Agreement on assumptions for cooperation regarding exploration for, evaluation and extraction of deposits of potassium salts, phosphorus, rock salt and nonferrous metals as part of a joint venture

Friday, 10 January, 2014
Current report no. 1/2014

The Management Board of KGHM Polska Miedź S.A. announces that on 10 January 2014 KGHM Polska Miedź S.A., Grupa Azoty Zakłady Azotowe „Puławy” S.A. and Gdańskie Zakłady Nawozów Fosforowych "Fosfory" Sp. z o.o. (a subsidiary of Grupa Azoty Zakłady Azotowe „Puławy” S.A.) signed an Agreement on assumptions for cooperation regarding exploration for, evaluation and extraction of deposits of potassium salts, phosphorus, rock salt and nonferrous metals as part of a joint venture („Agreement”).

The signing of this Agreement is a continuation of the cooperation initiated by the signing by KGHM Polska Miedź S.A. and the company Gdańskie Zakłady Nawozów Fosforowych "Fosfory" Sp. z o.o. of a Letter of Intent on cooperation in exploration projects, involving exploring for and evaluating deposits of chemical raw materials, including potassium salts, mining projects related to the development of existing deposits of chemical raw materials, both domestically and abroad, as well as the utilisation of secondary materials (wastes) in order to recover critical metals (including rare earth metals), as reported by the Company in current report no. 28/2013 dated 30 August 2013.

This Agreement allows other entities of the KGHM Polska Miedź S.A. Group and the Grupa Azoty S.A. Group to participate in the project to be realised under the Letter of Intent. The Agreement sets forth the conditions and further steps involved in realisation of this project, fundamental amongst which are agreeing the details of the investment contract, setting forth in particular the principles for the founding and operation of the special purpose company which will execute the project, obtaining antimonopoly permits and corporate agreements for its founding and the principles for purchase of the raw materials from this company. The Agreement foresees that the leader of the entire project will be KGHM Polska Miedź S.A., while the capital interest of Grupa Azoty Zakłady Azotowe „Puławy” S.A. and of Gdańskie Zakładów Nawozów Fosforowych "Fosfory" Sp. z o.o., or of entities belonging to the Grupa Azoty S.A. Group, in the special purpose company and in projects executed by it, will essentially amount to 50%.