Hayden Locke CEO at Emmerson leads the team developing the Khemisset potash mine project in Northern Morocco. He is interviewed by Donald Leggatt, Head of Investor Relations at London South East.
* Pre-production capital costs are $387 million
* Initial mine life of 19 years
* "with an IRR of nearly 39% and post-tax NPV of $480M this is clearly an extremely robust project in normal market conditions"
In short, Hayden is excited by the project because he believes the Feasibility Study proves the project is world class, with low costs and high margins, and improves marginally on the Scoping Study, which is rare to achieve.
"If you look at the economics, they are exceptional, we are talking EBITDA margins well north of 60%, and post-tax cash margins approaching 50%, those are nothing short of outstanding" explained Hayden.
"We accept that the devil is in the detail, and we still have $45M of contingency included which is at the high end of what other companies would provide".
The big question is can #EML raise the $400M in funding required and what impact will Coronovirus have. "The answer will come from the next round of funding discussions for which the Feasability Study is the catalyst - things are getting serious now. We have been in regular contact with straight debt financiers through to strategic partners, bigger traditional equity partners to non-traditional sources of capital" Hayden told us.
"We are focusing on groups who need to own a source of potash fertiliser, so industry participants in the Middle Eastern region and Africa".
Emmerson (EML)