Stephan Bernstein, CEO of GreenRoc, details the PFS results for the new graphite processing plant. Watch the video here.
An interesting article this morning from Highfield. They have updated their DFS (as EML will need to also do after receiving the ESIA). It looks like estimates have been pushed up by around 10%.
I don't think this is unexpected, probably lower than I would have guessed.
An updated feasibility study for Muga estimated a capital cost of €436-million for the Phase 1 operation and €226-million for Phase 2. This was up from the previous estimate of €398-million for Phase 1 and €209-million for Phase 2.
C1 costs for the project have also increased from the €76/t estimated in 2021 to €91/t.
The mine plan for the Muga has been maintained with the project expected to have a 30-year mine life and Phase 1 of the operation producing 500 000 t/y of potash and Phase 2 increasing production to one-million tonnes a year.
https://m.miningweekly.com/article/highfield-gets-a25m-investment-2023-05-23
Raindance may have worked according to today's weather reports its raining & snowing in Morocco & there is localised flooding in Khemisset.
No holder enjoys days like these when the SP tanks but we really are in the hands of the Moroccan authorities.
Graham Clarke was brought in to build & run a mine. He has years of experience doing this & is a perfect fit.
So why are we not building the mine?
A couple of reasons combined has held this back,
1, The Moroccan mining licencing rules changed in 2020 meaning the ESIA was far more important than it was before. EML are on the 4th application, we have an experienced approvals manager brought in especially to get the ESIA passed (Hajar Alaoui), was brought in April 2022).
2, Morocco is currently in the worst drought for 40yrs, currently reservoir levels are below 25% & this is after the rainy season. Of course they have to be careful conserving water & making sure there is zero contamination from the mining tailings. EML have offered solutions, hopefully they are enough to get the permit granted.
If you read the last RNS, it sounds like (or at least to me), that GC was hoping to be in position to announce the permit, meaning he believes it could land anytime.
The good news is while EML have been waiting pre construction work has been continuing. This work was always going to be needed to be done so time wise it will not have too much of a detriment to the actual mine construction.
While it is frustrating, I am happy to wait, GC has always said Morocco is fully supportive of the project & mining licences have been granted. Everyone involved in EML has been frustrated by the wait, but I cannot see what more they can do other than wait & answer any queries the Moroccan gov have swiftly which I am sure they are doing.
GLA
Hi Aim/Westie, I cannot remember which clip I heard it in but I am sure Graham mentioned it. Might have been licence to produce or words to that effect. He also said it was easy to obtain once the ESIA drops.
GL
When the ESIA lands I am sure there will be plenty of media coverage & a few interviews from the BOD. Hopefully a Q&A for LTH's.
The next step once the ESIA lands is a licence to mine, but that should come easily once the environmental permit is in place.
Pre production construction has continued & hopefully this will put EML in a good position to break ground hopefully the end of this year or early next.
Long term holders already know the potential here but for anyone new, EML hold approx 50% of the basin with the licence area extending NE.
Currently the mine life is 30yrs with a possible 10-20 years extension but OCP also own a large area within EML's licenced blocks. This would add considerably (roughly double), to the mining area & would make sense for both parties for an agreement to recover from this area also (it would simply not make economic sense for OCP to mine here one EML have a mine running).
With the worst drought for 40yrs the permit is certainly taking its time but once the permit arrives we have a world class asset with possibly 50yrs+ on our hands.
GLA
Good evening Westie & Trev, I am also remaining positive & expect some kind of update in the next few weeks.
One issue that is not being discussed on the BB though is just how severe the drought is & how it looks set to continue.
Currently the reservoirs are only 24% full, its no wonder we are having to wait on the environmental permit. I believe without last years drought we would have had the permit already this looks to have held things back.
Hopefully Grahams waste water & dry tailings solutions have been welcomed by the Moroccan gov & they might be in a position to issue that last remaining hurdle.
Lets hope so & fingers crossed for rain.
GLA
EML brought GC in because they believed by now we would be building the mine. That's what he is good at building & running potash mines.
Nobody, PI's II's directors etc ever thought that this ESIA would take this long.
The reason for such a big delay is being unlucky with the timing, the mining laws changes in 2020 meaning more empathies was put on the environmental side then last year Morocco suffered its worst drought in 40yrs.
The permit will come, its really a Q of when & what other hurdles we have to cross.
I have a high average but intend to put more in once we are into the new tax year.
Hopefully the next bit of news is ESIA or completion of pre mining engineering. The road access is also due for an update now we have a Canadian contractor working on it.
GLA
This didn't sound like a promise to me, realistic yes, hopeful yes, a promise? Nope.
"The Company is working through these solutions with the relevant government departments to ensure they are acceptable to all stakeholders, although the timing of final approvals is in the hands of the Moroccan authorities."
I expect news this week regarding the capex which will have had to rise with the inflation & water solutions being discussed.
GLA
Talk of the devil.
https://www.investorschronicle.co.uk/news/2023/02/22/miners-turn-to-the-growing-fertiliser-market/
Just sat down & had a good look through the RNS. As others have mentioned this is a great piece of news especially with the involvement of the UKIF for such a large percentage of the debt.
As a_sceptic alluded to costs may well have increased, but there was a large contingency built in there ($40m), & we have also had an extra $6m from the Singapore investors.
Even if the above did not cover the full costs it looks as though further funding via the raise would not be an issue.
Another good step in the right direction, the time lag between the environmental approval & debt raise should be closer from today's news.
GLA
Testpac3,
from the Q4 update
"Foremost among these is the confirmation of the capacity to use recycled water from the Khemisset Waste Water Treatment Plant, instead of drawing freshwater direct from the Ouljet Essoltane Dam. This revision, developed in conjunction with Reminex SA, significantly mitigates risks around water supply levels during dry periods."
"The Company has also determined that a dry tailings system will now be employed at Khemisset to reduce water consumption and essentially eliminate any risk of saline fluid outflow in the event of an extreme rainfall event. Such tailings storage facilities are in use at various potash operations around the world."
From the July Q2 update,
"Water Supply
In conjunction with Reminex, an improved solution for process plant water supply has been investigated in detail and now approved as the go forward case for further design work.".
This according to the latest presentation has been submitted in December.
As others have mentioned I do not think you need to be too concerned with the current drop Cbax. There is plenty of pre construction work ongoing at the site including road & junction work from a new Canadian contractor. GC mentioned in the Q4 update that we are fully funded up to the debt raise & with the extra funding we received in October there isn't any reason why the project should not be on course given the pre construction work was always going to take place 22/23.
If you look at the last presentation from the Emmerson website (Feb 23), the time line has been updated with the lates info which reads,
"Met with technical authorities on 28 October 2022 who confirmed only minor finalisations required to complete the submission."
"Technical submissions made to environmental and water agencies for review. December 2022"
I have always believed it's a matter of time as to when we receive the ESIA.
EML have been unlucky with the recent mining law changes & a severe drought in Morocco, coming when the application has been submitted.
I am happy to hold & wait, no investment especially on AIM is risk free but the project is world class & EML have submitted a viable alternative to using fresh water.
GLA
I don’t think the mining salt & tailings are a big concern here. If you street view or look at the photos on the Emmerson website you will see it’s just desert for miles & miles around. This doesn’t mean the tailings can be left in previous updates we know they have drilled to test the geology for wells for the tailings to be pumped into & further slides show the construction plan with plenty of room for mining waste.
Of course we need the ESIA but work is ongoing even if we had this last year I do not believe we would be any further ahead construction wise. Pre construction was always the first part & with the $18m raised we know the money is being put to good use in pre construction work. Best of all we have it confirmed that we are fully funded up to the debt raise for mine construction.
Hi all, I also believe the ESIA will be with us this quarter, there has been a lot of pre construction work onsite already & the three main contractors are all in place.
The further $6m has ensured we have the necessary funds up to the debt raise.
The further potential is enormous the JORC only covers 40% of the current mining claim, the further North/East the basin goes the better the grades which falls inline with the remaining EML area.
There is also a massive area in the middle of our claim owned by OCP. This will never be mined by them so I would expect EML at some point to make an offer for the claim. This area easily adds 30% to the current licence area.
That is true, but we can look at indicators to what we think the chances are.
Firstly the commitment from our Singapore backers with another $6m investment at a purchase price above the current SP. We are now funded through to project financing.
Secondly, the recent off take agreements, if this project was way off I doubt we would be entering into negotiation's for the off take agreements.
Thirdly, the recent presentation informed us that Graham had "Met with Technical authorities on the 28th October 2022 who confirmed only minor finalisations required to complete the submission"
It's hard watching this drop & awaiting the news we all want to hear but I believe this project is on track.
GL
Hi, sorry I meant shipping as in sending the potash/salt overseas as we would if our customer were based in Brazil. GL.
Nice to see Emmerson going back in the right direction. I especially like the offtake for the salt, with potash prices coming back of the highs the salt gives Emmerson a cushion. There wasn't much detail of who we could sell the salt to but with this offtake agreeing to take 50% it's the cherry on the top of the potash cake.
We all know there is another important piece of news we are all waiting for but in the meantime negotiating a deal for the dept financing is made easier when we give the backers confidence that our products are in demand & best of all no shipping costs involved.
Work done / ongoing. According to the update in July. All C&P form the article posted recently.
1, further drilling of deep holes was supplemented by directional drilling and four additional ERT surveys. The deeper drill holes had the dual purpose of further understanding the lithography around the declines to assist in finalising the precise siting for key infrastructure to take advantage of the most competent ground conditions.
2, The new portal location was approved as the go-forward case for more detailed engineering, the company said.
3, “Engineering is well under way on each of the key infrastructure areas. Civil and structural work has now commenced following the decisions made with regard to mine site and portal locations,”
4, In conjunction with Reminex, an improved solution for process plant water supply was investigated in detail and approved as the go-forward case for further design work.
5, Meanwhile, the power strategy for the mine was more clearly defined during the quarter, with the main feed onto site, backup feed and substation now confirmed. Emmerson said engagement with State-owned utility ONEE would now move forward to develop key design criteria.
6, In terms of other infrastructure, Emmerson engaged with a specialist consultant to assist in the design of the highway connection, after which a baseline study was completed to understand local transport characteristics such as travel directions and distances, traffic, air pollution or quality of roads, as well as to assess the impact of the future mine.
7, finance, This work was ongoing, the company said, with options for the location of the road junction already identified and under discussion with the relevant government bodies to achieve the best outcome.
The simply wall st articles are poorly written as they are just automated documents for clicks.
https://www.miningweekly.com/article/emmersons-moroccan-potash-project-progressing-well-2022-07-11#.Y3PyD7k5PZg.twitter
A few of you will have already read the above but its worth having a look at just what EML are doing currently. The project manager flew out this Monday so hopefully he is looking at the next parts of the pre production work necessary before the mine can be started.
There is plenty to be done, cash burn normally with miners is a worry but here we are using it in readiness for production.
The wait for the ESIA is driving us all nuts but I am happy that the background work continues.
https://www.agbi.com/analysis/morocco-aims-to-become-the-worlds-premier-fertiliser-tycoon/
This bit is interesting,
"Many Moroccan firms, he explained, will use their potash to produce the fertiliser end-product and sell that on – not just to Europe, but also to Africa, which he said Morocco is targeting as a future export market. Clarke said his team is looking to export potash, rather than create fertilisers and export those products."
Then this,
"OCP, Morocco’s state-owned and largest phosphate producer, has a “vision to supply fertilisers to Africa, and Africa will, because of the amount of arable land available, become a food exporter to feed the world – it has to do that, otherwise food security issues will become a significant problem,” Clarke said.