KORE POTASH PLC
ANNUAL REPORT
FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2023
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)
3
4
8
29
39
73
83
84
85
87
88
126
2
CORPORATE DIRECTORY
COMPANY REGISTRATION NUMBER
United Kingdom 10933682
NON-EXECUTIVE CHAIRMAN & CHIEF
EXECUTIVE OFFICER
David Hathorn
JOINT COMPANY SECRETARY
Henko Vos
St James’s Corporate Services Limited
NON-EXECUTIVE DIRECTORS
Jonathan Trollip
David Netherway
Wouter Poulinx (Appointed on 24 July 2023)
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
SHARE REGISTRY (JOHANNESBURG)
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue
Rosebank 2196, South Africa
Telephone: +27 (11) 370 5000
JSE SPONSOR
Questco Corporate Advisory Proprietary
Limited
Ground Floor, Block C, Investment Place
10th Road Hyde Park 2196, South Africa
Telephone: +27 (11) 011 9205
SECURITIES EXCHANGE LISTINGS
London Stock Exchange (AIM)
Australian Securities Exchange (ASX)
Johannesburg Stock Exchange (JSE)
AIM, ASX and JSE Codes: KP2
ISIN: GB00BYP2QJ94
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
JOINT BROKER
Shore Capital
Cassini House, 57 St James’s Street, London
SWIA 1LD
United Kingdom
Telephone: +44 (0) 20 7408 4050
AUDITOR
BDO LLP
55 Baker St, London W1U 7EU
United Kingdom
Telephone: +44 (0) 20 7486 5888
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
Acronym /
Term
$ or USD
2018 UK
Code
AGM
AIM
ASX
AUD
Board
Carnallitite/
Carnallite
CDIs
GLOSSARY
Stands For / Meaning
Definition and/or Additional Information
Denotes USD or United States dollars The official currency of the United States of
America and its territories, as well as being the
functional and presentation currency of the
Company and the Group.
Annual General Meeting
2018 UK Corporate Governance Code 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
The mandatory yearly gathering of
Company’s interested shareholders. The latest
AGM was held on 20 June 2023.
AIM
Investment
the Alternative
Market) is a market operated by the London
Stock Exchange.
The ASX is Australia's primary securities
exchange.
The official Australian currency.
Australian Securities Exchange
(formerly
AIM
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
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
the
shares on
exchange’s settlement systems.
the
Company’s case, one CDI is equivalent to one
share traded on the AIM market or on the JSE.
the exchange and use
In
CEO
CFO
CLN
Chief Executive Officer
Chief Financial Officer
Convertible Loan Notes
Company
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
Loan convertible to ordinary shares of Kore
Potash Plc subject to certain conditions.
Kore Potash plc
incorporated and
registered in England and Wales (registered
number 10933682).
is public
company
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
the
(DX) Project)
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.
is part of
4
GLOSSARY (CONT)
Stands For / Meaning
Definition and/or Additional Information
Dougou Extension
The Dougou Extension sylvinite solution
mining
project.
Acronym /
Term
DX
EBITDA
ENFI
EPC
Interest, Taxes,
Earnings Before
Depreciation and Amortization
China ENFI Engineering Corporation
Engineering,
Construction
Procurement
and
from
design,
A particular form of contracting arrangement
used in some industries where the EPC
contractor is made responsible for all the
activities
procurement,
construction, commissioning and
handover of the project to the end-user or
owner.
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.
insoluble
Low
advantageous.
content
is
considered
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.
Refers to those persons having authority and
for planning, directing and
responsibility
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.
ESIA
Environmental and social
assessment
impact
GBP
Granular
MoP
Group
HoA
Insoluble
material
JORC
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
JORC Code The Australasian Code for Reporting
of Exploration Results, Mineral
Resources and
Ore Reserves
Johannesburg Stock Exchange
JSE
KCI
KMP
Potassium Chloride
Key Management Personnel
Kola
Denotes the Kola Project.
Kore
Potash
KPI
KPM
Kore Potash plc
Key Performance Indicator
Kola Potash Mining S.A
LSE
London Stock Exchange
5
GLOSSARY (CONT)
Stands For / Meaning
Definition and/or Additional Information
Acronym /
Term
LTIP
Mining
Convention
MoP
MoU
Mt/Mtpa
NED
OIA
Period
Potash
PFS
Long Term Incentive Plan
Denotes the mining convention signed
by the Group and the government of
RoC
Muriate of Potash
Memorandum of Understanding
tonnes per
tonnes/Million
Million
annum
Non-Executive Director
Oman Investment Authority (former
SGRF)
The current reporting period for the
Annual report commencing 1 January
and ending 31 December.
Refers
to potassium compounds,
especially those of potassium chloride
(MoP) or sulfate
(SoP)
Pre – Feasibility Study
Power
China
Power China International Group
Limited
RoC
Republic of Congo
Rock-salt
SBP
SEPCO
Sintoukola
Potash
Project
SJCS
this case, a
In
rock comprised
predominantly of the mineral halite
(NaCl)
Share-Based Payment(s)
SEPCO Electric Power Construction
Corporation
the
Denotes
large potash project
operated by the Group through SPSA
located in the Kouilou Province of the
Republic of Congo
St
Limited
James’s Corporate Services
6
The mining convention governs the conditions
of construction, operation and mine closure of
the Kola and Dougou (including Dougou
Extension) mining projects.
The saleable form of potassium chloride (KCl),
comprising of a minimum 95% KCl.
The MoU was signed on 6 April 2021 by the
Company and Summit.
Non-Executive Director of Kore Potash plc.
OIA, is a sovereign wealth fund in Oman, and
is one of
the Company’s substantial
shareholders. Its investment in the Company is
held in the name of Princess Aurora
Company Pte.
Refer to MoP and SoP for the definitions on the
two main types of potash.
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.
Power China International Group Limited
(“Power China”) is a parent company of
SEPCO.
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.
GLOSSARY (CONT)
Stands For / Meaning
Definition and/or Additional Information
Acronym /
Term
SoP
Sulfate of Potash
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
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.
is
SPSA
Sintoukola Potash S.A.
SQM
Sociedad Quimica y Minera de Chile
S.A.
Standard
MoP
STIP
Summit
Summit
Consortium
Sylvinite
TPA
for
selling
description
The
uncompacted MoP.
Short Term Incentive Plan
Summit Africa Limited
The Summit Consortium refers to
Summit, OWI Global Limited, SEPCO
and their subcontractor ENFI.
A rock type comprised predominantly
of the potash mineral sylvite (KCl) and
halite (NaCl)
Tonnes per annum
7
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% share 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
an optimised construction costs of USD 1.83 billion and a shortened construction schedule of 40 months.
PowerChina has delivered EPC proposal and draft EPC contract on the 6th of February 2024.
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 24.8% 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.
8
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
SUMMARY OF KEY DEVELOPMENTS
• On 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.
• On 21 August 2023 the Minister of Mines wrote a letter to Kore Potash that pledges the Ministry and the
Republic of Congo’s support for Kore’s development of its projects at Kola and Dougou. The Minister
acknowledged that some of the development objectives for the Projects, as outlined in the Mining
Convention, have not yet been met. He also assures the Ministry's steadfast support, in the form of a
moral guarantee, to assist in addressing remaining challenges to completing the financing of Kola. The
Minister reaffirmed the validity of the Company’s mining tenement titles and the Mining Convention which
is the operating agreement between the Company and the Government.
• This dialogue has included meetings between the Ministry and members of the Summit Consortium who
intend to provide royalty and debt financing to cover the full construction cost of Kola and SEPCO who
intend to construct Kola on an Engineering, Procurement and Construction contract basis.
• Throughout 2023 representatives of Kore Potash have maintained increased levels of dialogue with the
Ministry of Mines, including with the Minister of State and Minister of Geology and Mining Industry, Mr
Pierre Oba. This dialogue has been aimed at improving the Ministry’s understanding of the Company’s
projects at Kola and Dougou, the capability of the intended financiers for Kola, the intended construction
partner and the processes the Company must work through towards securing financing for the
construction of the Kola Potash Project.
• SEPCO has had personnel living in the Republic of Congo for the past 24 months who continue dialogue
with potential in-country service providers and who have conducted several Kola site visits collecting
information for both the Study and the Works. Additionally, SEPCO mobilised a larger team to Kola for
four months in the second half of 2023 to source additional information to enable the Works finalisation,
including the planned service corridors, conveyor route, and geomechanical information on foundation
materials in the proposed processing plant and infrastructure areas. These findings were presented to
PowerChina in early December 2023.
• PowerChina, SEPCO and the subcontractors, in pursuit of the timeline objectives, commenced the Works
before reaching an agreement with the Company on costs.
• PowerChina subcontracted five technical groups who commenced additional design and engineering
works. Specific design areas included the underground mine, mineral processing jetty and transhipment
operations, energy transportation and storage, conveyor systems and material handling. PowerChina
advised the Company that the Works would cost in excess of USD10 million to complete. Illustrating
PowerChina’s commitment to Kola, it capped Kore Potash’s contribution at a maximum of USD5 million,
with the balance of the costs to be paid by PowerChina.
• Two payments of USD1.0 million each were made in August and November 2023 as required under the
Agreement. The remaining USD 3 million of which USD 800,000 payable up to 6 weeks from the date
PowerChina and SEPCO having presented to Kore a “complete contractual document capable of
finalising the financing arrangement of the Kola Project and capable of acceptance by Kore to form a
binding construction contract” and USD 2.2 million to be paid subject to Kore concluding its fund raise
with a target date of no later than 12 months of the signing of the EPC.
• On 8 August 2023, Kore Potash entered into a revised agreement with SEPCO to provide the Company
with an EPC contract for the construction of the Kola Project. Following the completion of SEPCO’s
parent company, PowerChina’s, review of the Kola design and construction schedule, one of the agreed
outcomes was that further engineering design works must be completed before PowerChina and SEPCO
jointly presenting an EPC proposal and EPC contract to the Company.
• Summit Consortium has confirmed that the financing proposal for the full capital cost of Kola will be
provided within six weeks of finalisation of EPC contract terms.
• PowerChina has delivered EPC proposal and draft EPC contract on 6 February 2024.
• Kore Potash and SEPCO/PowerChina will now further negotiate the EPC proposal and draft the EPC
contract, targeting signing full EPC documentation in Q2 2024.
9
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
• On 22 March 2024 the Company raised USD 530,000 via issue of five separate Convertible Loan Notes.
The net proceeds from the CLNs will be used to further advance work that is expected to lead to signing
of an EPC contract for the Kola Potash Project and provide working capital for Kore Potash. Each
Convertible Loan has a zero interest coupon and is convertible into new ordinary shares of US$0.001
each in the Company at a price of 0.38 pence per new Ordinary Share and will be converted immediately
after publication of the 2023 Annual Report on 28 March 2024. Subject to the conversion of the CLNs
the Company will issue 109,865,053 new Ordinary Shares in the Company.
• On 22 March 2024 the Company also announced that it is the intention of David Hathorn, Chairman and
Interim CEO, to subscribe for new ordinary shares of the Company for a consideration of USD 150,000
as soon as practicable following publication of the 2023 Annual Report and on the same terms as the
CLNs.
SUMMARY OF FINANCIALS
• During the Period, the Group’s Total Comprehensive income was USD 3,955,201 (2022: Loss USD
10,174,361), and the Group experienced net cash outflows from operating and investing activities of
USD 6,983,319 (2022: USD 5,744,285). Cash and cash equivalents totalled USD 1,583,657 as at 31
December 2023 (2022: USD 5,046,629).
• Group net assets increased in the year to USD 175,089,299 (2022: USD 167,650,279). This was
primarily driven by a USD 13,642,063 increase in exploration capitalised.
• The Directors prepared a cash flow forecast for the period ending 30 June 2025, 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 2025). Please refer to Note 1(b) to the financial statements for more detail on the
going concern statement.
• The Company will be required to raise funds in Q2 2024 for the working capital requirements for Kore
Potash for the period up to signing full EPC documentation and the financing proposal for the complete
construction of Kola from the Summit Consortium to ensure the realisation of assets on an orderly basis
and the extinguishment of liabilities as and when they fall due.
• Upon signing the EPC documentation and financing for the construction of Kola additional capital will be
required until the commencement of production.
• The Directors have considered various mitigating actions, which include raising additional capital to
enable the Group to continue to fund its working capital requirements.
CORPORATE ACTIVITIES
• Mr. Gavin Chamberlain, Chief Operations Officer, finished employment with the Company at the end of
January 2023, as announced on 23 December 2022.
• The Company held a General Meeting on 20 June 2023.
• The Company held its Annual General Meeting on 20 June 2023.
• On 24 July 2023, Wouter Pulinx was appointed as a non-executive director nominated by Sociedad
Química y Minera de Chile S.A.
• Successful completion of USD 1.0 million fundraise on 8 August 2023.
• The Company held a General Meeting on 21 September 2023.
• On 31 October 2023, Mr Brad Sampson, the Company’s Chief Executive Officer, resigned from the
Company. The Company does not intend to appoint a new CEO until after the receipt of the financing
proposal for the construction of the Kola Potash Project. The Chairman has assumed the role of CEO in
the interim.
• Successful completion of USD 2.5 million fundraise on 31 October 2023.
• The Company held a General Meeting on 7 December 2023.
• On 11 December 2023, acting Chief Financial Officer (CFO) Amanda Farris resigned, and Andrey Maruta
was appointed as CFO (non-board).
• As of 31 December 2023, the Company held USD 1.6 million in cash.
• On 22 March 2024 the Company raised USD 530,000 via issue of five separate Convertible Loan Notes.
Subject to the conversion of the CLNs the Company will issue 109,865,053 new Ordinary Shares in the
Company.
10
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
• On 22 March 2024 the Company also announced that it is the intention of David Hathorn, Chairman and
Interim CEO, to subscribe for new ordinary shares of the Company for a consideration of USD 150,000
as soon as practicable following publication of the 2023 Annual Report and on the same terms as the
CLNs.
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 OWI 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.
•
In June 2022 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 500/t MoP CFR Brazil the Kola financial metrics improve to:
§ NPV10 post tax USD 3.314 billion
§
IRR of 28% 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.
11
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
The HoA provided 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
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.
• On 24 January 2023, Kore Potash 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.
• On 8 August 2023, Kore Potash entered into a revised agreement with SEPCO to provide the Company
with an EPC contract for the construction of the Kola Project. Following the completion of SEPCO’s
parent company, PowerChina’s, review of the Kola design and construction schedule, one of the agreed
outcomes was that further engineering design works must be completed before PowerChina and SEPCO
jointly presenting an EPC proposal and EPC contract to the Group.
• PowerChina subcontracted five technical groups who commenced additional design and engineering
works. Specific design areas included the underground mine, mineral processing jetty and transhipment
operations, energy transportation and storage, conveyor systems and material handling. PowerChina
advised the Company that the Works would cost in excess of USD10 million to complete. Illustrating
PowerChina’s commitment to Kola, it capped Kore Potash’s contribution at a maximum of USD5 million,
with the balance of the costs to be paid by PowerChina.
• Two payments of USD1.0 million each were made in August and November 2023 as required under the
Agreement. The remaining USD 3 million of which USD 800,000 payable up to 6 weeks from the date
PowerChina and SEPCO having presented to Kore a “complete contractual document capable of
finalising the financing arrangement of the Kola Project and capable of acceptance by Kore to form a
binding construction contract” and USD 2.2 million to be paid subject to Kore concluding its fund raise
with a target date of no later than 12 months of the signing of the EPC.
• PowerChina, SEPCO and the subcontractors, in pursuit of the timeline objectives, commenced the Works
before reaching an agreement with the Company on costs.
12
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
• SEPCO has had personnel living in the Republic of Congo for the past 24 months who continue dialogue
with potential in-country service providers and who have conducted several Kola site visits collecting
information for both the Study and the Works. Additionally, SEPCO mobilised a larger team to Kola for
four months in the second half of 2023 to source additional information to enable the Works finalisation,
including the planned service corridors, conveyor route, and geomechanical information on foundation
materials in the proposed processing plant and infrastructure areas. These findings were presented to
PowerChina in early December 2023.
• Throughout 2023 representatives of Kore Potash have maintained increased levels of dialogue with the
Ministry of Mines, including with the Minister of State and Minister of Geology and Mining Industry, Mr
Pierre Oba. This dialogue has been aimed at improving the Ministry’s understanding of the Company’s
projects at Kola and Dougou, the capability of the intended financiers for Kola, the intended construction
partner and the processes the Company must work through towards securing financing for the
construction of the Kola Potash Project.
• This dialogue has included meetings between the Ministry and members of the Summit Consortium who
intend to provide royalty and debt financing to cover the full construction cost of Kola and SEPCO
including SEPCO Electric Power Construction Corporation who intend to construct Kola on an
Engineering, Procurement and Construction contract basis.
• On August 21 2023 the Minister of Mines wrote a letter to Kore Potash that pledges the Ministry and the
Republic of Congo’s support for Kore’s development of its projects at Kola and Dougou. The Minister
acknowledged that some of the development objectives for the Projects, as outlined in the Mining
Convention, have not yet been met. He also assures the Ministry's steadfast support, in the form of a
moral guarantee, to assist in addressing remaining challenges to completing the financing of Kola. The
Minister reaffirmed the validity of the Company’s mining tenement titles and the Mining Convention which
is the operating agreement between the Company and the Government.
• PowerChina has delivered EPC proposal and draft EPC contract on 6 February 2024.
Next Steps
• Kore Potash and SEPCO/PowerChina will now further negotiate the EPC proposal and draft the EPC
contract, targeting signing full EPC documentation in Q2 2024.
• 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 within six weeks of finalisation of EPC contract terms.
Dougou Extension (DX) Sylvinite Defined Feasibility Study Phase 1
• The DX Project update of the JORC (2012) compliant Mineral Resource, Ore Reserve, PFS information
and Production Target was announced on the 24 January 2023. The updated Mineral Resource
incorporates the most recent drilling results and interpretation of the geophysical data. A summary of the
results is presented below:
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.
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REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
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.
The updated information confirms that the DX Project is a financially attractive, low capital cost project
with a shorter construction period than Kola.
At present, the Company remains focused on completing the financing of Kola and moving forward
to construction of Kola as soon as possible. The Company is also exploring what strategic options
are available for the DX project, including a potential sale.
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.
• Throughout 2023 representatives of Kore Potash have maintained increased levels of dialogue with the
Ministry of Mines, including with the Minister of State and Minister of Geology and Mining Industry, Mr
Pierre Oba. This dialogue has been aimed at improving the Ministry’s understanding of the Company’s
projects at Kola and Dougou, the capability of the intended financiers for Kola, the intended construction
partner and the processes the Company must work through towards securing financing for the
construction of the Kola Potash Project.
•
• This dialogue has included meetings between the Ministry and members of the Summit Consortium who
intend to provide royalty and debt financing to cover the full construction cost of Kola and SEPCO who
intend to construct Kola on an Engineering, Procurement and Construction contract basis.
In August 2023 the Minister of Mines wrote a letter to Kore Potash that pledges the Ministry and the
Republic of Congo’s support for Kore’s development of its projects at Kola and Dougou. The Minister
acknowledged that some of the development objectives for the Projects, as outlined in the Mining
Convention, have not yet been met. He also assures the Ministry's steadfast support, in the form of a
moral guarantee, to assist in addressing remaining challenges to completing the financing of Kola. The
Minister reaffirmed the validity of the Company’s mining tenement titles and the Mining Convention which
is the operating agreement between the Company and the Government.
14
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
• The Minister further conveyed a pledge of security reflecting the RoC’s confidence in Kore Potash to
support ongoing dialogue and action towards the development of our projects in the RoC.
• The Minister of Mines of the RoC showed further support for the Company’s development of the Kola
Project during a visit to the Kola Project in September 2023.
• Kore Potash held a ceremony at the intended location of the Kola processing plant in recognition of the
extensive development work completed by Kore Potash to date. The ceremony also recognised the
commencement of work on the ground at the Kola site by SEPCO which was conducting detailed
surveys and foundation testing programmes in the plant site area.
• The ceremony was held near the village of Yanga in the Kouilou province of the RoC. The Minster,
members of his Ministry and local dignitaries were in attendance along with the Chairman of Kore Potash
David Hathorn, Mr Warren Thompson from the Summit Consortium and SEPCO Vice President Zhang
Quan.
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.
• 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, became 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.
15
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
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. No
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 2023 the Group
held cash of USD 1,583,657 (2022: USD 5,046,629) which is not sufficient to meet its obligations for at
least 12 months from the date of approval of these financial statements. On 22 March 2024 the
Company raised USD 530,000 via issue of five separate Convertible Loan Notes. Subject to the
conversion of the CLNs the Company will issue 109,865,053 new Ordinary Shares in the Company. On
22 March 2024 the Company also announced that it is the intention of David Hathorn, Chairman and
Interim CEO, to subscribe for new ordinary shares of the Company for a consideration of USD 150,000
as soon as practicable following publication of the 2023 Annual Report and on the same terms as the
CLNs.
• The Board plans to complete a further fundraise in Q2 2024 to ensure it has sufficient cash to meet its
ongoing obligations.
Kola Project EPC and Financing
• The Board set the KPI for 2023 to formalise an EPC Contract for the construction of Kola and Financing
agreement for the complete construction of Kola based on the optimised scope.
• Kore supported PowerChina with in-country geotechnical survey work in the 2nd half of 2023. This work
was to enable final design in order to allow PowerChina to complete their binding EPC proposal.
PowerChina has now delivered EPC Proposal and draft EP Contract offer on the 6th of February 2024.
• The 2024 KPI is for the financing proposal for the full construction cost of Kola to be provided by the
Summit Consortium following signing full EPC documentation in Q2 2024.
Viability Assessment
The Directors prepared a cash flow forecast for the period ending 30 June 2025, 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 2025). Current estimations are the Group will have exhausted current cash reserves in June
2024. The outcome of signing EPC contract drives both going concern and the viability period. Further
assessments of the going concern is in Note 1(b).
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.
16
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 which would require additional funding 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,
during 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.
17
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Table 1. Comparison of Potash Mineral Resources year-on-year between 2021, 2022 and 24 January 2023.
MINERAL RESOURCES
Category
Measured
Indicated
Measured +
Indicated
Inferred
TOTAL
Measured
Indicated
Measured +
Indicated
Inferred
TOTAL
Measured
Indicated
Measured +
Indicated
Inferred
TOTAL
Measured
Indicated
Measured +
Indicated
Inferred
TOTAL
Measured
Indicated
Measured +
Indicated
Inferred
TOTAL
Measured
Indicated
Measured +
Indicated
Inferred
TOTAL
Kola Sylvinite
deposit
Dougou Extension
Sylvinite deposit
TOTAL SYLVINITE
MINERAL
RESOURCES
Kola Carnallite
deposit
Dougou Carnallite
deposit
TOTAL
CARNALLITE
MINERAL
RESOURCES
Grade
KCl %
31 December 2021 and 2022
Containe
Million
d KCl
Tonne
(Mt)
s
75
216
104
292
34.9
35.7
508
35.4
180
340
848
0
79
79
66
145
216
371
587
406
993
341
441
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
116
295
0
31
31
27
58
75
135
211
143
353
59
83
783
18.1
142
1,266
2,049
148
920
18.7
18.5
20.1
20.7
1,068
20.6
1,988
3,056
489
1,361
20.8
20.7
18.2
20.1
1,851
19.6
236
378
30
190
220
414
634
89
273
362
24 January 2023
Million
Tonnes
Grade
KCl %
Contained
KCl (Mt)
216
292
508
340
848
20
8
28
101
129
236
300
536
441
977
341
441
783
1,266
2,049
148
920
34.9
35.7
35.4
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
1,068
20.6
1,988
3,056
489
1,361
20.8
20.7
18.2
20.1
1,851
19.6
75
104
180
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
3,254
5,105
20.0
19.8
650
1,012
3,254
5,105
20.0
19.8
650
1,012
18
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Table 2. Comparison of Ore Reserves year-on-year between 2021, 2022 and January 2023.
ORE RESERVES
Kola Sylvinite
deposit
ORE RESERVES
Dougou
Extension
Sylvinite
deposit
Notes:
Category
Proved
Probable
TOTAL
Category
Proved
Probable
TOTAL
31 December 2021 and
2022
Millio
n
Tonn
es
61.8
90.6
152.4
Grad
e KCl
%
32.1
32.8
32.5
Contai
ned
KCl
(Mt)
19.8
29.7
49.5
31 December 2021 and
2022
Millio
n
Tonn
es
0
17.7
17.7
Grad
e KCl
%
0
41.7
41.7
Contai
ned
KCl
(Mt)
0
7.4
7.4
24 January 2023
Million
Tonne
s
Grad
e KCl
%
Contain
ed KCl
(Mt)
61.8
90.6
152.4
32.1
32.8
32.5
19.8
29.7
49.5
24 January 2023
Million
Tonne
s
Grad
e KCl
%
Contain
ed KCl
(Mt)
6.1
3.2
9.3
32.5
41.8
35.7
2.0
1.3
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.
19
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
OPERATIONAL AND EXPLORATION ACTIVITY (CONT)
Figure1. Location of the Sintoukola Project showing the Kola, Dougou and DX Projects
20
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:
• Funding risk to going concern
The Group's financial projections and cash flow forecasts indicate that the Group will have a negative cash
balance in June 2024 and therefore will need to complete a capital raise prior to this in order to meet its
current planned activities for the full 12 months. The expectation is that the Group will complete the EPC
contract in Q2 2024 and raise additional funds once that has been completed. 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.
On 22 March 2024 the Company raised USD 530,000 via issue of five separate Convertible Loan Notes.
Subject to the conversion of the CLNs the Company will issue 109,865,053 new Ordinary Shares in the
Company. On 22 March 2024 the Company also announced that it is the intention of David Hathorn,
Chairman and Interim CEO, to subscribe for new ordinary shares of the Company for a consideration of USD
150,000 as soon as practicable following publication of the 2023 Annual Report and on the same terms as
the CLNs.
The Company is expecting to receive a financing proposal for the complete construction of Kola after signing
full EPC documentation. Future funding being dependent on the signing of the EPC contract and raising of
additional funds. Further assessments of the going concern is in Note 1(b).
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
21
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
POSITION AND PRINCIPAL RISKS (CONT)
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 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.
Throughout 2023 representatives of Kore Potash have maintained increased levels of dialogue with the
Ministry of Mines, including with the Minister of State and Minister of Geology and Mining Industry, Mr Pierre
Oba. This dialogue has been aimed at improving the Ministry’s understanding of the Company’s projects at
Kola and Dougou, the capability of the intended financiers for Kola, the intended construction partner and
the processes the Company must work through towards securing financing for the construction of the Kola
Potash Project.
This dialogue has included meetings between the Ministry and members of the Summit Consortium who
intend to provide royalty and debt financing to cover the full construction cost of Kola and SEPCO who intend
to construct Kola on an Engineering, Procurement and Construction contract basis.
On August 21 2023 Kore Potash reported a letter from Minister of Mines to Kore Potash that pledges the
Ministry and the Republic of Congo’s support for Kore’s development of its projects at Kola and Dougou
Projects. The Minister of Mines pledges further support for Kore Potash to continue to develop Kola and
Dougou.
• Ongoing title to Mining tenements re-confirmed.
• Confirmation that the Mining Convention remains in effect.
• The Minister encourages Kore’s shareholders to support Kore Potash in its development endeavours.
• 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
22
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
POSITION AND PRINCIPAL RISKS (CONT)
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.
• 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.
David Hathorn following the resignation of the CEO on 31 October 2023 also assumed the role of interim
CEO. The Company does not intend to appoint a new CEO until after the receipt of the financing proposal
for the construction of the Kola Potash Project.
23
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
POSITION AND PRINCIPAL RISKS (CONT)
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:
(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;
24
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
DIRECTORS’ SECTION 172 STATEMENT (CONT)
(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:
By virtue of their respective Investment Agreements, the Company’s two largest shareholders, SQM and
OIA, are entitled to appoint a NED to the board and accordingly, in replacement of Mr P Hernandez Mac-
Donald, Mr W Pulinx from SQM was appointed as a NED on 24 July 2023. Following the departure of Mr S
Oundhakar as a NED on the board on 22 December 2022, a replacement NED from OIA has not yet been
appointed. However, a representative from OIA acts as an observer at all board meetings and is 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. 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 20 June 2023, all resolutions were passed with at least 94% of the votes
cast in favour In order to reduce travel costs, no Directors were present at the AGM. However, the Directors
were able to dial-in to the Meeting via an electronic audio webcast and shareholders 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 127 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 61 to 69. Further, the Group gives full and fair consideration to applications for employment
irrespective of age, gender, colour, ethnicity, disability, nationality, religious beliefs or sexual orientation.
The Group maintains an open line of communication between its employees, senior management and the
Board of Directors. A whistle blower procedure is in place for employees to raise concerns anonymously.
Specifically, during the year the CEO 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.
Selected members of the Board periodically visit all parts of the business and interact with employees. There
were no such visits during 2023.
25
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
DIRECTORS’ SECTION 172 STATEMENT (CONT)
David Netherway, a NED, is the appointed designated director responsible for workplace engagement in
accordance with the 2018 Corporate Governance Code.
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.
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
26
REVIEW OF OPERATIONS AND STRATEGIC REPORT (CONT)
DIRECTORS’ SECTION 172 STATEMENT (CONT)
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.
27
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 27 March
2024 and is signed on its behalf by:
_________________________________________________
Non-Executive Chairman and Interim Chief Executive Officer
David Hathorn
27 March 2024
28
DIRECTORS’ REPORT
The Directors present their annual report on Kore Potash and the Group for the financial year ended 31
December 2023.
The Corporate Governance statement set out in pages 39 to 72 forms part of this Directors’ Report.
Directors
The names of directors of the Company in office at any time during or since the end of the year are:
David Hathorn
Brad Sampson
Jonathan Trollip
David Netherway
Pablo Hernandez Mac-Donald Non-Executive Director (Resigned with effect from 20 June 2023)
Mr Wouter Pulinx
Non-Executive Chairman & Interim Chief Executive Officer
Chief Executive Officer (Resigned with effect from 31 October 2023)
Independent Non-Executive Director
Independent Non-Executive Director
Non-Executive Director (Appointment effect from 24 July 2023)
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 2023 amounted to USD 1,091,055 (31
December 2022: 1,513,953).
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 (2022: nil).
Review of Operations and Strategic Report
Please refer to pages 8 to 28 of the Annual Report.
Significant Changes in State of Affairs
Board Changes
On 20 June 2023, Pablo Hernandez resigned as a NED of the Company. Mr Wouter Pulinx was appointed
as his replacement on the Board with effect from 24 July 2023.
On 31 October 2023 companies CEO Mr. Sampson has resigned and the Company does not intend to
appoint a new CEO until after the receipt of the financing proposal for the construction of the Kola Potash
Project. The Chairman Mr David Hathorn has assumed the role of CEO in the interim.
Other capital movements:
On 6 April 2023, a total of 1,760,000 ordinary shares were issued to an ex-employee following the vesting
of Performance Rights awarded under the Company's Employee Performance Incentive Plan.
CDI Movement
During the year the number of CDIs quoted on the ASX increased by 1,491,050 as a result of transfers
between CDIs quoted on the ASX and ordinary shares quoted on AIM and the JSE.
29
DIRECTORS’ REPORT (CONT)
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,
forex 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.
30
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 2023 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.
*These options expired on the 1 January 2024 without exercise or conversion.
Performance Rights
Performance rights outstanding at the date of this report: None
Movement in Performance Rights as share based payment arrangements during the Period:
Right
s
serie
s
15
Grant
Date
Expiry
Date
Balance
1 Jan
2023
Number
Rights
Lapsed
Numbe
r
Rights
Converted
Number
Rights
Cancelled
Number
Balance
31 Dec 2023
Number
29/05/2017
Not
Applicable
1,760,000
1,760,000
-
(1,760,000)
- (1,760,000)
- -
-
-
31
DIRECTORS’ REPORT (CONT)
Performance Rights converted into ordinary shares during the Period:
On 3 April 2023, a total of 1,760,000 ordinary shares were issued to an ex-employee following the vesting
of Performance Rights awarded under the Company's Employee Performance Incentive Plans.
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.
Information on Directors
David Hathorn
Non-Executive Chairman
and Interim Chief Executive
Officer
BCom, CA
Mr Hathorn joined the Group in November 2015. Mr Hathorn retired in 2017
from the Mondi group where he had been CEO for 17 years. The Mondi
group is an international packaging and paper group, employing around
25,000 people across more than 30 countries, listed on the LSE and the
JSE. Prior to the demerger of the Mondi group from Anglo American plc,
Mr Hathorn was a member of the Anglo-American group executive
committee from 2003 and an executive director of Anglo American plc from
2005, serving on several boards of the group's major mining operations.
Interest in Shares and
Options as at 31 December
2023
337,708,061 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
None
Former directorships of
listed companies in last
three years
None
Brad Sampson
Chief Executive Officer
B Eng (Mining) Hons, MBA,
AMP, GAICD, MAusIMM
Resigned with effect from
31 October 2023
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
2023
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
32
Jonathan Trollip
Independent Non-Executive
Director
B.A (Hons) LLM, FAICD
Interest in Shares &
Options as at 31 December
2023
Directorships held in other
listed entities
DIRECTORS’ REPORT (CONT)
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
Pablo Hernandez Mac-
Donald Non-Executive
Director
Resigned with effect from
20 June 2023.
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
2023
None
Directorships held in other
listed entities
None
Former directorships of
listed companies in last
three years
None
Wouter Pulinx
Non-Executive Director
Mr Pulinx serves as a legal counsel in the Belgian office of SQM,
overseeing legal operations of the commercial offices in the EMEAA
region. He has over 8 years of tax, compliance and legal experience. Mr
Pulinx was appointed to the board on 24 July 2023.
Interest in Shares &
Options as at 31 December
2023
None
Directorships held in other
listed entities
None
Former directorships of
listed companies in last
three years
None
33
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 lead independent non-executive Director
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
2023
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
Joint Company Secretaries
Henko Vos
B.Compt, CA, ACIS, RCA
Altus Strategies plc
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.
34
Board and Committee Meetings Attendance
DIRECTORS’ REPORT (CONT)
Attendance of directors and committee members at board and committee meetings held during the year is
set out in the table below.
Board Meetings
6/6
6/6
6/6
5/6
0/6
Audit and Risk
Committee
Meetings
1/2
-
2/2
1/2
-
6/6
-
David Hathorn
Brad Sampson
Jonathan Trollip
David Netherway
Pablo Hernandez
Mac-Donald (i)
Wouter Pulinx (ii)
Remuneration
and Nomination
Committee
Meetings (iiI)
0/1
1/1
1/1
-
-
Health, Safety
and
Environment
Meetings (iv)
-
-
-
-
-
-
(i)
(ii)
(iii)
(iv)
Meetings attended prior to ceasing to be a director on 20 June 2023.
Two meetings attended as a board observer prior to appointment as a director on 24 July 2023.
Only one formal remuneration and nomination committee meeting was held during the year as
committee members agreed in discussion to defer remuneration until after the Kola Project
financing proposal has been received.
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
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.
35
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 2023 Annual 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 performing their assessment of the Group and Company’s ability to continue as a going concern, the
Directors have prepared a cash flow forecast for the period ending 30 June 2025, which indicates that under
current conditions, the Group and Company will become cash negative in June 2024 and will remain in this
position until the end of the forecast period.
The Directors are currently in negotiations with PowerChina/SEPCO to secure an Engineering, Procurement
and Construction contract (‘EPC’) for the construction of the Kola Project.
The negotiations with the potential contractors, PowerChina/SEPCO, are advanced, and they have
committed to visit Kore’s mine site on 28–30 March 2024 with several engineers, including the Vice-President
of PowerChina to progress the EPC negotiations. The purpose of the visit is to perform additional technical
tests and studies prior to proceeding to signing the proposed contract.
Based on the status of the negotiations and the planned activity to finalise the contract, it is the Directors
expectation that the Group will sign the EPC contract in Q2 2024.
If the contract is not signed by the end of June 2024 then the Group and Company are unlikely to be able to
seek alternative contract partners before current cash reserves are utilised and will not be able to generate
sufficient cash to fund its normal business activities, as projected in the cash flow forecast.
Even if the Group is successful in finalising this EPC contract in Q2 2024, it will still need to raise a minimum
of USD 7.5million to be able to continue to meet it ongoing working capital requirements and to pay its
liabilities as they fall due.
36
Going Concern (CONT)
DIRECTORS’ REPORT (CONT)
This includes an amount of USD 3,000,000 which would be payable to PowerChina under the terms of the
revised agreement with SEPCO, dated 07 August 2023.
Of this USD 3,000,000, USD 800,000 is payable within 6 weeks of the EPC contract being finalised and USD
2,200,000 is to be paid no later than 12 months after the signing of the EPC.
In addition to the signing of the EPC contract, the Group is reliant on the SUMMIT consortium preparing a
funding proposal, which there is a non-binding agreement to do so within 6 weeks of the EPC contract being
signed.
The ability of the Group and Company to continue as a going concern is dependent on the successful
conclusion of the EPC contract negotiations within the timeframes planned and on the ability of the Group
and Company to raise the necessary funds to meet its working capital requirements as established in the
cash flow forecast. At the date of signing these financial statements, there is no guarantee that the contract
will be signed, and within the necessary timeframe, nor that the funding to meet the Group’s and Company’s
obligations will be secured. These conditions indicate the existence of a material uncertainty which may cast
significant doubt about the ability of the Group and Company 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 statements do 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 Group and Company are undertaking several activities to raise funds to fund its current and ongoing
commitments and to raise funds for the planned commitments should the EPC contract be agreed. This
fundraising is in addition to the cash balance at 22 March 2024 of USD1.4 million.
On 22 March 2024 the Company raised USD 530,000 via the issue of five separate Convertible Loan Notes
(‘CLN’). The net proceeds from the CLNs will be used to further advance work that is expected to lead to the
signing of the EPC contract for the Kola Potash Project. Each CLN has a zero interest coupon and is
convertible into new ordinary shares of ordinary shares of US$0.001 each in the Company at a price of 0.38
pence per new Ordinary Share and will be converted immediately after publication of the 2023 Annual Report
on 28 March 2024. Subject to the conversion of the CLNs the Company will issue 109,865,053 new Ordinary
Shares in the Company. As at 26 March 2024 the Company had received the total USD 530,000.
On 22 March 2024 the Company announced that it is the intention of David Hathorn, Chairman and Interim
CEO, to subscribe for new ordinary shares of the Company for a consideration of USD 150,000 as soon as
practicable following publication of the 2023 Annual Report and on the same terms as the CLNs.
The cash forecast for the Company includes an additional expected and non-binding private fund raise of
USD 320,000 in April 2024 from existing shareholders.
The Directors note the Group has a history of successfully raising capital on the AIM and JSE, and in the
past on the ASX. Having reviewed the Group's overall position and outlook in respect of the matters identified
above, the Directors 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.
In addition, the Directors believe that the proposed contract with PowerChina/SEPCO will be signed.
Accordingly, the Directors believe 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
to have sufficient funds to continue the work to finalise the Kola Project EPC and Financing Proposal for the
complete construction of Kola.
37
Statement of Directors’ Responsibilities
DIRECTORS’ REPORT (CONT)
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.
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.
Website publication
The directors are responsible for ensuring the annual report and the financial statements are made available
on a website. Financial statements are published on the company's website in accordance with legislation
in the United Kingdom governing the preparation and dissemination of financial statements, which may vary
from legislation in other jurisdictions. The maintenance and integrity of the company's website is the
responsibility of the directors. The directors' responsibility also extends to the ongoing integrity of the
financial statements contained therein.
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;
the review of operations and strategic report includes a fair review of the development and performance
of the business and the financial position of the Company and the Group, 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 27
March 2024 and is signed on its behalf by:
____________________________
Non-Executive Chairman and interim Chief Executive Officer
David Hathorn
27 March 2024
38
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 (being the Chairman) and three NEDs.
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.
39
CORPORATE GOVERNANCE REPORT (CONT)
BOARD LEADERSHIP AND COMPANY PURPOSE (CONT)
Provisions
1. The board should assess the basis on which
the company generates and preserves value
over the long-term. It should describe in the
annual report how opportunities and risks to the
future success of the business have been
considered and addressed, the sustainability of
the company’s business model and how its
governance contributes to the delivery of its
strategy.
2. The board should assess and monitor culture.
Where it is not satisfied that policy, practices or
behaviour throughout the business are aligned
with the company’s purpose, values and
strategy, it should seek assurance that
management has taken corrective action. The
annual report should explain the board’s
activities and any action taken. In addition, it
should include an explanation of the company’s
approach to investing in and rewarding its
workforce.
3.
In addition to formal general meetings, the chair
should seek regular engagement with major
shareholders in order to understand their views
on governance and performance against the
strategy. Committee chairs should seek
engagement with shareholders on significant
matters related to their areas of responsibility.
The chair should ensure that the board as a
whole has a clear understanding of the views of
shareholders.
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 20 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.
During the year the 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.
The Group’s communication strategy requires
communication with shareholders and
stakeholders in an open, regular and timely
manner.
The Company’s two largest shareholders, OIA
and SQM, are represented on the Board either
by appointment as a NED or as a board
observer. 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.
Shareholders were able to attend the AGM via a
dial-in facility 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.
40
CORPORATE GOVERNANCE REPORT (CONT)
BOARD LEADERSHIP AND COMPANY PURPOSE (CONT)
Provisions
4. When 20 per cent or more of votes have been
cast against the board recommendation for a
resolution, the company should explain, when
announcing voting results, what actions it
intends to take to consult shareholders in order
to understand the reasons behind the result. An
update on the views received from
shareholders and actions taken should be
published no later than six months after the
shareholder meeting. The board should then
provide a final summary in the annual report
and, if applicable, in the explanatory notes to
resolutions at the next shareholder meeting, on
what impact the feedback has had on the
decisions the board has taken and any actions
or resolutions now proposed.
5. The board should understand the views of the
company’s other key stakeholders and describe
in the annual report how their interests and the
matters set out in section 172 of the Companies
Act 2006 have been considered in board
discussions and decision-making. The board
should keep engagement mechanisms under
review so that they remain effective.
For engagement with the workforce, one or a
combination of the following methods should be
used:
• a director appointed from the workforce;
• a formal workforce advisory panel;
• a designated non-executive director.
If the board has not chosen one or more of these
methods, it should explain what alternative
arrangements are in place and why it considers
that they are effective.
o
6. There should be a means for the workforce to
raise concerns in confidence and – if they wish
– anonymously. The board should routinely
review this and the reports arising from its
o
o
operation. It should ensure that arrangements
are in place for the proportionate and
independent investigation of such matters and
for follow-up action.
o
At the Company’s AGM held on 20 June 2023,
all resolutions were passed on a poll by more
than 94% of the votes cast.
Refer to the section 172 Statement.
In addition, David Netherway is the appointed
for workplace
designated NED responsible
engagement.
The CEO holds monthly virtual meetings with all
employees where open questioning and sharing
of concerns is encouraged.
In addition, a confidential Whistleblowing Policy
is in force which allows employees to raise
suspected breaches of the 2018 UK 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.
41
CORPORATE GOVERNANCE REPORT (CONT)
BOARD LEADERSHIP AND COMPANY PURPOSE (CONT)
Provisions
7. The board should take action to identify and
manage conflicts of interest, including those
resulting from significant shareholdings, and
ensure that the influence of third parties does
not compromise or override independent
judgement.
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.
Investment agreements are in place with the
two major shareholders, who either have a
representative on the Board or have appointed
a board observer 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.
o All directors have the opportunity at Board
meetings to raise concerns on any issues
including the operation of the board or the
management of the company and give their
independent views on all matters being
discussed. All such concerns and views are
recorded in the minutes. NEDs are also able to
raise any such concerns during the annual
Board and Chairman’s internal evaluation, the
results of which are disclosed in the minutes of
the Board meeting at which the evaluations are
discussed.
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.
42
CORPORATE GOVERNANCE REPORT (CONT)
David Hathorn was considered independent on
appointment. Subsequent to the appointment,
Mr Hathorn’s shareholding has significantly
increased to him now being a substantial
shareholder of the Company. Following the
resignation of the CEO on 31 October 2023, he
also assumed the role of interim CEO.
The major shareholders, who are also
represented on the Board, supported the
appointment. The Company intends to appoint
a new CEO after the receipt of the financing
proposal for the construction of the Kola Potash
Project and advised the market via an
announcement on 31 October 2023.
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.
Given the small quantum of shares held by each
independent NED the Board is of the view that
these do not affect their independent judgement.
DIVISION OF RESPONSIBILITIES (CONT)
Provisions
9.
The chair should be independent on appointment
when assessed against the circumstances set out
in Provision 10. The roles of chair and chief
executive should not be exercised by the same
individual. A chief executive should not become
chair of the same company. If, exceptionally, this
is proposed by the board, major shareholders
should be consulted ahead of appointment. The
board should set out its reasons to all
shareholders at the time of the appointment.
10. The board should identify in the annual report
each non-executive director it considers to be
independent. Circumstances which are likely to
impair, or could appear to impair, a non-executive
director’s independence include, but are not
limited to, whether a director:
•
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 through involvement
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
•
•
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.
43
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.
o 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.
o
o Following the resignation of the CEO on 31
October 2023, the Non-Executive Chairman
assumed the role of interim CEO. 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.
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.
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.
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.
The Committee also reviews and recommends
an appropriate remuneration policy for
executives and considers the performance of
any executive director against his performance
objectives when considering the executive
director’s annual remuneration review.
44
CORPORATE GOVERNANCE REPORT (CONT)
DIVISION OF RESPONSIBILITIES (CONT)
Provisions
14. The responsibilities of the chair, chief
o As mentioned in Provision 9. above, the
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.
responsibilities of the Non-Executive Chairman
and the CEO are clearly defined in writing Each
NED, including the Senior Independent NED,
has a Letter of Appointment in place to ensure
they clearly understand the requirements of
their role. Following the resignation of Mr B
Sampson on 31 October 2023, the Non-
Executive Chairman has assumed the role of
CEO in the interim.
o
o 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.
o
The number of meetings of the Board and its
committees and the individual attendance by
directors is set out within the Directors Report.
15. When making new appointments, the board
should take into account other demands on
directors’ time. Prior to appointment, significant
commitments should be disclosed with an
indication of the time involved. Additional
external appointments should not be
undertaken without prior approval of the board,
with the reasons for permitting significant
appointments explained in the annual report.
Full-time executive directors should not take on
more than one non-executive directorship in a
FTSE 100 company or other significant
appointment.
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
32 to 34. 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.
o 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.
45
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
o
orderly succession to both the board and senior
management positions, and oversee the
development of a diverse pipeline for
succession. A majority of members of the
committee should be independent non-
executive directors. The chair of the board
should not chair the committee when it is
dealing with the appointment of their
successor.
o The Remuneration and Nomination Committee is
comprised of Jonathan Trollip, as Chairman
together with David Hathorn and David Netherway.
The Remuneration and Nomination Committee
Report is on pages 58 and 59 and details how the
Company has complied with the relevant sections
of the UK 2018 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.
o All directors are subject to annual re-election.
Shareholders are provided with all material
information in the notice of meetings to assist in
informing the decision on whether or not to elect or
re-elect a director as well as reasons why their
contribution is, and continues to be, important to
the Company’s long-term sustainable success.
David Hathorn has been the Non-Executive
Chairman for approximately six and a half years,
having been appointed a Director and Non-
Executive Chairman on 25 August 2017.
20. Open advertising and/or an external search
No such appointments were made during the year.
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.
46
CORPORATE GOVERNANCE REPORT (CONT)
COMPOSITION, SUCCESSION AND EVALUATION (CONT)
o
Provisions
21. There should be a formal and rigorous annual
evaluation of the performance of the board, its
committees, the chair and individual directors.
The chair should consider having a regular
externally facilitated board evaluation. In FTSE
350 companies this should happen at least
every three years. The external evaluator should
the annual report and a
be
statement made about any other connection it
has with the company or individual directors.
identified
in
o During the year the Company undertook an annual
evaluation of the Board and its committees. In
addition, an appraisal of
the Non-Executive
Chairman and CEOs performance was led by David
Netherway as
Independent Non-
Executive Director.
the Senior
The annual evaluation was conducted by SJCS who
provide company secretarial services.
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.
o Each director of
in
the
the Company at
time
participated
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
o The Remuneration and Nomination Committee
Report on pages 58 to 59 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
the policy on diversity and
been conducted,
inclusion and
the gender balance of senior
management and their direct reports.
the 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 to company strategy, how
it has been implemented and progress on
achieving the objectives; and
• the gender balance of those in the senior
management and their direct reports.
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.
47
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT, RISK AND INTERNAL CONTROL (CONT)
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.
25. The main roles and responsibilities of the audit
committee should include:
• monitoring the integrity of the financial
statements of the company and any formal
announcements relating to the company’s
financial performance, and
reviewing
significant financial reporting judgements
contained in them;
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
was appointed as a member of the Committee
on 7 September 2023 and was removed as a
member at the conclusion of this meeting. 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.
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.
•
is
understandable,
• providing advice (where requested by the
board) on whether the annual report and
fair,
taken as a whole,
accounts,
and
and
balanced
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
risk
addressed by a separate board
committee composed of independent non-
executive directors, or by the board itself;
• monitoring and reviewing the effectiveness
of the company’s internal audit function or,
where
is not one, considering
annually whether there is a need for one
and making a recommendation to the
board;
conducting the tender process and making
recommendations to the board, about the
appointment, reappointment and removal of
the external auditor, and approving the
remuneration and terms of engagement of
the external auditor;
reviewing and monitoring
auditor’s independence and objectivity;
the external
there
•
•
48
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT, RISK AND INTERNAL CONTROL (CONT)
•
reviewing the effectiveness of the external
audit process, taking into consideration
relevant UK professional and regulatory
requirements;
• developing and implementing policy on 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,
the
relevant regulations and ethical guidance in
this regard, and reporting to the board on
any improvement or action required; and
into account
taking
Details of the work of the Committee during the
year are set out in the Audit and Risk Committee
Report on pages 56 to 58.
26.
reporting to the board on how it has
discharged its responsibilities.
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 for the absence, how
internal assurance is achieved, and how
this affects the work of external audit;
and
o an explanation of how auditor
independence and objectivity are
safeguarded, if the external auditor
provides non-audit services.
49
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT, RISK AND INTERNAL CONTROL (CONT)
27.
28.
the
company’s
the annual
The directors should explain in the annual
report their responsibility for preparing the
annual report and accounts, and state that
they consider
report and
accounts, taken as a whole, is fair, balanced
and understandable, and provides
the
information necessary for shareholders to
assess
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 38.
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 21 to 24.
Factors beyond the Company’s control, including
such as COVID-19
pandemic diseases
(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.
The risk in relation to Climate Change has been
addressed in the Review of Operations and
Strategic Report under the section headed
climate change.
50
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT, RISK AND INTERNAL CONTROL (CONT)
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.
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
the controls are
management
appropriate and new risks identified are updated
and appropriate controls put in place.
to ensure
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
investigated with
are
appropriate actions put in place to ensure the
matter doesn’t reoccur.
controls
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 Company’s risk
The Board considers
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
relevant accounting
standards.
the
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
36 to 37.
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.
51
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT, RISK AND INTERNAL CONTROL (CONT)
31. Taking account of the company’s current
position and principal risks, the board should
explain in the annual report how it has assessed
the prospects of the company, over what period
it has done so and why it considers that period
to be appropriate. The board should state
whether it has a reasonable expectation that
the company will be able to continue in
operation and meet its liabilities as they fall due
over the period of their assessment, drawing
attention to any qualifications or assumptions
as necessary.
REMUNERATION
The Board has carried out a robust assessment
the Company’s viability, emerging and
of
principal risks and going concern details of which
are set out within the Review of Operations and
Strategic Report set out on pages 8 to 28.
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.
The Remuneration and Nomination Committee is
comprised of Jonathan Trollip, as Chairman,
together with David Netherway and David
Hathorn, who was considered independent on
his appointment as a Director and Chairman of
the Board.
Jonathan Trollip has had relevant experience of
listed company 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.
Provisions
32. The board should establish a remuneration
independent non-executive
committee of
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
independent on
member
appointment and cannot chair the committee.
Before appointment as
the
remuneration committee, the appointee should
have served on a remuneration committee for
at least 12 months.
they were
chair of
if
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.
52
CORPORATE GOVERNANCE REPORT (CONT)
their
to reflect
The remuneration of NEDs is determined by the
Board, taking cognisance of the Company’s
Articles of Association and
time
commitment and
responsibilities. Additional
remuneration is paid to the Chairman of the
Board and the chair of each Board Committee in
order
time commitment and
responsibilities required for those roles. No
increase in NEDs’ remuneration was made
during the year.
An external
is
remuneration
appointed as and when required to advise the
Committee. However, no such appointment was
required during the year.
consultant
the
REMUNERATION (CONT)
34. The remuneration of non-executive directors
should be determined in accordance with the
Articles of Association or, alternatively, by the
board. Levels of remuneration for the chair and
all non-executive directors should reflect the
time commitment and responsibilities of the
role. Remuneration
for all non-executive
directors should not include share options or
other performance-related elements.
responsibility of
35. Where a remuneration consultant is appointed,
this should be
the
the
remuneration committee. The consultant
should be identified in the annual report
alongside a statement about any other
connection it has with the company or individual
directors. Independent judgement should be
exercised when evaluating
the advice of
external third parties and when receiving views
from
senior
management.
executive
directors
and
53
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION (CONT)
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 Board.
Following discussion in 2022 and 2023 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.
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.
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 exception of the Chairman whose agreement
continues until terminated by the Board or in
accordance with its terms). The appointment of
the NED may be terminated by the Company
giving one month notice, by the NED by
immediate notice and also in accordance with the
Company’s Articles of Association.
36. Remuneration schemes should promote long-
term shareholdings by executive directors that
support alignment with long-term shareholder
interests. Share awards granted
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
post-employment
for
formal
shareholding requirements encompassing both
unvested and vested shares.
policy
for
37. Remuneration schemes and policies should
to override
the use of discretion
enable
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.
rates
for directors close
38. Only basic salary should be pensionable. The
pension contribution
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 remuneration, or contribution
rates, particularly
to
retirement, should be carefully considered
when compared with workforce arrangements.
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
ensure
compensation commitments in directors’ terms
reward poor
of appointment do not
in
robust
performance. They should be
reducing compensation to reflect departing
directors’ obligations to mitigate loss.
committee
should
54
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION (CONT)
The CEO’s remuneration was subject
to
detailed consideration by the Remuneration
and Nomination when he 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 2023 the Remunerations and Nomination
Committee didn’t recommend to the Board any
change to the CEO’s salary.
Mr Hathorn has been acting as interim CEO
since Mr Sampson’s resignation on 31 October
2023. Mr Hathorn, being an substantial
shareholder and Chairman of the Company, is
not receiving any additional remuneration for
acting in this interim role.
Mr Hathorn acting as Chairman and Interim
CEO is an interim measure which has been
fully approved by the Board although not fully
compliant with UK 2018 Code and will be
rectified in the near future.
The Remuneration and Nomination Report on
pages 61 to 69 sets out, inter alia the objectives
of the Committee and a description of the work
carried out during the year.
40. When
determining
director
the
remuneration policy and practices,
remuneration committee should address the
following:
executive
•
•
•
•
remuneration arrangements
clarity –
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 the
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.
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; •
is
reasons why
appropriate using internal and external
measures, including pay ratios and pay
gaps;
remuneration
the
• a description, with examples, of how the
remuneration committee has addressed
the factors in Provision 40;
• whether the remuneration policy operated
terms of company
as
performance and quantum, and, if not, what
changes are necessary;
intended
in
• what engagement has taken place with
shareholders and the impact this has had
on remuneration policy and outcomes;
55
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION (CONT)
• 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
remuneration
has been applied
outcomes and the reasons why.
to
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 assets 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.
56
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT AND RISK COMMITTEE (CONT)
• 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 June 2024. 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 five years. They were appointed in 2019
through a tender process.
The Committee is also responsible for approving, reviewing and monitoring the Company’s risk management
policy. The objectives of this risk management policy are to:
• Provide a structured risk management framework that will provide Senior Management and the Board
with comfort that the risks confronting the organisation are identified and managed effectively;
• Create an integrated risk management process owned and managed by the Group’s personnel that is
both continuous and effective;
• Ensure that the management of risk is integrated into the development of strategic and business plans,
and the achievement of the Group’s vision and values; and
• Ensure that the Board is regularly updated with reports by the committee.
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 21 to 24 of the Annual Report.
57
CORPORATE GOVERNANCE REPORT (CONT)
AUDIT AND RISK COMMITTEE (CONT)
During the year, the Committee reviewed the planning of the 2023 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 20
June 2023. 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 2024. Based
on this review, the Committee was satisfied with the effectiveness of the audit for the year ended 31
December 2023.
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 comparable; and
•
• adhere to the principle that no director or senior executive shall be involved in any decisions as to their
own remuneration.
Due to time zone differences between the countries where members of the committee reside made it difficult
to arrange virtual meetings. Accordingly, all matters that were required to be dealt with by the committee
were handled by way of bilateral and multilateral discussions among Committee members and other
directors as co-ordinated by the Chairman, and decisions of the Committee were effected by written
resolution.
58
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION AND NOMINATION COMMITTEE (CONT)
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 AGMs. 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.
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
0.0
49.4
2023
Male %
100.0
100.0
50.6
Total
Number
5
1
21
Female %
0.0
33.3
45.8
2022
Male %
100.0
66.7
54.2
Total
Number
6
3
24
Senior Executives include the CEO and CFO.
59
CORPORATE GOVERNANCE REPORT (CONT)
Directors’ Remuneration and Share Option Schemes (CONT)
Group and Individual Expectations
• Ensure diversity is incorporated into the behaviours and practises of the Group;
• Facilitate equal employment opportunities based on job requirements only using recruitment and
selection processes which ensures we select from a diverse pool;
• Engage professional search and recruitment firms when needed to enhance our selection pool;
• Help to build a safe work environment by acting with care and respect at all times, ensuring there is no
discrimination, harassment, bullying, victimisation, vilification or exploitation of individuals or groups;
• Develop flexible work practices to meet the differing needs of our employees and potential employees;
• Attract and retain a skilled and diverse workforce as an employer of choice;
• Enhance customer service and market reputation through a workforce that respects and reflects the
diversity of our stakeholders and communities that we operate in;
• Make a contribution to the economic, social and educational well-being of all of the communities it serves;
• Meet the relevant requirements of domestic and international legislation appropriate to the Group’s
operations;
• Create an inclusive workplace culture; and
• Establish measurable diversity objectives and monitor and report on the achievement of those objectives
annually.
Evaluation of Senior Executives
Arrangements put in place by the Board to monitor the ongoing performance of the Group’s Executives
include:
• A review by the Board of the Group’s financial performance;
• Annual performance appraisal meetings incorporating analysis of key performance indicators with each
individual to ensure that the level of reward is aligned with respective responsibilities and individual
contributions made to the success of the Group;
• An analysis of the Group’s prospects and projects; and
• A review of feedback obtained from third parties, including advisors (where applicable).
Informal evaluations of the CEO and other Senior 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.
Following the departure of Brad Sampson and Gavin Chamberlain, the Committee consists of David
Netherway and David Hathorn.
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.
60
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 2023. 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 2023 were:
Executive Directors
Brad Sampson
Chief Executive Officer (Resigned with effect from 31 October 2023)
Non-Executive Chairman (appointed on 25 August 2017) & Interim Chief
Non-Executive Directors
David Hathorn
Executive Officer (appointed on 31 October 2017)
Independent Non-Executive Director (appointed on 17 November 2017)
Jonathan Trollip
David Netherway
Independent Non-Executive Director (appointed on 12 December 2017)
Pablo Hernandez Mac-Donald Non-Executive Director (Resigned with effect from 20 June 2023)
Mr Wouter Pulinx
Non-Executive Director (Appointment effect from 24 July 2023)
Executives
Henko Vos
SJCS
Amanda Farris
Andrey Maruta
Remuneration Policy
Joint Company Secretary (appointed on 7 November 2017)
Joint Company Secretary (appointed on 1 October 2018)
Chief Financial Officer (resigned on 11 December 2023)
Chief Financial Officer (appointed on 11 December 2023)
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.
61
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION REPORT (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 Board believes these remain relevant during 2023 and to the date of this report. 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 2023:
Name
Andrey Maruta (CFO, appointed 11
December 2023)
Amanda Farris (CFO, resigned 11 December
2023)
Base Salary
per Annum
Term of
Agreement
Notice Period
GBP 154,800
Fixed Term
14 days’ notice period
AUD 288,000
Fixed Term
14 days’ notice period
Mr Henko Vos (Joint Company Secretary)
AUD 56,700
Ongoing
No notice period
St James’s Corporate Services Limited (Joint
Company Secretary)
GBP 58,718
Ongoing
No 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
-
62
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION REPORT (CONT)
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 56 to 60.
KMP Remuneration
The remuneration for each Director and KMP of the Group during the year ended 31 December 2023 was
as follows:
1 January 2023 to 31 December 2023
Short-Term Benefits
Annual
Bonus
USD
Termination
benefits
USD
Fees/Basic
Salary
USD
Executive
Directors
Brad Sampson
(i)
Non-Executive
Directors
David Hathorn
Jonathan
Trollip
David
Netherway
Executives
Henko Vos (iii)
SJCS
Gavin
Chamberlain
Amanda Farris
Andrey Maruta
550,000
100,000
63,000
80,500
793,500
37,038
71,781
25,510
183,600
11,029
328,958
Total
1,122,458
-
-
-
-
-
-
-
-
-
-
-
27,500
-
-
-
27,500
-
-
48,199
-
-
48,199
75,699
Post-
Employment
Benefits
Superannuation
USD
Options /
Performance
Rights (i)
USD
Total
USD
-
-
-
-
-
-
-
-
-
-
-
-
-
577,500
20,069
120,069
-
-
63,000
80,500
20,069
841,069
-
-
-
-
-
37,038
71,781
73,709
183,600
11,029
377,157
-
20,069 1,218,226
I.
II.
III.
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.
Brad Sampson resigned with effect on 31 October 2023.
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 2023 year and details of his remuneration are
disclosed above.
63
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
Termination
benefits
USD
Fees/Basic
Salary
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
-)
38,944
-)
)222322322234
63,182
306,359
-)
195,220
234
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.
Sameer Oundhakar resigned as a NED on 21 December 2022.
ii.
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.
64
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 2023
During the financial year, the following options as SBP arrangements for KMP and other personnel were in
existence:
Grant
Date
Vesting
Date
Option Series 33
19/07/2019
19/07/2022
Options Series
34
Options Series
35
Options Series
38
15/09/2019
15/09/2022
15/09/2019
15/09/2022
Number
of
Options
26,900,00
0
12,000,00
0
8,000,000
Expiry
Date
Fair Value
at Grant
Date
Exercise
Price
19/07/2024 GBP 0.007
01/01/2024
GBP 0.0092
01/01/2024
GBP 0.0092
GBP
0.022
GBP
0.022
GBP
0.022
GBP
0.022
13/06/2022
Conditional
9,000,000
9/06/2027
GBP 0.0089
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.
65
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 2023
During the financial year, the following performance rights as SBP arrangements for KMP and other
personnel were in existence:
Grant Date
29/05/2017 Refer below
Vesting
Date
Rights Series
15*
Number
of Rights
1,760,000 31/05/2022 AUD 0.17 / AUD 0.104
Fair Value at
Grant Date
Expiry
Date
The above Performance Rights have nil exercise price.
* Vested, converted to fully paid ordinary shares and/or cancelled during the year – Please refer to Note
21 to the financial statements for more details of conversions.
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 2023 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 2023 year.
For further information on each option and performance rights series, please refer to Note 21 to the financial
statements.
66
REMUNERATION REPORT (CONT)
Reconciliation of options as SBP arrangements and performance rights held by KMP (Cont)
CORPORATE GOVERNANCE REPORT (CONT)
Name,
option
or rights
series
No
Grant date
Amount
granted
Issue date
Balance at the start of
the year
Vested and
exercisable
Unvested
No
No
No
Grante
d or
allocat
ed as
compe
nsatio
n
No
Vested Exercised Cancelle
d or
expired
Balance at the end of the
year
Expensed
in 2023
Max
value
yet to
vest
No %
No
No %
No
No
USD
USD %
Vested and
exercisable Unvested
Executive Directors
Brad Sampson
Options
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
Andrey Maruta
Options
Series 35
19/07/2019
29/05/2017
15/09/2019
26,900,000
19/07/2019
26,900,000
-
9,000,000
09/06/2022
-
9,000,000
12,000,000
25/06/2020
12,000,000
-
2,200,000
29/05/2017
-
1,760,000
12,000,000
25/06/2020
8,000,000
-
-
-
-
-
-
-
-
-
-
-
1,760,000
-
-
-
-
-
1,760,000
-
-
-
-
-
26,900,000
-
-
-
-
-
-
-
9,000,000
100,345 20,069 20
-
-
-
-
-
-
12,000,000
-
8,000,000
-
-
-
-
-
-
-
-
-
-
-
-
CORPORATE GOVERNANCE 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.
Balance at
1 Jan 2023
Received as
Remuneration
Options
Exercised / Rights
Converted
Other
Movements
(i)
Balance at
31 Dec 2023
31 December 2023
Executive Directors
Brad Sampson
Non-executive directors
David Hathorn (i)
Jonathan Trollip
David Netherway
Executives
Henko Vos
Andrey Maruta
Gavin Chamberlain
31 December 2022
Executive Directors
Brad Sampson
Non-executive directors
David Hathorn (i)
Jonathan Trollip
David Netherway
Executives
Henko Vos
Gavin Chamberlain
2,464,705
144,237,061
7,276,296
8,536,434
162,514,496
1
133,334
800,000
933,335
2,464,705
144,237,061
7,276,296
8,536,434
162,514,496
1
516,667
516,668
Total
163,447,831
Balance at
1 Jan 2022
Received as
Remuneration
Options
Exercised / Rights
Converted
Other
Movements
(i)
Balance at
31 Dec 2022
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,464,705
193,471,000
-
-
193,471,000
337,708,061
7,276,296
8,536,434
355,985,496
-
-
1,760,000
-
-
-
1
133,334
2,560,000
1,760,000
-
2,693,335
1,760,000
193,471,000
358,678,831
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,464,705
-
-)
-)
-
144,237,061
7,276,296
8,536,434
162,514,496
-
283,333
-
-
1
800,000
283,333
-
800,001
283,333
-
163,314,497
Total
163,031,164
(i) Shares purchases as part of Fundraise on 8 August 2023 and 31 October 2023 of total 193,471,000 shares.
Other than otherwise indicated above, no other KMP held any ordinary shares in the Company during the
current or prior years.
68
CORPORATE GOVERNANCE REPORT (CONT)
REMUNERATION REPORT (CONT)
Options, rights and equity warrants over equity instruments granted as compensation
31 December 2023
Balance at
1 Jan 2023
Received as
Remuneration
Rights
Exercised
Other
Movements
Balance at
31 Dec 2023
Vested and
exercisable at
year end
Executive Directors
Brad Sampson
26,900,000
Non-executive directors
David Hathorn
Jonathan Trollip
Timothy Keating
David Netherway
Executives
Amanda Farris
Andrey Maruta
9,000,000
-
-
-
35,900,000
-
8,000,000
Gavin Chamberlain
13,760,000
21,760,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,760,000)
(1,760,000)
Total
57,660,000
-
(1,760,000)
-
-
-
-
-
-
-
-
-
-
-
26,900,000
26,900,000
9,000,000
-
-
-
-
-
-
-
35,900,000
26,900,000
-
8,000,000
-
8,000,000
12,000,000
12,000,000
20,000,000
20,000,000
55,900,000
46,900,000
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 2023.
Other transactions with KMP during the financial year ended 31 December 2023
No KMP has entered into a material contract (apart from employment) with the Company and the Group.
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 43,730.
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 71,780.
There were no other transactions with KMP and its related parties.
Voting of shareholders at last year’s AGM held on 20 June 2023
The Company received 99.97% “yes” votes on its Remuneration Report for the 2022 financial year. The
Company did not receive any specific feedback at the AGM or throughout the year on its remuneration
practices.
69
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.
70
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.
71
CORPORATE GOVERNANCE REPORT (CONT)
OTHER CORPORATE GOVERNANCE MATTERS (CONT)
Shareholders
The Group places considerable importance on effective communications with its shareholders. The
Group’s communication strategy requires communication with shareholders and other stakeholders in an
open, regular and timely manner so that the market has sufficient information to make informed investment
decisions on the operations and results of the Group. The strategy provides for the use of systems that
ensure a regular and timely release of information about the Group is provided to shareholders.
The Company’s website contains a separate section titled “Investors” which contains key documents for
its investors. The website also provides:
Information about the Company;
•
• An overview of the Group’s current projects;
• Copies of its half year reports and annual reports;
• Copies of quarterly cash flow reports and review of operations;
•
• Copies of its announcements to the stock exchanges
Investors’ presentations; and
The Company’s share register is maintained electronically by Computershare. Their contact details are
disclosed in the Corporate Directory of the Annual Report on page 3.
The Board encourages full participation of shareholders at the Company’s AGM to ensure a high level of
accountability, transparency and understanding of the Group’s strategy and goals. The Company provides
information in its notice of meeting that is presented in a clear, concise and effective manner. With the
Company listed on three exchanges, it aims, where possible, to hold general meetings at a reasonable
time for all shareholders. Shareholders are provided with the opportunity at these meetings to ask
questions in relation to each resolution before they are put to a vote and discussion is encouraged by the
Board. The Company intends to conduct all voting at general meetings via a poll, as was the case for the
shareholder meetings held during 2022 and 2023.
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 27 March 2024 and is
signed on its behalf by
___________________________
David Hathorn
Non-Executive Chairman
Interim Chief Executive Officer
72
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC
Opinion on the financial statements
In our opinion:
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent
Company’s affairs as at 31 December 2023 and of the Group’s and Parent Company’s loss for the
year then ended;
the financial statements have been properly prepared in accordance with UK adopted international
accounting standards; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
•
•
We have audited the financial statements of Kore Potash Plc (the ‘Parent Company’) and its subsidiaries
(the ‘Group’) for the year ended 31 December 2023 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 the 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 of Note 1 (b) to the financial statements, which explains
that the ability of the Group and Company to continue as a going concern is dependent on the successful
conclusion of the EPC contract negotiations within the timeframes planned and on the ability of the Group
and Company to raise the necessary funds to service its ongoing working capital requirements as
established in the cash flow forecast. At the date of signing these financial statements, there is no
guarantee that the contract will be signed, and within the necessary timeframe, nor that the funding to
meet the Group’s and Company’s obligations will be secured. These conditions indicate the existence of
a material uncertainty which may cast significant doubt about the ability of the Group and Company 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.
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:
73
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
• Obtaining the Directors’ cash flow forecasts for the period to 30 June 2025 and assessing 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 2023
against budgeted and contracted commitments.
• Performing a 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.
• Assessing the Director’s ability to forecast by performing a budget to actual for the prior year forecast.
In addition to assessing the actual costs incurred for January and February 2024 that are included in
the forecast.
• Challenging the Directors’ ability to raise funds for further equity placements by assessing the
assessing the historic performance of the Group in raising funds in the past.
• Challenging the ability of the Group to sign the EPC contract in Q2 2024 and to defer amounts due to
suppliers until after a fundraising occurs.
• Reviewing and considering 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
Materiality
96% (2022: 99%) of Group profit before tax
99% (2022: 99%) of Group total assets
2023
2022
ü
Carrying value
of exploration
and evaluation
assets
Group financial statements as a whole
ü
$2.63m (2022:$2.5m) based on 1.5% of Total Assets
(2022: 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.
74
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
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.
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 described in the Material uncertainty related to
going concern section of our report, we have determined the matters below to be the key audit matters to
be communicated in our report. 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.
75
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
Key audit matter
Impairment
of
exploration
and
evaluation
(“E&E”)
assets
Refer to
notes 1(t)
and note 7
At 31 December 2023, the
Group held E&E assets on
its statement of financial
position, as detailed in note
7, with a value of $176.4m
(2022: $162.7m).
As detailed in note 1(r),
there are judgements and
inherent uncertainties
around the recoverability of
exploration and evaluation
assets. The Directors’ and
the Board are required to
assess whether there are
any potential impairment
triggers, which would
indicate that the carrying
value of the assets at 31
December 2023 may not be
recoverable. Given the
financial significance of the
E&E assets in the context of
the Group’s statement of
financial position and the
significant degree of
judgement involved in
making the assessment of
whether any indicators of
impairment exist, we
considered this to be a key
audit matter.
How the scope of our audit addressed the key
audit matter
We reviewed and challenged ’Directors’ impairment
assessment, approved 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 whether the licences remain valid
and are in good standing.
• Held meetings with the Directors and technical
team to understand the future plans for the
assets and to discuss the progress of the
negotiations on the Engineering, Procurement
and Construction (EPC) agreement and funding
arrangements.
• Corroborated future plans to develop the assets
through to key documents including the draft
EPC agreement, correspondence with Power
China and Heads of Agreement for the
construction.
• Reviewed technical reports for evidence that the
exploration projects do not relate to
economically viable resources including the
underlying feasibility reports, which includes the
updated Mineral Resource at the Dougou
Extension (DX) asset.
Key observations:
We noted that the Directors are focused on
progressing the Kola licence area to development
and there are limited resources to develop the DX
project alongside Kola. The Directors are exploring
the strategic options available for the DX project and
although we agreed with the Directors’ assessment
there were no triggers for impairment under IFRS 6
at 31 December 2023, if the Directors did not identify
a strategic option that would result in the
development of the DX project, it could result in an
impairment trigger in future. The financial statements
do not contain the adjustments that would be
required if an impairment were to arise on the DX
project.
We found the Directors’ assessment of the carrying
value of E&E assets to be acceptable.
76
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect
of misstatements. We consider materiality to be the magnitude by which misstatements, including
omissions, could influence the economic decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality,
we use a lower materiality level, performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also
take account of the nature of identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole
and performance materiality as follows:
Group financial statements
2023
2022
Parent company financial statements
2023
2022
$2.63m
1.5% of Total Assets
$2.5m
$2.37m
Set at 90% of Group materiality
$2.34m
Materiality was based on 1.5% of
total assets. We considered total
assets to be the most appropriate
basis for materiality given the Group
is in the exploration and evaluation
stage.
Set at 90% of Group materiality given the
assessment of the components aggregation
risk.
$1.97m
$1.875m
$1.78m
$1.69m
75% of materiality
In reaching our conclusion on the level of performance materiality to be applied we
considered a number of factors including the expected total value of known and
likely misstatements (based on past experience), our knowledge of the group’s and
parent company’s internal controls and management’s attitude towards proposed
adjustments.
for
Materiality
Basis
determining
materiality
Rationale for the
benchmark
applied
for
Performance
materiality
Basis
determining
performance
materiality
Rationale for the
percentage
applied
performance
materiality
for
Specific materiality
We also determined that for items included in the Parent Company 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
$0.1m based on 5% of total expenditure (2022:$0.1m based on 5% of total expenditure). We further
applied a performance materiality level of 75% (2022: 75%) of specific materiality to ensure that the risk
of errors exceeding specific materiality was appropriately mitigated.
77
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
Component materiality
For the purposes of our Group audit opinion, we set materiality for each significant component of the
Group, based on a percentage of between 18% and 90% (2022: 21% and 91% ) of Group materiality
dependent on the size and our assessment of the risk of material misstatement of that component.
Component materiality ranged from $0.464m to $2.37m (2022: $0.463m to $2.25m). In the audit of each
component, we further applied performance materiality levels of 75% (2022: 75%) of the component
materiality to our testing to ensure that the risk of errors exceeding component materiality was
appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess
of $0.052m (2022: $0.05m). 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.
78
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
Going concern
and longer-
term viability
Other Code
provisions
• The Directors’ statement with regards to the appropriateness
of adopting the going concern basis of accounting and any
material uncertainties identified set out on pages 36 and 37;
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 36.
• Directors’ statement on fair, balanced and understandable
set out on page 38;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
page 38;
• The section of the annual report that describes the review of
effectiveness of risk management and internal control
systems set out on page 47 to 52; and
• The section describing the work of the Audit and Risk
Committee set out on page 56 to 58.
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
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.
•
Matters on
which we are
to
required
report
by
exception
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.
79
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view, and
for such internal control as the Directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the
Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the Directors either intend to
liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to
do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in which it operates;
• Discussion with management and the Audit Committee; and
• Obtaining and understanding of the Group’s policies and procedures regarding compliance with
laws and regulations.
We considered the significant laws and regulations to be the applicable accounting framework,
Companies Act 2006, Tax legislations, and the Listing Rules of AIM, ASX and JSE.
The Group is also subject to laws and regulations where the consequence of non-compliance could have
a material effect on the amount or disclosures in the financial statements, for example through the
imposition of fines or litigations. We identified such laws and regulations to be the local health and safety
legislation and the Mining convention along with the terms of the mining licences.
Our procedures in respect of the above included:
• Review of minutes of meetings of those charged with governance for any instances of non-
compliance with laws and regulations;
• Review of correspondence with regulatory and tax authorities for any instances of non-
compliance with laws and regulations;
• Review the work performed by the component auditors in respect of compliance with local laws
and regulations;
• Review of financial statement disclosures and agreeing to supporting documentation; and
• Review of legal expenditure accounts to understand the nature of expenditure incurred.
80
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KORE POTASH PLC (CONT)
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our
risk assessment procedures included:
• Enquiry with management and those charged with governance regarding any known or
suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and procedures relating to:
o Detecting and responding to the risks of fraud; and
o
Internal controls established to mitigate risks related to fraud.
• Review of minutes of meeting of those charged with governance for any known or suspected
instances of fraud;
• Discussion amongst the engagement team as to how and where fraud might occur in the
financial statements; and
• Performing analytical procedures to identify any unusual or unexpected relationships that may
indicate risks of material misstatement due to fraud.
Based on our risk assessment, we considered the areas most susceptible to fraud to be management
override of controls and areas of judgement due to the level of subjectivity involved with them.
Our procedures in respect of the above included:
• Fraud enquiries were held with management and those charged with governance to identify
whether any instances of fraud were noted in the period.
• Testing the financial statement disclosures to supporting documentation, performing testing on
account balances which were considered to be a greater risk of susceptibility to fraud. These
balances relate to our key audit matters as disclosed above.
• Making enquiries of management as to whether there was any correspondence with regulators
and the Government, in so far as the correspondence related to the financial statements and
reviewed this correspondence.
• Performing targeted journal entry testing based on identified characteristics the audit team
considered could be indicative of fraud to address the presumed risk of management override of
controls, including bribery. For example, we tested capitalisation to property plant and equipment
or exploration assets with the opposite entry being processed against bank and cash accounts
and not against liability accounts.
• Reviewing the Group’s year end unadjusted entries, consolidated entries and investigating any
that appear unusual as to nature or amount by agreeing to supporting documentation; and
• Assessing significant estimates made by management for bias.
We also communicated relevant identified laws and regulations and potential fraud risks to all
engagement team members, including component engagement teams who were all deemed to have
appropriate competence and capabilities and remained alert to any indications of fraud or non-
compliance with laws and regulations throughout the audit. For component engagement teams, we also
reviewed the result of their work performed in this regard.
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.
81
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.
John Black (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
27 March 2024
BDO LLP is a limited liability partnership registered in England and Wales (with registered number
OC305127).
82
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Continuing operations
Parent
Note Dec 2023
USD
Dec 2022
USD
Consolidated Entity
Dec 2022
USD
Dec 2023
USD
Other Revenue
2(a)
1,195,008
1,092,147
-
-
Directors’ remuneration
Equity compensation benefits
Salaries, employee benefits and
consultancy expense
Administration expenses
Interest income
Interest and finance expenses
and
realised
Net
foreign exchange losses
Loss before income tax expense
unrealised
2(b)
2(d)
2(c)
(795,566)
-
(814,597)
(9,412)
(252,602)
-
(418,962)
(9,412)
(783,023)
(601,727)
54,107
(2,991)
(890,518)
(542,146)
66,956
(3,935)
(239,615)
(644,850)
54,107
(2,991)
(293,292)
(546,507)
66,956
(3,935)
(5,104)
(939,296)
(308,801)
(1,410,306)
(5,104)
(1,091,055)
(308,801)
(1,513,953)
Income tax
Loss for the year
3
-
(939,296)
-
(1,410,306)
-
(1,091,055)
-
(1,513,953)
Other comprehensive income/(loss)
Items that may be classified subsequent
to profit or loss
Exchange differences on
foreign operations
Other comprehensive income/(loss) for
the year
translating
TOTAL COMPREHENSIVE INCOME /
(LOSS) FOR THE YEAR
Loss attributable to:
Owners of the Company
Non-controlling interest
Total comprehensive income / (loss)
attributable to:
Owners of the Company
-
-
-
-
5,046,256
(8,660,408)
5,046,256
(8,660,408)
(939,296)
(1,410,306)
3,955,201
(10,174,361)
(939,296)
-
(939,296)
(1,410,306)
-
(1,410,306)
(1,089,761)
(1,294)
(1,091,055)
(1,513,822)
(131)
(1,513,953)
(939,296)
(1,410,306)
3,956,495 (10,174,230)
Non-controlling interest
-
-
(1,294)
(131)
(939,296)
(1,410,306)
3,955,201 (10,174,361)
Basic and diluted loss per share (cents
per share)
22
(0.03)
(0.04)
(0.03)
(0.04)
The accompanying notes from pages 88 to 125 form part of these financial statements.
83
STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
Parent
Consolidated Entity
Note
Dec 2023
USD
Dec 2022
USD
Dec 2023
USD
Dec 2022
USD
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
NON CURRENT LIABILITIES
Design optimisation works
TOTAL LIABILITIES
4
5
5
6
7
8
9
9
1,561,869
74,189
1,636,058
4,999,889
112,272
5,112,161
1,583,657
180,532
1,764,189
5,046,629
200,251
5,246,880
167,313,290 158,444,734
-
-
68
167,313,359 158,444,802
-
-
69
38,147
356,259
38,597
385,103
176,371,257 162,729,194
-
176,765,663 163,152,894
-
168,949,417 163,556,963
178,529,852 168,399,774
1,044,913
26
1,044,939
396,982
26
397,008
1,240,527
26
1,240,553
749,469
26
749,495
2,200,000
3,244,939
-
397,008
2,200,000
3,440,553
-
749,495
NET ASSETS
165,704,478 163,159,955
175,089,299 167,650,279
EQUITY
Contributed equity – Ordinary Shares
Reserves
Accumulated losses
EQUITY ATTRIBUTABLE TO OWNERS OF
THE COMPANY
Non-controlling interests
TOTAL EQUITY
10
11
4,119,667
3,420,177
175,594,933 172,999,244
4,119,667
3,420,177
229,228,412 221,586,467
(14,010,122) (13,259,466)
(57,694,772)
(56,793,651)
11(f)
165,704,478
-
163,159,955
-
165,704,478 163,159,955
175,653,307
(564,008)
168,212,993
(562,714)
175,089,299 167,650,279
The accompanying notes from pages 88 to 125 form part of these financial statements.
These Financial Statements for Kore Potash plc, registered number 10933682, were approved by the Board of
Directors on 27 March 2024 and were signed on its behalf by:
___________________________
David Hathorn
Non-Executive Chairman
Interim Chief Executive Officer
84
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Consolidated Entity
Balance at
1 January 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
3,375,494
708,486
44,205,971
(18,623,503)
203,738,800
(55,422,779)
177,982,469
(562,583)
177,419,886
Loss for the period
Other comprehensive loss for the
year
Total comprehensive loss for the
year
-
-
-
Transactions with shareholders
Kore Potash Ltd SA Dis-investment
Cancellation of options
Conversion of performance rights
Share issues
Share issue costs
Share based payments
Balance at 31 December 2022
11(b)
11(a)(b)
10,11(b)
11(a)
-
-
-
44,683
-
-
3,420,177
Loss for the period
Other comprehensive income for the
year
Total comprehensive (loss)/income
for the year
11(c)
-
-
-
-
-
-
-
-
-
-
(8,660,408)
(8,660,408)
-
-
-
(1,513,822)
-
(1,513,822)
(8,660,408)
(131)
(1,513,953)
-
(8,660,408)
(1,513,822)
(10,174,230)
(131)
(10,174,361)
-
-
(4,449)
-
11,895
18,327
734,259
-
-
-
331,338
-
-
44,537,309
(139,989)
-
-
-
-
-
(27,423,901)
-
-
-
-
-
-
203,738,800
138,501
-
4,449
-
-
-
(56,793,651)
(1,488)
-
-
376,021
11,895
18,327
168,212,993
-
-
-
-
(562,714)
(1,488)
-
-
376,021
11,895
18,327
167,650,279
-
-
-
-
-
-
-
5,046,256
5,046,256
-
-
-
(1,089,761)
(1,089,761)
(1,294)
(1,091,055)
-
5,046,256
-
5,046,256
(1,089,761)
3,956,495
(1,294)
3,955,201
Transactions with shareholders
Conversion of performance rights
Share issues
Share based payments
Balance at 31 December 2023
11(a)
10,11(b)
-
699,490
-
4,119,667
(188,640)
-
20,069
565,688
-
2,764,260
-
47,301,569
-
-
-
(22,377,645)
-
-
-
203,738,800
188,640
-
-
(57,694,772)
-
3,463,750
20,069
175,653,307
-
-
-
(564,008)
-
3,463,750
20,069
175,089,299
The accompanying notes from pages 88 to 125 form part of these financial statements.
85
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Parent
Balance at 01 January 2022
Loss for the year
Total comprehensive loss 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
3,375,494
708,486
44,205,971
203,738,800
(76,011,124)
(11,853,609)
164,164,018
-
-
-
44,683
-
-
-
-
-
-
(4,449)
-
11,895
18,327
-
331,338
-
-
11(b)
10,11(b)
11(b)
-
-
-
-
-
-
-
-
-
-
-
-
(1,410,306)
(1,410,306)
(1,410,306)
(1,410,306)
4,449
-
-
-
-
376,021
11,895
18,327
3,420,177
734,259
44,537,309
203,738,800
(76,011,124)
(13,259,466)
163,159,955
Loss for the year
Total comprehensive (loss)/income for the year
-
-
-
-
-
-
-
-
-
-
(939,296)
(939,296)
(939,296)
(939,296)
Transactions with shareholders
Conversion of performance rights
Share issue
Share based payments
Balance at 31 December 2023
11(b)
10,11(b)
-
699,490
-
4,119,667
(188,640)
-
20,069
565,688
-
2,764,260
-
47,301,569
-
-
-
203,738,800
-
-
-
(76,011,124)
188,640
-
-
(14,010,122)
-
3,463,750
20,069
165,704,478
The accompanying notes from pages 88 to 125 form part of these financial statements.
86
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Note
Parent
Dec 2023 Dec 2022
Consolidated Entity
Dec 2023 Dec 2022
USD
USD
USD
USD
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
13
6
7
5
11
11
(120,023)
(984,931)
(593,005)
(538,184)
(907,915) (1,151,137)
(85,108)
(348,798)
(1,104,954) (1,131,189)
(1,256,713) (1,236,245)
-
-
-
-
(5,889,106) (4,532,663)
66,956
54,107
(1,527)
(633)
(5,779,186) (4,574,363)
-
66,956
-
54,107
(5,834,999) (4,465,707)
(5,726,606) (4,508,040)
3,504,618
-
3,504,618
550
-
3,504,618
-
550
3,504,618
550
-
550
(3,435,335) (5,596,346)
(3,478,701) (5,743,735)
4,999,889
(2,685)
10,916,397
(320,162)
5,046,629
15,729
11,092,509
(302,145)
4
1,561,869
4,999,889
1,583,657
5,046,629
The accompanying notes from pages 88 to 125 form part of these financial statements.
87
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOTE 1: MATERIAL 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 2023 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 27 March 2024.
New standards, interpretations and amendments effective from 1 January 2023 which have no impact on
the Group
•
•
•
•
IFRS 17 Insurance Contracts
IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 (Amendment –
Disclosure of Accounting Policies)
IAS 8 Accounting policies, Changes in Accounting Estimates and Errors (Amendment - Definition of
Accounting Estimates)
IAS 12 Income Taxes (Amendment – Deferred Tax related to Assets and Liabilities arising from a
Single Transaction).
None of these standards are deemed to have an impact on the Group for the year ending 31 December
2023.
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.
New standards, interpretations and amendments effective from 1 January 2024 not yet adopted
•
•
•
•
•
•
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)
IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures (Amendment).
IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information
IFRS S2 Climate-related Disclosures
88
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 1: MATERIAL ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(b) Going Concern
The 31 December 2023 Annual 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 performing their assessment of the Group and Company’s ability to continue as a going concern, the
Directors have prepared a cash flow forecast for the period ending 30 June 2025, which indicates that
under current conditions, the Group and Company will become cash negative in June 2024 and will remain
in this position until the end of the forecast period.
The Directors are currently in negotiations with PowerChina/SEPCO to secure an Engineering,
Procurement and Construction contract (‘EPC’) for the construction of the Kola Project.
The negotiations with the potential contractors, PowerChina/SEPCO, are advanced, and they have
committed to visit Kore’s mine site on 28–30 March 2024 with several engineers, including the Vice-
President of PowerChina to progress the EPC negotiations. The purpose of the visit is to perform additional
technical tests and studies prior to proceeding to signing the proposed contract.
Based on the status of the negotiations and the planned activity to finalise the contract, it is the Directors
expectation that the Group will sign the EPC contract in Q2 2024.
If the contract is not signed by the end of June 2024 then the Group and Company are unlikely to be able
to seek alternative contract partners before current cash reserves are utilised and will not be able to
generate sufficient cash to fund its normal business activities, as projected in the cash flow forecast.
Even if the Group is successful in finalising this EPC contract in Q2 2024, it will still need to raise a minimum
of USD 7.5million to be able to continue to meet it ongoing working capital requirements and to pay its
liabilities as they fall due.
This includes an amount of USD 3,000,000 which would be payable to PowerChina under the terms of the
revised agreement with SEPCO, dated 07 August 2023.
Of this USD 3,000,000, USD 800,000 is payable within 6 weeks of the EPC contract being finalised and
USD 2,200,000 is to be paid no later than 12 months after the signing of the EPC.
In addition to the signing of the EPC contract, the Group is reliant on the SUMMIT consortium preparing a
funding proposal, which there is a non-binding agreement to do so within 6 weeks of the EPC contract
being signed.
The ability of the Group and Company to continue as a going concern is dependent on the successful
conclusion of the EPC contract negotiations within the timeframes planned and on the ability of the Group
and Company to raise the necessary funds to meet its working capital requirements as established in the
cash flow forecast. At the date of signing these financial statements, there is no guarantee that the contract
will be signed, and within the necessary timeframe, nor that the funding to meet the Group’s and
Company’s obligations will be secured. These conditions indicate the existence of a material uncertainty
which may cast significant doubt about the ability of the Group and Company 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.
89
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 1: MATERIAL ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(b) Going Concern (Cont)
The financial statements do 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 Group and Company are undertaking several activities to raise funds to fund its current and ongoing
commitments and to raise funds for the planned commitments should the EPC contract be agreed. This
fundraising is in addition to the cash balance at 22 March 2024 of USD1.4 million.
On 22 March 2024 the Company raised USD 530,000 via the issue of five separate Convertible Loan Notes
(‘CLN’). The net proceeds from the CLNs will be used to further advance work that is expected to lead to
the signing of the EPC contract for the Kola Potash Project. Each CLN has a zero interest coupon and is
convertible into new ordinary shares of ordinary shares of US$0.001 each in the Company at a price of
0.38 pence per new Ordinary Share and will be converted immediately after publication of the 2023 Annual
Report on 28 March 2024. Subject to the conversion of the CLNs the Company will issue 109,865,053 new
Ordinary Shares in the Company. As at 26 March 2024 the Company had received the total USD 530,000.
On 22 March 2024 the Company announced that it is the intention of David Hathorn, Chairman and Interim
CEO, to subscribe for new ordinary shares of the Company for a consideration of USD 150,000 as soon
as practicable following publication of the 2023 Annual Report and on the same terms as the CLNs.
The cash forecast for the Company includes an additional expected and non-binding private fund raise of
USD 320,000 in April 2024 from existing shareholders.
The Directors note the Group has a history of successfully raising capital on the AIM and JSE, and in the
past on the ASX. Having reviewed the Group's overall position and outlook in respect of the matters
identified above, the Directors 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.
In addition, the Directors believe that the proposed contract with PowerChina/SEPCO will be signed.
Accordingly, the Directors believe 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
to have sufficient funds to continue the work to finalise the Kola Project EPC and Financing Proposal for
the complete construction of Kola.
(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.
90
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 1: MATERIAL ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(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
91
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 1: MATERIAL ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(g) 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.
(h) 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.
92
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 1: MATERIAL ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(i) 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.
(j) 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.
93
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 1: MATERIAL ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(j) 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.
(k) 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.
(l) 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.
(m) 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.
94
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 1: MATERIAL ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(n) 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.
95
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 1: MATERIAL ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(o) Share Based Payments
Equity-settled share-based payments to employees and others providing similar services are measured at
the fair value of the equity instruments at the grant date. The fair value grant rate is independently
determined using the different option pricing models that takes into account the exercise price, the term of
the option, the market and non-market based vesting and performance criteria, the impact of dilution, the
tradeable nature of the option, the share price at grant date and expected price volatility of the underlying
share, the expected dividend yield and the risk-free interest rate for the term of the option.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will
eventually vest, with a corresponding increase in equity.
When share options and performance rights are exercised, the Company issues new shares. The proceeds
received net of any directly attributable transaction costs are credited to share capital (nominal value) and
share premium.
All goods and services received in exchange for the grant of any share-based payment are measured at
their fair values
(p) 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.
(r) 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.
96
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 1: MATERIAL ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(s) 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.
(t) Critical Accounting Judgements and Estimates
In the application of the Group’s accounting policies, which are described in this note, the directors are
required to make judgements (other than those involving estimations) that have a significant impact on the
amounts recognised and to make estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The estimates and associated assumptions are
based on historical experience and other factors that are considered to be relevant. Actual results may
differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision and future periods if the revision affects
both current and future periods.
The loans to subsidiaries are repayable on demand where the directors have applied judgment that the
amount will not be settled or called within the next 12 months as subsidiaries do not have sufficient
liquidity and are not cash generating and classified the amount as non-current.
97
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 1: MATERIAL ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(t) 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
Non-
recognition of
DTA on losses
Going
Concern
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.104) 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.
The Group has carried forward losses from previous years and current year has a
nett loss which will be utilised against future profits.
judgement
the Directors have made
The Directors have set out in the going concern note why in their judgement the
company and group should prepare the financial statements on a going concern
basis. The key
the
appropriateness of the going concern basis is that the Group will sign the EPC
contract in Q2 2024 which will enable to group to raise the funds needed for the
group and company to continue as a going concern as described in that note. If the
EPC contract was not finalised in Q2 2024, the Group and Company would not have
sufficient levels of cash to continue as a going concern without raising additional
funds which have not been secured at the date of the approval of these financial
statements. Further details are provided in the going concern disclosure Note 1(b).
in determining
98
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 1: MATERIAL ACCOUNTING POLICIES (CONT)
Basis of Preparation (Cont)
(u) 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 2023
(v) 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.
99
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
Parent
Dec 2023
USD
Dec 2022
USD
Consolidated Entity
Dec 2022
USD
Dec 2023
USD
1,195,008 1,092,147
NOTE 2: LOSS FOR THE YEAR
(a) Revenue
Intra group services
Expenses
(b) Equity based payments
-
-
-
9,412
237,473
54,164
-
120,404
86,481
8,285
72
39,628
546,507
Directors, KMP and other employees (i)
-
9,412
(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
Professional fees
Other expenses
288,451
237,473
288,451
52,076
4,213
118,669
90,143
8,939
-
39,236
601,727
54,164
-
120,404
86,481
8,285
72
35,267
542,146
52,076
4,213
161,511
90,143
8,939
-
39,517
644,850
(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.
100
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (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
Dec 2023
USD
Dec 2022
USD
Consolidated Entity
Dec 2022
Dec 2023
USD
USD
148,798
7,538
626,687
783,023
528,514
9,670
352,334
890,518
55,628
7,538
176,449
239,615
75,438
9,670
208,184
293,292
Wages and Salaries
-
-
686,172
860,314
Total staff costs for the Group in the year ended 31 December 2023 were USD 1,076,559 (2022: US USD
945,423) The staff costs incurred during the year at a subsidiary, SPSA, of USD 1,013,393 has been
capitalised as Exploration and Exploration Asset (2022: USD 860,314).
(e) Average number of employees
Operational
Head Office
NOTE 3: INCOME TAX EXPENSE
Parent
Consolidated Entity
Dec 2023
Number
-
4
4
Dec 2022
Number
-
5
5
Dec 2023
Number
Dec 2022
Number
17
4
21
18
5
23
Parent
Dec 2023
USD
Dec 2022
USD
Consolidated Entity
Dec 2022
Dec 2023
USD
USD
Loss before tax
(939,296) (1,410,306) (1,091,055) (1,513,953)
Parent company tax on loss at the UK
corporation tax rate of 23.52% (2022: 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
(220,923)
(267,958)
(256,616)
(287,651)
-
(220,923)
-
(267,958)
-
(256,616)
-
(287,651)
-
-
234,824
-
(13,901)
1,788
-
266,170
-
-
-
270,517
-
-
17,120
270,531
-
-
(13,901)
-
220,923
267,958
256,616
287,651
Income tax expense
-
-
-
-
101
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 3: INCOME TAX EXPENSE (CONT)
From 1 April 2023, the Corporation Tax main rate for non-ring-fenced profits is 25% applying to profits over
£0.25 million. A small profits rate with profits of £0.05 million or less so Corporation Tax at 19%. Profit
needs to be apportioned for first 3 month which is January 2023 to March 2023 for 19% corporation tax
rate and from April 2023 to December 2023 at 25% corporation tax (or at 19% based on small profits rate)
(year ended 31 December 2022: 19%), representing the best estimate of the average annual effective tax
rate applied to the pre-tax income and considering the Group’s assets are in the exploration phase. The
statutory tax rate of Kore Potash plc is 23.52% (2022: 19%). 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). There is no income tax income for 2023 and the income tax
charge for the year ended 31 December 2022 USD Nil.
An increase in the UK corporation tax rate 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 2023. No deferred tax has been recognised in respect of the
Group’s tax losses of USD 20,854,332 (2022: USD 19,763,277) that are available for offset against any
future taxable profits in the companies in which the losses arose.
CASH
NOTE 4:
EQUIVALENTS
Cash at bank
AND
CASH
NOTE 5: TRADE AND OTHER
RECEIVABLES
Current
Advance to employees
Net GST, PAYE
recoverable
Prepayments
Other receivables
and VAT
Non-Current
Rental deposits
Others
Amounts due from subsidiaries (i) (ii)
Parent
Dec 2023
USD
Dec 2022
USD
Consolidated Entity
Dec 2022
Dec 2023
USD
USD
1,561,869
1,561,869
4,999,889
4,999,889
1,583,657 5,046,629
1,583,657 5,046,629
Parent
Dec 2023
USD
Dec 2022
USD
Consolidated Entity
Dec 2022
Dec 2023
USD
USD
-
-
16,006
17,742
22,273
(11,046)
22,273
(11,046)
51,916
-
74,189
108,033
15,285
112,272
103,594
38,659
180,532
140,765
52,790
200,251
1,464
-
1,212
-
167,311,826 158,443,522
167,313,290 158,444,734
4,493
33,654
-
38,147
36,801
1,796
-
38,597
Total Trade and Other Receivables
167,387,479 158,557,006
218,679
238,848
102
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 5: TRADE AND OTHER RECEIVABLES (CONT)
(i)
(ii)
The amount due from a subsidiary is interest-free and is repayable on demand. The loans to
subsidiaries are repayable on demand where the directors have applied judgment that the
amount will not be settled or called within the next 12 months as subsidiaries do not have
sufficient liquidity and are not cash generating and classified the amount as non-current.
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.
As at 31 December 2023 there were no other receivables that were past due but not impaired. Amounts
due from subsidiaries is inclusive of the expected loss provision of $28m (2022; $28m). There have been
no changes in the provision for the current financial year.
NOTE 6:
EQUIPMENT
PROPERTY,
PLANT
AND
Parent
Consolidated Entity
Dec 2023
USD
Dec 2022
USD
Dec 2023
USD
Dec 2022
USD
2,011,869
-)
1,964,294
-) (1,655,610) (1,579,191)
385,103
-)
356,259
-)
-)
-)
-)
-)
-)
385,103
1,559
482,530
645
(27,813)
(60,701)
(14,444)
11,854
356,259
(10,332)
(27,039)
385,103
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
-)
-)
-)
-)
-)
-)
-)
-)
-)
103
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 7: EXPLORATION AND EVALUATION
EXPENDITURE
Parent
Consolidated Entity
Dec 2023
USD
Dec 2022
USD
Dec 2023
USD
Dec 2022
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
-
-
-)
-)
-)
-)
-)
- 162,729,194 166,613,902
8,842,377
5,064,934
-)
-)
4,799,686 (8,949,642)
-) 176,371,257 162,729,194
-) 144,128,252 131,725,943
-)
32,243,005 31,003,251
-) 176,371,257 162,729,194
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.
104
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 8:
ENTITIES
CONTROLLED
Controlled Entities
Country of
Incorporation
Percentag
e
Owned
31 Dec 23
2023
%
Investment
31 Dec 23
2023
USD
Percentag
e
Owned
31 Dec 22
2022
%
Investment
31 Dec 22
2022
USD
Kore Potash Limited (i)
Sintoukola Potash S.A. (“SPSA”)
(ii)
Held through Sintoukola Potash
S.A.:
Kore Potash Mining S.A. (“KPM”) Republic of
Australia
Republic of
Congo
Dougou Potash Mining S.A.
(“DPM”)
Congo
Republic of
Congo
100
97
100
100
69
1
100
97
68
1
18,264
100
18,264
18,264
100
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.
NOTE 9: TRADE AND OTHER PAYABLES
Current
Trade and other creditors
Design & optimisation works
Accruals
Employee benefits and related payables
Total Trade and Other Payables
Parent
Dec 2023
USD
Dec 2022
USD
Consolidated Entity
Dec 2022
Dec 2023
USD
USD
5,170
800,000
219,119
20,624
1,044,913
30,959
-
137,793
228,230
396,982
18,097
800,000
231,143
191,287
1,240,527
47,162
-
311,409
390,898
749,469
Trade and other creditors are non-interest bearing and are normally settled on 30-day terms.
Non Current
Design & optimisation works
Total Trade and Other Payables
2,200,000
2,200,000
-
-
2,200,000
2,200,000
-
-
The cost for the Design Optimization Works yet to be paid by Kore is USD 3 million of which USD 800,000
payable up to 6 weeks from the date PowerChina and SEPCO having presented to Kore a “complete
contractual document capable of finalising the financing arrangement of the Kola Project and capable of
acceptance by Kore to form a binding construction contract” and USD 2.2 million to be paid subject to Kore
concluding its fund raise with a target date of no later than 12 months of the signing of the EPC Contract.
105
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 10: ISSUED CAPITAL
4,119,667,120 Fully Paid Ordinary Shares at
par value of USD 0.001 each (31 December
2022: 3,420,177,120 Fully Paid Ordinary
Shares at par value of USD 0.001)
Parent
Dec 2023
USD
Dec 2022
USD
Consolidated Entity
Dec 2023
USD
Dec 2022
USD
4,119,667
3,420,177
4,119,667
3,420,177
Fully Paid Ordinary Shares
4,119,667
3,420,177
4,119,667
3,420,177
Date
31 Dec 2021 Closing balance
Details
05 May 2022
13 June 2022
31 Dec 2022
03 Apr 2023
Issue of Equity (i)
Issue of Equity – SQM in lieu of fees payable (ii)
Closing balance
Issue of Equity (iii)
08 Aug 2023
26 Sept 2023
Issue of Equity 124,384,000 new ordinary shares $ 0.001
(iv)
Issue of Equity 31,096,000 new ordinary shares $ 0.001 (v)
07 Nov 2023
14 Dec 2023
Issue of Equity 336,575,000 new ordinary shares $ 0.001
(vi)
Issue of Equity 205,675,000 new ordinary shares $ 0.001
(vii)
No. of
Shares)
3,375,494,446
550,000
44,132,674
3,420,177,120
1,760,000
USD)
3,375,494
550
44,133
3,420,177
1,760
124,384,000
124,384
31,096,000
31,096
336,575,000
336,575
205,675,000
205,675
31 Dec 2023 Closing balance
4,119,667,120
4,119,667
(i) 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.
(ii) 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.
(iii) On 3 April 2023, a total of 1,760,000 ordinary shares were issued to certain an ex-employee following
the vesting of Performance Rights awarded under the Company's Employee Performance Incentive
Plans.
(iv) On 8 August 2023, the Company issued 124,384,000 new ordinary shares of US$0.001 each as part
of the USD 1 million fund raise with certain eligible existing shareholders at 0.5 cents per share.
(v) on 26 September 2023, the Company issued further 31,096,000 new ordinary shares of US$0.001
each as part of the USD 1 million fund raise with certain eligible existing shareholders at 0.5 cents per
share. The issue of 31,096,000 new ordinary shares were approved at the General Meeting on 21
September 2023.
(vi) on 31 October 2023, 336,575,000 new ordinary shares of US$ 0.001 each in the Company (the
“Unconditional Subscription Shares”) with existing shareholders at the Subscription Price of 0.38 cents
per share.
(vii)
on 31 October 2023, 205,675,000 new ordinary shares of US$ 0.001 each in the Company (the
“Conditional Subscription Shares”) conditionally placed with existing shareholders at the Subscription
Price of 0.38 cents per share. The Conditional Subscription Share were subsequently approved at the
General Meeting on 7 December 2023.
106
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 11: RESERVES
Parent
Consolidated Entity
SBP reserve (a)
Share premium reserve (b)
Foreign currency translation reserve (c)
Merger reserve (d)
Reorganisation reserve (e)
Total Reserves
Dec 2023
USD
565,688
Dec 2022
USD
734,259
Dec 2023
USD
565,688
Dec 2022
USD
734,259
47,301,569 44,537,309 47,301,569 44,537,309
- (22,377,645) (27,423,901)
203,738,800 203,738,800 203,738,800 203,738,800
-
(76,011,124) (76,011,124)
175,594,933 172,999,244 229,228,412 221,586,467
-
-
(a) SBP Reserve
Opening balance
Value performance rights converted in ordinary
share capital
Share based payment vesting expense (ii)
Closing balance
734,259
708,486
734,259
708,486
(188,640)
(4,449)
(188,640)
(4,449)
20,069
565,688
30,222
734,259
20,069
565,688
30,222
734,259
(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
Details
Date
31 Dec 2021 Closing balance
05 May 2022 Conversion of performance rights
09 Jun 2022
31 Dec 2022 SBP charge
31 Dec 2022 Closing balance
03 Apr 2023 Conversion of performance rights
31 Dec 2023 SBP Charges
31 Dec 2022 Closing balance
Issue of share options
No. of
Options
46,900,000
-
9,000,000
-
55,900,000
No. of
Performance
Rights
2,310,000
(550,000)
-
-
1,760,000
(1,760,000)
55,900,000
-
USD
708,486
(4,449)
-
30,222
734,259
(188,640)
20,069
565,688
107
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (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
Share issue
Less: Capital raising costs
Closing balance
Parent
Dec 2023
USD
Parent
Dec 2022
USD
Consolidated Entity
Dec 2023
USD
Dec 2022
USD
44,537,309 44,205,971 44,537,309 44,205,971
-
331,338
-
47,301,569 44,537,309 47,301,569 44,537,309
-
2,764,260
-
-
2,764,260
-
-
331,338
-
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 2023
USD
-)
-)
-)
Parent
Dec 2022
USD
Consolidated Entity
Dec 2022
USD
(18,623,503)
(8,800,398)
Dec 2023
USD
-) (27,423,901)
5,046,256
-)
-) (22,377,645)
(27,423,901)
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.
108
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (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 2023
USD
Dec 2022
USD
-)
-)
-
-)
-)
-
Consolidated Entity
Dec 2023
USD
562,714
1,294
564,008
Dec 2022
USD
562,583
131
562,714
NOTE 12: DIVIDENDS
No dividends have been proposed or paid during the year ended 31 December 2023 (2022: Nil).
NOTE 13: NOTES TO STATEMENT OF CASH
FLOWS
Parent
Consolidated Entity
Dec 2023
USD
Dec 2022
USD
Dec 2023
USD
Dec 2023
USD
Reconciliation of cash flows from operating
activities:
Loss for the year
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
(939,296) (1,410,306) (1,091,055) (1,513,953)
-
9,412
-
9,412
2,688
320,162
2,688
320,162
(54,107)
(66,956)
(54,107)
(66,956)
-
-
-
-
(990,715) (1,147,688)
(1,142,474) (1,251,335)
Increase in receivables
Decrease in payables
Net cash used in operating activities
71,150
(185,389)
(1,104,954)
(10,676)
27,175
(10,597)
71,150
25,687
(185,389)
(1,131,189) (1,256,713) (1,236,245)
109
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 14: FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
Overview
The Group has exposure to the following risks from their use of financial instruments:
• market risk,
• credit risk, and
•
liquidity risks.
The Group’s overall risk management programme focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the business. The Group will
use different methods to measure different types of risk to which it is exposed. These methods include
sensitivity analysis in the case of interest rate, foreign exchange and other price risks and ageing analysis
for credit risk.
This note presents information about the Group’s exposure to each of the above risks, their objectives,
policies and processes for measuring and managing risk, and the management of capital. The Board of
Directors has overall responsibility for the establishment and oversight of the risk management framework.
Management monitors and manages the financial risks relating to the operations of the Group through
regular reviews of the risks.
Financial Instruments by category
Group
FINANCIAL ASSETS
Cash at bank
Trade and other receivables
Total financial assets
FINANCIAL LIABILITIES
Trade and other payables
Derivative financial liability
Total financial liabilities
Parent
FINANCIAL ASSETS
Cash at bank
Investments in subsidiaries
Trade and other receivables
Amounts due from subsidiaries
Total financial assets
FINANCIAL LIABILITIES
Trade and other payables
Derivative financial liability
Total financial liabilities
Fair value
through
profit or loss
Dec-
23
USD
Dec-
22
USD
-
-
-
-
-
-
-
(26)
(26)
-
(26)
(26)
Amortised Cost
Interest Rate
Dec-23
USD
Dec-22
USD
1,583,657
218,679
1,802,336
(3,440,527)
-
(3,440,527)
5,046,629
238,848
5,285,477
(749,469)
-
(749,469)
Fair value through profit
or loss
Dec-23
USD
Dec-22
USD
Amortised Cost
Interest Rate
Dec-23
USD
Dec-22
USD
-
-
-
-
-
-
-
-
-
-
1,561,869
4,999,889
68
1,464
68
1,213
167,311,895
168,875,296
158,443,522
163,444,692
-
(26)
(26)
-
(26)
(26)
(3,244,913)
-
(3,244,913)
(396,982)
-
(396,982)
110
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (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 2023
CAD
GBP
XAF
ZAR AUD EUR
CAD
GBP
XAF
31 December 2022
ZAR AUD
EUR
2,011 15,021
21,788 5,366
25
199
7,970
463,487
46,740 5,548
-
146,056
-
-
-
-
(8,735)
92,631
-
-
-
23
-
-
(195,612)
-
(4,077)
-
(14,571)
(146,202)
(189,819)
(518)
(1,337) (3,725)
-
(26)
2,011 14,995
-
(27,768) 5,366
-
(4,052)
-
199
(6,601)
-
(26)
308,524
-
(50,448) 5,030
-
-
(1,337) (3,702)
Sensitivity analysis (Group)
A reasonably possible strengthening (weakening) of the CAD, GBP, XAF, ZAR, AUD and EUR, against
USD at 31 December 2023 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.
NOTES TO THE FINANCIAL STATEMENTS
111
FINANCIAL ASSETS
Cash at bank
Trade and
other
receivables
FINANCIAL LIABILITIES
Trade and
other payables
Derivative
financial
liability
Net exposure
-
-
FOR THE YEAR ENDED 31 DECEMBER 2023 (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
101
750
(1,388)
268
(203)
10
(101)
(750)
1,388
(268)
203
(10)
101
750
(1,388)
268
(203)
10
(101)
(750)
1,388
(268)
203
(10)
The summary quantitative data about the Parent’s financial instruments’ exposure to significant currency
risk as presented in USD is as follows:
31 December 2023
ZAR
GBP
CAD
AUD
EUR
CAD
GBP
31 December 2022
AUD
ZAR
EUR
FINANCIAL ASSETS
2,011
15,021
5,366
25
199
7,970
463,487
5,548
-
-
-
-
(8,735)
-
-
-
23
-
Cash at bank
Trade and other
receivables
Trade and other
payables
Derivative
financial liability
Net exposure
-
-
-
-
-
(4,077)
-
(14,571)
(146,202)
(518)
(1,337)
(3,725)
-
2,011
(26)
14,995
-
5,366
-
(4,051)
-
199
-
6,601
(26)
308,524
-
5,030
-
(1,337)
-
(3,702)
Sensitivity analysis (Parent)
A reasonably possible strengthening (weakening) of the CAD, GBP, ZAR, AUD and EUR, against USD at
31 December 2023 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 2023
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
101
750
268
(203)
10
(101)
(750)
(268)
203
(10)
101
750
268
(203)
10
(101)
(750)
(268)
203
(10)
(ii) Interest rate risk
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.
112
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (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
2023
%
Dec
2022
%
Fixed
Interest Rate
Floating
Interest Rate
Non-Interest
Bearing
Dec 2023 Dec 2022 Dec 2023 Dec 2022
Dec 2023
Dec 2022
USD
USD
USD
USD
USD
USD
1.63%
2.01%
- 3,338,818
198,264
191,889
1,363,605 1,515,992
-
-
- 3,338,818
-
198,264
-
191,889
74,189
98,083
1,437,794 1,614,075
FINANCIAL
ASSETS
Cash at bank
Trade and other
receivables
Total financial assets
FINANCIAL LIABILITIES
Trade and other
payables
Derivative financial
liability
Total financial
liabilities
-
-
-
-
-
-
-
-
-
-
-
-
(3,243,820)
(358,571)
(26)
(26)
(3,243,846)
(358,597)
All receivables and payables in the Parent at 31 December 2023 and at 31 December 2022 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 2023 and 31 December 2022 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.
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.
113
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (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 2023
Within 1 Month
1-3 Months
3-12 Months
12-24 Months
USD
USD
USD
USD
Non-derivatives
Non-interest bearing
Trade and other payables
Total Financial Liabilities
243,846
243,846
-
-
800,000
800,000
2,200,000
2,200,000
31 Dec 2022
Within 1 Month
1-3 Months
3-12 Months
12-24 Months
USD
USD
USD
USD
Non-derivatives
Non-interest bearing
Trade and other payables
Total Financial Liabilities
358,571
358,571
-
-
-
-
-
-
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 2023
Non-derivatives
Non-interest bearing
Trade and other payables
Total Financial Liabilities
31 Dec 2022
Non-derivatives
Non-interest bearing
Trade and other payables
Total Financial Liabilities
Within 1
Month
USD
244,913
244,913
Within 1
Month
USD
168,752
168,752
114
1-3 Months
USD
3-12 Months
USD
12-24 Months
USD
-
-
800,000
800,000
2,200,000
2,200,000
1-3 Months
USD
3-12 Months
USD
12-24 Months
USD
-
-
-
-
-
-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (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 3 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
PowerChina has delivered EPC proposal and draft EPC contract on 6 February 2024.
On 22 March 2024 the Company raised USD 530,000 via issue of five separate Convertible Loan Notes.
The net proceeds from the CLNs will be used to further advance work that is expected to lead to signing
of an EPC contract for the Kola Potash Project and provide working capital for Kore Potash. Each
Convertible Loan has a zero interest coupon and is convertible into new ordinary shares of ordinary shares
of US$0.001 each in the Company at a price of 0.38 pence per new Ordinary Share and will be converted
immediately after publication of the 2023 Annual Report on 28 March 2024. Subject to the conversion of
the CLNs the Company will issue 109,865,053 new Ordinary Shares in the Company.
On 22 March 2024 the Company also announced that it is the intention of David Hathorn, Chairman and
Interim CEO, to subscribe for new ordinary shares of the Company for a consideration of USD 150,000 as
soon as practicable following publication of the 2023 Annual Report and on the same terms as the CLNs.
115
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (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.
Cairq Conseil – ROC 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
Parent
Dec 2023
USD
Dec 2022
USD
Consolidated Entity
Dec 2022
Dec 2023
USD
USD
117,740
-
117,740
125,296
-
125,296
117,740
15,986
133,726
125,296
-
125,296
22,362
22,362
20,730
20,730
22,362
22,362
20,730
20,730
140,102
146,026
156,088
145,966
Fees payable to the Company’s external auditor for the
local audit of the Subsidiary’s annual accounts
Cairq Conseil
-
-
15,986
17,157
NOTE 19: RELATED PARTY TRANSACTIONS
Directors’ remuneration
The expense of USD 974,339 recognised (2022: USD 823,488) includes directors fees paid and
remuneration for the current CEO. An amount of USD 121,716 (2022: USD nil) is payable to directors fees
that have not been paid.
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 43,730 (2022: USD 89,232) and USD 5,640
(2022: USD 1,310) 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 2023 (2022: USD nil)
116
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (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 71,780 (2022: USD 118,870).
There were no amounts outstanding owed to in respect of services provided by St James’s Corporate
Services Limited at 31 December 2023 (2022: USD nil).
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
David Hathorn
Non-Executive Directors
David Hathorn
Jonathan Trollip
David Netherway
Pablo Hernandez Mac-Donald
Mr Wouter Pulinx
Chief Executive Officer (Resigned with effect from 31 October
2023)
Non-Executive Chairman & Interim Chief Executive Officer
Non-Executive Chairman (appointed on 25 August 2017)
Non-Executive Director (appointed on 17 November 2017)
Non-Executive Director (appointed on 12 December 2017)
Non-Executive Director (Resigned with effect from 20 June
2023)
Non-Executive Director (Appointment with effect from 24 July
2023)
Executives
Henko Vos
St James’s Corporate Services
Limited
Gavin Chamberlain
Amanda Farris
Andrey Maruta
Joint Company Secretary (appointed on 7 November 2017)
Joint Company Secretary (appointed on 1 October 2018)
Chief Operating Officer (Resigned with effect from 31 January
2023)
Chief Financial Officer (Resigned with effect from 11 December
2023)
Chief Financial Officer (appointed on 11 December 2023)
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
117
Consolidated Entity
Dec 2023
USD
1,331,427
20,069
1,351,496
Dec 2022
USD
1,396,971
30,222
1,427,193
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 20: KMP DISCLOSURES (CONT)
There were five directors who held office at the end of the 2023 (2022: five). Details of directors’
remuneration are provided in the Directors’ Remuneration Report on pages 61 to 69 of this Annual Report.
Individual directors and executives’ compensation disclosures
Information regarding individual directors and executives’ compensation and equity instruments
disclosures are provided in the Remuneration Report section of the Directors’ Report. Apart from the details
disclosed in this note, no Director has entered into a material contract with the Company or the Group
since the end of the previous financial year and there were no material contracts involving directors’
interests existing at year-end.
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 2023
USD
Dec 2022
USD
Dec 2023
USD
Dec 2022
USD
Expense arising from equity-settled share-
based payment transactions
-
9,412
-
9,412
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
Consolidated Entity
Dec 2023
USD
Dec 2022
USD
Dec 2023
USD
Dec 2022
USD
Amounts capitalised
to exploration and
evaluation expenditure arising from equity-
settled share-based payment transactions
20,068
20,810
20,810
20,068
118
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
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 20,068 (2022: USD 30,222) of which vesting expenses capitalised to exploration
and evaluation expenditure of USD 20,068 (2022: USD 20,810).
Details of the share options outstanding during the year are as follows:
2023
2022
Number of
share
options
Number of
share
options
Number of
share
options
Outstanding at beginning at year
55,900,000
55,900,000
46,900,000
Granted during the year
-
-
9,000,000
Outstanding at the end of the year
55,900,000
55,900,000 55,900,000
Weighted
average
exercise
price
GBP
0.022
GBP
0.022
GBP
0.022
The share options outstanding at 31 December 2023 had a weighted average exercise price of GBP 0.022
and a weighted average contractual life of 0.83 years.
Details of options and performance rights issued to KMP
Performance
Rights
Rights Issue
Number of
rights at 31
December
2022
Cancelled
in period
Exercised
Issued in
the
period
Lapsed
rights
15
1,760,000
1,760,000
-
-
(1,760,000)
(1,760,000)
-
-
-
-
Number
of rights
at 31
December
2023
-
-
Time to
expiry
(Years)
-
Performance
Rights
Rights Issue
Number of
rights at 31
December
2021
Cancelled
in period
Exercised
Issued in
the
period
15
25
1,760,000
550,000
2,310,000
-
-
-
-
(550,000)
(550,000)
-
-
-
Lapsed
rights
Number
of rights
at 31
December
2022
- 1,760,000
-
-
- 1,760,000
Time to
expiry
(Years)
-
-
119
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP (Cont)
The following Performance Rights from share-based payment arrangements were in existence during the
current and prior periods:
Rights Series 15
Grant Date
29/05/2017
Vesting Date
Refer below
Number of
Rights
Expiry Date
11,734,855 31/05/2022
Rights Series 25
17/03/2020
Refer below
2,500,000 17/03/2025
Fair Value at
Grant Date
AUD 0.17 / AUD
0.104
GBP 0.0615
The total charged for the year ended 2023 in respect of the above performance rights was Nil.
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:
Vesting
conditions
Total
Exercise
price
Exercisable
Expiry
Brad Sampson
(Option Series 33)
26,900,000
GBP 0.022
First, second and
third anniversary of
issue date
19/07/2024
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
120
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP (Cont)
Options Series 34, 35
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 ex-employee and 8,000,000 options to Andrey Maruta (CFO). The vesting conditions of the
options were as follows:
Vesting
conditions
Total
Exercise
price
Exercisable: First, second and third
33,000,000
GBP 0.022
anniversary of issue date
Expiry
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
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: Upon obtaining a
9,000,000
GBP 0.022
the
financing package
development of the Company’s Kola Project approved by the
Board.
fund
fully
to
Expiry
09/06/2027
121
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 21: SHARE-BASED PAYMENTS (CONT)
Details of options and performance rights issued to KMP (Cont)
The fair value of the options at grant date of GBP0.0089 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
Rights Series 15
On 29 May 2017, the Group announced that the Board resolved and agreed to issue up to 11,734,853
performance rights available to employees under the LTIP. These performance rights vest as one fully paid
ordinary share for each performance right, of which the final amount issued may be reduced by the Board
(in its discretion) depending upon the employee’s performance against certain non-market and market
performance conditions.
The fair value of the performance rights attached to the non-market performance conditions was estimated
at AUD 0.17 per performance right.
The fair value of the performance rights attached to the market performance condition was estimated at
AUD 0.104 per performance right at grant date.
On 3 April 2023, a total of 1,760,000 ordinary shares were issued to an ex-employee following the vesting
of performance rights. At the end of the year Nil (2022: 1,760,000) remained in existence.
122
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (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:
Grant
Date
Vesting
Date
17/07/2019
17/07/2022
15/09/2019
15/09/2022
13/06/2022
08/06/2027
Number
of
Options
26,900,00
0
33,000,00
0
9,000,000
Expiry
Date
Fair Value
at Grant
Date
17/07/2024 GBP 0.0070
01/01/2024
GBP 0.0092
09/06/2027 GBP 0.0089
Exercise
Price
GBP
0.022
GBP
0.022
GBP
0.022
Option Series 33
(i)
Options Series
34, 35 (ii)
Option Series 38
(iii)
(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 ex-employee and 8,000,000 to Andrey Maruta (CFO). At year end
20,000,000 options were outstanding.
(iii) Were granted on 13 June 2022 to David Hathorn. All 9,000,000 remained outstanding at year end.
123
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
NOTE 22: LOSS PER SHARE
Classification of securities as ordinary shares
The Company has only one category of ordinary shares included in basic earnings per share.
Classification of securities as potential ordinary shares – share options and rights outstanding
The Company has granted 55,900,000 share options in respect of a total of ordinary shares at 31
December 2023 (31 December 2022: 55,900,000) and Nil performance rights (31 December 2022:
1,760,000). 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
Dec 2023
USD
Dec 2022
USD
Consolidated Entity
Dec 2022
Dec 2023
USD
USD
(0.03)
(0.04)
(0.03)
(0.04)
Parent
Dec 2023
USD
Dec 2022
USD
Consolidated Entity
Dec 2022
Dec 2023
USD
USD
Loss attributable to ordinary shareholders
(939,296)
(1,410,306) (1,091,055) (1,513,953)
Parent
Dec 2023
Number
Dec 2022
Number
Consolidated Entity
Dec 2023
Number
Dec 2022
Number
Weighted average number of ordinary
shares used as the denominator in
calculating basic earnings per share
3,537,739,507
3,400,159,288 3,537,739,507
3,400,159,288
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 1/2023 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.
124
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023 (CONT)
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.
NOTE 24: CREDIT RISK MANAGEMENT PRACTICES
The Company has implemented robust credit risk management practices. These practices are essential
for assessing and mitigating credit risks associated with our financial assets.
Our definition of default aligns with industry standards and regulatory guidelines. Specifically, we consider
a counterparty to be in default under the following circumstances:
Past Due: A debtor is past due by more than 90 days on any significant credit obligation to the Company.
Unlikely to Pay: A debtor is unlikely to fulfil its credit obligations to the Company without recourse to actions
such as realizing security.
We arrived at this definition after analyzing our trade and other receivables, historical default data, and the
nature of our credit exposures. It enables us to accurately identify defaults and manage credit risk
effectively.
125
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
Pty Ltd
Level 11, 172 St George’s
Terrace
Perth WA 6000
Telephone: +61 (8) 9323 2000
Facsimile: +61 (8) 9323 2033
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
The shareholder and CDI holder information set out below was applicable as at 1 March 2024:
Number of holders of ordinary shares/CDIs on Issue
4,119,667,120 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
2,673
1,014
348
974
764
5,773
Units
627,661
2,592,928
2,711,545
40,524,269
4,073,210,717
4,119,667,120
Percentage
%
0.02
0.06
0.07
0.98
98.87
100.00
The number of holdings comprising less than a marketable parcel was 4,769 with a given a share value
of AUD 0.009 per share.
126
ASX ADDITIONAL INFORMATION (UNAUDITED) (CONT)
Substantial shareholders and CDI holders
Substantial shareholders and CDI holders listed in the Company’s share register as at 1 March 2024:
Name
The Bank of New York (Nominees)
Limited(i)
Sociedad Quimica y Minera
Huntress (CI) Nominees Limited(ii)
Luna Nominees Limited(iii)
No. of fully paid
ordinary shares /
CDIs
Percentage
%
No. of unlisted
options / equity
warrants held
684,712,335
538,210,503
514,467,826
337,750,061
2,075,140,725
16.62
13.06
12.49
8.20
50.37
-
-
-
-
-
(i) Includes 629,520,171 ordinary shares held by The Bank of New York (Nominees) Limited on behalf
of Princess Aurora Company Pte Ltd and 32,365,000 ordinary shares held directly.
(ii) Includes 507,797,313 ordinary shares held by Huntress (CI) Nominees Limited on behalf of Harlequin
Investments.
(iii) Includes 337,708,061 ordinary shares held by Luna Nominees Limited on behalf of Mr David Hathorn.
On-market buy-back
There is no current on-market buy-back.
Twenty largest holders of quoted equity securities (ordinary shares / CDIs)
Top 20 Shareholders and CDI Holders as at 1 March
2024
1
2
3
4
5
6
7
8
9
10
11
12
The Bank of New York (Nominees) Limited
Sociedad Quimica y Minera
Huntress (CI) Nominees Limited
Luna Nominees Limited
Wadeville International (Mauritius) Ltd
Golden Season International Limited
Interactive Brokers LLC
Pershing (CI) Nominees Limited
91 LP – DL Stevens
HSBC Custody Nominees
Hargreaves Lansdown (Nominees) Limited
BNP Paribas Nominees Pty Ltd
Goldman Sachs Securities (Nominees)
Limited
Citicorp Nominees Pty Limited
State Street Nominees Limited
John Earhart
Glen Deveron Investments Pty Ltd
Dingyi Group Investment Limited
Aurora Nominees Limited
Heriot Investments Pty Ltd
13
14
15
16
17
18
19
20
Total
127
Number of Shares /
CDIs
684,712,335
538,210,503
514,467,826
337,750,061
193,471,000
177,665,258
127,867,722
122,154,079
103,500,000
100,516,326
94,544,092
86,516,211
74,396,000
57,582,943
43,462,070
31,302,411
30,182,760
20,855,524
20,202,459
15,000,000
3,391,724,580
% Held
16.62%
13.06%
12.49%
8.20%
4.70%
4.31%
3.10%
2.97%
2.51%
2.44%
2.29%
2.10%
1.81%
1.40%
1.05%
0.76%
0.73%
0.51%
0.49%
0.36%
82.33%
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 9 Jun
2027
Number of
unquoted
equity
securities
20,000,000
26,900,000
9,000,000
Number
of holders
2
1
1
Number of
holders holding
20% or more in
the class
2
1
1
55,900,000
N/A
N/A
Unquoted equity security holdings greater than or equal to 20%
Unlisted options exercisable at GBP 0.022 expiring 1January
2024
Gavin Chamberlain
Andrey Maruta
Number of unlisted
options
12,000,000
8,000,000
20,000,000
Percentage
60%
40%
100%
Unlisted options exercisable at GBP 0.022 expiring 19 July 2024
Brad Sampson
Number of unlisted
options
26,900,000
Percentage
100%
Unlisted options exercisable at GBP 0.022 expiring 9 June 2027
David Hathorn
Number of unlisted
options
9,000,000
Percentage
100%
Voting Rights
The voting rights attaching to ordinary shares are:
On a show of hands, every member present in person or by proxy shall have one vote, and upon a poll,
each share shall have one vote.
Options, Performance Rights and Equity Warrants do not carry any voting rights.
Securities exchange listing
Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the
ASX. The Company’s ASX code is “KP2”. On the ASX they are traded as CDIs. On 29 March 2018, the
Company completed secondary listings on the AIM market operated by the 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.
128
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 2023 (and the date of this report) and a table
showing changes to the Potash Mineral Resources and Ore Reserves between 2022 and 2023 is
included in the Review of Operations on pages 8 to 28.
Project Overview
A project overview for the Group is included in the Review of Operations and Strategic Report on pages 8
to 28.
129