
(34,596)
(687,623)
-
(675,174)
-
14,709
(4,708)
(834,760)
(176,388)
(1,150,649)
-
(1,053,812)
1,027
30,116
(10,204)
(112,951)
(2,010,799)
48,378
(1,022,927)
(112,951)
(1,941,196)
42,800
(3,151,870)
Income tax
Loss for the year
3
-
(2,010,799)
-
(1,022,927)
-
(1,941,196)
7,698
(3,144,172)
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
-
-
-
-
(11,529,680)
11,321,754
(11,529,680)
11,321,754
(2,010,799)
(1,022,927)
(13,470,876)
8,177,582
(2,010,799)
-
(2,010,799)
(1,022,927)
-
(1,022,927)
(1,941,196)
-
(1,941,196)
(3,141,042)
(3,130)
(3,144,172)
(2,010,799)
-
(2,010,799)
(1,022,927)
-
(1,022,927)
(13,470,876)
-
(13,470,876)
8,180,712
(3,130)
8,177,582
Basic and diluted loss per share (cents per
share)
22
(0.06)
(0.04)
(0.06)
(0.17)
The accompanying notes from pages 84 to 120 form part of these financial statements.
79
STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
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
Derivative financial liability
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
Parent
Consolidated Entity
Note
Dec 2021
USD
Dec 2020
USD
Dec 2021
USD
Dec 2020
USD
4
5
5
6
7
8
9
10,916,397
88,836
11,005,233
5,443,551
119,085
5,562,636
11,092,509
197,996
11,290,505
5,555,000
225,044
5,780,044
153,515,625 147,741,819
-
-
69
153,515,694 147,741,888
-
-
69
107,577
482,530
166,613,902
-
167,204,009
99,436
542,418
172,025,750
-
172,667,604
164,520,927 153,304,524
178,494,514
178,447,648
356,882
26
356,908
358,841
26
358,867
1,074,602
26
1,074,628
786,020
26
786,046
356,908
358,867
1,074,628
786,046
164,164,019 152,945,657
177,419,886
177,661,602
EQUITY
Contributed equity – Ordinary Shares
Reserves
Accumulated losses
EQUITY ATTRIBUTABLE TO OWNERS OF
THE COMPANY
Non-controlling interests
TOTAL EQUITY
10
11
11(f)
3,375,494
2,451,768
172,642,133 169,598,292
(19,104,403)
(11,853,608)
3,375,494
230,029,754
(55,422,779)
2,451,768
238,515,593
(62,743,176)
164,164,019
-
152,945,657
-
164,164,019 152,945,657
177,982,469
(562,583)
177,419,886
178,224,185
(562,583)
177,661,602
The accompanying notes from pages 84 to 120 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 2022 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 2021
Consolidated Entity
Balance at
1 January 2020
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
Non-
Controlling
Interest
USD
Total
Equity
USD
1,541,253)
10,439,608
25,573,592
(18,415,577)
203,738,800)
(60,584,489)
162,293,187
(559,453)
161,733,734
Loss for the period
Other comprehensive loss for the year
Total comprehensive (loss)/income for
the year
-
-
-
-
-
-
-
-
-
-
11,321,754
11,321,754
-
-
-
(3,141,042)
-
(3,141,042)
(3,141,042)
11,321,754
(3,130)
-
(3,144,172)
11,321,754
8,180,712
(3,130)
8,177,582
Transactions with shareholders
Transfer of previously lapsed options
Conversion of performance rights
Cancellation of performance rights
Share issues
Share issue costs
Share based payments
Balance at 31 December 2020
Loss for the period
Other comprehensive loss for the year
Total comprehensive (loss)/income for
the year
Transactions with shareholders
Cancellation of options
Conversion of performance rights
Cancellation of performance rights
Share issues
Share issue costs
Share based payments
Balance at 31 December 2021
11(a)
11(a)
11(a)
10
11(a)
-
3,508
-
886,217
-
20,790
2,451,768
(127,825)
(212,111)
(642,419)
-
-
-
- 6,633,407
(281,199)
-
78,280
409,283
32,004,080
9,866,536
-
-
-
-
-
-
(7,093,823)
-
-
-
-
-
-
203,738,800
-
-
-
-
-
-
-
-
-
-
(11,529,680)
(11,529,680)
-
-
-
127,825
212,111
642,419
-
-
-
(62,743,176)
(1,941,196)
-
-
3,508
-
7,519,624
(281,199)
508,353
178,224,185
(1,941,196)
(11,529,680)
(1,941,196)
(13,470,876)
11(a)
11(a)
11(a)
10
11(a)
-
6,024
-
917,702
-
-
3,375,494
(6,015,412)
(446,583)
(2,799,598)
-
-
103,543
708,486
-
51,772
-
13,108,861
(958,742)
-
44,205,971
-
-
-
-
-
-
(18,623,503)
-
-
-
-
-
-
203,738,800
6,015,412
446,583
2,799,598
-
-
-
(55,422,779)
-
57,796
-
14,026,563
(958,742)
103,543
177,982,469
The accompanying notes from pages 84 to 120 form part of these financial statements.
-
-
-
-
-
-
(562,583)
-
-
-
-
-
-
-
-
(562,583)
-
3,508
-
7,519,624
(281,199)
508,353
177,661,602
(1,941,196)
(11,529,680)
(13,470,876)
-
57,796
-
14,026,563
(958,742)
103,543
177,419,886
81
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Parent
Balance at 01 January 2020
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
1,541,253)
10,439,608
25,573,592
203,738,800)
(76,011,124)
(19,063,831)
146,218,298)
Loss for the year
Total comprehensive (loss)/income for the year
-
-
-
-
-
-
-
-
-
-
(1,022,927)
(1,022,927)
(1,022,927)
(1,022,927)
Transactions with shareholders
Conversion of performance rights
Transfer of previously lapsed options
Cancellation of performance rights
Share issue
Share issue costs
Share based payments
Balance at 31 December 2020
Loss for the year
Total comprehensive (loss)/income for the year
Transactions with shareholders
Conversion of performance rights
Cancellation of options
Cancellation of performance rights
Share issue
Share issue costs
Share based payments
Balance at 31 December 2021
11(a)
11(a)
11(a)
10
11(a)
11(a)
11(a)
11(a)
10
11(a)
3,508
-
-
886,217
-
20,790
2,451,768
-
-
6,024
-
-
917,702
-
-
3,375,494
(212,111)
(127,825)
(642,419)
-
-
409,283
9,866,536
-
-
-
6,633,407
(281,199)
78,280
32,004,080
-
-
-
-
-
-
203,738,800
-
-
-
-
-
-
(76,011,124)
212,111
127,825
642,419
-
-
-
(19,104,403)
3,508
-
-
7,519,624
(281,199)
508,353
152,945,657
-
-
-
-
-
-
-
-
(2,010,799)
(2,010,799)
(2,010,799)
(2,010,799)
(446,583)
(6,015,412)
(2,799,598)
-
-
103,543
708,486
51,772
-
-
13,108,861
(958,742)
-
44,205,971
-
-
-
-
-
-
203,738,800
-
-
-
-
-
-
(76,011,124)
446,583
6,015,412
2,799,598
-
-
-
(11,853,608)
57,796
-
-
14,026,563
(958,742)
103,543
164,164,019
The accompanying notes from pages 84 to 120 form part of these financial statements.
82
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
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
Parent
Consolidated Entity
Note
31 Dec 2021
USD
31 Dec 2020
USD
31 Dec 2021
USD
31 Dec 2020
USD
13
6
7
5
(1,297,463)
(552,462)
-
(1,849,925)
(2,410,792)
(1,262,350)
-
(3,673,142)
(1,491,849)
(209,230)
-
(1,701,079)
(1,688,877)
(2,341,702)
7,691
(4,022,888)
-
-
(5,683,153)
14,698
(5,668,455)
-
-
(5,190,116)
28,083
(5,162,033)
(2,216)
(5,811,225)
-
14,709
(5,798,732)
(15,664)
(5,262,603)
-
30,116
(5,248,151)
11
11
14,026,563
(958,742)
7,519,624
(281,199)
14,026,563
(958,742)
7,519,624
(281,199)
-
-
13,067,821
-
-
7,238,425
-
-
13,067,821
(12,171)
(192)
7,226,062
5,549,441
(1,596,750)
5,568,010
(2,044,977)
5,443,551
(76,595)
7,046,089
(5,788)
5,555,000
(30,501)
7,578,727
21,250
4
10,916,397
5,443,551
11,092,509
5,555,000
The accompanying notes from pages 84 to 120 form part of these financial statements.
83
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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 2021 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 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 UK adopted international
accounting standards. 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 2022.
New standards, interpretations and amendments effective from 1 January 2021 which have no impact on the group
•
•
Interest rate benchmark reform - IBOR 'Phase 2' (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16); and
COVID-19-Related Rent Concessions beyond 30 June 2021 (Amendments to IFRS 16)
Neither of these standards are deemed to have an impact on the Group for the year ending 31 December 2021.
New standards, interpretations and amendments issued by the IASB 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 as they are not expected to have a material impact on the
Group.
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).
The following amendments are effective for the period beginning 1 January 2023:
• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
• Definition of Accounting Estimates (Amendments to IAS 8); and
• Deferred Tax Related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12).
84
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(b) Going Concern
The 31 December 2021 full-year report has been prepared on a going concern basis that contemplates the continuity of normal
business activities and the realisation of assets and extinguishment of liabilities in the ordinary course of business. In determining
the appropriateness of the basis of preparation, the directors have considered the impact of COVID-19 on the position of the
Group at 31 December 2021 and its operations in future periods.
Cash and cash equivalents, at 31 December 2021 were USD 11,092,509 (31 December 2020: USD 5,555,000) the increase was
driven by the successful fundraise of USD 14,024,597 announced on 8 April 2021. For the Period ended 31 December 2021 the
Group recorded a net loss of USD 1,941,196 31 December 2020: USD 3,144,172) and at 31 December 2021 had a net working
capital of USD 10,215,817 (31 December 2020: USD 4,993,998). The Group also recorded a net cash used in operating activities
for the Period ended 31 December 2021 of USD 1,701,079 (31 December 2020: USD 4,022,888).
The Group’s financial projections and cash flow forecasts covering a period of more than twelve months from the date of approval
of these financial statements show that, as a result of the successful fundraising in the review period, the Group will have sufficient
available funds in order to meet its contracted and committed expenditure. This does not include funding for the construction of
the Kola project which is subject to the successful completion of the Optimisation study and subsequent agreement to the EPC
and Financing proposal from the Summit Consortium.
The Company will be required to raise funds after the going concern period to meet its ongoing contracted and committed
expenditure. The Directors have considered various mitigating actions, which include raising additional capital to enable the
Group to continue to fund its working capital requirements. 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 prepared a cash flow forecast for the period ending 31 December 2023, which indicates that the Group will have
sufficient liquidity to meet its working capital requirements to the end of the going concern period (March 2023). This period is
considered to be the same for the viability assessment of the Group.
(c) 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.
(d) 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.
85
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(e) 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.
(f) 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.
86
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(f) Basis of Consolidation (Cont)
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.
(g) 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.
(h) 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 asset’s 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.
87
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(i) Financial Instruments
(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 receivables 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.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers
the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership
of the financial asset are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership
and does not retain control over the transferred asset. Any interest in such derecognised financial assets that is created or
retained by the Group is recognised as a separate asset or liability.
(ii) 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.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled, or expire.
(iii) 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.
.
88
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(i) Financial Instruments (Cont)
(iv) 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) Revenue Recognition
Revenue Is recognised from the provision of services has been provided under the contractual obligations.
Revenue for the provision of services to a group entity is recognised when the services have been provided to that entity as per
the Intra-Group Service Agreement.
(k) 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.
(l) 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. Cash held in currencies other than USD is measure based on the USD equivalent exchange rate at the end of
the period and cash flows are measured at the average USD equivalent exchange rate over the period.
(m) 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.
89
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(m) Capitalisation of Exploration and Evaluation Expenditure (Cont)
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 DFS, 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.
(n) 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
(o) 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.
90
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(p) 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.
(q) 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, CDIs 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.
(r) 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.
91
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(r) Critical Accounting Judgements and Estimates (Cont)
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
Classification of
capitalised
exploration and
evaluation costs to
date
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.97) 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.
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 2021.
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 work with the Summit
Consortium 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.
(s) Assumptions and Estimation Uncertainties
No assumptions and estimation uncertainties have a significant risk of resulting in a material adjustment to the carrying amounts
of assets and liabilities at 31 December 2021
(t) 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.
92
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 2: LOSS FOR THE YEAR
(a) Revenue
Intra group services
Expenses
(b) Equity based payments
Directors, KMP and other employees (i)
(c) 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
Other expenses
Parent
Dec 2021
USD
Dec 2020
USD
Consolidated Entity
Dec 2021
USD
Dec 2020
USD
834,158
-
-
-
34,596
176,388
34,596
176,388
305,518
79,929
6,238
131,665
119,847
4,737
176,187
148
-
-
26,155
850,424
352,984
90,737
42,710
125,691
139,814
-
106,655
99,335
2,239
42,440
75,933
1,078,538
305,518
79,981
6,238
131,665
119,847
4,842
-
148
-
-
26,935
675,174
354,173
91,226
42,710
135,658
146,557
(2,808)
-
99,335
2,239
61,131
123,591
1,053,812
(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.
(d) Salaries, employee benefits and consultancy expense
Wages and Salaries
Social Security costs
Consultancy costs
740,722
37,245
335,999
1,113,966
673,997
37,844
369,584
1,081,425
397,490
37,245
252,888
687,623
740,184
33,650
376,815
1,150,649
Staff Costs capitalised as Exploration and Exploration Asset
Wages and Salaries
-
-
698,428
733,108
Total staff costs for the Group in the year ended 31 December 2021 were USD 1,133,163 (2020: USD 1,506,942). The staff costs
incurred during the year at a subsidiary, SPSA, of USD 698,428 has been capitalised as Exploration and Exploration Asset (2020:
USD 733,108).
(e) Average number of employees
Operational
Head Office
Number
-
6
6
Number
-
9
9
Number
19
6
25
Number
34
12
46
93
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
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 2021
USD
Dec 2020
USD
Dec 2021
USD
Dec 2020
USD
-
-
-
-)
-)
-)
-
-
-
(7,698)
-)
(7,698)
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 2021
USD
Dec 2020
USD
Dec 2021
USD
Dec 2020
USD
Loss before tax
(2,010,799)
(1,022,927)
(1,941,196)
(3,151,870)
Parent company tax on loss at the UK corporation tax
rate of 19% (2020: 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
Remeasurement of deferred tax for change in tax
rate
(382,052)
(194,356)
(368,827)
(598,855)
-
(382,052)
-)
(194,356)
-
(368,827)
(41,656)
(640,511)
14,696
(6,571)
486,293
-
75,480
(354,192)
535,638
-
-
(113,433)
482,260
-
107,572
-
540,637
-
(112,366)
(62,570)
-
-
382,052
194,356
368,827
648,209
Income tax (credit) / expense
-
-
-
(7,698)
The statutory tax rate of Kore Potash plc is 19% (2020: 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 Nil (2020: charge of USD 7,698).
An increase in the UK corporation tax rate to 25% (effective from April 2023) was substantially enacted in May 2021. This is likely
to impact on the Group’s potential deferred tax asset not yet recognised in respect of tax losses, as well as impact on its reported
tax charge in the financial statements for the year ended 31 December 2022 accordingly. No deferred tax has been recognised in
respect of the Group’s tax losses of USD 19,763,277 (2020: USD 17,897,914) that are available for offset against any future
taxable profits in the companies in which the losses arose.
94
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
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
Bank guarantee
Rental deposits
Others
Amounts due from subsidiaries (i) (ii)
Parent
Dec 2021
USD
Dec 2020
USD
Consolidated Entity
Dec 2021
USD
Dec 2020
USD
10,916,397
5,443,551
10,916,397 5,443,551
11,092,509
5,555,000
11,092,509 5,555,000
Parent
Dec 2021
USD
Dec 2020
USD
Consolidated Entity
Dec 2021
USD
Dec 2020
USD
(9,517955-
-
5129,369
(23,971)
97,807
88,670
15,000 111bbh1,046
119,085
88,836
28,515 53,273
(23,971)
33,119
138,721
94,564
44,088
54,731
197,996 225,044
-
1,046
-
153,514,579
153,515,625
-
-)-
-
147,741,819
147,741,819
51,882
53,793
1,902
-
107,577
-
99,436
-
-
99,436
Total Trade and Other Receivables
153,604,461
147,860,904
305,573
324,480
(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 funds 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, SPSA 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.
EXPECTED CREDIT LOSS PROVISION
Parent
Dec 2021
USD
Dec 2020
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
14,582,887 16,375,499
-
-
(1,792,612)
-
14,582,887 14,582,887
As at 31 December 2021 there were no other receivables that were past due but not impaired.
95
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 6: PROPERTY, PLANT AND EQUIPMENT
Parent
Consolidated Entity
Dec 2021
USD
Dec 2020
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
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
Dec 2021
USD
2,095,475
(1,612,945)
482,530
Dec 2020
USD
2,267,839
(1,725,421)
542,418
542,418
2,361
(35,799)
-
-
(26,450)
482,530
560,711
20,723
(105,117)
(2,304)
(10,408)
78,813
542,418
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
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
Dec 2021
USD
Dec 2020
USD
Dec 2021
USD
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-)
-
-)
-)
-)
-)
-)
-)
-)
-
Dec 2020
USD
234,149)
(234,149)
(234,149)
234,149
-)
-)
42,278
-
-
(42,355)
-
77
-
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.
96
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 7: EXPLORATION AND EVALUATION
EXPENDITURE
Parent
Consolidated Entity
Dec 2021
USD
Dec 2020
USD
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
-
-
-)
-)
-)
-)
-)
Dec 2021
USD
172,025,750 156,019,360
Dec 2020
USD
6,581,097
2,835,793
(11,992,945) 13,170,597
166,613,902 172,025,750
134,392,245 142,554,630
32,221,657 29,471,120
166,613,902 172,025,750
-
-)
-)
-)
-)
-)
-)
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 DX) 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 5 years from profitability, and a corporation tax rate of 7.5% for the next
5 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 10% 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 expired in February
2021 and the company relinquished this tenement there is no value allocated to this tenement or costs incurred in relation to this
tenement.
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 RoC.
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 change in equity interest 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.
97
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
Percentage
Owned
Investment
31 Dec 2021 31 Dec 2021
Percentage
Owned
Investment
31 Dec 2020 31 Dec 2020
NOTE 8: CONTROLLED ENTITIES
Controlled Entities
Country of
Incorporation
Kore Potash Limited (i)
Australia
Sintoukola Potash S.A. (“SPSA”) (ii)
Kore Potash South Africa (Pty) Ltd
(“KPSA”) (iii)
Republic of Congo
South Africa
%
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
97
100
100
100
USD
67
1
1
18,264
18,264
(i) 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.
(ii) 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.
(iii) 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
Consolidated Entity
Dec 2021
USD
Dec 2020
USD
Dec 2021
USD
Dec 2020
USD
NOTE 9: TRADE AND OTHER PAYABLES
Current
Trade and other creditors
Accruals
Employee benefits and related payables
Other Payables
Total Trade and Other Payables
623
5,738
127,598 353,103
228,661
-
356,882
-
- -
358,841 1,074,602
47,457 223,964
684,299
342,846 154,320
414
786,020
407,322
Trade and other creditors are non-interest bearing and are normally settled on 30-day terms.
98
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 10: ISSUED CAPITAL
Parent
Dec 2021
USD
Dec 2020
USD
Consolidated Entity
Dec 2021
USD
Dec 2020
USD
3,375,494,446, Fully Paid Ordinary Shares at par value of
USD 0.001 each (31 December 2019: 2,451,769,214
Fully Paid Ordinary Shares at par value of USD 0.001)
3,375,494
2,451,768
3,375,494
2,451,768
Fully Paid Ordinary Shares
3,375,494 2,451,768
3,375,494 2,451,768
Date
31 Dec 2019
07 Apr 2020
07 Apr 2020
25 Jun 2020
25 Jun 2020
21 Sept 2020
06 Oct 2020
31 Dec 2020
31 Dec 2020
09 Apr 2021
06 May 2021
11 May 2021
01 Jun 2021
08 Jul 2021
31 Dec 2021
Details
Closing balance
Equity issued to directors in lieu of payment (i)
Conversion of performance rights (i)
Conversion of performance rights (ii)
Equity research services share issue (iii)
Capital raising at GBP 0.008515 each (iv)
Equity issued to directors in lieu of payment (v)
Equity issued to directors in lieu of payment and issue of Equity (vi)
Closing balance
Equity issued to directors in lieu of payment, Fundraise Tranche 1
admitted to market and Director’s performance rights (vii)
Issue of Equity - Fundraise Tranche 2 admitted to market (viii)
Issue of Equity - Fundraise OIA Princess Aurora Company (ix)
Issue of Equity (x)
Issue of Equity (xi)
Closing balance
No. of Shares)
1,541,252,572
7,770,939
1,250,000
2,258,333
4,000,000
882,688,876
6,566,821
5,980,632
2,451,768,173
365,518,522
462,310,392
92,226,613
716,667
2,954,079
3,375,494,446
USD)
1,541,253
7,770
1,250
2,258
4,000
882,689
6,567
5,981
2,451,768
365,518
462,310
92,227
717
2,954
3,375,494
(i) 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.
(ii) 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 COO.
(iii) 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.
(iv) 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.
(v) 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.
(vi) 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
99
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 10: ISSUED CAPITAL (CONT)
(vii) On 9 April 2021, a total of 1,103,296 ordinary shares were issued to David Hathorn, David Netherway and Jonathan Trollip in
lieu of cash fees for the quarter ended 31 March 2021. Additionally, a total of 1,250,000 ordinary shares due under the third
and final tranche of the Company’s performance rights plan for NEDs, were issued to David Hathorn, David Netherway,
Jonathan Trollip and Timothy Keating, at a subscription price of USD 0.001 per ordinary share.
The Company issued 363,165,226 ordinary shares to new and existing institutional investors at the Placing Price of 1.1p per
share.
(viii) On 6 May 2021, 462,310,392 ordinary shares were issued at 1.1p (2.0 Australian cents) per share in line with the Company’s
announcements of 19 April 2021, of which 23,056,653 ordinary shares were issued to David Hathorn.
(ix) On 11 May 2021, the company issued 92,226,613 ordinary shares to OIA as a substantial shareholder, after confirmation of
the Fundraise in April, OIA signed a subscription agreement at 1.1p for a total cash consideration of USD 1.4 million
(x) On 1 June 2021, a total of 716,667 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 of which 516,667 ordinary
shares were issued to Gavin Chamberlain, COO.
(xi) On 8 July 2021, a total of 2,954,079 ordinary shares were issued to David Hathorn, David Netherway and Jonathan Trollip in
lieu of cash fees for the quarter ended 30 June 2021.
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 2021
USD
708,486
44,205,971
-
Dec 2020
USD
9,866,536
32,004,080
-
203,738,800 203,738,800
(76,011,124)
(76,011,124)
169,598,292
172,642,133
Dec 2021
USD
Dec 2020
USD
9,866,536
708,486
32,004,080
44,205,971
(18,623,503)
(7,093,823)
203,738,800 203,738,800
-
230,029,754 238,515,593
-
(a)
SBP Reserve
Opening balance
Value performance rights converted in ordinary share
capital
Value of performance rights cancelled in the period
Value of cancelled options transferred to
accumulated losses (i)
Share based payment vesting expense (ii)
Closing balance
9,866,536
10,439,608
9,866,536
10,439,608
(446,583)
(212,111)
(446,583)
(212,111)
(2,799,598)
(642,419)
(2,799,598)
(642,419)
(6,015,412)
103,543
708,486
(127,825)
409,283
9,866,536
(6,015,412)
103,543
708,486
(127,535)
408,993
9,866,536)
(i) For further details, refer to Note 11(a).
(ii) For parameters used in the valuation of the above options and performance rights see Note 21.
100
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 11: RESERVES (CONT)
(a) SBP Reserve (Cont)
Movement in SBP Reserve of the Consolidated Entity
Date
31 Dec 2019
07 Apr 2020
07 Apr 2020
25 Jun 2020
25 Jun 2020
25 Jun 2020
27 Jun 2020
06 Dec 2020
31 Dec 2020
31 Dec 2020
15 Jan 2021
15 Jan 2021
15 Jan 2021
09 Apr 2021
09 Apr 2021
09 Apr 2021
01 Jun 2021
01 Jun 2021
01 Jun 2021
24 Jun 2021
23 Aug 2021
31 Dec 2021
31 Dec 2021
31 Dec 2021
Details
Closing balance
Conversion of performance rights
Cancellation of performance rights
Conversion of performance rights
Issue of performance rights
Issue of share options
Transfer of lapsed options
Expiry of performance rights
SBP charge
Closing balance
Conversion of performance rights (i)
Cancellation of performance rights (ii)
Cancellation of share options (iii)
Conversion of performance rights (iv)
Cancellation of performance rights (v)
Cancellation of share options (vi)
Conversion of performance rights (vii)
Cancellation of performance rights (viii)
Cancellation of share options (ix)
Issue of share options
Cancellation of share options (x)
Transfer of SBP previously lapsed to retained earnings
SBP charge
Closing balance
No. of Options
30,900,000
-
-
-
-
33,000,000
(4,000,000)
-
-)
59,900,000
-
(6,000,000)
(3,000,000)
-
-
(4,000,000)
12,000,000
(12,000,000)
-
-
46,900,000
No. of
Performance
Rights
28,183,108
(1,250,000)
(11,579,107)
(2,258,333)
2,250,000
-
-
(1,253,750)
-)
14,091,918
(3,071,251)
(2,044,001)
-
(1,250,000)
(4,500,000)
(716,667)
(199,999)
-
-
-)
-
-
2,310,000
USD
10,439,608
(78,833)
(642,419)
(133,278)
-
-
(127,825)
-
409,283
9,866,536
(247,269)
(235,777)
(67,758)
(194,114)
(2,443,910)
(19,294)
(5,200)
(2,736)
(25,725)
-
(4,398)
(6,015,412)
103,543
708,486
(i) On 15 January 2021, 3,071,251 performance rights were converted into ordinary shares, USD 247,269 has therefore been
reversed out from the SBP reserve.
(ii) On 15 January 2021, 2,044,001 performance rights were cancelled, USD 235,777 has therefore been reversed out from the
SBP reserve.
(iii) On 15 January 2021, 6,000,000 share options were cancelled, USD 67,758 has therefore been reversed out from the SBP
reserve.
(iv) On 9 April 2021, the NEDs, satisfied their vesting condition of their performance rights and had the following amounts of
performance rights converted into shares. A reversal of USD 194,114 from the SBP reserve was recognised in respect of
this.
Director
David Hathorn
David Netherway
Jonathan Trollip
Timothy Keating
Vested
500,000
250,000
250,000
250,000
101
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 11: RESERVES (CONT)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
On 9 April 2021, 4,500,000 performance rights were cancelled, USD 2,443,910 has therefore been reversed out
from the SBP reserve.
On 9 April 2021, 3,000,000 share options were cancelled, USD 19,294 has therefore been reversed out from the
SBP reserve.
On 1 June 2021, 716,667 performance rights were converted into ordinary shares. A reversal of USD 5,200 from
the SBP reserve was recognised in respect of this.
On 1 June 2021, 199,999 performance rights were cancelled, USD 2,736 has therefore been reversed out from the
SBP reserve.
On 1 June 2021, 4,000,000 share options were cancelled, USD 25,725 has therefore been reversed out from the
SBP reserve.
On 23 August 2021, 12,000,000 share options were cancelled, USD 4,398 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, cancellation or recognised as share
capital if exercised
(b) Share Premium Reserve
Movements during the period
Opening balance
Capital raising on 19 September 2020 at GBP 0.0085 each
Capital raising on 8 April 2021 at GBP 0.011 each
Share based payments
Less: Capital raising costs
Closing balance
Parent
Dec 2021
USD
32,004,080
-
13,108,861
51,772
(958,742)
44,205,971
Parent
Dec 2020
USD
25,573,592
6,633,407
-
78,280
(281,199)
32,004,080
Consolidated Entity
Dec 2021
USD
32,004,080
-
13,108,861
51,772
(958,742)
44,205,971
Dec 2020
USD
25,573,592
6,633,407
-
78,280
(281,199)
32,004,080
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 2021
USD
Parent
Dec 2020
USD
-)
-)
-)
Consolidated Entity
Dec 2021
USD
(7,093,823)
(11,529,680)
(18,623,503)
Dec 2020
USD
(18,415,577)
11,321,754
(7,093,823)
-)
-)
-)
The foreign currency translation reserve is used to record currency differences arising from the translation of the financial
statements of the foreign subsidiary.
102
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 11: RESERVES (CONT)
(d) Merger Reserve
In November 2017, the Company issued 771,395,768 shares with a par value 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.
(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 RoC.
Pursuant to the Mining Convention, the RoC Government were granted a 10% equity interest in KPM and DPM, which are wholly
owned by 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 end of the period.
Movements during the period
Opening balance
Loss/(profit) for the year (i)
Closing balance
Parent
Dec 2021
USD
Dec 2020
USD
Consolidated Entity
Dec 2021
USD
Dec 2020
USD
-)
-)
-
-)
-)
-
562,583
-
562,583
559,453
3,130
562,583
(i)
SPSA incurred a loss in 2020 therefore USD 3,130 was transferred to the non-controlling interest reserve
from retained earnings.
103
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 2021 (2020: Nil).
NOTE 13: NOTES TO STATEMENT OF CASH FLOWS
Parent
Dec 2021
USD
Dec 2020
USD
Consolidated Entity
Dec 2021
USD
Dec 2020
USD
Reconciliation of cash flows from operating activities:
Loss for the year
(2,010,799)
(1,022,927)
(1,941,196)
(3,144,172)
Adjustments for:
Depreciation of property, plant and equipment and
right-of-use assets
Equity compensation benefits
Net realised and unrealised foreign exchange losses
Interest received not classified as operating activities
cash inflow
Intra group services included in Investing Activities
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
-
34,596
113,729
(14,698)
-
-
-
-
-
(1,877,172)
-
176,388
(42,589)
-
34,596
117,153
14,303
176,388
(37,010)
(28,083)
-
(1,792,612)
-
-
(1,027)
(2,710,850)
(14,709)
75,833
-
-
-
-
(1,728,323)
(30,116)
-
-
165
(7,446)
(1,027)
(3,028,915)
(Increase)/Decrease in receivables
Decrease/(Increase) in payables
Net cash used in operating activities
(24,137)
51,381
(1,849,928)
(907,476)
(54,816)
(3,673,142)
(24,137)
51,381
(1,701,079)
(930,448)
(63,525)
(4,022,888)
104
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (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-21
USD
Dec-20
USD
Amortised Cost
Interest Rate
Dec-21
USD
Dec-20
USD
-
-
-
-
(26)
(26)
-
-
-
-
(26)
(26)
11,092,509
190,824
11,283,333
(731,756)
-
(731,756)
5,555,000
196,797
5,751,797
(631,700)
-
(631,700)
Fair value through profit or
loss
Dec-21
USD
Dec-20
USD
Amortised Cost
Interest Rate
Dec-21
USD
Dec-20
USD
10,916,397
5,443,551
69
69
153,530,694
164,447,160
147,967,909
153,411,529
(128,221)
-
(128,221)
(358,841)
-
(358,841)
-
-
-
-
-
(26)
(26)
-
-
-
-
-
(26)
(26)
105
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (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, South
African Rand (ZAR) / US Dollar (USD) exchange rate, Euro (EUR) / US Dollar (USD) exchange rate and Australian Dollar (EUR)
/ US Dollar (USD the 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 2021
XAF
GBP
ZAR
AUD EUR
CAD
31 December 2020
XAF
GBP
ZAR
FINANCIAL ASSETS
Cash at bank
Trade and other
receivables
FINANCIAL LIABILITIES
Trade and other
payables
Derivative
financial liability
Net exposure
-
206
206
3,920,715
174,624
9,111
587
67
20,425
658,241
107,401
358,215
-
-
1,046
174,778
(623) (603,535)
-
-
-
-
-
-
-
1,046
96,315
11,813
-
(358,842)
(272,859)
-
(26)
-
3,921,112 (254,133)
9,111
-
587
-
67
-
20,425
(26)
300,419
-
(69,143)
-
370,028
106
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 14: FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (CONT)
(a) Market Risk (Cont)
(i) Foreign currency risk (cont)
Sensitivity analysis (Group)
A reasonably possible strengthening (weakening) of the CAD, GBP, XAF, ZAR, AUD and EUR, against USD at 31 December
2021 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.
31 December 2021
CAD (5% movement)
GBP (5% movement)
XAF (5% movement)
ZAR (5% movement)
AUD (5% movement)
EUR (5% movement)
Equity
Profit or Loss
Strengthening
Gain/(Loss)
USD
Weakening
Gain/(Loss)
USD
Strengthening
(Gain)/Loss
USD
Weakening
(Gain)/Loss
USD
10
196,056
(12,707)
456
29
3
(10)
(196,056)
12,707
(456)
(29)
(3)
(10)
(196,056)
12,707
(456)
(29)
(3)
10
196,056
(12,707)
456
29
3
The summary quantitative data about the Parent’s financial instruments’ exposure to significant currency risk as presented in USD
is as follows:
31 December 2021
ZAR
GBP
CAD
AUD
EUR
CAD
GBP
ZAR
31 December 2020
FINANCIAL ASSETS
Cash at bank
Trade and other
receivables
206 3,920,715
7,623
587
67
20,425
658,241
354,167
FINANCIAL LIABILITIES
Trade and other
payables
Derivative
financial liability
Net exposure
-
-
1,046
(623)
-
(26)
206 3,921,112
-
-
-
-
-
7,623
-
587
-
-
-
67
-
1,046
-
(358,842)
-
-
-
20,425
(26)
300,419
-
354,167
Sensitivity analysis (Parent)
A reasonably possible strengthening (weakening) of the CAD, GBP, ZAR, AUD and EUR, against USD at 31 December 2021
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 2021
CAD (5% movement)
GBP (5% movement)
ZAR (5% movement)
AUD (5% movement)
EUR (5% movement)
Equity
Profit or Loss
Strengthening
Gain/(Loss)
USD
Weakening
Gain/(Loss)
USD
Strengthening
(Gain)/Loss
USD
Weakening
(Gain)/Loss
USD
10
196,056
381
29
3
107
(10)
(196,056)
(381)
(29)
(3)
(10)
(196,056)
(381)
(29)
(3)
10
196,056
381
29
3
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (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 2021 Dec 2020
%
%
Fixed
Interest Rate
Dec 2021 Dec 2020
USD
USD
Floating
Interest Rate
Non-Interest
Bearing
Dec 2021
USD
Dec 2020
USD
Dec 2021
USD
Dec 2020
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
0.14%
0.28%
7,870,120
5,443,551
190,507
-
7,870,120
-
5,443,551
-
190,507
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,031,882
-
190,824
3,222,706
109,174
109,174
(731,756)
(631,700)
(26)
(731,782)
(26)
(631,726)
All receivables and payables in the Parent at 31 December 2021 and at 31 December 2020 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 2021 and 31 December 2020 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 manages the credit risk associated with cash by investing these funds with highly rated financial institutions, and by
monitoring its concentration of cash held in any one institution. As such, the Group deems the credit risk on its cash to be low. At
31 December 2021 71% of the Group's cash balances were invested in A+ rated financial institutions (2020:63% with A+ rated
and 5% with BB- rated) according to Fitch Ratings.
The Group closely monitors its financial assets (excluding cash) and does not have any significant concentration of credit risk.
108
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 14: FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (CONT)
(b) Credit risk (Cont)
The Company has Intercompany balances that are received from the subsidiaries and the associated risk is covered in Note 5.
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.
(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 2021
Non-derivatives
Non-interest bearing
Trade and other payables
Total Financial Liabilities
31 Dec 2020
Non-derivatives
Non-interest bearing
Trade and other payables
Total Financial Liabilities
Within 1 Month
USD
1-3 Months
USD
3-12 Months
USD
731,756
731,756
Within 1 Month
USD
1-3 Months
USD
631,700
631,700
-
-
-
-
3-12 Months
USD
-
-
-
-
The table below analyses the Parent's financial liabilities into maturity groupings based on the remaining period from the balance
date to the contractual maturity date.
31 Dec 2021
Non-derivatives
Non-interest bearing
Trade and other payables
Total Financial Liabilities
31 Dec 2020
Non-derivatives
Non-interest bearing
Trade and other payables
Total Financial Liabilities
Within 1 Month
USD
1-3 Months
USD
3-12 Months
USD
128,221
128,221
Within 1 Month
USD
1-3 Months
USD
358,841
358,841
109
-
-
-
-
3-12 Months
USD
-
-
-
-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 14: FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (CONT)
(c) Liquidity and capital risk management (Cont)
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.
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
Kore Potash appointed SP Angel Corporate Finance LLP as its new nominated adviser and joint broker to replace Canaccord
Genuity Limited with effect from 1 January 2022.
NOTE 17: COMMITMENTS FOR EXPENDITURE
Exploration and Evaluation Expenditure Commitments
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.
110
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (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 – Group Auditor.
4S Advisory – Component 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
Total fees payable to the Company’s external auditor
and their associates
NOTE 19: RELATED PARTY TRANSACTIONS
Parent
Consolidated Entity
Dec 2021
USD
Dec 2020
USD
Dec 2021
USD
Dec 2020
USD
71,649
-
71,649
70,610
-
70,610
71,649
72,490
144,139
70,610
37,518
108,128
21,731
21,731
20,495
20,495
21,731
21,731
20,495
20,495
93,380
91,105
165,870
128,623
Directors’ remuneration
The expense of USD 839,026 recognised (2020: USD 1,459,338) includes directors fees paid and remuneration for the current
CEO.
The Company paid USD nil to Jonathan Trollip as directors fees (2020: USD 28,665 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 63,427 (2020: USD 84,203) and USD 91,453
(2020: USD 118,989) 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 2021 (2020: 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 64,635 (2020: USD 59,713). There were no amounts outstanding owed to in respect of services
provided by St James’s Corporate Services Limited at 31 December 2021 (2020: USD nil).
There were no other transactions with KMP and its related parties.
111
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (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
David Netherway
Timothy Keating
Trinidad Maria Reyes Perez
Sameer Oundhakar
Ignacio Joaquin Majluf Caceres
Pablo Hernandez Mac-Donald
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 12 December 2017)
Non-Executive Director (resigned on 01 April 2021)
Non-Executive Director (resigned on 01 September 2021)
Non-Executive Director (appointed on 01 April 2021)
Non-Executive Director (appointed on 01 September 2021 and resigned 30
November 2021)
Non-Executive Director (appointed on 30 November 2021)
Executives
Henko Vos
St James’s Corporate Services Limited
Andrey Maruta
Jean-Michel Bour
Amanda Farris
Gavin Chamberlain
Joint Company Secretary (appointed on 7 November 2016)
Joint Company Secretary (appointed on 1 October 2018)
Chief Financial Officer (appointed 21 September 2019 and resigned on 10
June 2021)
Chief Financial Officer (appointed 09 June 2021 and resigned on 15 August
2021)
Chief Financial Officer (appointed 16 July 2021)
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 201
USD
1,480,218
-
-
184,732
1,654,950
Dec 2020
USD
1,530,048
-
-
775,552
2,305,600
There were six directors who held office at the end of the 2021 (2020: six). Details of directors’ remuneration are provided in the
Directors’ Remuneration Report on pages 56 to 69 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.
112
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (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 2021
USD
Dec 2020
USD
Dec 2021
USD
Dec 2020
USD
Expense arising
payment transactions (Note 11)
from equity-settled share-based
34,596
176,388
34,596
176,388
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:
Parent
Dec 2021
USD
Dec 2020
USD
Consolidated Entity
Dec 2021
USD
Dec 2020
USD
Amounts capitalised
expenditure arising
payment transactions
to exploration and evaluation
from equity-settled share-based
68,947
232,895
68,947
232,895
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 34,596 (2020: USD
176,388) and vesting expenses capitalised to exploration and evaluation expenditure of USD 68,947 (2020: USD 232,895).
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
2021
2020
Number of
share
options
59,900,000
12,000,000
(25,000,000)
-
46,900,000
Weighted
average
exercise
price
GBP 0.024
GBP 0.022
GBP 0.022
-
GBP 0.022
Number of
share
options
30,900,000
33,000,000
-
(4,000,000)
59,900,000
Weighted
average
exercise
price
GBP 0.033
GBP 0.022
-
GBP 0.11
GBP 0.024
The share options outstanding at 31 December 2021 had a weighted average exercise price of GBP 0.022 and a weighted average
contractual life of 2.33 years.
113
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP
Performance
Rights
Rights Issue
9 (i)
12 (i) (iii)
13(i)
14 (i) (iii)
15 (i)
16-20 (iii)
25 (ii)
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
Cancelled in
period
Exercised
Issued in
the period
Lapsed
rights
(4,500,000)
(530,000)
-
(131,665)
(499,002)
-
(1,083,333)
(6,744,000)
(531,250)
(75,000)
(660,000)
(1,405,001)
(500,000)
(1,250,000)
(616,667)
(5,037,918)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Number of
rights at 31
December
2021
-
-
-
-
1,760,000
-
550,000
2,310,000
Time to
expiry
(Years)
-
-
-
-
-
-
3.24
Performance Rights
Rights Issue
Number of rights
at 31 December
2019
Cancelled
in period
Exercised
Issued in the
period
Lapsed
rights
7 (i)
9 (i)
12 (i) (iii)
13(i)
14 (i) (iii)
15 (i)
16-20 (iii)
25 (ii)
2,255,000
5,881,250
1,405,000
660,000
3,747,003
11,734,855
2,500,000
-
28,183,108
(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
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 19
Rights Series 20
Rights Series 25
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
17/03/2020
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
Number of
Rights
2,255,000
5,881,250
1,405,000
660,000
3,747,003
11,734,855
1,000,000
500,000
500,000
500,000
2,500,000
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
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 total charged for the year ended 2021 in respect of the above performance rights was USD 17,326.
114
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP (cont)
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, 6,743,998
Performance Rights previously issued have been cancelled as follows:
Performance Rights expiring 1 March 2021 (Director) - Series 9
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
Performance Shares under Short Term Incentive Scheme Plan - Series 25
Total
4,500,000
530,000
131,665
499,002
1,083,333
6,744,000
ii. Performance Rights converted into ordinary shares during the period:
On 9 April 2021, 1,250,000 Performance Rights Series 16 – 20 for NEDs 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
115
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (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
LTIP. The options were issued on 25 June 2020 in accordance with the Company’s LTIP. 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 (COO) and Andrey Maruta
(CFO). 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
GBP 0.0145
99.7%
-0.04%
4.3 years
GBP 0.0092
During the period 13,000,000 options were cancelled including 4,000,000 options for Andrey Maruta (CFO) who resigned from
the company during the period.
Options Series 37
The Board approved the grant of 12,000,000 unlisted options to Jean-Michel Bour (CFO) on 1 June 2021 under the Company’s
LTIP. The options were issued on 01 June 2021 in accordance with the Company’s LTIP. The options vest over 3 years on a one
third basis per annum.
Vesting
conditions
Total
Exercise price
Exercisable:
Expiry
12,000,000
GBP 0.022
First, second and third
anniversary of issue
date
01/06/2026
116
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP (cont)
The fair value of the options at grant date of GBP0.0053 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 37
GBP 0.00925
95.0%
0.32%
5 years
GBP 0.0053
During the period the 12,000,000 options were cancelled upon Jean-Michel’s resignation.
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. During the 2021 financial year, an additional 4,500,000 Performance
Rights was cancelled for the same reason and 531,250 were converted into ordinary share capital. No rights remain at reporting
date.
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. During the year ended 31
December 2021, 75,000 performance rights relating to rights series 12 were converted into ordinary share capital and 530,000
were cancelled as the vesting conditions was not met. No rights remain 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. During the year ended 31 December 2021, 660,000
performance rights relating to rights series 13 were converted into ordinary share capital. No rights remain at reporting date.
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.
117
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP (cont)
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. During the year ended 31 December 2021, 1,405,001 performance rights
relating to rights series 14 were converted into ordinary share capital and 131,665 were cancelled as the vesting conditions was
not met. No rights remain at reporting date.
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. During the year ended 31 December 2021, 500,000 performance rights relating to rights series 15
were converted into ordinary share capital and 499,002 were cancelled as the vesting conditions was not met. The remaining
1,760,000 remained in existence at the year end.
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
NEDs 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 unconditionally vested in three equal tranches on the first, second and third
anniversary of the Company’s admission to the AIM market. They vested as one fully paid ordinary share for each performance
right and expire on 22 May 2022. No options remained in existence at the year end.
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. During the 2021 financial year, on the third anniversary of the Company’s AIM listing,
1,250,000 performance rights vested and was converted into ordinary shares. No rights remain at reporting date.
The fair value at grant date of the performance rights was estimated at GBP 0.0564 per performance right.
118
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP (cont)
Rights Series 25
During the 2020 financial year, 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
During the year ended 31 December 2021, 616,667 performance rights relating to rights series 25 were converted into ordinary
share capital and 1,083,333 were cancelled as the vesting conditions was not met. The remaining 550,000 remained in existence
at the year end.
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 32 *
Option Series 33 **
Options Series 34,
35 and 36 ***
Option Series 37 ****
Grant
Date
27/06/2018
17/07/2019
Vesting Date
Refer Below
17/07/2028
Number of
Options
4,000,000
26,900,000
Expiry Date
27/06/2020
17/07/2024
Fair Value at
Grant Date
GBP 0.0241
GBP 0.0070
Exercise
Price
GBP 0.011
GBP 0.022
15/09/2019
01/06/2021
15/09/2022
01/06/2024
33,000,000
12,000,000
01/01/2024
01/06/2026
GBP 0.0092
GBP 0.0053
GBP 0.022
GBP 0.022
* Option Series 32 were granted to David Hathorn. The options expired on 27 June 2020 and were not exercised.
** 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 LTIP. The
options were issued on 25 June 2020 in accordance with the Company’s LTIP. 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 (COO) and Andrey Maruta ((CFO). At year end
20,000,000 options were outstanding.
**** Were issued on the 01 June 2021 and subsequently cancelled up the resignation of Jean-Michel Bour (CFO).
119
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021 (CONT)
NOTE 22: LOSS PER SHARE
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 46,900,000 share options in respect of a total of ordinary shares at 31 December 2021 (31 December
2020: 59,900,000) and 2,310,000 performance rights (31 December 2020: 13,809,000). Options, 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 2021
USD
Dec 2020
USD
Dec 2021
USD
Dec 2020
USD
(0.06)
(0.04)
(0.06)
(0.17)
Parent
Consolidated Entity
Dec 2021
USD
Dec 2020
USD
Dec 2021
USD
Dec 2020
USD
Loss attributable to ordinary shareholders
(2,010,799)
(1,022,927)
(1,941,196)
(3,141,042)
Parent
Consolidated Entity
Dec 2021
Number
Dec 2020
Number
Dec 2021
Number
Dec 2020
Number
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
3.179,304,188 1,796,239,418 3.179,304,188 1,796,239,418
Headline earnings/loss per share
It is a JSE listing requirement to disclose headline earnings/loss per share, a non-IFRS measure, calculated in terms of Circular
1/2021 as issued by the South African Institute of Chartered Accountants. 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 is a claim from a former Finance and Administration Manager who claims unfair dismissal. This claim has been brought to
court by the complainant as the mediation attempt at the Inspector of Labour office in Pointe Noire failed.
The lawyer of a former employee 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, and the Group is
contesting this matter.
120
ASX ADDITIONAL INFORMATION (UNAUDITED)
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
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
The shareholder and CDI holder information set out below was applicable as at 28 February 2022:
Number of holders of ordinary shares
3,375,494,446 fully paid ordinary shares and CDIs are held by shareholders.
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
Units
2,240
1,046
338
1,029
853
5,506
573,873
2,615,338
2,675,364
46,023,105
3,323,606,766
3,375,494,446
Percentage
%
0.02
0.08
0.08
1.36
98.46
100.00
The number of holdings comprising less than a marketable parcel was 1,190 with a given a share value of AUD 0.0170 per
share.
121
ASX ADDITIONAL INFORMATION (UNAUDITED) (CONT)
Substantial shareholders and CDI holders
Substantial shareholders and CDI holders listed in the Company’s share register as at 28 February 2022:
Name
Princess Aurora Company Pte Ltd (i)
Sociedad Quimica y Minera
Harlequin Investments (ii)
Pershing Nominees Limited
Dingyi Group Investment (iii)
No. of fully paid
ordinary shares /
CDIs
665,934,543
494,077,829
378,339,581
207,331,325
198,520,782
1,944,204,060
Percentage
%
19.73
14.64
11.21
6.14
5.88
57.60
No. of unlisted
options / equity
warrants held
-
-
-
-
-
-
(i) Includes 633,569,543 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 20,855,524 ordinary shares held directly.
On-market buy-back
There is no current on-market buy-back.
Twenty largest holders of quoted equity securities (ordinary shares / CDIs)
Number of Shares / CDIs
665,934,543
494,077,829
378,339,581
207,331,325
198,520,782
167,122,933
103,500,000
100,855,497
72,036,152
66,446,895
52,308,401
47,097,653
30,838,004
26,343,161
22,037,806
21,828,923
20,671,628
18,238,616
15,853,004
15,000,000
2,724,382,733
% Held
19.73%
14.64%
11.21%
6.14%
5.88%
4.95%
3.07%
2.99%
2.13%
1.97%
1.55%
1.40%
0.91%
0.78%
0.65%
0.65%
0.61%
0.54%
0.47%
0.44%
80.71%
Top 20 Shareholders and CDI Holders as at 28 February 2022
Princess Aurora Company Pte Ltd
Sociedad Quimica y Minera
Harlequin Investments
Pershing Nominees Limited
Dingyi Group Investment
The Bank of New York (Nominees) Limited
IALEND - DL Stevens
BNP Paribas Nominees Pty Ltd
State Street Nominees Limited
Hargreaves Lansdown (Nominees) Limited
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
Glen Deveron Investments Pty Ltd
Interactive Investor Services Nominees Limited
Aurora Nominees Limited
Jim Nominees Limited
Interactive Brokers LLC
HSDL Nominees Limited
Hero Nominees Limited
Heriot Investments Pty Ltd
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total
122
ASX ADDITIONAL INFORMATION (UNAUDITED) (CONT)
Unquoted equity securities
Class
Unlisted options exercisable at GBP 0.022 expiring 1 Jan 2024
Unlisted options exercisable at GBP 0.022 expiring 19 Jul 2024
Performance Rights expiring 17 Mar 2025 (Short Term Plan)
Performance Rights (Long Term Plan)
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
Unlisted options exercisable at GBP 0.022 expiring 19 July 2024
Brad Sampson
Voting Rights
The voting rights attaching to ordinary shares are:
Number of
unquoted equity
securities
Number of
holders
20,000,000
26,900,000
550,000
1,760,000
49,210,000
2
1
4
1
N/A
Number of holders
holding 20% or
more in the class
2
1
2
1
N/A
Number of unlisted
options
12,000,000
8,000,000
20,000,000
Number of unlisted
options
26,900,000
Percentage
60%
40%
100%
Percentage
100%
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 LSE 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.
123
ASX ADDITIONAL INFORMATION (UNAUDITED) (CONT)
Company Structure and Tenement Details
The Company is incorporated and registered in England and Wales. Kore Potash Limited incorporated in Australia is wholly
owned by Kore Potash. The Company also has a 97% holding in SPSA in the RoC (see Note 11(f)). SPSA is the 100% owner of
KPM which is the sole owner of the Kola Mining Tenement and 100% owner of DPM, which is the sole owner of the Dougou
Mining Tenement (which has not been transferred from SPSA at the reporting date). The Kola deposit is located within the Kola
Mining Tenement. The Dougou Mining Tenement hosts the Dougou deposit and the DX deposit.
Under the Mining Convention the RoC government is granted a 10% equity interest in DPM and KPM. The Company continues
to work with government to transfer this interest to the State.
Schedule of Tenements
A schedule of mining tenements held at 31 December 2021 (and the date of this report) and a table showing changes to the
Potash Mineral Resources and Ore Reserves between 2020 and 2021 is included in the Review of Operations on pages 7 to 24.
Project Overview
A project overview for the Group is included in the Review of Operations and Strategic Report on pages 7 to 24.
124