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LONDON (Alliance News) - Emmerson PLC said Monday newly completed cost estimates for the scoping study of its Khemisset potash project in northern Morocco found the potential for significant capital cost savings.
Shares in the Moroccan-focused potash development company were trading 7.5% higher at 4.88 pence each.
The company completed the design and cost estimates for the project, including the development of road connections.
"These estimates have confirmed the potential for significant capital cost savings for the project due to its proximity to excellent infrastructure," the company said.
Emmerson said the project requires only 1.2 kilometres of paved roads to be constructed and presents no requirement to build rail spur connections.
The total budgeted capital cost required to connect the Khemisset site to existing highway infrastructure is approximately USD1.3 million, including a 30% contingency, Emmerson said. This represents an estimated capital cost savings of more than USD130 million, compared to comparabel work at a Canadian potash mine.
"In the development of a potash mine, low capital cost to production is integral in demonstrating economic viability in any commodity price environment," Chief Executive Officer Hayden Locke said.
He added: "Access to infrastructure results in significant capital cost savings in construction, especially when compared to other development stage potash projects globally, which typically require significant investment in roads and rail connections to transport their product to an export port."