Interim Results for the six months to 30 June 2022

RNS Number : 5392A

Emmerson PLC

26 September 2022

 

Emmerson PLC / Ticker: EML / Index: AIM / Sector: Mining

26 September 2022

Emmerson PLC ("Emmerson" or the "Company")

Interim Results for the six months ended 30 June 2022

Emmerson, which is developing the world class Khemisset Potash Project in Morocco ("Khemisset" or the "Project"), is pleased to announce its interim results for the six-month period ended 30 June 2022.

Highlights

· Strong progress at Khemisset in basic engineering and drilling campaigns, positioning the Company to proceed rapidly towards the construction of the mine in 2023 after financial close

· Enhancements made to the Project to reduce further its environmental impact, including sourcing of waste water for processing, and the selection of dry tailings storage

· Potash prices remain high due to tight supply and growing demand - food security becoming a major global issue

· Further support for the Project from strategic investors, with US$40 million financing commitment extended for a further 12 months, and a new subscription of US$6.0 million at 6.0 pence per share (see separate announcement)

· Emmerson now funded for remaining technical and other workstreams to deliver Khemisset through to construction decision and financial close, currently expected to be during H2 2023

· Positive discussions around environmental approvals as Emmerson continues to work with the relevant authorities to receive full approval.

Chief Executive Graham Clarke said: "I am pleased to report that we have made strong progress in 2022 to date towards completing the basic engineering and technical workstreams as part of finalising the design of the Khemisset project. We are now well placed to move rapidly towards concluding the financing for the construction of the mine, once the final environmental approvals are received. Although these approvals have been taking longer than we had originally anticipated, the Moroccan authorities have assured us of their support for the Project, which all parties recognise has a significant role to play in the context of the global crisis around food security, of which potash supply is a key element.

"Today we announce the extension of our US$40 million financing commitment with Global Sustainable Minerals Pte Ltd and Gold Quay Capital Pte Ltd, together with a US$6 million placing for new equity. These agreements demonstrate the ongoing support of our strategic investors and leave us funded for our remaining technical workstreams up to financial close. Once we receive the final environmental approvals, we expect financial close to take around six months if all goes well, and construction to commence soon thereafter. Subject to progress in the coming months on the environmental permit, we would hope to be able to commence construction in the second half of 2023. "

Financing

The Company announces today that it has received further support from its strategic investors Global Sustainable Minerals Pte Ltd ("GSM") and Gold Quay Capital Pte Ltd ("GQC") (together the "Strategic Investors") in the form of an extension to its existing Convertible Loan Notes agreement, and a new US$6.0 million subscription for new shares at a price of 6.0 pence per share by GSM. Further details of this important and positive development, and the opportunity for existing shareholders to participate alongside the GSM subscription are covered in separate announcements published immediately following this announcement.

Discussions have continued regarding the financing package for the construction project at Khemisset. A range of international and Moroccan banks have expressed interest in participating in the debt funding, while there has also been considerable interest in the equity portion, which is corner-stoned by the Strategic Investors' renewed commitment for up to US$64 million, comprising US$12 million of equity subscriptions to date (including US$6 million announced today), up to US$40 million of convertible notes, and potential additional funding of US$12 million from warrant exercises.

The combination of strong economics, solid jurisdiction, an experienced management team and a compelling investment case for potash have attracted significant attention from a variety of investors, in spite of some challenging market conditions.

Khemisset

Emmerson is committed to making Khemisset the first potash producer in Africa. Achieving this will enhance Morocco's status as a fertiliser hub supporting food security for Africa and the rest of the world and will confirm the country's growing reputation as an attractive destination for foreign investment. Emmerson's management is committed to working proactively with Morocco to ensure that the development of the Project aligns with the Kingdom's economic strategy through a mutually beneficial relationship that maximises local and national benefits. It will continue to engage closely with a wide range of Moroccan stakeholders to ensure the optimum route to production is achieved.

Technical Workstreams

The Emmerson team in Morocco continues to progress towards achieving construction readiness at Khemisset. The work undertaken during the period, in partnership with Moroccan partners Reminex Engineering on the general infrastructure, and Barr Engineering on the process plant, has ensured that the Company is well positioned to move quickly to the next stage once the final permits and financing are in place.

Recent geotechnical work has driven the adjustment of the mine site location, with decline alignment drilling conducted during the period demonstrating better than anticipated ore conditions at the end of the decline.  Information gathered from boreholes and Electrical Resistance Tomography ("ERT") surveys has led to the selection of a more suitable area for construction of the site and the decline, as well as reducing the use of private land.

Additional deep drill holes, supplemented by directional drilling and four further ERT surveys, were completed in order to provide further insights into the lithography around the declines, and will assist in finalising the precise siting of key infrastructure to take advantage of the most competent ground conditions. One of the holes was extended to provide detailed data to feed into the design of the Deep Well Injection ("DWI") which will help minimise surface tailings.  The 8km of ERT surveys have covered the tailings storage facility area and the Mining Infrastructure Area, for best understanding of rock competence for foundations.

As previously reported, the Company has determined that a dry tailings system will now be employed at Khemisset. The key advantages of the dry tailings system are the environmental benefits of reduced footprint, reduced water consumption and also reduced risk in the event of any extreme weather events, a key environmental benefit.

Workstreams relating to the process plant have also progressed well, with process flow diagrams, piping and instrumentation diagrams, and function specifications now completed.  Infrastructure and service investigations are now well advanced, and an improved solution for process plant water supply has been identified whereby water will be taken either partially or fully from the Khemisset Waste Water Treatment Plant, with the ultimate goal of requiring no fresh water for the process. This is a scientifically robust and environmentally friendly approach that both reduces risks of water supply to the Project, and further reduces environmental impacts with a shorter pipeline required.

Potash market

During the first half of 2022 the significant rise in the price of potash, especially in the large growth market of Brazil, became more broad-based, with prices reaching US$1,000/t in many markets around the world. These prices reflect the tightening of supply following many years of underinvestment in mining, a situation brought sharply into focus by the war in Ukraine, with sanctions imposed on both Russia and Belarus (which together account for nearly 40% of global potash production).

Although prices have settled back slightly in recent weeks at lower levels, at approximately US$800/t they remain considerably higher than the assumptions included at the time of the Khemisset Feasibility Study in 2020, which estimated a project net present value of US$1.4 billion. While supply issues related to the Ukraine crisis are likely to remain for the foreseeable future, the longer-term drivers of potash demand, in particular population growth and pressure on land usage in the context of climate change, are expected to sustain high prices for some time.

Permitting Update

As shareholders will be aware, the Company's Environmental and Social Impact Assessment ("ESIA") is awaiting final approval.  Emmerson is committed to meeting the highest environmental standards in Morocco and this will remain a core principle at the heart of its work throughout the construction phase and during the subsequent life of the mine. The Company has addressed all the ESIA issues raised by the relevant Moroccan authorities. It has enhanced and upgraded various aspects of its proposed development plan, far surpassing the minimum requirements of the ESIA and working to International Finance Corporation Performance Standards, including, as stated above, in its water sourcing and tailings management strategies.

Corporate

Emmerson has continued to make significant strides towards securing the funding need to bring Khemisset into construction and has strengthened its internal and advisory teams with a view to finalising these steps.  In February 2022, Emmerson announced the appointed of Jim Wynn as CFO, and Liberum Capital as a joint broker, and Matt Wilmott was recruited as Technical Services Manager.

Condensed Consolidated Statement of Comprehensive Income for the six months ended 30 June 2022

		6 months ended 30 Jun 2022	6 months ended 30 Jun 2021	12 months ended 31 Dec 2021
		(Unaudited)	(Unaudited)	(Audited)
	Notes	US$'000	US$'000	US$'000
Administrative expenses	3	(1,244)	(897)	(2,349)
Share-based payment expense		(53)	(217)	(33)
Net foreign exchange loss		(81)	(26)	(388)
Operating loss		(1,378)	(1,140)	(2,770)
Finance cost		-	(5)	(7)
Loss before tax		(1,378)	(1,145)	(2,777)
Income tax		-	-	-
Loss for the period attributable to equity owners		(1,378)	(1,145)	(2,777)
Other comprehensive income
Exchange loss on translating foreign operations		(84)	(169)	(693)
Total comprehensive income attributable to equity owners		(1,462)	(1,314)	(3,470)
Loss per share (cents)	4	(0.15)	(0.14)	(0.34)

Condensed Consolidated Statement of Financial Position as at 30 June 2022

		30 June 2022	30 June 2021	31 Dec 2021
		(Unaudited)	(Unaudited)	(Audited)
	Notes	US$'000	US$'000	US$'000
Non-current assets
Intangible assets	5	16,489	12,032	13,555
Property, plant and equipment		39	12	41
Total non-current assets		16,528	12,044	13,596
Current assets
Trade and other receivables		1,126	490	771
Cash and cash equivalents		4,535	6,362	10,032
Total current assets		5,661	6,852	10,803
Total assets		22,189	18,896	24,399
Current liabilities
Trade and other payables		(1,005)	(207)	(1,835)
Total current liabilities		(1,005)	(207)	(1,835)
Net assets		21,184	18,689	22,564
Shareholders equity attributable to equity owners
Share capital		29,025	23,223	28,774
Share-based payment reserve		2,163	1,572	2,048
Reverse acquisition reserve		2,234	2,198	2,198
Retained earnings		(11,867)	(8,650)	(10,278)
Translation reserve		(371)	346	(178)
Total equity		21,184	18,689	22,564

Condensed Consolidated Statement of Changes in Equity for the six months ended 30 June 2022

US$'000	Share Capital	Share-based payment reserve	Reverse acquisition reserve	Retained earnings	Translation reserve	Total equity
Balance as at 1 January 2021	15,755	1,499	2,198	(7,508)	515	12,459
Loss for the period	-	-	-	(1,145)	-	(1,145)
Other comprehensive loss:
Exchange loss on translating foreign operations	-	-	-	-	(169)	(169)
Total comprehensive loss	-	-	-	(1,145)	(169)	(1,314)
Share option and warrant issue	-	166	-	-	-	166
Transfer	-	(3)	-	3	-	-
Share issue - 3rd parties	8,223	(90)	-	-	-	8,133
Share issue costs	(755)	-	-	-	-	(755)
Balance as at 30 June 2021	23,223	1,572	2,198	(8,650)	346	18,689
Balance as at 1 January 2021	15,755	1,499	2,198	(7,508)	515	12,459
Loss for the year	-	-	-	(2,777)	-	(2,777)
Other comprehensive loss:
Exchange loss on translating foreign operations	-	-	-	-	(693)	(693)
Total comprehensive income	-	-	-	(2,777)	(693)	(3,470)
Issue of share options and warrants	90	(104)	-	-	-	(14)
Transfer	-	(7)	-	7	-	-
Issue of shares for cash	14,345	660	-	-	-	15,005
Share issue costs	(1,416)	-	-	-	-	(1,416)
Balance as at 31 December 2021	28,774	2,048	2,198	(10,278)	(178)	22,564
Adjustment for change in functional currency 1/1/22	219	65	36	(211)	(109)	-
Balance as at 1 January 2022	28,993	2,113	2,234	(10,489)	(287)	22,564
Loss for the period	-	-	-	(1,378)	-	(1,378)
Other comprehensive loss:
Exchange loss on translating foreign operations	-	-	-	-	(84)	(84)
Total comprehensive loss	-	-	-	(1,378)	(84)	(1,462)
Issue of share options	-	53	-	-	-	53
Share option and warrant exercised	3	(3)	-	-	-	-
Issue of shares for cash	29	-	-	-	-	29
Balance as at 30 June 2022	29,025	2,163	2,234	(11,867)	(371)	21,184

Condensed Consolidated Statement of Cash Flows for the six month period ended 30 June 2022

	6 months ended 30 June 2022	6 months ended 30 June 2021	12 months ended 31 Dec 2021
	(Unaudited)	(Unaudited)	(Audited)
	US$'000	US$'000	US$'000
Cash flows from operating activities
Loss before tax	(1,378)	(1,145)	(2,777)
Add back: Foreign exchange	81	(324)	(448)
Add back: Share-based payment	53	167	33
Add back: Depreciation	2	4	5
Changes in working capital
Increase in trade and other receivables	(355)	(60)	(351)
(Decrease)/increase in trade and other payables	(821)	(473)	1,182
Net cash flows used in operating activities	(2,418)	(1,831)	(2,356)
Cash flows from investing activities
Exploration expenditure	(2,934)	(766)	(2,671)
Property, plant and equipment purchase	-	-	(30)
Net cash flows used in investing activities	(2,934)	(766)	(2,701)
Cash flows from financing activities
Proceeds from issuing shares and warrants	29	8,133	14,958
Cost of issuing shares	-	(755)	(1,416)
Net cash flows generated from financing activities	29	7,378	13,542
(Decrease)/increase in cash and cash equivalents	(5,323)	4,781	8,485
Cash and cash equivalents at beginning of period	10,032	1,563	1,563
Foreign exchange on cash and cash equivalents	(174)	18	(16)
Cash and cash equivalents at end of period	4,535	6,362	10,032

Notes to the Condensed Consolidated Financial Statements for the six months ended 30 June 2022

1.  General information

Emmerson PLC (the "Company") is a company incorporated and domiciled in the Isle of Man, whose shares were admitted to the Standard Listing segment of the Main market of the London Stock Exchange on 15 February 2017. On 27 April 2021, the Ordinary Shares of the Company were admitted to trading on AIM and the listing of the Company's ordinary shares on the Official List and their trading on the Main Market were cancelled.

The principal activity of the Group is the exploration, development and exploitation of a potash development project in Morocco .

2.  Basis of preparation

2.1  General

The Condensed Consolidated Financial Statements have been prepared in accordance with UK-adopted International Accounting Standards.  The Condensed Consolidated Financial Statements for the six months ended 30 June 2022 are unaudited and have not been reviewed by the Group's auditor, and do not include all of the information required for full annual financial statements.

They should be read in conjunction with the Company's annual financial statements for the year ended 31 December 2021.  The principal accounting policies applied in the preparation of the Condensed Consolidated Financial Statements are unchanged from those disclosed in those statements. These policies have been consistently applied to each of the periods presented.

The financial information of the Group is presented in US Dollars, which is also the functional currency of the Company and has been prepared under the historical cost convention. The individual financial statements of each of the Company's wholly owned subsidiaries are prepared in the currency of the primary economic environment in which it operates (its functional currency).

2.2  Basis of consolidation

The Consolidated Financial Statements comprise the financial statements of the Company, Moroccan Salts Limited and Moroccan Salts Limited's subsidiaries (the "MSL Group") following the business combination which took place on 4 June 2018.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

· The contractual arrangement with the other vote holders of the investee;

· Rights arising from other contractual arrangements; and

· The Group's voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in the Group Financial Statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions that are recognised in assets, are eliminated in full.

All the Group's companies have 31 December as their year-end. Consolidated financial statements are prepared using uniform accounting policies for like transactions.

2.3  Functional and presentational currency

The financial information of the Group is presented in US dollars. The functional currency of the Company Emmerson PLC changed on 1 January 2022 from GBP to US$ reflecting the stage in development of activities whereby the cost base of the Group changed from GBP to US$. The effect of a change in functional currency is accounted for prospectively. All items were translated into the new functional currency using the exchange rate at the date of the change .

The individual financial statements of each of the Company's wholly-owned subsidiaries are prepared in the currency of the primary economic environment in which they operate (functional currency ).

2.4  Change in Functional and Presentation Currency

The Group presented its results in US dollars for the first time for the year to 31 December 2021 having previously reported in GBP. This change should help to provide a clearer understanding of the Group's financial position as the future corporate development activity is likely to be US focused.

In order to satisfy the requirements of IAS 21 with respect to a change in presentation currency, the statutory financial information as previously reported in the Group's Annual Reports have been restated from UK Sterling into US Dollars using the procedures outlined below:

· Assets and liabilities were translated to US Dollars at the closing rates of exchange at each respective balance sheet date.

· Share capital, share premium and other reserves were translated at the historic rates prevailing at the dates of transactions.

· Income and expenses were translated to US Dollars at an average rate at each of the respective reporting years. This has been deemed to be a reasonable approximation.

· Differences resulting from the retranslation were taken to reserves.

· All exchange rates used were extracted from the Group's underlying financial records.

2.5  Going concern

The Directors have reviewed the Group's ongoing activities and have a reasonable expectation that the Group has adequate resources to continue operating for the foreseeable future. For this reason, they have adopted the going concern basis in preparing the Interim Financial Statements.

2.6  Future changes in accounting policies

The Directors have reviewed the IFRS standards in issue which are effective for annual accounting periods ending on or after the stated effective date. In their view, none of these standards would have a material impact on the financial reporting of the Group.

2.7  Segment reporting and cyclicality

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments.

The Directors consider the Group is engaged in a single segment of business being the exploration activity of potash in one geographical area, being the Khemisset Project in Morocco.

The interim results for the six months ended 30 June 2022 are not necessarily indicative of the results to be expected for the full year ending 31 December 2022. Due to the nature of the entity, the operations are not affected by seasonal variations at this stage.

3.  Administrative fee and other expenses

	6 months ended 30 Jun 2022	6 months ended 30 Jun 2021	12 months ended 31 Dec 2021
	(Unaudited)	(Unaudited)	(Audited)
	US$'000	US$'000	US$'000
Project costs	-	7	7
Directors' fees	292	263	635
Travel and accommodation	61	9	59
Auditors' remuneration including associates:   Current year   Adjustment for prior year	22 12	15 -	25 -
Employment costs	298	105	455
Professional and consultancy fees	559	498	1,168
Total	1,244	897	2,349

 

4.  Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

	6 months ended 30 Jun 2022	6 months ended 30 Jun 2021	12 months ended 31 Dec 2021
	(Unaudited)	(Unaudited)	(Audited)
	US$'000	US$'000	US$'000
Earnings
Loss from continuing operations for the period attributable to the equity holders of the Company	(1,378)	(1,145)	(2,777)
Number of shares
Weighted average number of ordinary shares for the purpose of basic and diluted earnings per share
	915,425,829	794,971,631	822,875,086
Basic and diluted loss per share	0.15 cents	0.14 cents	0.34 cents

5.  Intangible assets

The intangible assets consist of capitalised exploration and evaluation expenditure, including the cost of acquiring the mining license and research permits held by the Company's subsidiaries.

	30 Jun 2022	30 Jun 2021	31 Dec 2021
	(Unaudited)	(Unaudited)	(Audited)
	US$'000	US$'000	US$'000
Cost:
At the beginning of the period	13,555	11,132	11,132
Additions	2,934	766	2,671
Effects of changes in foreign exchange rates	-	134	(248)
As at end of period	16,489	12,032	13,555

 

6.  Related party transactions

Directors' consultancy fees

Hayden Locke is a Director of the Company and is a director of Benson Capital Limited, which provided consulting services to the Company. During the period, Benson Capital Limited received total fees of US$65k (year to 31 December 2021: US$244k). The amount outstanding as at period end was US$nil (31 December 2021: US$nil).

Robert Wrixon is a Director of the Company and also provided consulting services to the Company. During the period, Robert Wrixon received fees of US$ 55k (year to 31 December 2021: US$116k). The amount outstanding as at period-end was US$ nil (31 December 2021: US$ nil).

Graham Clarke is a Director of the Company and is a director of GCUK Consulting Limited, which provided consulting services to the Company during 2021 for US$99k. No services were provided during the period and no amounts were outstanding at 30 June 2022 or 31 December 2021.

The total Directors' fees during the period is shown in note 3.

7.  Post-balance sheet events

 

On 26 September 2022, the Company announced it had entered into an agreement with Global Sustainable Minerals Pte Ltd ("GSM") and Gold Quay Capital Pte Ltd ("GQC") to extend the commitment period for the previously announced US$40.0 million convertible loan note subscription to 30 September 2023, providing continued cornerstone financing support for the development of the Khemisset Potash Project, as well as extending the expiry date for the 82.4 million warrants at 8.2 pence due to expire on 6 December 2022 for a further 12 months. GSM received a renewal fee of 50 million warrants at 8.2 pence with an expiry date of 6 December 2023.

GSM also agreed to subscribe for 89.3 million shares at a price of 6.0 pence per Ordinary share representing aggregate proceeds of US$6.0 million before expenses.

 

8.  Change in Functional and Presentation Currency

The Directors believe that US dollars are a more appropriate currency in which to present the Group's consolidated results, on the basis that, along with most international mining groups, the majority of financing and pricing discussions and presentations are undertaken in that currency.

Consequently, the Group opted for the financial results to be presented in US dollars for the year ended 31 December 2021. The change in presentation currency was applied retrospectively.

In re-presenting the Group Financial Statements for the year ended 31 December 2021, the reported information was converted to US dollars from GBP using the following procedures:

· Assets and liabilities were translated to US dollars at the closing rates of exchange at each respective balance sheet date (31 December 2021: GBP1: US$1:3532; 31 December 2020: GBP1:US$1.367).

· Share capital, share premium and other reserves were translated at the historic rates prevailing at the dates of transactions.

· Income and expenses were translated to US dollars at an average rate at each of the respective reporting periods. This has been deemed to be a reasonable approximation (31 December 2021: GBP1: US$1.377; 31 December 2020: GBP1: US$1.276).

· Differences resulting from the retranslation were taken to reserves.

With effect from 1 January 2022 the Company changed the functional currency to US dollars from GBP. This was deemed appropriate as the Company moves from a prospecting stage to the development of the mining asset.  As a consequence, the expense base for the Group has changed from GBP to US$.

In accordance with IAS 21, the change in functional currency is applied prospectively with all balances being converted to US$ at the rate of exchange on the appropriate date.

To assist shareholders during this change, the impact on the prior period results, closing balance sheet and the numerator for earnings per share as originally reported is set out below:

 

 

Condensed Consolidated Statement of Comprehensive Income for the six months ended 30 June 2021 (represented)

		As originally reported 6 months to 30 June 2021	Re-presented 6 months to 30 June 2021
	Note	£'000	US$'000
Continuing Operations
Administrative expenses	3	(658)	(897)
Share-based payment expense		(158)	(217)
Net foreign exchange loss		(19)	(26)
Operating loss		(835)	(1,140)
Finance cost		(4)	(5)
Loss before tax		(839)	(1,145)
Income tax		-	-
Loss for the year attributable to equity owners		(839)	(1,145)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Exchange gain on translating foreign operations		(176)	(169)
Total comprehensive income attributable to equity owners		(1,015)	(1,314)
Loss per share - Basic and diluted	4	(0.11 pence)	(0.14 cents)

Consolidated Statement of Financial Position at 30 June 2021 (represented)

		As originally presented 30 June 2021	Re-presented 30 June 2021
	Note	£'000	US$'000
Non-current assets
Intangible assets	5	8,699	12,032
Property, plant and equipment		9	12
Total non-current assets		8,708	12,044
Current assets
Trade and other receivables		354	490
Cash and cash equivalents		4,600	6,362
Total current assets		4,954	6,852
Total assets		13,662	18,896
Current liabilities
Trade and other payables		(150)	(207)
Total current liabilities		(150)	(207)
Net assets		13,512	18,689
Shareholders equity attributable to equity owners
Share capital		17,388	23,223
Share-based payment reserve		1,216	1,572
Reverse acquisition reserve		1,651	2,198
Translation reserve		(167)	346
Retained earnings		(6,576)	(8,650)
Total equity		13,512	18,689

**ENDS**

  For further information, please visit  www.emmersonplc.com , follow us on Twitter (@emmerson_plc), or contact:

Emmerson PLC Graham Clarke / Jim Wynn / Charles Vaughan	[phone]
Shore Capital (Nominated Adviser and Joint Broker) Toby Gibbs / John More	[phone]
Liberum Capital Limited (Joint Broker) Scott Mathieson	[phone]
Shard Capital (Joint Broker) Damon Heath / Isabella Pierre	[phone]
St Brides Partners (Financial PR/IR) Susie Geliher / Charlotte Page	[phone]

Notes to Editors

Emmerson is focused on advancing the Khemisset project ("Khemisset" or the "Project") in Morocco into a low cost, high margin supplier of potash, and the first primary producer on the African continent.  With an initial 19-year life of mine, the development of Khemisset is expected to deliver long-term investment and financial contributions to Morocco including the creation of permanent employment, taxation and a plethora of ancillary benefits.  As a UK-Moroccan partnership, the Company is committed to bringing in significant international investment over the life of the mine.

Morocco is widely recognised as one of the leading phosphate producers globally, ranking third in the world in terms of tonnes produced annually, and the development of this mine is set to consolidate its position as the most important fertiliser producer in Africa. The Project has a large JORC Resource Estimate (2012) of 537Mt @ 9.24% K₂O, with significant exploration potential, and is perfectly located to support the expected growth of African fertiliser consumption whilst also being located on the doorstep of European markets. The need to feed the world's rapidly increasing population is driving demand for potash and Khemisset is well placed to benefit from the opportunities this presents. The Feasibility Study released in June 2020 indicated the Project has the potential to be among the lowest capital cost development stage potash projects in the world and also, as a result of its location, one of the highest margin projects. This delivered outstanding economics, including a post-tax NPV8 of approximately US$1.4 billion using industry expert Argus' price forecasts, and the spot price for granular MOP fertiliser has since risen, further enhancing the valuations.

 

END

 

 

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