Member Info for Ideas

ESIA turnaround here for a wind farm in Morocco around the same time - three months from submission to approval from Dec 21 to Mar 22:

https://www.ebrd.com/work-with-us/projects/esia/koudia-al-baida-100-mw-wind-repowering.html

Not on all fours but sharing as new to me on the subject of this new law, etc.

Seconded. Thanks for your decent reply, Westie.

Maybe Graham’s a good in-life-of-mine guy and just came in too early. Maybe Hayden saw the next CEO job and thought the options were banked and the project was on autopilot to’ success - certainly seemed that way.

Given that we’re up to the hilt with global and local advisors, including local companies linked to powerbrokers, the statements coming out of the company make me feel that the block is the goal posts have moved or keep moving.

Graham would be conflicted in shouting out about this on RNS because it wouldn’t help his permit chances, but he’ll have to say something soon in some way.

I’m not so worried as you said about missing the Liberem timeline you mentioned, Westie, as we’ve already missed it once before they reset to H1; agree it does raise the chance of their being frustrated and deprioritising us (for now) though. Warrants are greater concern.

My personal hope is that we’re past peak-delay because it’s gone on so long Graham cannot assume its coming on a conveyor belt and he will have grasped the nettle to find and do whatever necessary.

Yes, completely agree Westie - I’ve seen no mention of a final meeting being claimed to have occurred.

I was saying that, if we’ve been preparing “for the evaluation meeting” (aka. final meeting) since 24 July 2021 and have said that multiple times, then it starts to look either as if we’re incredibly naive / incompetent to have said it was done to the highest international standards possible and the same for the tailings, or there’s more to it.

Roughly two years, including the various restarts, is a very long time for final touches. I also was surprised to see that they thought the ESIA would come in before the mining permit. Of course, hoping it comes tomorrow as you will; just also want to manage risk by trying to understand it.

1/1

Westie, thanks for asking for sources. I've included a snapshot of the ESIA progress reported to us below.

I don't think my message below was misleading as to the final meetings expected because these RNS are littered with references to waiting for the final meeting, or similar language. On 11 July, the company expressly said that it didn't know why the permit wasn't yet issued. Can't be clearer than that in saying that the process is not within our full control or understanding.

I don't follow the view that the absence of a "no" is a future "yes". Though I am a supporter of the company or wouldn't be here I don't think that we can safely draw any such conclusion (so far as I know). If you do know the local process and it does work that way conventionally then I'd certainly welcome any sources you can share as it will put our minds greatly at rest!

Here are a selection of the RNS:

RNS dated 13 Apr 2023

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"Environmental permit for Khemisset - continued positive discussions to establish optimum water management routes ahead of final approval."

https://www.lse.co.uk/rns/EML/2022-financial-results-and-q1-update-00luu5wl75n0da0.html

RNS dated 11 July 2022

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"Environmental approval for the project remains outstanding. The Company has invested significant resources into meeting Moroccan requirements, including various important design optimisation steps since the submission of the Environmental and Social Impact Assessment in 2020. No specific environmental objections have been raised by the Moroccan authorities and the Company is not aware of any reason why the ESIA will not be granted in due course."

https://www.lse.co.uk/rns/EML/q2-activities-update-d1zcfbs4343sak5.html

RNS dated 31 May 2022

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"I was delighted that we were able to strengthen our Board by appointing Rupert Joy as a non-executive Director. Rupert is a highly experienced diplomat and former Ambassador & Head of the EU Delegation to Morocco, and has already proved invaluable in our discussions with Moroccan authorities"

[...]

"The Company received a mining permit in January 2021, and proceeded to submit an Environmental and Social Impact Assessment ("ESIA"), which is currently awaiting final approval. The Company has addressed all of the ESIA issues raised by the relevant authorities in a timely manner."

https://www.lse.co.uk/rns/EML/audited-results-for-the-year-ended-31-dec-2021-woy0uw8rmy0mf86.html

2/2

RNS dated 30 September 2021

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"The land acquisition process is being finalised with the Moroccan authorities."

[...]

"We are pleased to say that all parties are currently satisfied with the thorough supplementary work and the final meeting with the Environmental Evaluation Committee ("EEC") (referred to in Morocco as the "Commission Regionale Unifiée de l'Investissement"), should take place in due course."

https://www.lse.co.uk/rns/EML/operational-update-khemisset-potash-project-3irvg7ss03aspyi.html

RNS dated 24 June 2021

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"The review meeting with the EEC was held in December 2020 where valuable advice and guidance was given by the committee members to better prepare for the evaluation meeting. The EEC comprises the relevant Government stakeholders in the Project including the Ministry of Energy and Mines, Regional Department of the Environment, and the water agency (l'Agence du Bassin Hydraulique de Sebou)."

[...]

"Following the positive feedback of the review meeting, the month-long Public Consultation phase was launched covering the three local communes where the Project installations are planned. No concerns or objections were recorded by the local population."

[...]

"[T]he Company has been following up with the relevant Government entities to prepare for the evaluation meeting."[FN1]

RNS dated 18 November 2020

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"The ESIA has been done to the highest standard recommended by the World Bank, with no corners cut. It is the culmination of two years of studies and monitoring in the field"

https://www.lse.co.uk/rns/EML/completion-of-esia-for-khemisset-potash-project-hr4sb7xhyb6o0mo.html

RNS dated 12 Feb 2019

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"The ESIA will be the key document underpinning our application for a Mining Licence for the Khemisset Project. We are using local consultants with extensive in country experience, having been involved in some of the largest projects in Morocco including recently delivering an ESIA and Environmental and Social Monitoring programs to support an application for a Mining Licence."

https://www.lse.co.uk/rns/EML/commencement-of-esia-baseline-studies-pqp30zgi3qzmyum.html

[FN1]

This RNS makes a separate but relevant point that the water plans were submitted to the "the most stringent international standards that are applicable to such installations":

"Additional engineering detail on the Tailings Storage Facility ("TSF") including scenario analysis for risk management and mitigation was completed by Golder Associates to the standard required by the Government agencies. This study presents design fundamentals which are based on the most stringent international standards that are applicable to such installations and shows accordingly the very low risk associated with its design contemplated and assesses possible mitigation strategies that could be implemented.""

As the business has posted multiple 'final' meeting notifications in RNS, I think it’s thought it was 'there' more than once. Singaporeans no doubt thought the same as we have too.

Now I think it has to be political because its hard to imagine any combinations taking this time to discuss - the business could go straight to the most draconian to unlock, but that hasn't happened.

I’m starting to expect the ESIA to come with a substantial government equity stake, and perhaps [greater] debt syndicate inclusion - we get a permit when it gets its slice.

If that were right, it's hard to see why the board hasn't seen it and acted.

If it's wrong, and they've thought they were 'there' multiple times, then I wonder if they're being messed around (e.g. cold shoulder from OCP) and that's more nefarious and could continue until we run dry and sell. Wouldn't like that option.

It’s anyone’s guess by now really!

Appreciate the AGM is administrative but today’s RNS and this year’s wider transparency / comms aren’t blowing me away yet!

We’re looking for the sp to go up, Graham; new joiners need to hear a reason to believe!

Trouble is hearing what's asked and replied! As far as I remember, haven't heard anything in the past.

Anyone going or know if it’s streamed?

Yes that's right, thanks Westie, we don't want to go to the wire but the more time the better to get it in the door.

We’ll have to see what big chiefs at Liberum say if the ESIA misses the next seven days; Liberum must have been told that it was a sure date (that included overrun) when they stuck ‘H1’ in their research note after the first miss last year.

The trouble with the run-on is that it starts to reflect on other's like Liberem, whose support we will rely on (though yes I know they're also paid) and who will not wish to look unreliable to the market themselves, as the research note is technically Liberum advice to its own clients.

Nov 2022 research note:

- ESIA H2 2022

- Construction finance Q422-H1 23

Source: https://twitter.com/Emmerson_Potash/status/1594626207491899397

Jan 2023 research note:

- ESIA H1 2023

Source: https://twitter.com/Emmerson_Potash/status/1637748905507995649

Its one thing to default on shareholder-promised timelines but less ideal to mess a corporate broker around too much as it goes to market reputation and the degree they will want to promote you as reliable on fund raising.

Also interesting that they got the £61k/1m shares at 5.6 when the typical sell was 5.7, as though (but not proving) the buyer has clout to lean on the market maker, i.e. higher net worth, another market maker seeking a favour / earlier agreed deal or institution (not much of a buy for an institution, of course)

Decent offload there. Assume someone may have come in at 4.5, let’s say, sell at 5.7 and take 25% (thank you) before the price drops if no permit comes out of the agricultural summit (not here saying that it should drop if no permit emerges from the show but fair to expect that it might).

Fairly reasonable choice if so and you’re trading! Hopefully we’ll get an RNS and it can go the other way for speculators too.

This, the UK Export partner funding and foreign office officials like Tom Hill name checking EML ahead of this conference are opportunities that Rupert may have led and created through his network as an ex-ambassador.

Can't at all say that's true but mentioning as we often ask what he's visibly doing, etc.

Fingers crossed SIAM involves decision makers and leads somewhere.

AIMtodeath, also not challenging your take in the post below.

The permit timing debate has taken on a life of its own on here - it sometimes feels like there's a rush to challenge anything other than the permit being 'on time' and going well.

My post is just to say that posts like DShox expressed below do have some objective backing, and not directed at you, as such.

I think it's okay to have that opinion, that's all. Not shooting down your point that there are a lot of moving parts.

AIMtodeath, for context:

The Port infrastructure was underway in 2019 [1],

"The management authorities for the Port confirmed that there is sufficient storage and loading capacity, with equipment suitable for both potash and salt, to handle all of Emmerson's export needs with no additional investment."

The ESIA began in 2020, building on baseline environmental studies in Q1 2019 [2].

Graham says that "it would be impossible to deny that [the ESIA] has already taken longer than had been hoped, or expected"[3].

Other companies with a like Predator Oil and Gas have had environmental permits through within a year [4], though Predator (75%) operates Guercif in joint venture with the Office National des Hydrocarbures et des Mines ("ONHYM") acting on behalf of the State (25%).

However, fair minded reasons there are to say that it's complex, there has to come some point at which we can say openly that it's dragging on without it seeming unacceptable to suggest, as Graham has himself.

[1] https://www.lse.co.uk/rns/EML/elimination-of-port-infrastructure-capital-cost-imnxnrvadhrssgu.html

[2] https://www.lse.co.uk/rns/EML/commencement-of-esia-at-khemisset-zubc21qgl75if49.html

[3] https://www.lse.co.uk/news/EML/in-brief-emmerson-widens-loss-khemisset-project-closer-to-approval-6rx5sp4v86e77e2.html

[4] https://www.lse.co.uk/rns/PRD/approval-guercif-environmental-impact-assessment-pv8r76yqsmiemlv.html

Yes, oldwasp - that would be a very logical explanation given the latest press claims that the permit is 'imminent'; a collaboration would be a great 'announceable'!

Who knows the reality but fingers crossed for that.

Matador, agree the sentiment.

However, I don't think they have the funds and I don't think this is the sort of jurisdiction where you could play it that way.

If the authorities decide they don't want an economic asset in foreign hands, the project won't be going ahead and OCP will pick it up at a decent price from the administrators.

I don't follow the argument that inward investment will be shaken if they don't grant because there can always be excuses and explanations as to why it didn't work and startups have short memories and will still come (IMO).

For this to work, EML have to convince the authorities that it can be better off this way, including on the water front (which may or may not be a 'front' - can a water sourcing plan really take 2yrs? Is it conspicuous government controlled OCP hasn't engaged?).

I assume they understood all this and that's why they hired Rupert early doors.

??

Yes, very chunky looking at those!