Commencement of Feasibility Study

RNS Number : 1184Y

Emmerson PLC

07 May 2019

 

Emmerson Plc / Ticker: EML / Index: LSE / Sector: Mining

7 May 2019

Commencement of Feasibility Study at Khemisset Potash Project Continues
Rapid Pace of Development

Emmerson Plc ("Emmerson" or "the Company"), which is focused on developing the low cost, high margin Khemisset Potash Project, is pleased to announce the commencement of a feasibility study (the 'Feasibility Study') on the Company's 100% owned Khemisset Potash Project in Northern Morocco ("Khemisset" or "the Project").  The Feasibility Study will be undertaken by globally-recognised engineering firm, Golder Associates, which completed the Scoping Study at Khemisset.

Overview

·     The Feasibility Study has commenced following successful completion of Scoping Study in November 2018 which highlighted sector leading capital costs and EBITDA margins and which delivered a post-tax NPV₁₀ of US$1.14 billion using independent industry analyst price forecasts

·     Appointment of Golder is the culmination of a rigorous tendering process encompassing a field of highly experienced international consultants

·     Tendering underway for processing design expert with decision expected to coincide with the conclusion of the comprehensive metallurgical test programme currently underway

·     Expected to require 9 to 12 months to complete, with the Company targeting release of results to the market in the first half of 2020

·     Feasibility Study will be divided into discrete work streams which will be released to the market as they are completed

·     £2.3 million of cash remaining as at the end of March 2019 provides sufficient funds to complete the workstream

Hayden Locke, CEO of Emmerson, commented: "We continue to make strong progress at Khemisset thanks to the exemplary work and dedication of our team.  This process has been able to be accelerated thanks to the significant historical work completed on the Project. The Board is encouraged by the outstanding results of the Scoping Study delivered in November 2018, which highlighted Khemisset's extraordinary potential, most notably a post-tax NPV₁₀ of US$1.14 billion and confirmation of industry leading low capital cost requirements, which sets the Khemisset Project apart from its peers.  

"In selecting Feasibility Study engineers, we conducted an extremely thorough and detailed tender process and were pleased with the level of interest from global engineering firms to work with Emmerson on the Khemisset Potash Project. The level of submissions the Company received was exceptional and Emmerson is delighted with the appointment of Golder, an outstanding, global, independent engineering firm with deep experience in the delivery of feasibility studies for complex mining projects.

"This commencement of the Feasibility Study marks the next significant milestone for the Company. We continue to progress the Project on the timelines we initially targeted and look forward to continuing to meet these expectations.

"We will continue to update our investors on the various operational and corporate activities we have underway as we progress with the development of this world class project."

Key Workstreams and News Flow

The Company has numerous activities underway or to commence which it is targeting to release to the market during 2019. Results of key workstreams will be released as they are completed and will include:

·     Completion of metallurgical test work programme

·     Appointment of process design engineers

·     Completion of resource drilling and updated Mineral Resource Estimates

·     Partnerships with in country service providers and Project partners

·     Early engagement with potential financing partners for project development

·     Commencement of Environmental and Social Impact Assessment

·     Planning for mine permitting process

**ENDS**

For further information, please visit www.emmersonplc.com, follow us on Twitter (@emmerson_plc), or contact:  Hayden Locke Emmerson Plc Tel: [phone] Edward McDermott James Biddle Roland Cornish Beaumont Cornish Limited Financial Adviser Tel: [phone] Jeremy King Optiva Securities Limited Broker Tel: [phone] Gaby Jenner Melissa Hancock St Brides Partners Ltd Financial PR/IR Tel: [phone]

Notes to Editors

Emmerson's primary focus is on developing the Khemisset Potash Project located in Northern Morocco.  The project has a large JORC Resource Estimate (2012) of 311.4Mt @ 10.2% K₂O and significant exploration potential with an accelerated development pathway targeting a low capex, high margin mine.  Khemisset is perfectly located to capitalise on the expected growth of African fertiliser consumption whilst also being located on the doorstep of European markets. This unique positioning means the project will receive a premium netback price compared to existing potash producers. The need to feed the world's rapidly increasing population is driving demand for potash and Emmerson is well placed to benefit from the opportunities this presents.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

 

END

 

 

MSCBQLLBKEFZBBD