Kore Potash H1 2025: Cash up, loss narrowed, and a pathway to fund Kola
Kore Potash has delivered a tidy half-year update that blends steady finances with real movement on the big prize – getting Kola financed and shovel-ready. The headline is the non-binding term sheets to arrange approximately USD2.2 billion for Kola, alongside a signed, fixed-price EPC contract with PowerChina. Cash rose after a USD10 million fundraise, and the loss narrowed.
For retail investors, the crux is simple: funding clarity plus cost certainty moves Kola closer to reality. There is still a big leap from term sheets to financial close, but the pieces are lining up.
Funding the Kola Project: non-binding term sheets for USD2.2 billion
On 10 June 2025, Kore signed non-binding term sheets with OWI-RAMS GMBH to arrange and provide the total funding requirement for Kola – about USD2.2 billion – via a blend of senior secured project finance and royalty financing. The structure is intended to comply with Shariah principles. OWI-RAMS is part of Record PLC’s portfolio and targets food security and energy transition assets.
This is not yet committed funding, but it is a necessary step towards financial close. The company is now focused on two near-term tasks: appointing technical support for the construction phase (RFPs have been received and are being evaluated) and negotiating an operator contract on a cost plus basis.
EPC certainty: fixed-price contract and early works in motion
The EPC (engineering, procurement and construction) contract was signed with PowerChina on 19 November 2024. It is a fixed-price contract of USD1.929 billion, with penalties for delay and performance shortfalls, and remains subject to financial close. Fixed price matters – it reduces the risk of cost overruns for shareholders.
To keep momentum, Kore and PowerChina agreed an Early Works programme. Kore paid USD5 million in April 2025, included within the total EPC price, for supplementary geological work, additional FEED on the mining shafts, and beneficiation tests. These activities should allow construction to start quickly after financial close.
Optimised DFS: updated mine plan and economics
The Optimised DFS, announced on 27 February 2025, reframes Kola on a more conservative resource base and integrates the signed EPC. A quick glossary: DFS is a definitive feasibility study. LoM is life of mine. MoP is muriate of potash. EBITDA is earnings before interest, tax, depreciation and amortisation.
- Life of mine: 23 years, using all Proved and Probable Ore Reserves and only 6% of Inferred Mineral Resources.
- Potential upside: 340 Mt of Inferred Resources could extend the mine life if upgraded during operations.
- Capital cost: USD2.07 billion (nominal, including owner’s costs) on a signed fixed-price EPC basis.
- Construction schedule: 43 months.
- Throughput: nameplate 2.2 million tonnes per annum of MoP; average production 2.2 Mtpa for 50 Mt over 23 years.
- Delivered cost: USD128/t to Brazil.
- Average annual EBITDA: approximately USD733 million with a 74% EBITDA margin.
- Economics at USD449/t MoP CFR Brazil, on a 90% attributable basis: post-tax NPV10% (real) USD1.7 billion, IRR 18% (real) ungeared.
The economics paint Kola as a prospective low-cost supplier to Brazil and high-growth African markets. The upgrade from earlier studies is that the plan is now anchored on reserves with minimal reliance on inferred resources.
Half-year numbers at a glance
| Metric | H1 2025 | H1 2024 | FY 2024 |
|---|---|---|---|
| Net loss after tax | USD435,428 | USD528,636 | USD1,146,535 |
| Cash and cash equivalents | USD3,499,143 | USD959,956 | USD1,339,321 |
| Total assets | USD200,213,405 | USD174,195,818 | USD171,223,741 |
| Total liabilities | USD2,739,470 | USD3,684,134 | USD3,919,698 |
| Net assets | USD197,473,935 | USD170,511,684 | USD167,304,043 |
| Basic and diluted loss per share | 0.01 cents | 0.01 cents | 0.03 cents |
The loss narrowed to USD435,428 as admin and staff costs stayed disciplined. A large other comprehensive gain of USD20,252,180, driven by foreign currency translation, turned total comprehensive profit positive at USD19,816,752. This is an accounting gain, not operating cash – useful for equity, but not a sign of profitability.
Cash flow and capex: fundraise offsets early works spend
- Operating cash outflow: USD835,158.
- Investing cash outflow: USD7,406,246, mainly exploration and evaluation of USD7,407,571 and USD67,202 for plant and equipment.
- Financing inflow: USD10,218,204 from share issues, net of USD266,377 costs.
- Net increase in cash: USD1,976,800 to USD3,499,143.
On the balance sheet, exploration and evaluation assets climbed to USD196,123,524, up USD26,775,654 since year end. The company capitalised USD6,368,341 in the period, and the carrying value also rose by USD20,407,313 due to the weakening USD against the currency of the Republic of Congo.
Governance and incentives: option grants to non-executives
In April, options were granted to non-executive directors – 4,000,000 options to NEDs, 2,000,000 to the Chairman, and the vesting of 9,000,000 options previously reported in 2022. The board acknowledges this is not compliant with the UK Corporate Governance Code but argues it is appropriate given the company’s stage and the need to conserve cash. Whether investors agree will depend on how swiftly these incentives translate into funding and construction milestones.
DX project: valuable optionality, potential sale under review
The updated JORC-compliant work for the Dougou Extension (DX) was announced on 24 January 2023. DX remains a lower-capital, quicker-to-build asset, but Kore is prioritising Kola. The company is exploring strategic options for DX, including a potential sale.
Why this update matters
- Funding momentum – the term sheets for approximately USD2.2 billion are the clearest signal yet of a path to financial close. They are non-binding, so execution risk remains.
- Cost certainty – a USD1.929 billion fixed-price EPC with performance penalties reduces a key risk for a project of this scale.
- Low-cost positioning – the Optimised DFS points to a delivered cost of USD128/t to Brazil and a 74% EBITDA margin at USD449/t, which, if achieved, would be highly competitive.
- Balance sheet – cash improved to USD3.5 million after the USD10.0 million raise, supporting early works while financing is finalised.
What to watch next
- Conversion of the non-binding term sheets into binding financing, including details of the senior facility and royalty components and any conditions precedent.
- Appointment of technical support for construction and the outcome of the operator contract negotiations.
- Progress on Early Works, including the beneficiation tests – a condition precedent to the EPC – and any further payments due under design optimisation agreements.
- Any update on the potential sale or partnership for DX to recycle value into Kola.
My take as a UK analyst
This is a constructive half-year for Kore. The numbers show discipline – a small operating loss, higher cash, and a sizeable asset base. More importantly, the strategic blocks for Kola are stacking together: a fixed-price EPC, real engineering progress, and a credible route to funding the full USD2.2 billion.
The flip side is familiar to long-time followers – execution risk at financial close, a 43-month build, and the need to keep funding the pre-construction work without straining the balance sheet. Still, if management converts the term sheets and keeps early works on track, Kola’s scale and cost profile could be transformational for shareholders.
