Member Info for Ideas

The voting power may end when equity finance is raised for the final build, as they’ll be diluted back, though they could equally demand that they can invest to the same level as a condition of approving the resolution to raise.

The Board seat has power too, hopefully can be a positive commercial influence.

Plus the other entity they control, so can now (or when the voting rights come) block any resolution requiring 75% of shareholders to agree.

Graham is still in the game with three 'Who Wants to be a Millionaire' used:

- Phone a friend (Singapore)

- Ask the audience ((private investors) for money)

- 50:50 (chances of ESIA approval)

After the permit, we only have to fund, build and operate the mine. Phew! 🤣

Yes, looks like Graham has decided not to look a gift horse in the mouth.

With the challenge of arranging finance from someone new and little demand from private investors, it may be a good thing we already had the relationship and what was needed to sign off the annual report, as SloppyG said in advance.

May also be good to have an investor with interests like ours on the Board.

GSM has 13% of the company now, will get a further 7% now and 7% option in December at a blended price of 2.4p a share - very good value (were they going to pay 8p or so?). Looks like they might get nearly all of their investment done.

With the Board seat to propose shareholder resolutions and a 25%+ shareholding between them and Gold Quay Capital Pte Ltd, they'll have a lot of influence. If they are pushy enough, it could fill in for any absent-commerciality now.

However bad it seems, if he hadn't done this, he could have been calling the administrators in September. Must have calculated that he couldn't rely on the decision and fund raising in time, especially with an annual report saying they couldn't pay their costs for the next 12 months.

If we take 'within days' as saying the new application will go in this month and 'weeks' as meaning 12 wks / 3 months, then he'll be hoping to have the ESIA by 1 August and then raise to raise funding before the warrants trigger in December so the he can dilute those away. Sailing close to the wind!

Perhaps GSM said that if you're so confident the permit will be 'imminent', you'll have good time to fund raise and we'll need a big equity % to account for solution on main funding.

True but the annual report is backwards looking and the Q1 report can repeat the last RNS and say they have reapplied. Can say add little as they want really.

August is 90 days plus a few weeks from the RNS date.

Agreed, Trev.

Only uncertainty is whether Graham’s knows the timing or what’s required.

We have been played when you read back, so is the Pied Piper Graham, the approval authorities or both - Graham hired a PR specialising in crisis management and the RNS are too vague to use, as you say, so there is spin from Graham, at a minimum!

Lots of helpful and informing posts recently, Beyondthesea. Thanks for taking the time to share.

Junior workers sometimes go silent when they’re overwhelmed. By CEO, it should be possible to handle pressure and communicate about it.

I think Graham’s out of his depth and that it was an ill judged and overly technical hire by Hayden; doesn’t mean I think badly of Graham but I’m not seeing the gravitas (and it’s only a personal opinion).

I expect it will come too Kim but not based on the RNS you’re quoting. EML ESIA RNS are too unreliable.

Just one, “The Company has completed all significant items in the process previously outlined, all in compliance with best international relevant standards, and is now awaiting the confirmation for the evaluation meeting with the EEC, following which the ESIA approval will be granted.”?

RNS 24 June 2021 (https://www.lse.co.uk/rns/EML/khemisset-potash-project-update-nlthll80q9l3cgv.html)

Logic says it should come though and … hopefully it will! Even Testpack’s in!! ; )

Crossed fingers a new application was made if this isn’t imminent and guaranteed - you get on the 90 day decision SLA tracking and no one can say the right of appeal is already ‘exhausted’ if the CRUI is still ‘unable’ to award. Please update us EML.

Must be very well connected to know the seller by chance. Be careful there.

Without looking, the language sounds like the account previously run by Makes on here under the name Lloyd Philips, and which I understand was renamed to Peter / emmerson potash after adverse press about the other name.

That account often seemed to know the seller when the share price dropped and it was usually for a unique, explainable reason shopping the same lines.

Maybe extremely well connected with people who say when they sell but I always felt it a bit of coincidence to know so many sellers.

Yes, might shed light on the age old question of whether they refused the permit or lacked regulatory competence / capacity and were ‘unable’ to award it.

Surely if they lacked the regulatory capacity, they arguably wouldn’t be able to decide now. Perhaps a bit of a porkie being flushed out there? No matter providing they get the paperwork this time!

I think that’s a good way of thinking about it.

Appeal’s don’t really ‘uphold’ a referal, they uphold the appeal and make a different decision, so I think there is some more PR wordsmithery going on here and what you said is the best interpretation.

1/2

Jinx, yes I agree that many,n seemingly including Graham were expecting the Ministerial Committee to rule:

"the Company has exercised its right to refer approval to the Ministerial Committee"

Source: RNS, 6 Jul 2023

https://www.lse.co.uk/rns/EML/q2-update-0hygvaqv11mh42c.html

Although obviously guesswork, a few thoughts on today's decision:

1) Could be helping the EML

Appeals are by nature a second opinion on the same facts; you cannot change the facts you are asking the appeal to rule on or it wouldn't be an appeal but instead a new deliberation.

Morocco is seriously short of water. The Committee might have told EML that, if we rule on the original case we'll have to refuse you. Instead we'll as the CRUI to take another look and please can you amend your application because its better for you if we don't rule on the project with original water demands now you have a new plan.

In this situation, we're effectively being told to make a new application (yes, I accept the point below that its not literally new, but I'm saying it is that in substance).

2) Cross boarder politics

Instead of the above, events may have taken over things.

Perhaps the project was refused / 'unable to be decided' on good grounds but now they want to build next door with OCP notwithstanding.

Refusing EML is one thing but refusing and then building your own national mine doing exactly the same thing next door may not be seen to be politically acceptable.

EML may have been asked to brush up its water proposal and then by magical coincidence it didn't just appeal the decision with confidence it had done all it could but developed a new process (p.s. revealing there was more it could have done all along) and this gave the Committee the grounds to refer it back.

It's worth saying that none of all of this follows the published law governing the approval of ESIA by CRUI authorities (Law 47-18), which still appears to be in force. I looked this up before and have copied my summary from July last year for anyone to check or look up. Idg69, the law says that no one with a conflict can sit on the committee. I don't know how this can work when its a state committee and OCP is state owned, but theoretically(!) there seem to be protections.

The Ministerial Committee is not a technical committee and, therefore, they might be saying they're not equipped to assess our new process. If this is right then being sent for reconsideration would not be the same as being 'blessed' for approval.

Whatever it is, the whole thing continues to be very spooky and the sooner we can get the paper and retake control of our own the better.

However, you'd have to think the chances are at least 51/49 in our favour now and that an approval would be the more likely outcome, especially because of the fall our of appearing to refuse us and build next door themselves, showing it was possible all along. In this respect, OCP's build could be just as much a

2/2

Sources for the above:

"Moroccan Law 47-18 covers ESIA approvals and governs the Regional Investment Centre that EML is currently appealing from. 

- the Regional Commission meets weekly (article 34); 

- no one with a conflict of interest can be on the panel (art 32); 

- members are bound to absolute secrecy about how decisions are made (art 35), so not great for transparency; 

- it has to reach a decision within 30 days of a project file being submitted by the Centre Director (art 34), so we might infer that the Centre Director didn't want to submit it or dragged heels until circa 2 months ago (you might imagine why Graham couldn't say the latter and perhaps that explains his RNS saying that he didn't know why it wasn't going in); 

- decisions are taking by majority and by the Chairman if there is a tie (art 34), who may be a guy called Rachid El Abdi, who appears to be a significant figure in the Moroccan legislature but I don't know;

You should verify all or any of this yourself and not rely directly on it. My process was to download the statue from https://www.rabatinvest.ma/wp-content/uploads/2022/12/Loi47.18-FR.pdf (https://www.rabatinvest.ma/wp-content/uploads/2022/12/Loi47.18-FR.pdf)

and copy that into

https://www.deepl.com/translator/files (https://www.deepl.com/translator/files)

Source: post of 28 Jul 2023

https://www.lse.co.uk/profiles/ideas/?page=8

ARTICLE 37 

Any refusal decision issued by the regional commission must be reasoned. 

It may be the subject, by the investor concerned, of an appeal before the Ministerial Steering Committee provided for in Title III of this law within 10 days from the date of its notification. 

However, the investor may, prior to referral to the Ministerial Commission, file an informal appeal with the regional wali, who presents it to the Regional Commission, which must rule within 10 days of receipt of the appeal. 

In the absence of a response within the aforementioned period or when the Regional Commission confirms its previous decision, the investor may lodge an appeal before the Ministerial Commission, which rules within a period not exceeding 30 days.

Good news RNS as the ministerial committee decision could have killed the project stone dead.

The estimate for the full ESIA process from scratch at CRUI is around 90 days, I think (dyor), in which case we might hope for good news in H1 with any luck.

To be clear below, I’m saying 2-6 months from communication.

We might assume it was communicated 5 weeks ago. It could also have been trailed for some months already, before announcement of the detail to the markets.

With no knowledge or comment on ‘late 2024’ below, I think it is reasonable to think any ‘deal’ on the ESIA will realistically take two to six months.

I say ‘deal’ as it will need regulatory ‘agreement’ that the new technique is sufficient and that will take some scrutiny and internal meetings and diary time.

Good points. What doesn’t kill your makes you stronger. More time at planning allows tighter plans. Just need to get the ESIA.