Results of Proposed Fundraise

Kore Potash plc, the potash exploration and development company whose flagship asset is the 97%-owned Sintoukola Potash Project (“Kola” or the “Kola Project”), located within the Republic of Congo (“RoC”), is pleased to announce the successful completion of the oversubscribed Proposed Fundraise. A total of 823,475,6181 New Ordinary Shares will be issued at the Placing Price of 1.1 pence (2.0 Australian cents) for a total value of approximately US$12.50 million1.

Shore Capital Stockbrokers (“Shore Capital”) acted as Sole Bookrunner in the Proposed Fundraise. 180 Markets Pty Ltd coordinated the Australian element of the Proposed Fundraise.

Highlights

• The Company has conditionally raised, in aggregate, approximately US$12.5 million* at a price of 1.1 pence (2.0 Australian cents) per new Ordinary Share (the “Placing Price”).
• 363,165,226 new Ordinary Shares have been placed with new and existing institutional investors at the Placing Price (the “Unconditional Placing”). The New Ordinary Shares proposed to be issued pursuant to the Unconditional Placing will be issued within the Company’s existing ASX Listing Rule 7.1 capacity.
• 195,037,6681 new Ordinary Shares have been conditionally placed with new and existing institutional investors at the Placing Price (the “Conditional Placing”).
• In addition, certain new and existing shareholders have subscribed directly with the Company for a total of 265,272,7241 new Ordinary Shares at the Placing Price (the “Subscription Shares”).
• Harlequin Investments Ltd (a Substantial Shareholder as defined under the AIM Rules, and a Company in which David Stevens is an associate) is participating in the Proposed Fundraise for a total of 65,876,1521 New Ordinary Shares with a total value of approximately US$1.0 million.
• David Hathorn, Chairman of Kore, has indicated he is participating in the Proposed Fundraise for a total of 23,056,653 New Ordinary Shares for a total value of approximately $350,000, his participation in the Subscriptions is to be confirmed once the Company has released its quarterly results for the period ended 31 March 2021.
• Conditionally, in aggregate, a total of 823,475,618* New Ordinary Shares will therefore be issued pursuant to the Proposed Fundraise, representing approximately 25.1% per cent. of the Enlarged Share Capital.

*Assumes the completion of the subscription by certain South African investors and the passing of the necessary resolutions to authorise the issue of new Ordinary Shares which will be sought at a general meeting of the Company

Completion of the Conditional Placing and the Subscription are subject to Shareholder approval of certain resolutions (including for the purposes of ASX Listing Rule 7.1 and ASX Listing Rule 10.11) to authorise the issue of new Ordinary Shares, which will be sought at a general meeting of the Company, details of which will be made available in due course. In addition, certain South African investors who fall within the exemptions set out in section 96(1)(a) and/or (b) of the South African Companies Act 71 of 2008 have subscribed for a total of 146,339,919 New Ordinary Shares in the Subscriptions, and this is conditional on South African Reserve Bank approval being in place. Completion of the Proposed Fundraise shall not be subject to SARB Approval which may or may not take place after completion of the Proposed Fundraise. Should SARB approval not be forthcoming then the Company will not be able to accept the funds from South African investors and the gross proceeds of the Proposed Fundraise will be lowered accordingly.

The Placing is not conditional on either receiving SARB approval or the Subscriptions completing. Should SARB approval not be forthcoming and/or the Subscriptions otherwise not complete, the gross proceeds of the Proposed Fundraise will be lowered accordingly.

The Company’s two largest shareholders, the Oman Investment Authority (“OIA”) and Sociedad Quimica y Minera (“SQM”) will be offered the opportunity to subscribe for New Ordinary Shares at the Placing Price, in order to preserve their respective shareholdings in the Company. OIA and SQM have up to 20 business days to inform the Company if they intend to subscribe and such participation would be a related party transaction for the purposes of AIM Rule 13. Any participation by OIA and SQM would be in addition to funds raised via the Proposed Fundraising.

Capitalised terms used in this announcement have the meanings given to them in the announcement made earlier today regarding the Fundraising (the “Fundraising Announcement”), unless the context provides otherwise.

For the purposes of the Proposed Fundraise, the following exchange rates have been used:

1 GBP = US$1.38

1 GBP = AUS$1.82

Circular and notice of general meeting

A circular containing further details of the Proposed Fundraise and notice of a general meeting of the Company to, inter alia, pass the resolutions required to enable the Company to implement the Conditional Placing and the Subscription, is expected to be published and despatched to Shareholders as soon as reasonably practicable. Following its publication, the circular will be available on the Company’s website at www.korepotash.com.

Normal trading in the Company’s securities on the ASX is expected to resume following the release of this announcement to ASX.

Directors and related parties’ participation

Subject to the passing of the Shareholder resolutions and on completion of the Conditional Placing and the Subscription, the following are expected to be the shareholdings of existing significant shareholders who have participated in the Proposed Fundraise:

• Harlequin Investments – 65,876,152 new shares subscribed for in placing (368,451,313 total shares held or 11.25%)
• David Hathorn – 23,056,653 new shares subscribed for in placing (140,430,043 total shares or 3.33%

As a significant shareholder, Harlequin Investments Ltd’s intended participation in the Proposed Fundraise is deemed to be a related party transaction for the purposes of AIM Rule 13. The directors of the Company, having consulted with the Company’s nominated adviser, Canaccord Genuity, consider that the terms of Harlequin’s participation in the Proposed Fundraise are fair and reasonable insofar as Shareholders are concerned.

As a director, David Hathorn’s intended participation in the Proposed Fundraise is deemed to be a related party transaction for the purposes of AIM Rule 13. The directors of the Company, other than David Hathorn, having consulted with the Company’s nominated adviser, Canaccord Genuity, consider that the terms of his participation in the Proposed Fundraise are fair and reasonable insofar as Shareholders are concerned.

Admission and Total Voting Rights

Application will be made to the London Stock Exchange for the 363,165,226 New Ordinary Shares which are being issued pursuant to the Unconditional Placing to be admitted to trading on AIM, the ASX and JSE (“First Admission”). It is expected that First Admission will take place at 8.00 a.m. on 14 April 2020.

Following First Admission and the issue of the 363,165,226 New Ordinary Shares, the Company’s issued share capital will consist of 2,814,933,399 ordinary shares of US$0.001. Accordingly, following First Admission the total number of voting rights in the Company will be 2,814,933,399. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the Company under the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules.

180 Markets Pty Ltd are to be issued 2,000,000 new Ordinary Shares in the Company as part of their fee (“Fee Shares”). Application will also be made to the London Stock Exchange for the 462,310,392 New Ordinary Shares which are being issued pursuant to the Conditional Placing, Subscriptions and issue of the Fee Shares to be admitted to trading on AIM, the ASX and JSE (“Second Admission”). It is expected that Second Admission will take place at 8.00 a.m. on 6 May 2020.

Brad Sampson, CEO of Kore Potash, commented:

“This fundraise will allow the Company to deliver our element of the optimisation study to reduce Kola’s capital cost following the signing of the non-binding MoU with the Summit Consortium which outlines a roadmap to optimise, fully finance and construct Kola via a mix of debt and royalty financing.

“We are pleased that the financing for Kola is moving forward at a time when we see increasing potash prices and demand for potash remains strong despite challenging times in the global economy, underpinning our belief in continued potash demand growth”

“We are committed to delivering the best possible results for our shareholders, local communities, and all of our stakeholders.”

This announcement has been approved by the Board of Kore Potash plc.