SUMMIT has a strong African expertise and relationships in the Republic of Congo, track record and experience in mega project development, construction, and project execution.
The investment would be sufficient for Elemental to fund its flagship potash project, the Kola Sylvinite Project in the Republic of Congo through to the commencement of the construction.
It would accelerate the construction of the Kola Mine within 24 months and allow a larger construction of a 2 million tonne per annum MOP operation, rather than a phased approach.
While non binding at present, the Board is in discussions with SUMMIT about the proposal and a proposed new strategy, which includes partnering with a consortium of world-class, experienced, project engineers and project managers.
To date this includes Vinci Construction Group, Technip France S.A., Egis Group, and Louis Dreyfus Armateurs.
The proposal involves the company appointing the construction consortium to lead the completion of the Definitive Feasibility Study for the Kola Mine.
The proposal is conditional on due diligence and other approvals.
The proposal would involve inclusive of pre-engineering works, enabling the construction consortium to produce an open-book, fixed price, binding Engineering, Procurement and Construction offer.
It would conclude with a binding EPC contract, early contractor involvement through DFS by the Construction Consortium results, within 3 months of completion of the DFS,
In addition, a new strategic plan for Elemental's Kola, Dougou and Yangala projects could evolve and to evaluate how best to incorporate these projects within the overall development of Sintoukola.
Sintoukola encompasses the Kola, Dougou and Yangala areas and has potential to be among the world's lowest-cost potash producers.
The Phased Implementation Study for Kola, projects operating costs (OPEX) of US$91 per tonne of Muriate of Potash which is lower than African peer companies with OPEX of US$125 - US$165 per tonne (MoP).
A Scoping Study for solution mining at the Dougou Deposit has an even lower OPEX of US$68 per tonne of MoP.
The projects benefit from proximity to bulk export facility options, the availability of low-cost energy in the RoC and enjoy direct and low cost access to major fertilizer markets in Brazil.
Projected EBITDA/tonne of Dougou and Kola are higher than its peer group (scoping studies) while delivered cost/tonne is also lower.
This is a promising development for Elemental that would enable it to fast track Kola to a larger construction scenario of a 2 million tonne per annum MOP operation, rather than a phased approach.
Last month, Elemental signed a non binding term sheet with India's Shapoorji Pallonji Group.
This week saw the appointment of David Hathorn and Sean Bennett in the roles of non-executive chairman and managing director, respectively.
Proactive recently flagged potential for funding of Sintoukola given the cost advantages of Sintoukola against its potash peers and that this would substantially de-risk project development and provide a "runway" to production and accelerating a re-rating of the Elemental share price.
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