Member Info for SloppyG

Cash is going to be the next challenge at this rate.

We know from the interims that they had sufficient cash to see them through to around September (assuming the scoping study did not incur significant additional expenditure).

They cannot however drift along until they run out so will need to put in place contingency measures pretty soon. The question is do they realistically have any options in this regard (without the permit); unlikely one would presume

They also have the small matter of needing to publish the Annual Report by the end of April. As it stands I cannot see the auditors signing this off as a going concern as they simply don't have a further 12m cash in the absence of the ESIA.

One way or another this all therefore needs to come to a head pretty soon. Its pretty clear the company have been tip toeing around the authorities through fear of upsetting the applecart. Understandable post earthquake but its fairly clear now that "National" operations are back to BAU hence at what point do EML need to get on the front foot.

Sense April could be a defining month here with the AR due to be published and Q1 trading update. If still in a holding pattern at this point then fearing the worst to be honest.

@Aghmir - have you already asked then about the permit ......any response etc ?

Trying to square the circle here. Lots of "National" meetings happening so how is it possible that the last documented meeting that ruled over investor appeals was Nov'21 ? Must be a huge backlog or are they being reviewed offline.

Additionally the audience is broadly similar re. Investment & Ministerial committee which is why previously they just rolled one into the other to hear appeals. Investment committee has met 3 x since EML "appeal" so surely once you have the guys in the room you just knock them out afterwards.

Did ask the company for thoughts but no response.

Honestly not a scooby what is going on here....."When you have eliminated the impossible, whatever remains, however improbable, must be the truth" Big Foot ?

Once can just picture the line of questioning:

PJ: "So you are telling us that the Ministerial Committee has not ruled over an investor appeal since Nov 2021 but that you are very confident you will get your permit soon. Do you not stop and think that just maybe they are playing the long game waiting for you to run out of cash so can get their hands on your assets on the cheap ?....Its not for me I'm out".

GC: "Trust me it's imminent"

Some interesting snippets in here re. the role of the ESIA.

https://www.iisd.org/system/files/publications/igf-esia-background-en.pdf?q=sites/default/files/publications/igf-esia-background-en.pdf

What is more damning than anything here is how quickly they have to refinance the previous re-finance. The gaps are shortening which is never a good sign.

People were questioning why they were effectively giving the business away when Italy MDC refinance was imminent; well here is your answer it is fairly clear hardly any of that 2.9m found its way back to them. They have never, as far as I can see, managed a single scheduled debt repayment.

The financial mismanagement here is simply staggering.

They were "confident" when submitted the appeal last July. Perhaps next RNS we need to see an upgrade to "Uber confident" !

I think we would just take a hearing date for now. Are we to believe this committee has not met once in the last 7 months and there is nothing yet scheduled in for 2024. How does it work .....send out a Group WA with morning coffee saying fancy meeting up today its been a while.

Nothing passing the sniff test here at present.

Back to holding pattern and a drift back I suspect after a relative flurry of activity.

The more I think about it I just cannot envisage a world with 2 x independent operations which rules out an EISA anytime soon.

The time required to either establish some sort of formal partnership agreement or tactically push us to one side has to be considerable; even what with has gone on before.

Maybe licensing revenue from KMP will land first !

The recent RNS is indeed overwhelmingly positive and the SP appears to be reacting accordingly. It does however pose a number of questions with regards to both the convenient timing and content.

For starters we have the Technical Team who, whilst twiddling their thumbs awaiting the permit to land, have knocked out a new, ground breaking, industry changing, patent pending processing route (KMP); not to belittle this achievement but can the MA, if and when the KMP hopefully lands on their desk, just accept this 60% water reduction at face value. Is it definitive or still unproven in practice and hence requires further testing etc. Can the ESIA simply be revised and subsequently approved (mid-appeal) off the back of a scoping study in the absence of any further information.

We then have the timing in respect to noises coming out from OCP. Is this a nudge RNS to National to say we are still here and by the way we could be of huge importance to you one way or another.

Final point is our provisional funding from Singaporean investors was based on an IRR of 40% in the PFS. This would have fallen to circa 25% based on inflationary pressures. However, conveniently it is now back at exactly 40% by incorporating the KMP !

Not going to complain about the recent SP rise nor indeed the recent RNS. However trying to intuitively predict how this all plays out is nigh on impossible; far too many moving parts and left wondering how much is being held back in terms of "informal" discussions with National/OCP.

Admin expenses (excl. Uganda one off tax) are circa 800k for FY23 of which 150k were salaries.

It is inevitable that the DFC grant will be used to cover some admin expenses going forward as the company cannot conduct the work required to hit the DFS milestones without paying people, consultants, travel etc. The two go hand in hand.

The Annual Report has clearly spooked a few but the risks detailed here should be apparent to all. It is just when written in black and white in formal audit language that some get twitchy. We always knew there was a DFC funding gap and that is the potential raise they allude to in the AR.

To be fair though the wording perhaps strikes a tad too much of a negative slant in places.

I think that's our issue. Someone would like to take a big chunk of this at knock down prices.

If they can keep the price low, well away from the strike price for warrants, it may force Bres' hands to place low for their share of the DFS in due course. If this is the case then lets hope Mike can throw them a curve ball with alternative ways to fund any gap.

Nothing else makes sense even with dire small cap market. Every RNS has been near word perfect for a couple of years and yet still struggling to tread water. Imagine an RNS with a neutral/negative slant. Would get hammered.

Some good posts here the last few days.

I think most are in agreement that something has to give here as 2 separate mining operations appears intuitively to be a complete non-starter. The question then is how fair will the State play.

The challenge is, in my view, that I cannot envisage a world where National would issue an ESIA to Emmerson until these apparent issues are firmly resolved; after all why would they risk the possibility of Emmerson forging ahead with their mine independently of OCP and worst case (although unlikely) cutting them out of offtake agreements if pricing not deemed agreeable. They simply wouldn't.

So the question is how much longer does all this take to resolve one way or another ? Graham has given no indication of any developments/discussions with OCP as simply states waiting on a date for National to meet. There is always the possibility they are already in advanced discussions with them but instincts say very unlikely.

The runway may well need to allow for more than a further 12m months cash here - time for the BOD to look at the structure of those packages in the meantime !

Thanks BTS.

I think the point is that even the broker acknowledged that there seems little point in having 2 standalone operations so something surely has to give here. The need to resolve promptly has been brought to the forefront as OCP is clearly now pressing ahead with their tenements.

I am conscious that the only thing preventing EML from moving forward independently of OCP is the ESIA. Consequently why would National approve this anytime soon given this ?

My instincts are they will simply want EML out of the way as I cannot see what value they add given OCP's financial position and industry contacts. The outcome for SH's all depends then on how fair they want to play. Clearly EML have a robust ML in place but it must be conditional on being able to satisfy the conditions to enable ESIA issuance; hence some wriggle room.

The other thing that is of interest is the broker highlighted that one option would be an offtake agreement with OCP. It does beg the question as to why EML announced offtake MOUs in Nov22 for 65% of its MOP production but excluded OCP from this. Is it possible this is when the relationship started to turn a bit sour as surely this was the ideal opportunity to get them and by default the State on their side.

Agree though all just speculation at this stage. However with radio silence on all fronts it is inevitable that attempts to join what dots there are ensues.

Likewise not sure.

Presumably OCP had the opportunity to acquire EML's licence blocks so this news infers a change in stance in terms of their appetite towards potash exploitation. In addition, it is now clear as to the reasons why Regional could not approve the ESIA given this was rumbling in the background.

If OCP would indeed like to get their hands on/consolidate EML's licence blocks then it strikes me that National could play this in a number of ways:

1. Maintain the holding pattern by continuing to defer any decision re. EML's ESIA in the knowledge that cash will run out in due course. It seems unlikely that EML could raise any fresh funds against this backdrop with the inevitable administration ensuing

2. Reject the ESIA by aligning with Regional. Possibly relinquish the mining license thereafter and take their chances with regards to reputational damage and court of arbitration etc

3. Mutually agreeable tie up between OCP and EML

4. Outright purchase of EML

Each scenario likely comes with a materially different SP. The question for me is what do EML bring to the party given state owned OCP have deep pockets, industry expertise/contacts, local knowledge, ability to expedite matters etc. Why have 2 different operators giving rise to a fragmented approach when they could bring it all under one roof one way or another ?

Ultimately the only thing of relevance is what does all this mean for shareholders. Absolutely no idea !

Minutes from the meeting this time last year showed they discussed circa 50 investment cases of varying descriptions. It seems likely therefore that they meet relatively infrequently for matters such as this and no doubting that the earthquake will have impacted H2 scheduling to a degree. I am sure there are many other equally frustrated parties so it will not be confined to EML as you say.

The messaging from the meeting in Jan'23 was all geared towards making Morocco an attractive investment destination and this appeared to be supported in their decision making. Whilst a lot can and has happened in 12 months that underlying message must surely remain.

Personally think they will get this over the line in due course but there is no doubting this is an incredibly frustrating period and for sure not without risk. You pays your money.....

No one hence the SP.

The frustrating thing is with fresh leadership and a clean slate this has the potential to 10 bag + and get back to a 50m MC; admittedly not enough for LT holders to recoup losses but a good opportunity to avge down nevertheless.

The challenge we face is it is not a level playing field. Given this could well be DPs last gig (given reputation damage) he will want to maximise returns from this baby. Consequently I fully expect him/them to be major benefactors in a private Newco with said clean slate. Someone will make a lot of money out of this tech but it will not be us; of that I am convinced.

All IMHO of course.

Good spot.

Reads positively for cases such as EML, so lets hope todays volume was nosey buying off the back of this meeting.

Open tomorrow should be interesting ......

Confirmation of cash position has clearly provided some reason for optimism as the chances of raising further funds pending permit are in all likelihood slim; need the runway to be as long as possible therefore.

All about probabilities here. Personally always felt the chances of outright rejection of the permit are minimal hence on the face of it it would appear a strong risk reward play at these levels; not adding however for the time being as still feels somewhat binary in nature and timelines also a complete unknown.

There is the drop I was personally expecting at the bell.

The RNS was very cleverly worded in as much as it provided reassurance without specifically referencing any of the issues raised at a local level. Some will not even be aware of those local objections so just filtering through no doubt.

A storm in a teacup no doubt. Time for a top up ?

I think it will get marked down fairly heavy first thing off the back of this. All about perceptions.

Will be looking to add if it does but suspect it will be difficult to trade in any volume.

Director trades always a moot point.

Closed periods

Options

Buy too little and it's a token effort

Too much at low prices and taking advantage of price trashing

Eggs in one basket......

No read basically.

Saying all that finding it inconceivable that the company have not heard something back from National. The cynic in me thinks it might have been kicked back (informally) and they are preparing a fresh application to announce simultaneously. Normally you would think not given materiality of news but the rejection by Regional was announced only when appeal prepared and submitted so must have been held back.

What is the working day for BOD at present. Check email first thing. Nothing from national so hit golf course pending afternoon check of email. Still nothing so driving range to work on a few things for tomorrows round.