KORE POTASH PLC
ANNUAL REPORT
FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022
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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4
7
24
34
66
75
76
77
79
80
114
2
CORPORATE DIRECTORY
NON-EXECUTIVE DIRECTORS
Jonathan Trollip
David Netherway
Pablo Hernandez Mac-Donald
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)
45 Gresham Street, London EC2V 7BG
United Kingdom
Telephone: +44 (0) 203 963 1776
AUSTRALIAN OFFICE
Level 3, 88 William Street,
Perth WA 6000
Telephone: +61 (8) 9463 2463
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
SINTOUKOLA POTASH S.A
Level 3, Apartment C
91 Germain Bikoumat centre-ville route de la radio
Immeuble Abdallah
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
SHARE REGISTRY (JOHANNESBURG)
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue
Rosebank 2196, South Africa
Telephone: +27 (11) 370 5000
JOINT BROKER
Shore Capital
Cassini House, 57 St James’s Street, London SWIA 1LD
United Kingdom
Telephone: +44 (0) 20 7408 4050
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
AUDITOR
BDO LLP
55 Baker St, London W1U 7EU
United Kingdom
Telephone: +44 (0) 20 7486 5888
SECURITIES EXCHANGE LISTINGS
London Stock Exchange (AIM)
Australian Securities Exchange (ASX)
Johannesburg Stock Exchange (JSE)
AIM, ASX and JSE Codes: KP2
ISIN: GB00BYP2QJ94
FINANCIAL PUBLIC RELATIONS
Tavistock Communications Limited
18 St. Swithin's Lane, London EC4N 8AD
United Kingdom
Telephone: +44 (0) 20 7920 3150
WEBSITE
https://www.korepotash.com/
3
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
AIM
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 (Parent Company)
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 2022.
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 Australian 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
from design,
procurement, construction, commissioning and
handover of the project to the end-user or owner.
the activities
for all
GLOSSARY (CONT)
Stands For / Meaning
Definition and/or Additional Information
Acronym /
Term
ESIA
GBP
Granular MoP
Group
HoA
Insoluble
material
JORC
JORC Code
JSE
KCI
KMP
Environmental and social impact assessment
British pound sterling
The selling description for compacted MoP
Kore Potash plc (Parent Company) and its
controlled entities
Head of Agreement
Here refers to clays, organic material and other
insoluble components of the sylvinite
Australasian Joint Ore Reserves Committee
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
Mt/Mtpa
NED
OIA
Period
Muriate of Potash
Memorandum of Understanding
Million tonnes/Million tonnes per annum
Non-Executive Director
Oman Investment Authority (former SGRF)
The current reporting period for the Annual
report commencing 1 January and ending 31
December.
5
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.
form of potassium chloride
(KCl),
Non-Executive Director of Kore Potash plc.
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.
GLOSSARY (CONT)
Stands For / Meaning
Definition and/or Additional Information
Acronym /
Term
Potash
PFS
Refers to potassium compounds, especially
those of potassium chloride (MoP) or sulfate
(SoP)
Pre – Feasibility Study
Refer to MoP and SoP for the definitions on the two main
types of potash.
A PFS is a comprehensive study of a range of options for
the technical and economic viability of a mining project
that has advanced to a stage where a preferred mining
method is established, and an effective method of mineral
processing is determined. A PFS is at a lower confidence
level than a Feasibility Study.
The RoC is where the Group’s exploration activities are
located.
SEPCO is an international engineering and construction
group headquartered in Jinan, China.
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.
RoC
Republic of Congo
Rock-salt
SBP
SEPCO
Sintoukola
Potash Project
SJCS
SoP
SPSA
SQM
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.
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)
TPA
Tonnes per annum
2018 UK Code 2018 UK Corporate Governance Code
Sylvinite
6
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
Sintoukola Potash SA, the Congolese subsidiary company that that holds the Kola and Dougou Potash Projects. The ROC
Government is to hold 10% of the Kola and Dougou Potash projects based on the Mining Convention however at the end of the
period the transfer of ownership to the State was not complete.
The Group is developing its globally significant potash deposits in the RoC, ideally located to supply the important Brazilian
agricultural market and 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 area contains 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 Projects 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 27 June 2022, the Company announced the Optimisation Study
was completed with a optimised construction costs of USD 1.83 billion and a shortened construction schedule of 40 months.
The results of the updated DX PFS were announced on 24 January 2023, which determined the DX Deposit contains a total
sylvinite Mineral Resources of 129 Mt with an average grade of 24.9% KCl, Proven and Probable Ore Reserves of 9.3 Mt with an
average grade of 35.7% 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.
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 and at depth. A scoping study was completed and announced in February 2015.
7
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
SUMMARY OF KEY DEVELOPMENTS
• On 1 April 2022, the Company announced it had received the Optimisation Study on the Kola Project.
•
The detailed review of the Study was completed, and the outcomes of the Study announced to shareholders on 27 June
2022.
• On 28 June 2022, the Company announced it had signed a HoA for the construction of Kola.
• On 19 October 2022, the Company announced receipt of correspondence from the Minister of Mines of the RoC on 12
October 2022 expressing discontent with the progress towards construction of the Kola Project and providing the
Company 30 days within which to respond. The letter was received following the arrest and subsequent release, without
charge, of two senior employees of the Company by the RoC police. Neither the employees nor the Company have been
informed of the reason for the arrests.
The Company provided a response to the Minister on 11 November 2022. On 17 December 2022, the Company met in
person with the Minister, and the discussion included a further update on the progress towards financing Kola. At the
end of the meeting the Minister expressed his thanks for how the Company responded to his most recent letter and
assured the Company of his and the RoC Government’s ongoing support for Kore Potash and to develop the Kola
Project.
•
• Since this time the Company has held multiple meetings with the Minister of Mines and is assured that the Company
has and will continue to have his full support and that the Company’s tenements in the RoC remain in good standing.
• Subsequent to the end of the period on the 24 January 2023, the Company announced the updated Dougou Extension
PFS and Production Target.
SUMMARY OF FINANCIALS
• During the Period, the Group’s Total Comprehensive Loss was USD 10,174,361 (2021: Loss USD 13,470,876), and the
Group experienced net cash outflows from operating and investing activities of USD 5,744,285 (2021: USD 7,499,811
million). Cash and cash equivalents totalled USD 5,046,629 as at 31 December 2022 (2021: USD 11,092,509).
•
• Group net assets decreased in the year to USD 167,650,279 (2021: USD 177,419,886). This was primarily driven by a
USD 5,064,934 increase in exploration expenditure capitalised offset by a USD 8,949,642 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 2024, which indicates that the Group
will not have sufficient liquidity to meet its working capital requirements to the end of the going concern period (March
2024). 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 before Q4 2023 in order to meet its current planned activities over the next
12 months. 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 potential
funding options available to the Group.
•
CORPORATE ACTIVITIES
• On 5 May 2022, a total of 550,000 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 283,333
ordinary shares were issued to Gavin Chamberlain, COO.
• On 13 June 2022, the Company issued 44,132,674 ordinary shares to SQM in lieu of fees payable of USD 375,470 for
the DX DFS Phase 1 work completed under the Technical Services Agreement.
• On 14 June 2022, the Company announced that the registered office of the Company has changed to 45 Gresham
Street, London, EC2V 7BG.
• On 21 December 2022, Mr Sameer Oundhakar resigned as a Non-Executive Director on the Board as a nominee of
OIA. The Company has been advised of OIA’s preferred Non-Executive Director candidate. This nomination is currently
being considered by the Board and the Company intends to announce the appointment after completing the normal due
diligence processes.
• On 23 December 2022, the Company announced that Mr Gavin Chamberlain COO would be leaving the Company. Mr
Chamberlain departed the company in January 2023.
8
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY
Kola Potash Project
• The Company signed a non-binding MoU with Summit, on behalf of a consortium of investors and engineering firms on
6 April 2021, to arrange the total financing required for the construction of Kola, in the presence of the Minister of Mines
of the RoC and his key staff in Brazzaville.
• The Summit Consortium includes:
o BRP Global, headquartered in Abu Dhabi, who will provide royalty financing in conjunction with product offtake.
o SEPCO, an international engineering and construction group headquartered in Jinan, China and with offices in
Dubai which is 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 seven of these in Africa, in addition to its construction
capability, SEPCO will also assist in arranging the debt financing: and
o China ENFI Engineering Corporation, 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 around the world. ENFI’s potash specific experience includes design and construction of an
underground potash mine in southeast Asia.
• During the period, the Summit Consortium completed the Optimisation Study with the successful outcomes:
o Capital cost reduced by USD 520 million to USD 1.83 billion on an EPC basis compared to the DFS capital cost
of USD 2.35 billion on an equivalent EPC basis.
o Construction period reduced to 40 months from the DFS construction period of 46 months.
o Key financial metrics improved on DFS outcomes (at potash pricing averaging USD 360/tonne unchanged from
the DFS):
Kola net present value NPV10 post tax improved to USD 1.623 billion
IRR improved to 20% on ungeared post tax basis
o At a potash price of USD 1000/t MoP CFR Brazil (less than potash price of approximately USD 1100/t MoP
CFR Brazil when announced in June 2022) the Kola financial metrics improve to:
NPV10 post tax USD 9.354 billion
IRR of 49% on ungeared post tax basis
o Designed with a nameplate production capacity of 2.2 Mtpa of MoP.
o MoP production scheduled over an initial 31 year project life.
o Designed as a conventional mechanised underground potash mine with shallow shaft access. Ore from
underground is transported to the process plant via an overland conveyor approximately 25 km long. After
processing, the MoP product is conveyor transported 11 km to the marine export facility. MoP is conveyed from
the storage area onto barges via the dedicated barge loading jetty and then trans-shipped into ocean going
vessels for export.
• On 28 June 2022, Kore Potash signed a HoA for the construction in the presence of the Minister of State and Minister
of Mining Industry and Geology of the RoC, Mr Pierre Oba.
The HoA confirms the timeline for SEPCO to complete their discussions with Kore Potash ahead of presenting the
Company an EPC contract proposal for Kola. It also provides additional clarity on matters that SEPCO are required to
finalise in advance of presenting Kore with the construction contract proposal.
The HoA provides for:
o Kola to be designed and constructed as a conventional underground potash mine and processing plant
producing up to 2.2 Mtpa of granular MoP over an initial 31 year life.
o The granular MoP produced will be at a minimum quality of 95.3% KCI in line with international standards.
o The capital cost to construct will be USD 1.83 billion and the construction period will be 40 months.
o During the preconstruction engineering design phase, the HoA provides SEPCO with an opportunity to adjust
the costs related to the underground mine portion of the works. SEPCO’s current capital cost is based in part
9
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Kola Potash Project (Cont)
o upon information collected during the DFS Study phase, some of which SEPCO continues to review. Should
the final agreed quantities of materials and labour or the underground construction period differ materially from
the baseline, SEPCO will be able to adjust proportionately. The underground portion of the works (excluding
equipment and infrastructure) is currently estimated as USD 164 million, which represents 9% of the total capital
cost.
o SEPCO will also be able to adjust the capital cost if the Chinese RMB or Congolese FCFA currency exchange
rates to the US dollar vary materially prior to commencement of the works. In such circumstance only the cost
of affected works or components may be adjusted.
• On 10 October 2022, Kore Potash announced that SEPCO had delivered the EPC proposal for Kola. The EPC proposal
was approved for presentation to Kore Potash by the Boards of SEPCO, and its parent company, Power Construction
Corporation of China.
The EPC proposal reflects the capital cost and construction timeline reported in the Optimisation Study and the terms
agreed to in the HoA. The EPC proposal includes an EPC Agreement which details the contractual terms in a format
congruent with the FIDIC Silver book (2nd Edition, 2017) conditions of contract.
The contractual terms are being finalised prior to acceptance of the EPC. Kore Potash and SEPCO are in dialogue to
complete this process. The Company notes that it may transpire that SEPCO will require further SEPCO and Power
Construction Corporation of China Board approvals prior to the finalisation of the contractual terms.
Next Steps
• Kore Potash and SEPCO to finalise all EPC terms based on FIDIC Silver book (2nd Edition, 2017).
• The Summit Consortium has advised that the strongly positive outcomes of the Study continue to support their financing
of Kola and it intends to provide the financing proposal for the complete construction cost of Kola after the agreement of
the key EPC terms.
Dougou Extension (DX) Sylvinite Defined Feasibility Study Phase 1
• Subsequent to the Period, the Company released its update on the DX PFS and Production Target on 24 January
2023.The Company reported the following highlights:
o Production Target of 15.5Mt sylvinite at a grade of 30.63 % KCl demonstrates initial project life of 12 years at
a production rate of 400,000 tpa MoP.
o Production Target based on Proven and Probable Ore Reserves and 13% of the Inferred Mineral Resources
that represents 30% of the life of project MoP production.
o NPV10 (real) of USD 275 million and 27% IRR on a real post tax basis at life of project average granular MoP
price of USD 450/t.
o Approximately 2.9 years post-tax payback period from first production.
o Proven and Probable Ore Reserve of 9.31 Mt sylvinite at an average grade of 35.7% KCl.
o Mineral Resource of 129 Mt at an average grade of 24.9% KCl.
o Higher confidence in the distribution of Sylvinite within the Top Seams and improved understanding of the
Sylvinite/Carnallite boundary within the Hanging Wall Seam.
10
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 deposits1.
• 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 DPM1.
• On 14 December 2020 and 12 October 2022, 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 this time the Company has held multiple meetings with the Minister of Mines and is assured that the Company has
and will continue to have his full support and that the Company’s tenements in the RoC remain in good standing and that the
Company remains compliant with its obligations under the Mining Convention.
1 Under the Mining Convention, the RoC government will be granted a 10% carried equity interest (subject to signing
shareholders agreement) in the project companies (DPM and KPM, which SPSA wholly owns).
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.
Workstreams with RoC authorities
Declaration of Public Utility (DUP) this is the formal process to authorise the use of 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 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 Kola financing is in place, the Company will submit a
formal request to have the DUP renewed.
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 in the exploration camp. To assist in offsetting this impact, Kore Potash 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.
11
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Impact on Climate Change (Cont)
• 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. A conservation focused Non-Government Organisation, become
actively involved with preserving this National Park in 2021 and the Company commenced partnering with them in 2022 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. There were no lost time injuries during the year. The Company maintained
its COVID-19 measures to ensure the spread of the disease was minimised. Only one positive COVID case was reported
during the year in our Congolese employees.
Available Cash and cash equivalents
•
The Group is required to have sufficient cash to meet its obligations. At 31 December 2022 the Group held cash of USD
5,046,629 (2021: USD 11,092,509) which is not sufficient to meet its obligations for at least 12 months from the date of
approval of these financial statements. The Board plan to complete a fundraise prior to Q4 2023 to ensure it has sufficient
cash to meet its ongoing obligations.
Kola Project Optimisation
•
The 2022 KPI was to complete the Optimisation for the Kola Project reducing the project capital costs and construction
schedule. On the 27 June 2022 the Company announced the outcomes of the Optimisation study including Kola production
target and forecast financial information which incorporated the results of the optimisation study.
Kola Project EPC and Financing
•
•
The Board 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. On 10 October 2022, the Company announced the receipt of
the EPC Proposal and is continuing work to finalise the terms of the proposal. Once the EPC terms are agreed, the Financing
proposal will be provided by the Summit Consortium.
The 2023 KPI is for the financing proposal for the full construction cost of Kola to be provided by the Summit Consortium
following agreement on the EPC contract terms.
Viability Assessment
The Directors prepared a cash flow forecast for the period ending 31 December 2024, which indicates that the Group will not
have sufficient liquidity to meet its working capital requirements to the end of the going concern period (March 2024). Current
estimations are the Group will have exhausted current cash reserves in Q4 2023.
The Board is confident that funding can be obtained based on past performance.
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.
12
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 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 producers exports have been stopped
due to international sanctions, further reducing supply. Given the increase in potash prices, the outcomes of the optimisation
study 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 2021, 2022 and 24 January 2023
Tables 1 and 2 provide a comparison of the Company’s Mineral Resources and Ore Reserves, year-on-year between 2021, 2022
and 24 January 2023, as per ASX Listing rule 5.21.4.
There are no changes to the Mineral Resources and Ore Reserves for Kola and Dougou in 2022. However, after the period the
DX sylvinite resource and reserves were updated in the Updated Dougou Extension (DX) PFS and Production Target announced
on 24 January 2023. The main drivers for the change in the Mineral Resources and Ore Reserves were:
• For the HWSS, only five drillholes in the ‘mining area’ contained sylvinite that was not immediately underlain by carnallite.
Therefore, the overall grade and volume of HWSS Mineral Resources were reduced as a result of these drilling results,
• Reduced KCl grade for the TSS due to the ID2 estimation method, whereby if there are no nearby drillholes, the grade
in a block will be reduced in accordance with the weighted mean of the square of the distances from drillholes within the
search radius.
13
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Changes to Potash Mineral Resources and Ore Reserves between 2021, 2022 and 24 January 2023 (Cont)
Table 1. Comparison of Potash Mineral Resources year-on-year between 2021, 2022 and 24 January 2023.
MINERAL RESOURCES
Kola Sylvinite deposit
Dougou Extension
Sylvinite deposit
Category
Measured
Indicated
Measured + Indicated
Inferred
TOTAL
Measured
Indicated
Measured + Indicated
Inferred
TOTAL
TOTAL SYLVINITE
MINERAL RESOURCES
Measured
Indicated
Measured + Indicated
Inferred
TOTAL
Measured
Indicated
Measured + Indicated
Inferred
TOTAL
Measured
Indicated
Measured + Indicated
Inferred
TOTAL
Measured
Indicated
Measured + Indicated
Inferred
TOTAL
Kola Carnallite deposit
Dougou Carnallite
deposit
TOTAL CARNALLITE
MINERAL RESOURCES
31 December 2021 and 2022
Grade
KCl %
34.9
35.7
35.4
Contained
KCl (Mt)
75
104
180
Million
Tonnes
216
292
508
116
295
0
31
31
27
58
75
135
211
143
353
59
83
142
236
378
30
190
220
414
634
89
273
362
650
1,012
340
848
0
79
79
66
145
216
371
587
406
993
341
441
783
1,266
2,049
148
920
1,068
1,988
3,056
489
1,361
1,851
3,254
5,105
34.0
34.8
0.0
39.1
39.1
40.4
39.7
34.7
36.4
35.9
35.2
35.5
17.4
18.7
18.1
18.7
18.5
20.1
20.7
20.6
20.8
20.7
18.2
20.1
19.6
20.0
19.8
14
24 January 2023
Grade
KCl %
34.9
35.7
35.4
Contained
KCl (Mt)
75
104
180
Million
Tonnes
216
292
508
340
848
20
8
28
101
129
236
300
536
441
977
341
441
783
1,266
2,049
148
920
1,068
1,988
3,056
489
1,361
1,851
3,254
5,105
34.0
34.8
32.4
23.1
29.9
23.5
24.8
34.7
35.4
35.1
31.6
33.5
17.4
18.7
18.1
18.7
18.5
20.1
20.7
20.6
20.8
20.7
18.2
20.1
19.6
20.0
19.8
116
295
6
2
8
24
32
82
106
188
139
327
59
83
142
236
378
30
190
220
414
634
89
273
362
650
1,012
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Changes to Potash Mineral Resources and Ore Reserves between 2021 and 2022 (Cont)
Table 2. Comparison of Ore Reserves year-on-year between 2021, 2022 and January 2024.
ORE RESERVES
Kola Sylvinite deposit
ORE RESERVES
Dougou Extension
Sylvinite deposit
Category
Proved
Probable
TOTAL
Category
Proved
Probable
TOTAL
Notes:
31 December 2021 and 2022
Grade
KCl %
32.1
32.8
Contained
KCl (Mt)
19.8
29.7
Million
Tonnes
61.8
90.6
152.4
32.5
49.5
31 December 2021 and 2022
Grade
KCl %
0
41.7
Contained
KCl (Mt)
0
7.4
Million
Tonnes
0
17.7
24 January 2023
Grade
KCl %
32.1
32.8
Contained
KCl (Mt)
19.8
29.7
32.5
49.5
Million
Tonnes
61.8
90.6
152.4
24 January 2023
Grade
KCl %
32.5
41.8
Contained
KCl (Mt)
2.0
1.3
Million
Tonnes
6.1
3.2
17.7
41.7
7.4
9.3
35.7
3.3
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 “Updated Dougou
Extension (DX) PFS and Production Target” on 24 January 2023. Dr. Douglas F. Hambley, Ph.D., P.E., P.Eng., P.G of Agapito Associates Inc., for the
Exploration Results and Mineral Resources. Mr. Hambley is a licensed professional geologist in states of Illinois (Member 196-000007) and Indiana
(Member 2175), USA, and is an Honorary Registered Member (HRM) of the Society of Mining, Metallurgy and Exploration, Inc. (SME, Member
1299100RM), a Recognized Professional Organization’ (RPO) included in a list that is posted on the ASX website from time to time and 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.
15
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
Figure1. Location of the Sintoukola Project showing the Kola, Dougou and DX Projects
16
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 and 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. 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 a financing proposal for the complete construction of Kola after agreement on the EPC
terms.
Factors beyond the Company’s control, including pandemic diseases such as COVID-19 (coronavirus) and the Russian/Ukraine
conflict impact on macro-economics 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 including. 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-RoC bilateral investment treaty, which
provides strengthened legal protection to the Group’s investments in the RoC.
On 14 December 2020 and 12 October 2022, 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 HoA for the construction of
Kola.
17
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 Group plans to be a low cost 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 buyers with the intention to enter contractual arrangements to sell
production prior to commercial production.
The Company’s 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 reduce the impact of COVID-19 testing, and control procedures were introduced for all people in 2020 and the Company
reviews these on a periodic basis. All employees and consultants have been vaccinated with the only exemptions being for
medical reasons. Those employees that cannot 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.
• Government policy change
The mineral exploration and development activities and future operations of the Group are subject to various laws and regulations
governing mineral concession acquisition, prospecting, development, mining, production, exports, taxes, labour standards,
occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters.
New rules and regulations could be enacted, or existing rules and regulations could be applied or amended in a manner that
could have a material and adverse effect on the business, financial condition, and results of operations of the Group. The Group
monitors changes in legislation for relevant jurisdictions to enable rapid and effective response. The Group also consults with tax,
legal, accounting and regulatory experts as required to ensure that any upcoming changes in legislations are proactively
accounted for.
18
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 the 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.
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:
19
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
DIRECTORS’ SECTION 172 STATEMENT (CONT)
(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 two largest shareholders, SQM and OIA, by virtue of their respective Investment Agreements, have 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.
At the Company’s AGM, held on 9 June 2022, all resolutions were passed with at least 95% of the votes cast in favour. The CEO,
CFO and NEDs, 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 limited shareholders were able 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 115 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 53 to 62. 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.
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.
20
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
DIRECTORS’ SECTION 172 STATEMENT (CONT)
Stakeholder Engagement (Cont)
In normal circumstances, selected 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, CFO and CEO visited 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
April 2022.
David Netherway, a NED, is the appointed designated director responsible for workplace engagement in accordance with the
2018 Corporate Governance Code. Due to the restrictions imposed as a result of the COVID-19 Pandemic where possible
meetings were held virtually with the workplace. To fulfil his duties during 2023, 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. In the second half of the
year, the COO and CFO meet face to face with the villagers to update them on the Company’s progress.
The CEO and the COO and other relevant senior management have established good relationships with the official local and
country establishments including the Ministry of Mines and Geology and the Ministry of Environment with whom regular contact
and consultation is maintained. The Chairman and CEO meet with the Minister of Mines and some of his cabinet on several
occasions during the year. Ongoing discussions between the Company and the various other 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 has undertaken to amend the ESIA accordingly ahead of commencement of construction. 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.
21
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 Kola Optimisation Study is contained under
the Summary of Key Developments within the Review of Operations and Strategic Report.
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
COMPETENT PERSON STATEMENT
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 Dougou Extension sylvinite Mineral Resource Estimate and Ore Reserve Estimate were reported in an announcement titled
“Updated Dougou Extension (DX) PFS and Production Target” on 24 January 2023. Dr. Douglas F. Hambley, Ph.D., P.E., P.Eng.,
P.G of Agapito Associates Inc., for the Exploration Results and Mineral Resources. Mr. Hambley is a licensed professional
geologist in states of Illinois (Member 196-000007) and Indiana (Member 2175), USA, and is an Honorary Registered Member
(HRM) of the Society of Mining, Metallurgy and Exploration, Inc. (SME, Member 1299100RM), a Recognized RPO included in a
list that is posted on the ASX website from time to time and 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.
22
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 2023 and is signed on its
behalf by:
____________________________
Non-Executive Chairman
David Hathorn
30 March 2023
_________________________________
Chief Executive Officer
Brad Sampson
30 March 2023
23
The Directors present their annual report on Kore Potash and the Group for the financial year ended 31 December 2022.
DIRECTORS’ REPORT
The Corporate Governance statement set out in pages 34 to 64 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
David Netherway
Sameer Oundhakar
Pablo Hernandez Mac-Donald Non-Executive Director
Non-Executive Chairman
Chief Executive Officer
Independent Non-Executive Director
Independent Non-Executive Director
Non-Executive Director (Resigned with effect from 21 December 2022)
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 2022 amounted to USD 1,513,953 (31 December 2021:
1,941,196).
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 (2021: nil).
Review of Operations and Strategic Report
Please refer to pages 7 to 23 of the Annual Report.
Significant Changes in State of Affairs
Board Changes
On 21 December 2022, Sameer Oundhakar resigned as a NED of the Company nominated by OIA. A replacement has been
nominated to replace Mr Oundhakar and the Company intends to provide a further update to shareholders following completion
of the normal due diligence processes.
Other capital movements:
On 5 May 2022, a total of 550,000 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 283,333 ordinary shares
were issued to Gavin Chamberlain, COO.
On 13 June 2022, the Company issued 44,132,674 ordinary shares to SQM in lieu of fees payable for the DX DFS Phase 1 work
completed under the Technical Services Agreement.
24
DIRECTORS’ REPORT (CONT)
Significant Changes in State of Affairs (Cont)
Other capital movements (Cont):
On 13 June 2022, David Hathorn was granted 9,000,000 options, as approved at the Annual General Meeting held on 9 June
2022 and pursuant to the Directors and Executives Share Option Plan. The options will only vest, and be exercisable into shares,
subject to the Company obtaining a financing package to fully fund the development of the Company’s Kola Project approved by
the Board.
CDI Movement
During the year the number of CDIs quoted on the ASX decreased by 48,536,088 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.
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 at the next AGM. The Notice of the AGM will be distributed
to shareholders together with the Annual Report.
Auditor
Following the appointment of BDO LLP as the Company auditor on 28 June 2019, a resolution to reappoint BDO LLP as the
Company auditor 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.
25
DIRECTORS’ REPORT (CONT)
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 2022 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 potash development activities of the Kola and the Dougou deposits.
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.
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
Options expiring on or before 12 June 2027
Exercise Price
GBP 0.022
GBP 0.022
GBP 0.022
Number of
Options
26,900,000
20,000,000
9,000,000
55,900,000
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.
Performance Rights
Performance rights outstanding at the date of this report:
Class
Employee Performance Shares (Long Term)
Expiry
Not Applicable
Number of Rights
1,760,000
1,760,000
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. On 5 May 2022, 550,000 performance rights were exercised. See Note 11(a)
to the financial statements for further details on the performance rights issued during the year.
26
Information on Directors
David Hathorn
Non-Executive Chairman
BCom, CA
DIRECTORS’ REPORT (CONT)
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 2022
144,237,061 Fully Paid Ordinary Shares
9,000,000 Unlisted Options exercisable at GBP 0.022 each expiring 12 June 2027
Directorships held in other listed
entities
Former directorships of listed
companies in last three years
None
None
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.
Interest in Shares and Options as
at 31 December 2022
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
27
DIRECTORS’ REPORT (CONT)
Information on Directors (Cont)
Jonathan Trollip
Independent Non-Executive
Director
B.A (Hons) LLM, FAICD
Interest in Shares & Options as at
31 December 2022
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, Plato Income Maximiser Ltd and Spheria Emerging
Companies Ltd and a non-executive director of BCAL Diagnostics Limited. He also holds
various private company directorships in the commercial and not-for-profit sectors.
7,276,296 Fully Paid Ordinary Shares
Global Value Fund Limited (from 20 March 2014)
Plato Income Maximiser Limited (from 20 February 2017)
Spheria Emerging Companies Limited (from 12 September 2017)
BCAL Diagnostics Limited (from 23 December 2020)
Former directorships of listed
companies in last three years
Antipodes Global Investment Company Limited
Future Generation Investment Company Limited
Propel Funeral Partners Limited
Spicers Limited
Sameer Oundhakar
Non-Executive Director
B Eng (Mechanical), BDipBbus,
MBA
Resigned with effect from 21
December 2022
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 2022
Directorships held in other listed
entities
Former directorships of listed
companies in last three years
None
None
None
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 2022
Directorships held in other listed
entities
Former directorships of listed
companies in last three years
None
None
None
28
Information on Directors (Cont)
David Netherway
Independent Non-Executive
Director
B.Eng (Mining), CDipAF,
F.Aus.IMM, F.IoM3, C.E.
DIRECTORS’ REPORT (CONT)
Mr Netherway joined the Group in December 2017 and is a mining engineer with over 40
years of experience in the mining industry. He was involved in the construction and
development of the New Liberty, Iduapriem, Siguiri, Samira Hill and Kiniero gold mines in
West Africa and has mining experience in Africa, Australia, China, Canada, India and the
Former Soviet Union. Mr Netherway served as the CEO of Shield Mining until its takeover
by Gryphon Minerals. Prior to that, he was the CEO of Toronto listed 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 TSX-V listed Elemental Altus Royalties Corp., 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 2022
8,536,434 Fully Paid Ordinary Shares
Directorships held in other listed
entities
Canyon Resources Ltd (from 17 March 2014)
Elemental Altus Royalties Corp. (from 17 August 2022)
Former directorships of listed
companies in last three years
Altus Strategies plc
Avesoro Resources Inc.
Kilo Goldmines Ltd
Joint Company Secretaries
Henko Vos
B.Compt, CA, ACIS, RCA
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 Jane Kirton (ACG), following the retirement of Phil Dexter in
December 2022. Ms Kirton has worked for SJCS since its inception in June 1998 and its
former parent company in excess of 20 years
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.
29
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
Sameer Oundhakar (i)
Pablo Hernandez Mac-
Donald
Board Meetings
3/3
3/3
2/3
2/3
2/3
1/3
Audit and Risk
Committee
Meetings
1/2
-
2/2
1/2
-
-
Remuneration and
Nomination
Committee Meetings
(ii)
-
-
-
-
-
-
Health, Safety and
Environment
Meetings (iii)
-
-
-
-
-
-
(i) Meetings attended prior to ceasing to be a director on 21 December 2022.
(ii) No formal remuneration and nomination committee meeting as was held during the year as committee members agreed in discussion
to defer remuneration until after the Kola Project financing proposal has been received.
(iii) Health, safety and environmental matters are reported on each month in management reporting to the Board and are part of each Board
meeting agenda. With limited operational activity during the feasibility study phases, creating a low-risk environment no separate Health,
Safety and Environment Committee meetings were held during the Period.
Directors’ Conflicts of Interest
The Board has formal procedures to deal with directors’ conflicts of interest. In the instance where there is a transactional conflict
of interest identified, the director would not take part in the discussion or determination of any matter in respect of which he had
disclosed a transactional conflict of interest. There were no transactional conflicts of interest concerning any director that arose
during the year.
Directors’ Service Contracts
The CEO is employed on an ongoing basis, which may be terminated by either party giving six months’ notice.
Each NED has a letter of appointment for an initial term of six years after which the re-election will be subject to a review to ensure
the Board remains progressive. The appointment of the NED may be terminated by the Company giving one 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.
30
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 auditor
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 auditor 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 2022 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 2022 and its operations in future periods.
Cash and cash equivalents, at 31 December 2022 were USD 5,046,629 (31 December 2021: USD 11,092,509) the decrease
was driven by parent expenditure USD 1,236,245 and exploration expenditure USD 4,574,363. For the Period ended 31
December 2022 the Group recorded a net loss of USD 1,513,953 (31 December 2021: USD 1,941,196) and at 31 December
2022 had a net working capital of USD 4,497,385 (31 December 2021: USD 10,215,877). The Group also recorded a net cash
(used in) operating activities for the Period ended 31 December 2022 of USD 1,236,245 (31 December 2021: USD 1,701,079).
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 the Group will have insufficient available funds in order to meet its current planned
activities over the next 12 months. This does not include funding for the construction of the Kola project which is subject to
agreement to the EPC and Financing proposal from the Summit Consortium.
The Group's financial projections and cash flow forecasts indicate that it has sufficient funding until Q4 2023 and therefore will
need to complete a capital raise prior to this in order to meet its current planned activities for the full12 months. The directors
have considered various mitigating actions, which includes 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 with the support from its two major shareholders. If this was not successful further mitigating action would
include raising funds through the sale of assets. However, factors beyond the Group’s control, including pandemic diseases such
as COVID-19, the Russian/Ukraine conflict impact on macro-economics, inflation, interest rates and the banking crisis and
uncertainty in the overall public markets, which affect the stock markets, may in turn have a negative impact on any fund raising.
The Directors have reviewed the Group's overall position and outlook in respect of the matters identified above and are of the
opinion that there are reasonable grounds to believe that funding will be secured and therefore that the operational and financial
plans in place are achievable and accordingly the Group will be able to continue as a going concern and meet its obligations as
and when they fall due. The Directors will continue to pursue further capital raising initiatives in order to have sufficient funds to
continue the work to finalise the Kola Project EPC and Financing Proposal for the complete construction of Kola.
31
DIRECTORS’ REPORT (CONT)
Going Concern (Cont)
The ability of the Group to continue as a going concern is dependent on the matters set out above. As at of the date of approving
the financial statement none of these matters are complete. These conditions indicate that a material uncertainty exists which
may cast significant doubt as to the Group’s ability to continue as a going concern and therefore it may be unable to realise its
assets and discharge its liabilities in the normal course of business.
The financial report does not include adjustments relating to the recoverability and classification of recorded asset amounts or to
the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern. The
directors reviewed a cash flow forecast for the period ending 31 December 2024, which indicates that the Group will have
insufficient liquidity to meet its working capital requirements to the end of the going concern period (March 2024). This period
covered by the financial projection to 31 December 2024 is considered to be the same for the viability assessment of the Group.
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.
32
DIRECTORS’ REPORT (CONT)
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 2023 and is signed
on its behalf by:
____________________________
Non-Executive Chairman
David Hathorn
30 March 2023
_________________________________
Chief Executive Officer
Brad Sampson
30 March 2023
33
INTRODUCTION
CORPORATE GOVERNANCE REPORT
The Board is committed to the principles of good corporate governance and to maintaining the highest standards and best practice
of corporate governance. In this regard the Board has given consideration to the provisions set out in the 2018 UK Code and has
taken due regard of the principles of good governance set out therein in relation to the size and stage of development of the
Company.
The Board 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.
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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 had 22 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.
During 2022 he met with each employee at least once face
to face.
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 are being developed.
requires
The Group’s
communication with shareholders and stakeholders in an
open, regular and timely manner.
communication
strategy
The Company’s two 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 able to attend the AGM in person, a
dial-in facility was made available to shareholders to listen
to business of the meeting via a webcast and shareholders
were also afforded the opportunity to submit questions to
the Board in advance of the AGM by e-mail.
3.
In addition to formal general meetings, the chair should
seek regular engagement with major shareholders in order
to understand their views on governance and performance
against the strategy. Committee chairs should seek
engagement with shareholders on significant matters
related to their areas of responsibility. The chair should
ensure that the board as a whole has a clear understanding
of the views of shareholders.
35
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 2022, 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
2023, 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. The CEO met in person with all employees
during the year, 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.
36
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 two 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.
37
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 each
Given
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.
38
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, two NEDs and two independent NEDs.
During the course of the year, one NED resigned, and no
additional 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.
39
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 27 to 29. 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 joint company secretaries, one based in
London, and one based in Australia. Both the appointment
and removal of the company secretary is a matter for the
whole Board.
40
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 51 and 52 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.
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 five 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 annual
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.
41
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 51 to 52 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 comprised of three
members during the period, David Netherway and Jonathan
Trollip both of whom are independent NEDs and David
Hathorn who resigned from this committee on 24 January
2023, 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 two
Independent NEDs members. This matter is kept under
review and the appointment of a further independent NED
will be considered when deemed appropriate.
42
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.
43
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 49 to
50.
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
32.
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 17 to 19.
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.
44
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 statement also confirms the integrity of the Group’s
financial statements and that they are founded on a sound
system of risk management, internal compliance and
controls which are 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 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 Board has considered that preparing the financial
statements on a going concern basis is appropriate and that
material uncertainty exists as set out within the Directors
Report on pages 31-32.
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 7-23.
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.
45
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.
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
the
35. Where a remuneration consultant is appointed, this
remuneration
responsibility of
should be
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.
judgement should be exercised when
Independent
evaluating the advice of external third parties and when
receiving views from executive directors and senior
management.
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 directorships and senior executive remuneration
in his former capacity as chairman of ASX listed Spicers
Limited and as NED of ASX listed of BCAL Diagnostics
Limited and Global Value Fund 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.
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.
An external remuneration consultant is appointed as and
when required to advise the Committee. However, no such
appointment was required during the year.
46
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION (CONT)
in 2022
the Board. Following a discussion
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 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
Remunerations and Nomination Committee didn’t
recommend to the Board any change to the CEO’s salary,
and it was noted that the Kola Project optimisation and full
funding remains a work in progress. 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.
Details of the pension arrangements, including contribution
rates, for the CEO are set within the Remuneration Report.
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.
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.
the exception of
The CEO is employed on an ongoing basis, which may be
terminated by either party giving six months’ notice. Each
NED has a letter of appointment for an initial term of six
years (with
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 one month
notice, by the NED by immediate notice and also in
accordance with the Company’s Articles of Association.
47
CORPORATE GOVERNANCE REPORT (CONT)
The CEO’s remuneration was subject
to detailed
consideration by the Remuneration and Nomination when
the current CEO was employed in 2018. In 2021 it was
agreed and subsequently approved by the Board that the
CEO’s salary remains unchanged at USD 550,000 per
annum and that he be eligible for a short-term bonus of
USD 270,000. Following a discussion in 2022 the
Remunerations and Nomination Committee didn’t
recommend to the Board any change to the CEO’s salary.
The Remuneration and Nomination Report on pages 53 to
62 sets out, inter alia the objectives of the Committee and
a description of the work carried out during the year.
REMUNERATION (CONT)
Provisions
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
•
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;
the
•
internal and
is appropriate using
remuneration
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
reasons why
• whether
remuneration policy operated as
intended in terms of company performance and
quantum, and, if not, what changes are necessary;
• what engagement has taken place with shareholders
and the impact this has had on remuneration policy
and outcomes;
what engagement with the workforce has taken
place to explain how executive remuneration aligns
with wider company pay policy; and
•
• 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
remuneration
outcomes and the reasons why.
to
48
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT AND RISK COMMITTEE
The Audit and Risk Committee (“the Committee”) comprises comprised of three members during the period, David Netherway
and Jonathan Trollip both of whom are independent NEDs and David Hathorn who has resigned from this committee subsequent
to the period end, of which David Netherway, who is the chairman of the committee, 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 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 though the company has insufficient funding
beyond Q3 2023. The committee considers the mitigating actions to be appropriate and the disclosure of material
uncertainty in note 1(b) to the financial statements to be appropriately reflected 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 or 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 LLP have been in place for four 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;
49
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT AND RISK COMMITTEE (CONT)
• Create an integrated risk management process owned and managed by the Group’s personnel that is both continuous and
effective;
• Ensure that the management of risk is integrated into the development of strategic and business plans, and the achievement
of the Group’s vision and values; and
• Ensure that the Board is regularly updated with reports by the committee.
Management is responsible for efficient and effective risk management across the activities of the Group. This includes ensuring
the implementation of policies and procedures that address risk identification and control, training and reporting. The CEO is
responsible for ensuring the process for managing risks is integrated within business planning and management activities.
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 Committee, 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 17 to 19 of the Annual Report.
During the year, the Committee reviewed the planning of the 2022 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 auditor with effect from 28 June 2019, a resolution to reappoint BDO
LLP as auditor was proposed and passed by the requisite majority at the AGM held on 9 June 2022. A resolution will be proposed
at this year’s AGM to reappoint BDO LLP 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 2023. Based on this review, the Committee was satisfied with the effectiveness of the audit
for the year ended 31 December 2022.
50
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 affected 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 2022 and
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
five 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.
51
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, 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.
Diversity
Board
Senior Executives
All Employees
Female %
0.0
33.3
45.8
2022
Male %
100.0
66.7
54.2
Total Number
6
3
24
Female %
0.0
33.3
31.0
2021
Male %
100.0
66.7
69.0
Total Number
6
3
29
Senior Executives include the CEO, COO and CFO.
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 Executives’ 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 comprised 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.
52
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 2022. 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 2022 were:
Executive Directors
Brad Sampson
Non-Executive Directors
David Hathorn
Jonathan Trollip
David Netherway
Sameer Oundhakar
Pablo Hernandez Mac-Donald
Executives
Henko Vos
SJCS
Amanda Farris
Gavin Chamberlain
Remuneration Policy
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 (appointed on 1 April 2021 and resigned on 21 December 2022)
Non-Executive Director (appointed on 30 November 2021)
Joint Company Secretary (appointed on 7 November 2017)
Joint Company Secretary (appointed on 1 October 2018)
Interim Chief Financial Officer (appointed on 16 July 2021)
Chief Operating Officer (appointed on 1 October 2017)
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.
53
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION REPORT (CONT)
Remuneration Policy (Cont)
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 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 2022:
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
Amanda Farris (Interim CFO, appointed 16 July 2021)
AUD 288,000
Fixed Term
14 days notice period
Gavin Chamberlain (COO, appointed 23 September
2019)
USD 306,124
No fixed Term
3-month notice period
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
2022.
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 49 to 52.
54
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 2022 was as follows:
1 January 2022 to 31 December 2022
Short-Term Benefits
Annual
Bonus
USD
Fees/Basic
Salary
USD
Termination
benefits
USD
Executive Directors
Brad Sampson
Non-Executive Directors
David Hathorn
Jonathan Trollip
David Netherway
Sameer Oundhakar (ii)
Pablo Hernandez Mac-
Donald
Executives
Henko Vos (iii)
SJCS
Gavin Chamberlain
Amanda Farris
550,000
100,000
63,000
80,500
-
-
793,500
38,944
63,182
306,125
195,220
603,471
Total
1,396,971
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Post-
Employment
Benefits
Superannuation
USD
Options /
Performance
Rights (i)
USD
Total
USD
-
-
-
-
-
-
-
-
-
-
-
-
-
18,716
568,716
11,272
-
-
-
-
111,272
63,000
80,500
-
-
29,988
823,488
-)
-)
234
-)
234
38,944
63,182
306,359
195,220
603,705
30,222
1,427,193
(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) Sameer Oundhakar resigned as a NED on 21 December 2022..
(iii) 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 2022 year and details of his remuneration are disclosed above.
55
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.
56
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 2022
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 38*
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
8,000,000
01/01/2024
GBP 0.0092
GBP 0.022
13/06/2022
Conditional
9,000,000
12/06/2027
GBP 0.0089
GBP 0.022
* These options were granted to David Hathorn in the period.
On 13 June 2022, David Hathorn was granted 9,000,000 options, as approved at the AGM held on 9 June 2022 and pursuant to
the Directors and Executives Share Option Plan. The options will only vest, and be exercisable into shares, subject to the
Company obtaining a financing package to fully fund the development of the Company’s Kola Project approved by the Board.
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.
Further details of the performance conditions for Option Series 34-38 can also be found in Note 21 to the financial statements.
There was no exercise of options during the year or any further issues.
57
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 2022
During the financial year, the following performance rights as SBP arrangements for KMP and other personnel were in existence:
Rights Series 15
Rights Series 25*
Grant Date
29/05/2017
17/03/2020
Vesting Date
None vested
Refer below
The above Performance Rights have nil exercise price.
Number of
Rights
1,760,000
550,000
Expiry Date
31/05/2022
17/03/2025
Fair Value at
Grant Date
AUD 0.17 / AUD 0.104
GBP 0.0615
* Vested, converted to fully paid ordinary shares during the year – Please refer to Note 21 to the financial statements for more details of
conversions.
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.
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 2022 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 2022 year.
For further information on each option and performance rights series, please refer to Note 21 to the financial statements.
58
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION REPORT (CONT)
Reconciliation of options as SBP arrangements and performance rights held by KMP (Cont)
Grant date
Amount
granted
Issue date
Balance at the start of
the year
Name,
option or
rights
series No
Vested and
exercisable
Unvested
Granted
or
allocate
d as
compen
sation
Vested Exercis
ed
Cancelled
or
expired
Balance at the end of
the year
Expensed
in 2022
Max
value
yet to
vest
Vested and
exercisable Unvested
No
No
USD
USD %
No
No
No
No
No
%
No
No %
Executive Directors
Brad Sampson (i)
Options
26,900,000
19/07/2019
17,933,334
8,966,666
-
8,966,666
33
9/06/2022
Series 33
02/07/2019
Non-executive directors
David Hathorn
Option
Series 38
Executive
Gavin Chamberlain
Options
Series 34
Performance rights
Series 15
Series 25
29/05/2017
17/03/2020
19/07/2019
9,000,000
09/06/2022
-
-
12,000,000
25/06/2020
8,000,000 4,000,000
2,200,000
850,000
29/05/2017
17/03/2020
-
-
8,000,000
1,760,000
283,333
6,043,333
-
-
-
-
-
-
-
4,000,000
33
-
283,333
4,283,333
-
33
-
-
283,333
283,333
-
-
-
-
-
26,900,000
-
- 18,716
6
-
-
-
9,000,000
100,345 11,272 11
-
-
33
-
-
-
-
-
12,000,000
-
-
53
-
-
12,000,000
1,760,000
-
1,760,000
188,640
-
188,640
-
-
-
-
-
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION REPORT (CONT)
Share-based payments granted as compensation to KMP
Options and Performance Rights granted during 2022
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 2022.
Options / Rights
Series
Number of Options /
Rights Granted at
Grant Date
Number
Value of Options /
Rights Granted at
Grant Date
USD
Option Series 38
9,000,000
100,345
Executive Directors
David Hathorn
Shares issued on exercise of options or performance rights
No shares were issued to KMP during the financial year ended 31 December 2022.
60
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 2022
Executive Directors
Brad Sampson
Non-executive directors
David Hathorn (i)
Jonathan Trollip
David Netherway
Executives
Henko Vos
Gavin Chamberlain
Balance at
1 Jan 2022
Received as
Remuneration
Options
Exercised / Rights
Converted
Other
Movements
(i)
Balance at
31 Dec 2022
2,464,705
144,237,061
7,276,296
8,536,434
162,514,496
1
516,667
516,668
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,464,705
-
-)
-)
-
144,237,061
7,276,296
8,536,434
162,514,496
-
283,333
283,333
-
-
-
1
800,000
800,001
Total
163,031,164
-
283,333
-
163,314,497
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
-
2,615,968
1,910,106
-
2,440,690
6,966,764
-
-
1
-
500,000
250,000
250,000
250,000
1,250,000
-
516,667
516,667
24,943,528
-)
-)
-)
24,943,528
144,237,061
7,276,296
750,000
8,536,434
163,264,496
-
-
1
516,667
-
516,668
Total
130,104,205
6,966,764
1,766,667
24,943,528
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.
Other than otherwise indicated above, no other KMP held any ordinary shares in the Company during the current or prior years.
61
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION REPORT (CONT)
Options, rights and equity warrants over equity instruments granted as compensation
Balance at
1 Jan 2022
Received as
Remuneration
Rights
Exercised
Other
Movements
Balance at
31 Dec 2022
Vested and
exercisable
at year end
31 December 2022
Executive Directors
Brad Sampson
Non-executive directors
David Hathorn
Jonathan Trollip
Timothy Keating
David Netherway
Executives
Amanda Farris
Gavin Chamberlain
26,900,000
-
-
-
-
26,900,000
-
14,043,333
14,043,333
-
9,000,000
-
-
-
9,000,000
-
-
-
-
-
-
-
-
-
-
(283,333)
(283,333)
-
-
-
-
-
-
-
-
-
-
26,900,000
26,900,000
9,000,000
-
-
-
35,900,000
-
-
-
-
26,900,000
-
13,760,000
13,760,000
-
12,000,000
12,000,000
49,660,000
38,900,000
Total
40,943,333
9,000,000
(283,333)
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 2022.
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 2022.
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 39,696 and USD 1,310 to Evelyn Partners 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 63,182.
There were no other transactions with KMP and its related parties.
Voting of shareholders at last year’s AGM held on 9 June 2022
The Company received 99.82% “yes” votes on its Remuneration Report for the 2021 financial year. The Company did not receive
any specific feedback at the AGM or throughout the year on its remuneration practices.
62
CORPORATE GOVERNANCE REPORT (CONT)
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.
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.
63
CORPORATE GOVERNANCE REPORT (CONT)
OTHER CORPORATE GOVERNANCE MATTERS (CONT)
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.
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
64
CORPORATE GOVERNANCE REPORT (CONT)
OTHER CORPORATE GOVERNANCE MATTERS (CONT)
Shareholders (Cont)
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 2022.
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 2023 and is signed on its behalf by
___________________________
David Hathorn
Non-Executive Chairman
_______________________________
Brad Sampson
Chief Executive Officer
65
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
2022 and of the Group’s loss 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 2022 which comprise the Statements of Profit or Loss and Other
Comprehensive Income, Statements of Financial Position, Statements of Changes in Equity, 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.
Material uncertainty related to going concern
We draw attention to the Going concern section in note 1 (b) to the financial statements, which explains that the
Group and Parent company require additional funding in the next twelve months after the approval of the financial
statements in order to continue as a going concern.
As stated in Note 1 (b), these events or conditions, indicate that a material uncertainty exists that may cast
significant doubt on the Group and Parent Company’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
For the reason set out above and based on our risk assessment, we determined going concern to be a key audit
matter.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’
assessment of the Group and the Parent Company’s ability to continue to adopt the going concern basis of
accounting and our response to the key audit matter included:
• Obtained the Directors cash flow forecasts for the period to 31 December 2024 and assessed the key
underlying assumptions, including forecast levels of expenditure and exploration costs used in preparing
these forecasts. In doing so we considered actual costs incurred in the financial year 2022 against budgeted
and contracted commitments.
66
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
• Performed sensitivity analysis in respect of key assumptions underpinning the forecasts, including
operational costs and level of exploration expenditure and assessing the levels of funding required under
each sensitivity.
• Corroborating the opening cash position in the forecast to bank statements.
• Assessed the underlying integrity of the cash flow forecasts.
• Challenged the Directors ability to raise funds from further equity placements and assessed the historic
performance of the Group in raising funds in the past. Assessed other funding options open to the Group,
including the sale of assets, as disclosed in note 1.
• Reviewed and considered the adequacy and consistency of the going concern disclosures within the
financial statements alongside the Directors going concern assessment.
In relation to the Parent Company’s voluntary reporting on how it has applied the UK Corporate Governance Code,
we have nothing material to add or draw attention to in relation to the Directors’ statement in the financial
statements about whether the Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report.
Overview
Coverage
Key audit matters
99% (2021: 99%) of Group profit before tax
99% (2021: 100%) of Group total assets
2022
Carrying value of
exploration and
evaluation assets
Going concern
2021
Materiality
Group financial statements as a whole
$2.5m (2021:$2.6m) based on 1.5% of Total Assets (2021: 1.5% 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.
67
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
As part of the full scope audit for Dougou Potash Mining S.A, and Kola Potash S.A, specified procedures were
performed by a BDO Member firm based in West Africa. The group audit team performed the remaining
procedures on the full scope audits of the significant components identified above, including additional specific
procedures over key risk areas including the Key Audit Matters and the audit of the consolidation.
Our involvement with component auditors
For the work performed by component auditors, we determined the level of involvement needed in order to be
able to conclude whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on the
Group financial statements as a whole. Our involvement with component auditors included the following:
• Detailed Group reporting instructions were sent to the component auditor, which included the specified
procedures to be undertaken on significant risk areas (including the areas that were considered to be key
audit matters), 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 specified procedures performed by the
component auditor for the 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 a virtual
clearance meeting.
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. In addition to the matter disclosed in the Material uncertainty related to going concern section of our report,
we determined the matter below to be the key audit matter to be communicated. 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.
68
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
Key audit matter
of
Carrying
value
exploration
and
evaluation
(“E&E”)
assets
Refer
notes
and note 7
to
1(r)
At 31 December 2022, the Group held
E&E assets on its statement of financial
position, as detailed in note 7, with a
value of $162.7m (2021: $166.6m).
As detailed
in note 1(r), there are
judgments and inherent uncertainties
around the recoverability of exploration
and evaluation assets. Management and
the Board are required to assess
there are any potential
whether
triggers, which would
impairment
indicate that the carrying value of the
asset at 31 December 2022 may not be
recoverable. Given
financial
significance of the E&E assets in the
context of the Group’s statement of
financial position and the significant
judgement
in making the
assessment of whether any indicators of
impairment exist we considered this to
be a key audit matter.
involved
the
reviewed and
How the scope of our audit addressed the key audit
matter
challenged Management’s
We
impairment assessment, reviewed by the Board,
against the requirements of the relevant accounting
standards 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.
to discuss
the progress of
• Held meetings with Management
to
understand the future plans for the assets
and
the
Engineering,
on
negotiations
(EPC)
and
Procurement
agreement and funding arrangements.
• Corroboration of future plans to develop the
asset through to key documents including the
draft EPC agreement, correspondence with
Power China and Heads of Agreement for the
construction.
the
Construction
• Verification of the Net Present Value (NPV) to
the underlying
in
particular the reduced NPV announced in the
post balance sheet period in relation to the
Dougou Extension (DX) asset.
feasibility
reports,
Key observations:
We found management’s assessment of the carrying
value of E&E assets to be acceptable.
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.
69
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
Based on our professional judgement, we determined materiality for the financial statements as a whole and
performance materiality as follows:
Group financial statements
2021
2022
Parent company financial statements
2022
2021
US$ 2.5million
1.5% Total Assets
US$ 2.6 million
1.5% Total Assets
US$ 2.25 million
Set at 90% of Group Materiality
US$ 2.34 million
Materiality was based
total
on 1.5% of
We
assets.
total
considered
assets to be the most
appropriate basis for
materiality given the
the
is
Group
exploration
and
evaluation stage.
US$1.875 million
in
Materiality
was
based on 1.5% of
We
total assets.
total
considered
assets to be the most
appropriate basis for
materiality given the
the
is
Group
exploration
and
evaluation stage.
US$1.95 million
in
75% materiality
Set at 90% of Group materiality given the
assessment
components
of
aggregation risk.
the
US$1.69 million
US$1.75 million
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.
for
Materiality
Basis
determining
materiality
Rationale
for the
benchmark applied
for
Performance
materiality
Basis
determining
performance
materiality
Rationale
for the
percentage applied
performance
for
materiality
Specific materiality
We also determined that for items included in the Statement of Profit or Loss, a misstatement of less than
materiality for the financial statements as a whole, specific materiality, could influence the economic decisions of
users. As a result, we determined materiality for these items to be $0.1 million based on 5% of Group expenditure
(2021: $0.1 million based on 5% of expenditure). The same specific materiality was applied to items included in the
Statement of Profit or Loss for the Parent Company. We further applied a performance materiality level of 75%
(2021:75%) of specific materiality to ensure that the risk of errors exceeding specific materiality was appropriately
mitigated.
Component materiality
We set materiality for each significant component of the Group based on a percentage of between 21% and 91%
(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 $0.463 million to $2.25 million (2021: $0.487 million to
$2.34 million). In the audit of each component, we further applied performance materiality levels of 75%
(2021:75%) of the component materiality to our testing to ensure that the risk of errors exceeding component
materiality was appropriately mitigated.
70
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
Reporting threshold
We agreed with the Audit and Risk Committee that we would report to them all individual audit differences in
excess of $0.05 million (2021:$0.052 million). 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 Code
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 to the appropriateness of adopting the going
concern basis of accounting and any material uncertainties identified set out on page
31 and 32; and
• The Directors’ explanation as to their assessment of the Group’s prospects, the period
this assessment covers and why the period is appropriate set out on page 12 and 13.
Other
provisions
Code
• Directors’ statement on fair, balanced and understandable set out on page 32;
• Board’s confirmation that it has carried out a robust assessment of the emerging and
principal risks set out on page 33;
• The section of the annual report that describes the review of effectiveness of risk
management and internal control systems set out on page 42 to 45; and
• The section describing the work of the Audit and Risk Committee set out on page 49 to
50.
71
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
Directors’
report
and
Matters
on
which we are
to
required
report
by
exception
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic report and the Directors’ report for the financial year
for which the financial statements are prepared is consistent with the financial statements;
and
the Strategic report and the Directors’ report have been prepared in accordance with
applicable legal requirements.
•
In the light of the knowledge and understanding of the Group and Parent Company and its
environment obtained in the course of the audit, we have not identified material
misstatements in the strategic report or the Directors’ report.
We have nothing to report in respect of the following matters in relation to which the
Companies Act 2006 requires us to report to you if, in our opinion:
•
• adequate accounting records have not been kept by the Parent Company, or returns
adequate for our audit have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting
records and returns; or
•
certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ responsibilities, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent
Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements.
72
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
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:
• Holding discussions with management and the audit and risk 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;
• Holding discussions with management and the audit and risk 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 and Risk
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).
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. 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.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
73
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
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, UK
30 March 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
74
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
Continuing operations
Parent
Note
Dec 2022
USD
Dec 2021
USD
Consolidated Entity
Dec 2022
USD
Dec 2021
USD
Other Revenue
2(a)
1,092,147
Directors’ remuneration
Equity compensation benefits
Salaries, employee benefits and consultancy
expense
Credit loss provision
Administration expenses
Interest income
Interest and finance expenses
Net
realised
foreign exchange losses
Loss before income tax expense
and
unrealised
2(b)
2(d)
5
2(c)
(814,597)
(9,412)
(890,518)
-
(542,146)
66,956
(3,935)
834,158
)
(743,353)
(34,596)
(1,113,966)
-
(850,424)
14,698
(4,365)
-
-
(418,962)
(9,412)
(293,292)
-
(546,507)
66,956
(3,935)
(440,853)
(34,596)
(687,623)
-
(675,174)
14,709
(4,708)
(308,801)
(1,410,306)
(112,951)
(2,010,799)
(308,801)
(1,513,953)
(112,951)
(1,941,196)
Income tax
Loss for the year
3
-
(1,410,306)
-
(2,010,799)
-
(1,513,953)
-
(1,941,196)
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 FOR
THE YEAR
Loss attributable to:
Owners of the Company
Non-controlling interest
Total comprehensive loss attributable to:
Owners of the Company
Non-controlling interest
-
-
-
-
(8,660,408)
(11,529,680)
(8,660,408)
(11,529,680)
(1,410,306)
(2,010,799)
(10,174,361)
(13,470,876)
(1,410,306)
-
(1,410,306)
(2,010,799)
-
(2,010,799)
(1,513,822)
(131)
(1,513,953)
(1,941,196)
-
(1,941,196)
(1,410,306)
-
(1,410,306)
(2,010,799)
-
(2,010,799)
(10,174,230)
(131)
(10,174,361)
(13,470,876)
-
(13,470,876)
Basic and diluted loss per share (cents per
share)
22
(0.04)
(0.06)
(0.04)
(0.06)
The accompanying notes from pages 80 to 113 form part of these financial statements.
75
STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
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 2022
USD
Dec 2021
USD
Dec 2022
USD
Dec 2021
USD
4
5
5
6
7
8
9
4,999,889
112,272
5,112,161
10,916,397
88,836
11,005,233
5,046,629
200,251
5,246,880
11,092,509
197,996
11,290,505
158,444,734 153,515,625
-
-
69
158,444,802 153,515,694
-
-
68
38,597
385,103
162,729,194
-
163,152,894
107,577
482,530
166,613,902
-
167,204,009
163,556,963 164,520,927
168,399,774
178,494,514
396,982
26
397,008
356,882
26
356,908
749,469
26
749,495
1,074,602
26
1,074,628
397,008
356,908
749,495
1,074,628
163,159,955 164,164,019
167,650,279
177,419,886
EQUITY
Contributed equity – Ordinary Shares
Reserves
Accumulated losses
EQUITY ATTRIBUTABLE TO OWNERS OF
THE COMPANY
Non-controlling interests
TOTAL EQUITY
10
11
11(f)
3,420,177
3,375,494
172,999,244 172,642,133
(11,853,608)
(13,259,466)
3,420,177
221,586,467
(56,793,651)
3,375,494
230,029,754
(55,422,779)
163,159,955 164,164,019
-
163,159,955 164,164,019
-
168,212,993
(562,714)
167,650,279
177,982,469
(562,583)
177,419,886
The accompanying notes from pages 80 to 113 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 2023 and were signed on its behalf by:
___________________________
David Hathorn
Non-Executive Chairman
_______________________________
Brad Sampson
Chief Executive Officer
76
Consolidated Entity
Balance at
1 January 2021
Loss for the period
Other comprehensive loss for the year
Total comprehensive loss 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
Loss for the period
Other comprehensive loss for the year
Total comprehensive loss for the year
Kore Potash ltd SA Divestment
Transactions with shareholders
Conversion of performance rights
Share issues
Share issue costs
Share based payments
Balance at 31 December 2022
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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
2,451,768
9,866,536
32,004,080
(7,093,823)
203,738,800
(62,743,176)
178,224,185
(562,583)
177,661,602
-
-
-
-
-
-
-
-
-
-
(11,529,680)
(11,529,680)
-
-
-
(1,941,196)
-
(1,941,196)
11(b)
11(b)
11(b)
11(b)
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)
-
(8,660,408)
(8,660,408)
(139,989)
-
-
-
-
-
-
203,738,800
-
-
-
-
6,015,412
446,583
2,799,598
-
-
-
(55,422,779)
(1,513,822)
-
(1,513,822)
(1,941,196)
(11,529,680)
(13,470,876)
-
57,796
-
14,026,563
(958,742)
103,543
177,982,469
(1,513,822)
(8,660,408)
(10,174,230)
-
-
-
-
-
-
-
-
(562,583)
(1,941,196)
(11,529,680)
(13,470,876)
-
57,796
-
14,026,563
(958,742)
103,543
177,419,886
(131)
-
(131)
(1,513,953)
(8,660,408)
(10,174,361)
138,501
(1,488)
-
(1,488)
11(a)
11(b)
11(a)
-
44,683
-
-
3,420,177
(4,449)
-
11,895
18,327
734,259
-
331,338
-
-
44,537,309
-
-
-
-
(27,423,901)
-
-
-
-
203,738,800
4,449
-
-
-
(56,793,651)
-
376,021
11,895
18,327
168,212,994
-
-
-
-
(562,714)
-
376,021
11,895
18,327
167,650,280
The accompanying notes from pages 80 to 113 form part of these financial statements.
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Parent
Balance at 01 January 2021
Loss for the year
Total comprehensive loss 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
Loss for the year
Total comprehensive (loss)/income for the year
Transactions with shareholders
Conversion of performance rights
Share issue
Share issue costs
Share based payments
Balance at 31 December 2022
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
2,451,768
9,866,536
32,004,080
203,738,800
(76,011,124)
(19,104,403)
152,945,657
-
-
6,024
-
-
917,702
-
-
3,375,494
-
-
-
44,683
-
-
3,420,177
-
-
-
-
-
-
-
-
(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
-
-
-
(11,853,609)
57,796
-
-
14,026,563
(958,742)
103,543
164,164,018
-
-
-
-
-
-
-
-
(1,410,306)
(1,410,306)
(1,410,306)
(1,410,306)
(4,449)
-
11,895
18,327
734,259
-
331,338
-
-
44,537,309
-
-
-
-
203,738,800
-
-
-
-
(76,011,124)
4,449
-
-
-
(13,259,466)
-
376,021
11,895
18,327
163,159,955
11(b)
11(b)
11(b)
11(b)
11(b)
11(b)
11(b)
11(b)
The accompanying notes from pages 80 to 113 form part of these financial statements.
78
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
CASH FLOWS FROM OPERATING
ACTIVITIES
Payments to suppliers
Payments to employees
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
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
Dec 2022
USD
Dec 2021
USD
Dec 2022
USD
Dec 2021
USD
13
6
7
5
11
11
(593,005)
(538,184)
(1,131,189)
(1,297,463)
(552,462)
(1,849,925)
(1,151,137)
(85,108)
(1,236,245)
(1,491,849)
(209,230)
(1,701,079)
-
-
(4,532,663)
66,956
(4,465,707)
-
-
(5,683,153)
14,698
(5,668,455)
(633)
(4,574,363)
-
66,956
(4,508,040)
(2,216)
(5,811,225)
-
14,709
(5,798,732)
550
-
550
14,026,563
(958,742)
13,067,821
550
-
550
14,026,563
(958,742)
13,067,821
(5,596,346)
5,549,441
(5,743,735)
5,568,010
10,916,397
(320,162)
5,443,551
(76,595)
11,092,509
(302,145)
5,555,000
(30,501)
4
4,999,889
10,916,397
5,046,629
11,092,509
The accompanying notes from pages 80 to 113 form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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 2022 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 45 Gresham Street, London, United Kingdom EC2V 7BG.
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 2023.
New standards, interpretations and amendments effective from 1 January 2022 which have no impact on the group
• 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).
None of these standards are deemed to have an impact on the Group for the year ending 31 December 2022.
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 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).
The following amendments are effective for the period beginning 1 January 2024:
• IFRS 16 Leases (Amendment -Liability in a Sale and Leaseback)
• IAS 1 Presentation of Financial Statements (Amendment -Classification of Liabilities as Current or Non-Current)
• IAS 1 Presentation of Financial Statements (Amendment -Classification of Liabilities with Covenants)
80
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(b) Going Concern
The 31 December 2022 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 2022 and its operations in future periods.
Cash and cash equivalents, at 31 December 2022 were USD 5,046,629 (31 December 2021: USD 11,092,509) the decrease was
driven by parent expenditure USD 1,236,245 and exploration expenditure USD 4,574,363. For the Period ended 31 December
2022 the Group recorded a net loss of USD 1,513,953 (31 December 2021: USD 1,941,196) and at 31 December 2022 had a net
working capital of USD 4,497,385 (31 December 2021: USD 10,215,877). The Group also recorded a net cash (used in) operating
activities for the Period ended 31 December 2022 of USD 1,236,245 (31 December 2021: USD 1,701,079).
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 the Group will have insufficient available funds in order to meet its current planned activities
over the next 12 months. This does not include funding for the construction of the Kola project which is subject to agreement to
the EPC and Financing proposal from the Summit Consortium.
The Group's financial projections and cash flow forecasts indicate that it has sufficient funding until Q4 2023 and therefore will
need to complete a capital raise prior to this in order to meet its current planned activities for the full12 months. The directors
have considered various mitigating actions, which includes 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 with the support from its two major shareholders. If this was not successful further mitigating action would
include raising funds through the sale of assets. However, factors beyond the Group’s control, including pandemic diseases such
as COVID-19, the Russian/Ukraine conflict impact on macro-economics, inflation, interest rates and the banking crisis and
uncertainty in the overall public markets, which affect the stock markets, may in turn have a negative impact on any fund raising.
The Directors have reviewed the Group's overall position and outlook in respect of the matters identified above and are of the
opinion that there are reasonable grounds to believe that funding will be secured and therefore that the operational and financial
plans in place are achievable and accordingly the Group will be able to continue as a going concern and meet its obligations as
and when they fall due. The Directors will continue to pursue further capital raising initiatives in order to have sufficient funds to
continue the work to finalise the Kola Project EPC and Financing Proposal for the complete construction of Kola.
The ability of the Group to continue as a going concern is dependent on the matters set out above. As at of the date of approving
the financial statement none of these matters are complete. These conditions indicate that a material uncertainty exists which may
cast significant doubt as to the Group’s ability to continue as a going concern and therefore it may be unable to realise its assets
and discharge its liabilities in the normal course of business.
The financial report does not include adjustments relating to the recoverability and classification of recorded asset amounts or to
the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern. The
directors reviewed a cash flow forecast for the period ending 31 December 2024, which indicates that the Group will have
insufficient liquidity to meet its working capital requirements to the end of the going concern period (March 2024).
81
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(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)
The presentational currency of the Group is US dollars.
(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 Potash S.A. 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
82
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(f) Basis of Consolidation (Cont)
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one
or more of the three elements of control listed above. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group, other than
in the event of a Group re-organisation as occurred during the year as described below.
The acquisition of Kore Potash Limited by the Company on 20 November 2017 is considered outside the scope of IFRS 3 Business
Combinations and accordingly has been accounted for as a common control transaction. The investment in Kore Potash Limited
acquired by the Company as a result of the internal reorganisation was recognised at a value consistent with the carrying value
of the equity items in the Kore Potash Limited accounts immediately prior to the Scheme. In the Parent entity, the difference
between the carrying amount of share capital and options issued by the Company under the Scheme and the investment in Kore
Potash Limited has been recognised in a Reorganisation Reserve.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit
and losses resulting from intra-Group transactions have been eliminated in full.
The acquisition of subsidiaries has been accounted for using the purchase method of accounting, other than in the Group re-
organisation described above. The purchase method of accounting involves allocating the cost of the business combination to the
fair value of the assets acquired and the liabilities and contingent liabilities assumed at the date of acquisition. Accordingly, the
consolidated financial statements include the results of subsidiaries for the period from their acquisition.
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and are
presented separately in the consolidated Statement of Profit or Loss and Other Comprehensive Income and within equity in the
consolidated Statement of Financial Position.
In the Company’s financial statements, investments in subsidiaries are carried at cost. A list of controlled entities is contained in
Note 8 to the financial statements.
(f) Income Tax
The charge for current income tax expenses is based on the profit for the year adjusted for any non-assessable or disallowed
items. It is calculated using tax rates that have been enacted or are substantively enacted by the reporting date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised
from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or
taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised, or liability is settled.
Deferred tax is recognised in the profit or loss in the Statement of Profit or Loss and Other Comprehensive Income except where
it relates to items that are recognised directly in equity, in which case the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent it is probable that future tax profits will be available against which
deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse
change will occur in income taxation legislation and the anticipation that the Group will derive sufficient future assessable income
to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.
83
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(g) Property, Plant and Equipment
Property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment losses.
The carrying amount of property, plant and equipment is reviewed at each reporting date to ensure it is not in excess of the
recoverable amount from those assets. The recoverable amount is assessed on the basis of the expected net cash flows which
will be received from the 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.
(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.
.
84
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(i) Financial Instruments (Cont)
(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.
(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.
85
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(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
•
• 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; and
• exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits
a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory
drilling, trenching and sampling and associated activities and an allocation of depreciation and amortised of assets used in
exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and
evaluation costs where they are related directly to operational activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount
of an exploration and evaluation asset may exceed its recoverable amount at the reporting date. The recoverable amount of the
exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant
area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently
reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent
that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment
loss been recognised for the asset in previous years.
Where a decision is made to proceed with development in respect of a particular area of interest, the relevant exploration and
evaluation asset is assessed for impairment and the balance is classified as a development asset. The point at which an area of
interest is considered developmental is based on finalisation of a 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.
86
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(n) Share Based Payments (Cont)
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.
(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.
87
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (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.93) 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 2022.
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 to finalise EPC terms and conditions and the receipt of a financing proposal 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.
Management have considered the appropriateness of the carrying value of the Dougou Potash Project
based on the updated DX PFS and Production Target on 24 January 2023. Where the Company reported a
NPV10 (real) of USD 275 million and 27% IRR on a real post tax basis at life of project average granular
MoP price of USD 450/t. The reduced NPV for the DX Project is higher than the current carrying value of
the asset.
88
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(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 2022
(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.
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
Other expenses
Parent
Consolidated Entity
Dec 2022
USD
Dec 2021
USD
Dec 2022
USD
Dec 2021
USD
1,092,147
834,158
-
-
9,412
34,596
9,412
34,596
237,473
54,164
-
120,404
86,481
8,285
-
72
35,267
542,146
305,518
79,929
6,238
131,665
119,847
4,737
176,187
148
26,155
850,424
237,473
54,164
-
120,404
86,481
8,285
-
72
39,628
546,507
305,518
79,981
6,238
131,665
119,847
4,842
-
148
26,935
675,174
(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.
89
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 2: LOSS FOR THE YEAR (CONT)
(d) Salaries, employee benefits and consultancy expense
Wages and Salaries
Social Security costs
Consultancy costs
Staff Costs capitalised as Exploration and Exploration Asset
Parent
Consolidated Entity
Dec 2022
Dec 2021
Dec 2022
Dec 2021
USD
USD
USD
USD
528,514
9,670
352,334
890,518
740,722
37,245
335,999
1,113,966
75,438
9,670
208,184
293,292
397,490
37,245
252,888
687,623
Wages and Salaries
-
-
860,314
698,428
Total staff costs for the Group in the year ended 31 December 2022 were USD 945,423 (2021: US USD 1,133,163) The staff
costs incurred during the year at a subsidiary, SPSA, of USD 860,314 has been capitalised as Exploration and Exploration Asset
(2021: USD 698,428).
(e) Average number of employees
Operational
Head Office
NOTE 3: INCOME TAX EXPENSE
Parent
Consolidated Entity
Dec 2022
Number
-
5
5
Dec 2021
Number
-
6
6
Dec 2022
Number
18
5
23
Dec 2021
Number
19
6
25
Parent
Consolidated Entity
Dec 2022
USD
Dec 2021
USD
Dec 2022
USD
Dec 2021
USD
Loss before tax
(1,410,306)
(2,010,799)
(1,513,953)
(1,941,196)
Parent company tax on loss at the UK corporation tax
rate of 19% (2021: 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
(267,958)
(382,052)
(287,651)
(368,827)
-
(267,958)
-
(382,052)
-
(287,651)
-
(368,827)
1,788
-
266,170
-
14,696
(6,571)
486,293
-
-
(112,366)
-
17,120
270,531
-
-
-
(113,433)
482,260
-
-
267,958
382,052
287,651
368,827
Income tax expense
-
-
-
-
90
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 3: INCOME TAX EXPENSE (CONT)
The statutory tax rate of Kore Potash plc is 19% (2021: 19%), representing the UK corporation tax rate. The Group is subject to
varying statutory rates, primarily being Australia (30%), and the RoC (see Note 7 regarding corporate tax concessions applicable
under the new mining convention). The current tax charge is USD Nil (2021: charge of USD Nil).
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 and didn’t impact on the reported
tax charge in the financial statements for the year ended 31 December 2022. No deferred tax has been recognised in respect of
the Group’s tax losses of USD 19,763,277 (2021: USD 19,763,277) that are available for offset against any future taxable profits
in the companies in which the losses arose.
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 2022
USD
Dec 2021
USD
Consolidated Entity
Dec 2022
USD
Dec 2021
USD
4,999,889
4,999,889
10,916,397
10,916,397
5,046,629
5,046,629
11,092,509
11,092,509
Parent
Dec 2022
USD
Dec 2021
USD
Consolidated Entity
Dec 2022
USD
Dec 2021
USD
-
(11,046)
108,033
15,285
112,272
-
(23,971)
97,807
15,000
88,836
-
1,212
-
158,443,522
158,444,734
-
1,046
-
153,514,579
153,515,625
17,742
(11,046)
140,765
52,790
200,251
-
36,801
1,796
-
38,597
28,515
(23,971)
138,721
54,731
197,996
51,882
53,793
1,902
-
107,577
Total Trade and Other Receivables
158,557,006
153,604,461
238,848
305,573
(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.
91
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 5: TRADE AND OTHER RECEIVABLES (CONT)
EXPECTED CREDIT LOSS PROVISION
Parent
Dec 2022
USD
Dec 2021
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 14,582,887
-
-
14,582,887 14,582,887
-
-
As at 31 December 2022 there were no other receivables that were past due but not impaired.
NOTE 6: PROPERTY, PLANT AND EQUIPMENT
Parent
Dec 2022
USD
Dec 2021
USD
Plant and equipment – at cost
Less accumulated depreciation
Reconciliation:
Opening balance
Additions
Depreciation capitalised under exploration and evaluation
Disposals
Foreign exchange differences
Closing balance at period end
-)
-)
-)
-)
-)
-)
-)
-)
-)
Consolidated Entity
Dec 2022
USD
1,964,294
(1,579,191)
385,103
Dec 2021
USD
2,095,475
(1,612,945)
482,530
482,530
645
(60,701)
(10,332)
(27,039)
385,103
542,418
2,361
(35,799)
-
(26,450)
482,530
-)
-)
-)
-)
-)
-)
-)
-)
-)
92
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 7: EXPLORATION AND EVALUATION
EXPENDITURE
Parent
Consolidated Entity
Dec 2022
USD
Dec 2021
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 2022
USD
166,613,902
Dec 2021
USD
172,025,750
5,064,934
(8,949,642)
162,729,194
6,581,097
(11,992,945)
166,613,902
131,725,943
31,003,251
162,729,194
134,392,245
32,221,657
166,613,902
-
-)
-)
-)
-)
-)
-)
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 ten years of each mining permit as production capacity is extended,
which includes zero corporation tax for the first five years from profitability, and a corporation tax rate of 7.5% for the next
five years;
• An ongoing corporation tax rate of 15% for the rest of the life of mine;
• Exemptions from withholding taxes including interest, dividends and capital gains during the term of the mining
convention;
• VAT and import duty exemptions (including all subcontractors) during construction;
• Royalties of 3% payable to the RoC, which is based on an equivalent to EBITDA;
• Guarantee from the RoC that it will facilitate and support the implementation of the project, as defined in the convention
(for example, in granting the necessary consents to permit export of the final product through the use of a dedicated
jetty); and
• The RoC to be granted a 10% carried equity interest (subject to signing shareholders agreement) 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.
93
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
Percentage
Owned
Investment
31 Dec 2022 31 Dec 2022
Percentage
Owned
Investment
31 Dec 2021 31 Dec 2021
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
-
USD
67
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 6005.
(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 91 Germain Bikoumat centre-ville route de la radio, Immeuble
Abdallah BP 662 Pointe Noire, République du Congo.
(iii) During the financial year Kore Potash South Africa (Pty) Ltd was voluntarily liquidated.
NOTE 9: TRADE AND OTHER PAYABLES
Current
Trade and other creditors
Accruals
Employee benefits and related payables
Total Trade and Other Payables
Parent
Consolidated Entity
Dec 2022
USD
Dec 2021
USD
Dec 2022
USD
Dec 2021
USD
30,959
137,793
228,230
396,982
623
127,598
228,661
356,882
47,162
311,409
390,898
749,469
47,457
684,299
342,846
1,074,602
Trade and other creditors are non-interest bearing and are normally settled on 30-day terms.
94
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 10: ISSUED CAPITAL
Parent
Dec 2022
USD
Dec 2021
USD
Consolidated Entity
Dec 2022
USD
Dec 2021
USD
3,420,177,120 Fully Paid Ordinary Shares at par value of
USD 0.001 each (31 December 2021: 3,375,494,446
Fully Paid Ordinary Shares at par value of USD 0.001)
3,420,177
3,375,494
3,420,177
3,375,494
Fully Paid Ordinary Shares
3,420,177
3,375,494
3,420,177
3,375,494
Date
31 Dec 2020
09 Apr 2021
06 May 2021
11 May 2021
01 Jun 2021
08 Jul 2021
31 Dec 2021
05 May 2022
13 June 2022
31 Dec 2022
Details
Closing balance
Equity issued to directors in lieu of payment, Fundraise Tranche 1
admitted to market and Director’s performance rights (i)
Issue of Equity - Fundraise Tranche 2 admitted to market (ii)
Issue of Equity - Fundraise OIA Princess Aurora Company (iii)
Issue of Equity (iv)
Issue of Equity (v)
Closing balance
Issue of Equity (vi)
Issue of Equity – SQM in lieu of fees payable (vii)
Closing balance
No. of Shares)
2,451,768,173
365,518,522
462,310,392
92,226,613
716,667
2,954,079
3,375,494,446
550,000
44,132,674
3,420,177,120
USD)
2,451,768
365,518
462,310
92,227
717
2,954
3,375,494
550
44,133
3,420,177
(i) 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.
(ii) 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.
(iii) 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
(iv) 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.
(v) 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.
(vi) On 5 May 2022, a total of 550,000 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 283,333 ordinary
shares were issued to Gavin Chamberlain, COO.
(vii) On 13 June 2022, the Company issued 44,132,674 ordinary shares to SQM in lieu of fees payable for the DX DFS Phase 1
work completed under the Technical Services Agreement.
95
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 11: RESERVES
SBP reserve (a)
Share premium reserve (b)
Foreign currency translation reserve (c)
Merger reserve (d)
Reorganisation reserve (e)
Total Reserves
Parent
Consolidated Entity
Dec 2022
USD
734,259
44,537,309
-
203,738,800
(76,011,124)
172,999,244
Dec 2021
USD
708,486
44,205,971
-
203,738,800
(76,011,124)
172,642,133
Dec 2022
USD
734,259
44,537,309
(27,423,901)
203,738,800
-
221,586,467
Dec 2021
USD
708,486
44,205,971
(18,623,503)
203,738,800
-
230,029,754
(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
708,486
9,866,536
708,486
9,866,536
(4,449)
(446,583)
(4,449)
(446,583)
-
(2,799,598)
-
(2,799,598)
-
30,222
734,259
(6,015,412)
103,543
708,486
-
30,222
734,259
(6,015,412)
103,543
708,486)
(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.
Movement in SBP Reserve of the Consolidated Entity
Date
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
05 May 2022
09 Jun 2022
31 Dec 2022
31 Dec 2022
Details
Closing balance
Conversion of performance rights
Cancellation of performance rights
Cancellation of share options
Conversion of performance rights
Cancellation of performance rights
Cancellation of share options
Conversion of performance rights
Cancellation of performance rights
Cancellation of share options
Issue of share options
Cancellation of share options
Transfer of SBP previously lapsed to retained earnings
SBP charge
Closing balance
Conversion of performance rights (i)
Issue of share options
SBP charge
Closing balance
No. of Options
59,900,000
-
(6,000,000)
(3,000,000)
-
-
(4,000,000)
12,000,000
(12,000,000)
-
-
46,900,000
-
9,000,000
-
55,900,000
No. of
Performance
Rights
14,091,918
(3,071,251)
(2,044,001)
-
(1,250,000)
(4,500,000)
(716,667)
(199,999)
-
-
-)
-
-
2,310,000
(550,000)
-
-
1,760,000
USD
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
(4,449)
-
30,222
734,259
(i)
On 5 May 2022, 550,000 performance rights were converted into ordinary shares. A reversal of USD 4,449 from the
SBP reserve was recognised in respect of this.
96
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 11: RESERVES (CONT)
(a)
SBP Reserve (Cont)
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 8 April 2021 at GBP 0.011 each
Share based payments
Less: Capital raising costs
Closing balance
Parent
Dec 2022
USD
44,205,971
-
331,338
-
44,537,309
Parent
Dec 2021
USD
32,004,080
13,108,861
51,772
(958,742)
44,205,971
Consolidated Entity
Dec 2022
USD
44,205,971
-
331,338
-
44,537,309
Dec 2021
USD
32,004,080
13,108,861
51,772
(958,742)
44,205,971
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 2022
USD
Parent
Dec 201
USD
-)
-)
-)
Consolidated Entity
Dec 2022
USD
(18,623,503)
(8,800,398)
(27,423,901)
Dec 2021
USD
(7,093,823)
(11,529,680)
(18,623,503)
-)
-)
-)
The foreign currency translation reserve is used to record currency differences arising from the translation of the financial
statements of the foreign subsidiary.
(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 76,011,124 was recognised in a
Reorganisation Reserve in the parent company accounts during the year ended 31 December 2017.
During the year ended 31 December 2018, 8,191,226 SBP options expired. The value of the options of USD 888,802 was
transferred to Accumulated Losses in the Australian subsidiary Kore Potash Limited, and to the Reorganisation Reserve in the
Parent company.
97
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 11: RESERVES (CONT)
(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 2022
USD
Dec 2021
USD
Consolidated Entity
Dec 2022
USD
Dec 2021
USD
-)
-)
-
-)
-)
-
562,583
131
562,714
562,583
-
562,583
NOTE 12: DIVIDENDS
No dividends have been proposed or paid during the year ended 31 December 2022 (2021: Nil).
NOTE 13: NOTES TO STATEMENT OF CASH FLOWS
Parent
Dec 2022
USD
Dec 2021
USD
Consolidated Entity
Dec 2022
USD
Dec 2021
USD
Reconciliation of cash flows from operating activities:
Loss for the year
(1,410,306)
(2,010,799)
(1,513,953)
(1,941,196)
Adjustments for:
Equity compensation benefits
Net realised and unrealised foreign exchange losses
Interest income not classified as operating activities
cash inflow
Intra group services included in Investing Activities
Operating loss before changes in working capital
9,412
320,162
34,596
113,729
9,412
320,162
34,596
117,153
(66,956)
-
(1,147,688)
(14,698)
-
(1,877,172)
(66,956)
-
(1,251,335)
(14,709)
75,833
(1,728,323)
Increase in receivables
Decrease in payables
Net cash used in operating activities
(10,676)
27,175
(1,131,189)
(24,134)
51,381
(1,849,925)
(10,597)
25,687
(1,236,245)
(24,137)
51,381
(1,701,079)
98
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (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
Fair value through profit or
loss
Dec-22
USD
Dec-21
USD
Amortised Cost
Interest Rate
Dec-22
USD
Dec-21
USD
-
-
-
-
(26)
(26)
-
-
-
-
(26)
(26)
5,046,629
98,083
5,144,712
(358,571)
-
(358,571)
11,092,509
190,824
11,283,333
(731,756)
-
(731,756)
Fair value through profit or
loss
Dec-22
USD
Dec-21
USD
Amortised Cost
Interest Rate
Dec-22
USD
Dec-21
USD
FINANCIAL ASSETS
Cash at bank
Investments in subsidiaries
Trade and other receivables
Amounts due from subsidiaries
Total financial assets
FINANCIAL LIABILITIES
Trade and other payables
Derivative financial liability
Total financial liabilities
-
-
-
-
-
-
(26)
(26)
4,999,889
10,916,397
68
1,213
69
16,115
158,443,522
163,444,692
153,514,579
164,447,160
(168,752)
-
(168,752)
(128,221)
-
(128,221)
-
-
-
-
-
-
(26)
(26)
99
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (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:
31 December 2022
XAF
GBP
CAD
ZAR
AUD
EUR
CAD
GBP
XAF
31 December 2021
ZAR AUD EUR
FINANCIAL ASSETS
Cash at bank
Trade and other
receivables
FINANCIAL LIABILITIES
Trade and other
payables
Derivative
financial liability
Net exposure
-
(6,601)
(14,571)
7,970
463,487
46,740
5,548
23
206 3,920,715
174,624 9,111
587
67
-
(8,735)
92,631
-
-
-
-
-
-
1,046
174,778
(623)
(603,535)
-
-
-
-
-
-
(146,202) (189,819)
(518) (1,337)
(3,725)
(26)
308,524
-
(50,448)
-
5,030 (1,337)
-
(3,702)
-
(26)
206 3,921,112
-
(254,133) 9,111
-
587
-
67
Sensitivity analysis (Group)
A reasonably possible strengthening (weakening) of the CAD, GBP, XAF, ZAR, AUD and EUR, against USD at 31 December
2022 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.
100
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 14: FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (CONT)
(a) Market Risk (Cont)
(i) Foreign currency risk (Cont)
31 December 2022
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
(330)
15,426
(2,522)
252
(67)
(185)
330
(15,426)
2,522
(252)
67
185
330
(15,426)
2,522
(252)
67
185
(330)
15,426
(2,522)
277
(67)
(185)
The summary quantitative data about the Parent’s financial instruments’ exposure to significant currency risk as presented in USD
is as follows:
31 December 2022
ZAR
GBP
CAD
AUD
EUR
CAD
GBP
ZAR
31 December 2021
EUR
AUD
FINANCIAL ASSETS
Cash at bank
Trade and other
receivables
7,970
463,487
5,548
-
(8,735)
-
-
-
23
-
Trade and other
payables
Derivative
financial liability
Net exposure
(14,571)
(146,202)
(518)
(1,337)
(3,725)
-
(6,601)
(26)
308,524
-
5,030
-
(1,337)
-
(3,702)
-
206
(26)
3,921,112
-
7,623
-
587
206
3,920,715
7,623
587
67
-
-
1,046
(623)
-
-
-
-
-
-
-
67
Sensitivity analysis (Parent)
A reasonably possible strengthening (weakening) of the CAD, GBP, ZAR, AUD and EUR, against USD at 31 December 2022
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.
Equity
Profit or Loss
31 December 2022
CAD (5% movement)
GBP (5% movement)
ZAR (5% movement)
AUD (5% movement)
EUR (5% movement)
Strengthening
Gain/(Loss)
USD
Weakening
Gain/(Loss)
USD
Strengthening
(Gain)/Loss
USD
Weakening
(Gain)/Loss
USD
(330)
15,426
252
(67)
(185)
330
(15,426)
(252)
67
185
330
(15,426)
(252)
67
185
(330)
15,426
277
(67)
(185)
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.
101
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 14: FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (CONT)
(a) Market Risk (Cont)
(ii)
Interest rate risk (Cont)
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 2022 Dec 2021
%
%
Fixed
Interest Rate
Dec 2022 Dec 2021
USD
USD
Floating
Interest Rate
Non-Interest
Bearing
Dec 2022
USD
Dec 2021
USD
Dec 2022
USD
Dec 2021
USD
2.01%
0.14%
3,338,818
7,870,120
191,889
190,507
1,515,992
3,031,882
-
3,338,818
-
7,870,120
-
191,889
-
190,507
98,083
1,614,075
190,824
3,222,706
-
-
-
-
-
-
-
-
-
-
-
-
(358,571)
(731,756)
(26)
(358,597)
(26)
(731,782)
FINANCIAL ASSETS
Cash at bank
Trade and other
receivables
Total financial assets
FINANCIAL LIABILITIES
Trade and other
payables
Derivative financial
liability
Total financial liabilities
All receivables and payables in the Parent at 31 December 2022 and at 31 December 2021 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 2022 and 31 December 2021 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.
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 2022 66% of the Group's cash balances were invested in A rated financial institutions (2021:71% with A+ rated)
according to Fitch Ratings.
The Group closely monitors its financial assets (excluding cash) and does not have any significant concentration of credit risk.
The Company has Intercompany balances that are received from the subsidiaries and the associated risk is covered in Note 5.
102
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 14: FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (CONT)
(b) Credit risk (Cont)
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 2022
Non-derivatives
Non-interest bearing
Trade and other payables
Total Financial Liabilities
31 Dec 2021
Non-derivatives
Non-interest bearing
Trade and other payables
Total Financial Liabilities
Within 1 Month
USD
1-3 Months
USD
3-12 Months
USD
358,571
358,571
Within 1 Month
USD
1-3 Months
USD
731,756
731,756
-
-
-
-
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 2022
Non-derivatives
Non-interest bearing
Trade and other payables
Total Financial Liabilities
31 Dec 2021
Non-derivatives
Non-interest bearing
Trade and other payables
Total Financial Liabilities
Within 1 Month
USD
1-3 Months
USD
3-12 Months
USD
168,752
168,752
Within 1 Month
USD
1-3 Months
USD
128,221
128,221
103
-
-
-
-
3-12 Months
USD
-
-
-
-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (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
Gavin Chamberlain, who served as COO since September 2017, concluded his employment with Kore Potash at the end of
January 2023 to take up a role located closer to his home. Gavin left within the Company highly experienced engineering capability
to progress the development of the Company’s potash projects. Mr Ryan Leland, who has been the Project Director for Kola since
2017, now reports directly to the Chief Executive Officer.
On the 24 January 2023 the Company announced an update of the JORC (2012) compliant Mineral Resource, Ore Reserve, PFS
information and Production Target at the DX Project. The updated Mineral Resource incorporates the most recent drilling results
and interpretation of the geophysical data. The highlights of the results were:
• Production Target of 15.5MT sylvinite at a grade of 30.63 % KCl demonstrates initial project life of 12 years at a production
rate of 400,000 tpa MOP.
• Production Target based on Proven and Probable Ore Reserves and 13% of the Inferred Mineral Resources that
represents 30% of the life of project MOP production.
• NPV10 (real) of USD 275 million and 27% IRR on a real post tax basis at life of project average granular MOP price of
USD 450/t. • Approximately 2.9 years post-tax payback period from first production.
• Proven and Probable Ore Reserve of 9.31 Mt sylvinite at an average grade of 35.7% KCl.
• Mineral Resource of 129 Mt at an average grade of 24.9% KCl.
• Higher confidence in the distribution of Sylvinite within the Top Seams and improved understanding of the
Sylvinite/Carnallite boundary within the Hanging Wall Sea.
104
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
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 (subject to signing
shareholders agreement) in the project companies, which are currently wholly owned by the Group’s subsidiary, SPSA.
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 LLP – 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
Fees payable to the Company’s external auditor for the
local audit of the Subsidiary’s annual accounts
Parent
Consolidated Entity
Dec 2022
USD
Dec 2021
USD
Dec 2022
USD
Dec 2021
USD
125,296
-
125,296
71,649
-
71,649
125,296
-
125,296
71,649
72,490
144,139
20,730
20,730
21,731
21,731
20,730
20,730
21,731
21,731
146,026
93,380
145,966
165,870
Cairq Conseil
-
-
17,157
-
NOTE 19: RELATED PARTY TRANSACTIONS
Directors’ remuneration
The expense of USD 814,597 recognised (2021: USD 743,353) includes directors fees paid and remuneration for the current
CEO.
The Group 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
Evelyn Partners 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 89,232 (2021: USD 63,427) and USD 1,310 (2021: USD
91,453) to Evelyn Partners LLP. There were no amounts outstanding owed in respect of services provided by Nexia Perth or
Evelyn Partners LLP at 31 December 2022 (2021: USD nil)
105
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 19: RELATED PARTY TRANSACTIONS (CONT)
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 118,870 (2021: USD 64,635). There were no amounts outstanding owed to in respect of services
provided by St James’s Corporate Services Limited at 31 December 2022 (2021: USD nil).
On 13 June 2022, the Company issued 44,132,674 ordinary shares to SQM in lieu of fees payable of USD 375,470 for the DX
DFS Phase 1 work completed under the Technical Services Agreement.
There were no other transactions with KMP and its related parties.
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
Sameer Oundhakar
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 (appointed on 01 April 2021 and resigned on 21
December 2022)
Non-Executive Director (appointed on 30 November 2021)
Executives
Henko Vos
St James’s Corporate Services Limited
Amanda Farris
Gavin Chamberlain
Joint Company Secretary (appointed on 7 November 2017)
Joint Company Secretary (appointed on 1 October 2018)
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
Equity compensation benefits
Consolidated Entity
Dec 2022
USD
1,396,971
30,222
1,427,193
Dec 2021
USD
1,480,218
184,732
1,664,950
There were five directors who held office at the end of the 2022 (2021: six). Details of directors’ remuneration are provided in the
Directors’ Remuneration Report on pages 53 to 62 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.
106
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (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 2022
USD
Dec 2021
USD
Dec 2022
USD
Dec 2021
USD
Expense arising
payment transactions (Note 13)
from equity-settled share-based
9,412
34,596
9,412
34,596
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 2022
USD
Dec 2021
USD
Consolidated Entity
Dec 2022
USD
Dec 2021
USD
Amounts capitalised
expenditure arising
payment transactions
to exploration and evaluation
from equity-settled share-based
20,810
20,810
68,947
68,947
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 30,222 (2021: USD
176,388) and vesting expenses capitalised to exploration and evaluation expenditure of USD 20,810 (2021: USD 68,947).
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
Outstanding at the end of the year
2022
2021
Number of
share
options
46,900,000
9,000,000
-
55,900,000
Weighted
average
exercise
price
Number of
share
options
Weighted
average
exercise
price
GBP 0.022
GBP 0.022
-
GBP 0.022
59,900,000
12,000,000
(25,000,000)
46,900,000
GBP 0.024
GBP 0.022
GBP 0.022
GBP 0.022
The share options outstanding at 31 December 2022 had a weighted average exercise price of GBP 0.022 and a weighted average
contractual life of 1.79 years.
107
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP
Performance
Rights
Rights Issue
15
25
Performance
Rights
Rights Issue
9
12
13
14
15
16-20
25
Number of
rights at 31
December
2021
1,760,000
550,000
2,310,000
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
-
-
-
-
(550,000)
(550,000)
-
-
-
-
-
-
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
2022
1,760,000
-
1,760,000
Number of
rights at 31
December
2021
-
-
-
-
1,760,000
-
550,000
2,310,000
Time to
expiry
(Years)
-
-
Time to
expiry
(Years)
-
-
-
-
-
-
3.24
The following Performance Rights from share-based payment arrangements were in existence during the current and prior
periods:
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
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
4 June 2018
Refer below
Refer below
Refer below
Refer below
Refer below
Refer below
Refer below
Number of
Rights
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
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 0.1867
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 2022 in respect of the above performance rights was USD 181.
108
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP (Cont)
Option Series 33
At the 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
109
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (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 Gavin Chamberlain (COO). 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
Options Series 38
At the Company’s General Meeting on 9 June 2022, the Company’s shareholders approved the grant of 9,000,000 unlisted options
pursuant to the Directors and Executives Share Option Plan to David Hathorn. The options will only vest, and be exercisable into
shares, subject to the Company obtaining a financing package to fully fund the development of the Company’s Kola Project
approved by the Board.
Vesting
conditions
Total
Exercise price
Exercisable:
Expiry
9,000,000
GBP 0.022
Upon obtaining a financing package to fully fund the development of the
Company’s Kola Project approved by the Board.
09/06/2027
The fair value of the options at grant date of GBP0.0089 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 38
GBP 0.0143
89.3%
1.80%
5 years
GBP 0.0089
110
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP (Cont)
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.
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. At the end of the year 1,760,000 (2021;
1,760,000) remained in existence.
Employee
Gavin Chamberlain (COO)
Total
Series 15
1,760,000
1,760,000
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)
Other employees
Total
Series 25
850,000
1,400,000
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 2022, 550,000 performance rights relating to rights series 25 were converted into ordinary
share capital and no shares remained in existence at the year end.
111
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
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 33 (i)
Options Series 34,
35 and 36 (ii)
Option Series 37 (iii)
Option Series 38 (iv)
Grant
Date
17/07/2019
15/09/2019
01/06/2021
13/06/2022
Vesting Date
17/07/2022
Number of
Options
26,900,000
Expiry Date
17/07/2024
Fair Value at
Grant Date
GBP 0.0070
Exercise
Price
GBP 0.022
15/09/2022
01/06/2024
08/06/2027
33,000,000
12,000,000
9,000,000
01/01/2024
01/06/2026
12/06/2027
GBP 0.0092
GBP 0.0053
GBP 0.0089
GBP 0.022
GBP 0.022
GBP 0.022
(i) Were issued in the year ended 30 September 2019 to Brad Sampson. All 26,900,000 remained outstanding at year end.
(ii) 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 Gavin Chamberlain (COO). At year end 20,000,000 options were
outstanding.
(iii) Were issued on 01 June 2021 and subsequently cancelled upon the resignation of Jean-Michel Bour (CFO).
(iv) Were granted on 13 June 2022 to David Hathorn. All 9,000,000 remained outstanding at year end.
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 55,900,000 share options in respect of a total of ordinary shares at 31 December 2022 (31 December
2021: 46,900,000) and 1,760,000 performance rights (31 December 2021: 2,310,000). 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 2022
USD
Dec 2021
USD
Dec 2022
USD
Dec 2021
USD
(0.04)
(0.06)
(0.04)
(0.06)
Parent
Consolidated Entity
Dec 2022
USD
Dec 2021
USD
Dec 2022
USD
Dec 2021
USD
Loss attributable to ordinary shareholders
(1,410,306)
(2,010,799)
(1,513,953)
(1,941,196)
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
3,400,159,288
3,179,304,188 3,400,159,288
3.179,304,188
Parent
Consolidated Entity
Dec 2022
Number
Dec 2021
Number
Dec 2022
Number
Dec 2021
Number
112
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022 (CONT)
NOTE 22: LOSS PER SHARE
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.
113
ASX ADDITIONAL INFORMATION (UNAUDITED)
Registered office and principal place of business
Principal and Registered Office (UK)
45, Gresham Street, London
United Kingdom EC2V 7BG
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.
Level 3, Apartment C
91 Germain Bikoumat centre-ville route de la radio
Immeuble Abdallah
BP 662 Pointe Noire
République du Congo
Telephone: +242 22 294 1924
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 2023:
Number of holders of ordinary shares
3,420,177,120 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
2,761
1,142
375
1,048
791
6,117
670,098
2,944,266
2,926,184
44,536,261
3,369,100,311
3,420,177,120
Percentage
%
0.02
0.09
0.08
1.30
98.51
100.00
The number of holdings comprising less than a marketable parcel was 1,177 with a given a share value of AUD 0.0150 per
share.
114
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 2023:
Name
Princess Aurora Company Pte Ltd (i)
Sociedad Quimica y Minera
Harlequin Investments (ii)
Dingyi Group Investment (iii)
No. of fully paid
ordinary shares /
CDIs
661,885,171
538,210,503
368,451,313
198,520,782
1,767,067,769
Percentage
%
19.35
15.74
10.77
5.80
51.66
No. of unlisted
options / equity
warrants held
-
-
-
-
-
(i) Includes 629,520,171 ordinary shares held by Forest Nominees Limited on behalf of Princess Aurora Company Pte Limited and
32,365,000 ordinary shares held directly.
(ii) Includes 368,451,313 ordinary shares held by Huntress (CI) Nominees Limited on behalf of Harlequin Investments.
(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
661,885,171
538,210,503
368,451,313
198,520,782
144,237,061
114,878,334
114,358,478
85,318,906
54,702,070
43,365,347
34,639,580
30,182,760
27,334,093
27,253,031
26,569,500
26,053,948
25,232,511
22,830,283
20,029,487
14,900,001
2,578,953,159
% Held
19.35%
15.74%
10.77%
5.80%
4.22%
3.36%
3.34%
2.49%
1.60%
1.27%
1.01%
0.88%
0.80%
0.80%
0.78%
0.76%
0.74%
0.67%
0.59%
0.44%
75.41%
Top 20 Shareholders and CDI Holders as at 28 February 2022
Princess Aurora Company Pte Ltd
Sociedad Quimica y Minera
Harlequin Investments
Dingyi Group Investment
Mr David Halthorn
Mr David Stevens
Wadeville International
Hargreaves Lansdown Asset Mgt
Ninety One
Gardenrose Investing Limited
Interactive Brokers
Glen Deveron Investments Pty Ltd
Interactive Investor Services Nominees Limited
SegalInterSettle Settlement
The Vee Trust
Halifax Share Trading
Jarvis Investment Mgt
A J Bell Securities
UBS
Mr Mohammed I Al-abdulla
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total
115
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
Unlisted options exercisable at GBP 0.022 expiring 8 Jun 2027
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
Unlisted options exercisable at GBP 0.022 expiring 8 June 2027
David Hathorn
Performance Rights (Long Term Plan)
Gavin Chamberlain
Voting Rights
The voting rights attaching to ordinary shares are:
Number of
unquoted equity
securities
Number of
holders
20,000,000
26,900,000
9,000,000
1,760,000
57,660,000
2
1
1
1
N/A
Number of holders
holding 20% or
more in the class
2
1
1
1
N/A
Number of unlisted
options
12,000,000
8,000,000
20,000,000
Number of unlisted
options
26,900,000
Number of unlisted
options
9,000,000
Number of unlisted
rights
1,760,000
Percentage
60%
40%
100%
Percentage
100%
Percentage
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.
116
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 2022 (and the date of this report) and a table showing changes to the
Potash Mineral Resources and Ore Reserves between 2021 and 2022 is included in the Review of Operations on pages 7 to 23.
Project Overview
A project overview for the Group is included in the Review of Operations and Strategic Report on pages 7 to 23.
117