Keras Resources plc / Index: AIM / Epic: KRS / Sector: Mining

29 April 2024

Keras Resources plc ('Keras' or the 'Company')

Q1 2024 Operations and Sales Update

Keras Resources plc (AIM: KRS) is pleased to provide an operations and sales update for the first quarter of 2024.  As previously announced, the Company's 100% owned subsidiary, Falcon Isle Resources Corp ("FIR"), commenced construction of the integrated milling and granulator plant ("Integrated Plant") at its newly acquired property in Delta, Utah in February 2024.  The Integrated Plant is the cornerstone of the joint venture ("JV") with Idaho based partner, Phosul LLC.  Construction is on schedule with commissioning expected during the second half of May 2024 with production ramp-up through Q3 2024. When fully commissioned, the Integrated Plant will have nameplate Phosul® production capacity of 520 tons per month ("tpm") and 920tpm when operating on single shift and double shift respectively.

The Integrated Plant, comprising FIR's high pressure grinding rolls ("HPGR") mill transplanted from its original Spanish Fork site and a 5 ton per hour granulator plant received from a Chinese original equipment manufacturer ("OEM"), will initially operate on a single shift basis but will be scaled up to continuous operations by the end of the year. The Integrated Plant will produce Phosul® granules, the formulation of which has been through extensive field trials and will be marketed by Phosul LLC predominantly in the western states of the US. Importantly the Phosul® formula comprises 80% of FIR's rock phosphate produced its 100% owned Diamond Creek mine, equating to up to 760tpm at full production which will be sold by FIR to the JV and will materially increase sales of 50 mesh product for the balance of 2024 and the remainder of the initial five year JV term.

FIR continues to produce organically certified 10 mesh and 50 mesh dry sized products with total sales for Q1 2024 of 1,969 tons, a 109% increase relative to the 941 tons sold during the same period in 2023 (Q1 2022: 829t), and demonstrates evidence of the increased traction that the Company's  high grade certified products are attracting in the organic market.  It's key to note that at full production, the JV is expected to increase FIR's quarterly sales of 50 mesh by approximately 2,280 tons per quarter (a further 115% increase on the Q1 2024 sales -i.e. traditional sales plus sales to the JV), with 100% of the revenue from the sales to the JV attributable to FIR while also sharing 50% in of the profit from the Phosul® product produced from this material.

Phosul® is currently being produced at the Phosul LLC's processing facility in Sugar City, Idaho.  Current demand for the product outweighs Phosul's Idaho processing capacity so the JV's product will be delivering into an established market with significant scope for growth in the south western states.  With this envisaged growth, the Company is actively looking at new projects both in Utah and surrounding states to augment the 25,000 tons per year capacity from the Diamond Creek mine.

Graham Stacey, CEO of Keras, commented, "The acquisition of the Delta facility and the Phosul JV will be transformative for the Company.  The site will not only house the processing equipment for all products, including the new Phosul® granulate, but also allows all run-of-mine crushed feed material and final products to be stored under cover.  The associated reduction in moisture content reduces the cost of processing and provides a better quality product for our ever growing customer base. I cannot over-emphasise the importance of the Phosul JV, which at steady-state operation will consume approximately 10,500 tons per year of 50 mesh which compares to total sales of 2,111 tons in 2023, with the consequent effect on cash flow and profitability.

The Q1 2024 sales of our sized milled products, which doubled sales for the comparative reporting period in 2023, was very encouraging and will create a significant baseload on which to build with both the increase in 50 mesh product being sold to the JV and the attributable sales of Phosul® granulates. With commissioning of the Delta plant during May, the timing is perfect as we look forward to commencing our summer mining season.

We look forward to updating shareholders as we progress our journey to being the pre-eminent high-grade organic phosphate producer in north America. I also urge readers of this announcement to review our social media channels to see the outstanding results the team has been able to achieve in such a short timeframe."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under Article 7 of the Market Abuse Regulation (EU) No. 596/2014 (as amended) as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (as amended). Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

**ENDS**

For further information please visit www.kerasplc.com, follow us on Twitter @kerasplc or contact the following:

Notes:

Keras Resources (AIM: KRS) wholly owns the Diamond Creek organic rock phosphate mine in Utah, US. Diamond Creek is one of the highest-grade organic phosphate deposits in the US and is a fully integrated mine to market operation with in-house mining and processing facilities. The operation produces a variety of organic phosphate products that can be tailored to customer organic fertiliser requirements.

The Company is focused on continuing to increase market share in the fast-growing US organic fertiliser market and build Diamond Creek into the premier organic phosphate producer in the US.