The Satimola Project

KPC is in the process of acquiring 100% shareholding in Satimola Limited, which holds via its wholly owned subsidiary Satbor LLP the Satimola potash deposit in the Republic of Kazakhstan.

The Satimola deposit is located within the geological formation known as the Satimola Dome in Western Kazakhstan. The Satimola Dome lies approximately 40 km east of the Ural River, 65 km from the railhead at Inderbor which is linked to the main Kazakhstan railway system to the Kazakh-Chinese border and some 200 km north of the Caspian Sea.

Historical Exploration

Soviet geologists first discovered the Satimola Dome in 1964 and the initial exploration focus was on borates resources. Exploration between 1963 and 1972 totalled 74 drill holes, drilled to a depth of between 600 meters (m) and 1,300m, generally on a grid of 2km × 2km covering the entire Satimola Dome. This deeper exploration drilling intersected high-grade potash mineralization and boron. Between 2004 and 2009, an additional exploration campaign was conducted including 46 new drill holes, 2D and down-hole seismic survey and geophysical logging. The work has confirmed the existence of a large scale, layered, relatively shallow-depth Salt Dome structure containing significant potash and borates resources.

JORC Resources

Drilling has defined three geological units in the salts beneath the palaeo-phreatic surface: the Lower Halite Layer, Central Productive Zone and the Upper Halite Layer, within thickness of over 400m, 500m to 650m and 400m to 600m respectively. JORC Compliant Potash and Borate Resources have been estimated in February 2011 (Tables 1 and 2 below), and subsequently re-considered by Tetra Tech to be compliant with JORC 2012 in an Independent Geologist Report in 2014.

Table 1 – Satimola JORC Potash Resources (Cut-off grade 10% K2O)

Table 2 – Satimola JORC B2O3 Resources (Cut-off grade 4% B2O3)

Note: JORC Compliant Resource, effective date on 28 February 2011; Source: Wardrop Engineering Inc. (now Tetra Tech WEI Inc.)

Geological 3D Model of Satimola Deposit

Synthesis

The synthesis of all work to date have confirmed that:

• The Satimola Dome hosts one of the world’s largest undeveloped potash resources
• The structure of the salt beds in the Dome is relatively simple and continuity is good over significant distances, as shown by the correlation achieved by comparing gamma log and chemical analysis
• JORC compliant potash resources of over 6.0 billion tonnes grading 15.5% K2O (10% K2O cut-off grade) and borate resource of over 600 million tonnes B2O3 grading 6.95% B2O3 in the production zone
• The deposits are amenable to conventional, low cost, soft rock mining methods starting at modest depths and conventional ore beneficiation processing
• The Satimola project has moved beyond exploration and preliminary engineering into the feasibility study engineering and development stage