Member Info for Ideas

Sorry yes, I was meaning the same internal people preparing the RNS as have been preparing the permit application (as in, why is the RNS taking so long?).

Too clever for my own clogs as it was ambiguous and agree it wouldn‘t be right to expect they’re preparing an RNS to say the permit is in. Could come but defo not expecting it at this stage. Sale to OCP for 10p would look good at the moment but even that would be a struggle to justify from here in the 3s! What a shocker!

Isn’t all over yet, though, so fingers and toes crossed.

Wondering could Graham have the permits team preparing the RNS.

Hoping it’s imminent!

I can't recall if it was Investor Meets or another, with Graham, Charles & Hayden joining after role change, "three big value catalysts in the next six months" were his words (paraphrased), as I remember.

Must have been a few years back and before or upon the 'strategic investment' (£6m on risk, plus conditional £3[?]m if all are risks removed).

They've definitely come unstuck somehow. I think govt equity is relevant too. Hard to see why any nation would want someone to extract and export its natural resources for standard corporate taxes only. Standard corporates don't deplete finite resources.

I think the Moroccan govt / royal family either should or will need to have a stake in the project (25% is common for in-country natural resources).

Trouble is that wasn't set up before we invested so would mean dilution, and the debt market we want to rely upon is getting trickier by the day.

If it doesn’t get fixed, OCP will pick up a bargain in the coming sales when markets re-rate.

He’s siriusly experienced ; )

Keep in mind that the RNS you speak of itself say "based on current discussions..."; there is no 'agreement' yet and the financing ‘news’ is that we have had preliminary non binding discussions.

No syndicated loan agreement exists and nor can it because we don't know how much we need and they clearly won't set the interest rate and terms until the time.

Agree it's 'not insignificant'. Flipping that, is it significant (comfort)?! You may say 'no'.

If you're buying a house, you might ask a bank for an estimate of how much they might lend and that's all it is and it's a long way from any paper work.

These are standard pre-contractual discussions that it's great we're having to warm lenders up but might be expected.

It shows movement where it's within their control, but we're still 30+ months later on a key deliverable than was committed in the AIM Prospectus asking us to invest and there's a danger the financing piece may sound like more than it is (as at today).

ESIA trumps all.

Source: RNS dated 14 February 2023

https://www.lse.co.uk/rns/EML/mandated-lead-arrangers-appointed-for-financing-irnc8t8bnut6nvm.html

No major sp move, not because the business is rock solid, so suggests non delivery is now be baked INTO market expectation!? Remarkable.

Look forward to hearing from the business.

If Liberem did exit, having taken an interest when coming on board, that would be interesting Goldbar as its one of the relatively few commercial investors - could reasonably be cross as it clearly advised H1 for the ESIA in its client note (extended once already).

Of course, there’s no way to know; you just don’t often see a private investor offloading quite so heavily in one lump.

Agree G_G_G, I'm teasing a little but not maliciously; there are a lot of unsubstantiated comments around:

"It's coming"

Hayden's "doing plenty of work behind the scenes"

All fine but please let's see the citations so that we’re know is more than bluster.

Yes the permit could come any day, but we have no factual basis that I know to believe that it will come in H1, or for us to be able to rely on past guidance because it's been unreliable for the last few years now.

Successive company, Liberem and other ESIA guidance timelines have passed and been rescheduled.

Case in point the article the other day called it a ‘speculative buy’ and was heartily upvoted - yet this means a gamble!

I think it would help reduce the 'doom merchants' side of the board's feeling if a need to rebalance the comments if the optimists were more realistic and admitted that we just don't know.

Strongly hoping the implication is that we’re in a no-ESIA development zone and build started last year!

Agree testpack.

I couldn't decide if Grapham was inspired to take on a nepotistic local consultant (if we hadn't waited a further year, I might think so) or pressed upon as a 'good idea' to help his application and ended up with a double agent or equivalent of a taxi driver taking a tourist the long route with the meter on.

It hasn't escaped me that our consultants could - with some effort - lean across the table at any board meeting and ask what's needed, and thereby has the relationships to call up any time in any event.

Hasn't seemed to work that way, which does at least raise the spectre your nefarious concerns when the business says it doesn’t know why there’s a delay, despite these connections.

If the business does end in difficulty, the Moroccans will at least have all the plans already to carry swiftly on! Ha ha.

Links below

************

Reminex is a subsidiary of Managem

https://www.managemgroup.com/en/who-we-are/our-expertises-services/engineering

Managem is a subsidiary of Al Mada and Regulator ONHYM is on the Managem Board

https://www.managemgroup.com/en/who-we-are/governance

Al Mada is a Morocco-based private equity fund controlled by Morocco's Royal Family

https://en.wikipedia.org/wiki/Al_Mada_(holding)

EML's RNS differ a little on the waste water point below:

Today 16:57:

"[Hajar Alaoui] is also an expert on using grey/waste water, which is why EML either suggested using it or brought Hajar in to over see the resubmitted ESIA."

RNS dated 11 July 2022:

"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. Whereas in the 2020 Feasibility Study the mine site water supply was envisaged to be from the Ouljet Essoltane dam, it will now 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."

Who are these advisors?

- Reminex is the engineering arm of Managem Group.

- Mangem group is owned by Al Mada and has the National Office of Hydrocarbons and Mines on its board.

- Al Mada, formerly the Société Nationale d'Investissement ( SNI, lit. 'National Company of Investment') is a large private Moroccan holding company mainly owned by the Moroccan royal family.

In sum, the people advising us on how to unlock the ESIA are interconnected the people that haven't granted the ESIA.

With everyone knowing everyone, you'd imagine this could be unlocked.

@Beyondthesea

Agree it’s natural to follow and take confidence in the corporate guidance after buying-in, because it's rational to think it's reliable.

However, it is worth being cautious on the silence.

Finding a similar post from a year ago, if I'm right that Dshox, who has made some great board contributions:

31 May 2022 11:15, responding to the thread "Same old..."

"Confident Khemisset lands its last major permit to build in June [2022] and nobody will want to be out for that. If being construction ready in 2022 is the target, work backwards from there. Liberium sorting out the finance."

And

Later on 29 Jun 2022 13:02 with no permit:

"Good to get some action and excitement brewing here. Potential is there. All this silence for good reason?

We’ve all echoed these thoughts because we're repeatedly told it's always 'nearly there'.

See Charles Vaughan back in Jan 2022

https://youtu.be/e7mMuiles-c

As of then, the ESIA was at an 'advanced stage' (see 8m00s)

In his later slides, encouraging financiers to invest, the ESIA is marked as overdue and supposed to have been in a month before his talk - marked as due Nov/Dec 21 - suggesting he must have used an old slide in a hurry without updating (see 9m30s)

18 months is just a long time to be at an 'advanced stage' - either it wasn't truly advanced and the statement was untrue (unlikely) or it's advanced but stalled for 18+ months now.

In sum, I wouldn't assume, automatically at least, that per the below and from last year above, the company's silence means the permit is about to come - it might will mean that, but it hasn't meant that in the last 24 months or so.

It's like waiting for a train with no departure board by now! We should be getting better and more detailed guidance.

Trouble with AIM is that the permit could come tomorrow and, just as easily, the first time you hear of any trouble could be the business entering administration or a distressed sale.

It is significant for a permit forecast by industry experts Golder to take three months to remain outstanding beyond 30 months.

Agree Westie, I’d imagine a lot of pent up deliverables will come through in a domino fashion. Very much hoping for free following progress within our control again! GLA.

Let us know the ticker on that one with “all the work out of the way” A2D!

- Emmerson’s 2020 feasibility study is out of date and needs updating for all design changes, including an updated mine plan and set of financial estimates with all the recent cost inflation - it isn't fit for funding (as is);

- we're awaiting the processing plant design by US-based Barr Engineering not yet announced complete (90% complete in Jan 2023); and

- we're awaiting the infrastructure design by the Moroccan firm Reminex SA (said 80% complete in Jan)

Jan RNS said "Both [of the last two] streams will be completed within Q1 2023" - while forecasting H1 for ESIA, so seems they are not dependent on the ESIA but are running later than guidance.

Before that, there's the land acquisition plan and other things in the 2022 RNS.

Emmerson has plenty of good stuff to do!

1/2

Thanks Corryvreckan, I thought I’d seen the results posted on the website but you might well be right.

Your nudge to the AIM rules helped me answer two recent questions – the ESIA *is* late and EML needs to say more than only if it gets an ESIA refusal. All explained below:

I didn’t quickly see a need to publish AGM resolutions, but I did see the AIM Note for Mining, Oil and Gas Companies.

- the AIM mining note required EML to include a Competent Person’s Report (CPR) in its AIM admissions doc [FN1]; and

- under AIM Rule 17, EML must then notify “any material change between [the company’s] actual trading performance […] and any […] estimate or projection included in the admission document” must be notified. [FN2]

Both of these help some of our discussions:

Firstly, it confirms that the need for an RNS isn’t limited to getting a “no” on the ESIA. EML must RNS “any material change” from Golder’s CPR in the admissions doc.

Secondly, we often discuss whether the ESIA can or cannot be ‘late’ in the absence of a timeline. The admissions document clears this up and is explicit that “The [entire] permitting roadmap to be undertaken by Emmerson [including ESIA, mining licence and ancillary authorisations] is illustrated below and [was] expected to take 12 months”. [FN3]

With sight of this document, I think that we can and it’s not misleading to say that the ESIA is “late” – bit of a nothing point but it has caused some debate.

2/2

Has EML complied with AIM rules in its permitting disclosures?

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TBD and for you to decide! We’ve been told that the permit hasn’t arrived. Liberem has communicated that *it* expects the permit to come by H1. You could say that Liberem is EMLs broker so EML has communicated through its agent. You could say that Liberem’s note was a note from it in its own capacity and not a communication on behalf of the company.

You could argue that to satisfy the requirement to notify us of “any material change between [the company’s] actual trading performance […] and [the permitting] estimate or projection included in the admission document”, we arguably need to know:

1. The old estimate was (the admissions doc allowed 3 months for ESIA approval);

2. What had changed; and

3. The new estimate of when the permit will arrive – effectively to refresh the Admissions doc Gantt chart with new information.

Fragments of info have dripped out but I think that clear Rule 17 disclosure compliance could be hard to claim on what we have today.

Goes without saying that ESIA is only an example, and this is useful to know generally. I’ve linked all the docs at the relevant pages below so that anyone can build on this or share own thoughts.

Summary, ESIA *is* late and EML needs to tell us more than only if it get a no.

FOOTNOTES / SOURCES

[FN1] https://docs.londonstockexchange.com/sites/default/files/documents/mog-note-markup.pdf#page=4

[FN2] https://docs.londonstockexchange.com/sites/default/files/documents/AIM%20Rules%20for%20Companies%20(01012021)_1.pdf#page=9

[FN3] https://www.emmersonplc.com/wp-content/uploads/2021/03/Emmerson-plc-Appendix-to-Schedule-One-Announcement.pdf#page=260

“res ultra of the AGM” = “result of the AGM”

Getting in a few types of my own! Ha ha

Chisler’s comment last night had some misspellings but I didn’t see anything ‘report’ worthy to warrant a request to take down.

He said that the res ultra of the AGM has been removed from the EML website and it appears it has been removed from the website, as it’s no longer present:

https://www.emmersonplc.com/investors/corporate-documents/

Unless offensive or seriously misleading, I think we should in general leave comments up where possible for the health of the board.

Just checked and the Koudia Al Baida Wind Farm below is a partnership between the Moroccan solar energy agency and EDF.

Every UK oil and gas project in territory was 25% government-owned when I last looked. I don’t know of any independents.

Does anyone know of any running examples of natural resources companies in Morocco that are, like us, wholly independent and not in partnership with the government?