LONDON (ShareCast) - (Sharecast News) - Kore Potash reported a narrowed first-half loss on Friday, and said it had made significant progress on advancing its flagship Kola project in the Republic of Congo, including securing a fixed-price construction contract and signing non-binding funding term sheets for the $2.2bn development.
The AIM- and JSE-listed potash developer, which is pre-revenue, posted a net operating loss after tax of $435,428 for the six months ended 30 June, down from $528,636 a year earlier.

It held $3.5m in cash at period end, up from $1.3m at the end of December, following a $10m fundraising completed in March.

The company said the Kola project's engineering, procurement and construction contract with PowerChina, signed in November, was worth $1.93bn on a fixed-price basis and included penalties for delays or performance failures.

It also said OWI-RAMS GMBH had signed non-binding term sheets indicating plans to arrange and provide a $2.2bn funding package through a mix of senior secured project finance and royalty financing.

An optimised definitive feasibility study published in February projected average annual EBITDA of $733m over a 23-year mine life, with output of 2.2 million tonnes per year of muriate of potash at an estimated delivered cost of $128 per tonne to Brazil, positioning Kore among the sector's lowest-cost producers.

Kore said its immediate focus was on progressing towards financial close for Kola, including finalising technical support for construction and negotiating an operator contract, while also continuing to assess strategic options for its Dougou Extension project.

At 1410 BST, shares in Kore Potash were up 3.12% at 3.3p.

Reporting by Josh White for Sharecast.com.

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