Kore Potash (LON: KP2) on Thursday posted highly useful results from drilling at the Dougou Extension project in the Republic of Congo, quite possibly the highest grading potash project on earth.

The potash developer holds 97% ownership of the Kola and Dougou Extension (“DX”) potash projects located in the Republic of Congo’s (“RoC”) Sintoukola Basin.

Assay results from the drilling program for phase 1 of the DX project’s Definitive Feasibility Study (“DFS”) have been received. In total, the company drilled seven diamond drill holes, assays from which were then sent for geochemical testing.

Brad Sampson, chief executive, said the recent campaign achieved its “main objective”, which was to improve Kore’s “knowledge of the location of the sylvinite and carnallite potash mineralisation”.

This analysis confirmed the locations of the Hanging wall and Top potash seams while simultaneously improving confidence in sylvinite distribution within the Top Seams.

Sylvanite is a rock containing potassium chloride and sodium chloride, a key source of potash.

The name potash applies to a group of minerals that provide potassium for plant growth. Potassium is one of three key plant nutrients, along with nitrogen and phosphorus.

Potassium helps maintain soil fertility and also boosts plant health, improving not only the size but also the taste and colour of foods. For that reason, it is sometimes referred to as the ‘quality nutrient’.

DX has previously returned grades of between 57% and 60% potassium chloride, making it “a candidate for the world’s highest grading potash project”.

However, analysing the assay results and drill hole logs also demonstrated that the Hanging Wall Seam’s sylvinite / carnallite boundary is structurally controlled, with sylvinite distribution proving more complex than in the pre-feasibility study model.

Some areas containing carnallite were identified that will be excluded and not considered for extraction in Kore’s future DX mine planning. Carnallite is another important potash source.

Moreover, testing indicated that the company may need more drill hole and seismic information to be confident in sylvinite distribution in the Hanging Wall Seam.

So far, Kore has completed a number of technical studies, as well as laboratory test work, for the first phase of the DX DFS. Efforts include designing the production well to provide specifications when estimating future capital cost, as well as testing rock mechanics properties to help determine cavern stability.

All work so far complete in phase 1 of the DX DFS was “within the planned budget”.

One of the firm’s next steps, before further working on the DX DFS, will be to develop a new DX deposit geological model – incorporating recent drilling results.

Another step will be to use new modelling to determine if more drill hole and seismic information is needed to improve confidence in sylvinite and carnallite distribution within the DX deposit.

Work has already begun on developing a new geological model, set to complete before the end of 2021.

While the recent results from DX were more complex than hoped for, the current share price dip could present a good time to buy given that Kore has an even bigger project in the form of Kola.

Kola is the company’s largest scale project: with Kola sylvanite a tier 1 asset with potential for 2.2 million tons per annum muriate of potash production over a 33-year life.

“The update of the DX geological model will happen in parallel with the ongoing capital optimisation and financing activity for the development of the Kola project which is currently the company’s main focus,” said Sampson.

Author: Anna Farley

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