Last checked at 2 Dec 2021 07:00
Emmerson Plc / Ticker: EML / Index: LSE / Sector: Mining
2 December 2021
Emmerson Plc ("Emmerson" or the "Company")
Operational Update: Khemisset Potash Project
Emmerson, the Moroccan focused potash development company, is pleased to provide an update on progress at its world class Khemisset potash project ("Khemisset" or the "Project") in Morocco as it moves into the pre-construction phase of development.
Overview
· Awarded the first Basic Engineering contract (the "Contract") to Barr Engineering for the Mineral Processing Facility
· The Contract, signed on time and within budget, prioritised to address the Project's critical path focused on achieving first production early 2024
· Expects to select the further contractor(s) for the balance of Basic Engineering before the end of 2021, signing contract(s) before the end of January 2022
Graham Clarke, CEO, commented:
"The financing deal we secured with GSM and GQC included an upfront cash injection so that we could advance the next stage of the Project's development, the basic engineering. This is part of the upfront capex, rather than an additional cost, and moves us firmly into the pre-construction phase. Having already signed The Contract with Barr Engineering for the Mineral Processing Facility, we have also received bids for the balance of the Basic Engineering aspects of the Project, comprising highways connection and site access; portal and declines; mine site infrastructure; tailings storage facility; electrical power; and water. We expect to be able sign contracts for these before the end of January 2022 so that this work can be dual tracked with the due diligence phase of the lending banks syndicate."
Details
Emmerson remains focused on developing Khemisset located in Northern Morocco towards commencing production in 2024 and taking advantage of the robust potash market dynamics. Accordingly, and following the transformational $46.75m equity financing deal with the Singaporean fund Golden Sustainable Minerals ("GSM") and Gold Quay Capital ("GQC") announced on 10th November, Emmerson has rapidly advanced the Basic Engineering contract stage having awarded the first Basic Engineering contract to Barr Engineering for the Mineral Processing Facility.
The execution of this contract, which was signed on time and within budget, was prioritised to address the project critical path. The basic engineering phase is part of the total pre-production capital; this contract enables the original timeline to be maintained resulting in achieving the target first production of early 2024.
Furthermore, the Company is in discussions with various contractors regarding all other aspects of the Basic Engineering and expects to select the preferred contractor(s) before the year end, and sign contracts before the end of January 2022.
Barr Engineering (www.barr.com) is a multi-award-winning engineering and consulting firm headquartered in Minneapolis, USA. With a global client base, its engineers, scientists, and technical specialists work together to help clients develop, manage, process, and restore natural resources.
**ENDS**
For further information, please visit www.emmersonplc.com, follow us on Twitter (@emmerson_plc), or contact:
Emmerson Plc Graham Clarke
| +44 (0) 20 7236 1177
|
Shore Capital (Nominated Adviser and Joint Broker) Toby Gibbs / John More (Corporate Advisory)
| +44 (0)20 7408 4090
|
Shard Capital (Joint Broker) Damon Heath / Isabella Pierre
| +44 (0)20 7186 9927
|
St Brides Partners (Financial PR/IR) Susie Geliher / Isabel de Salis
| +44 (0)20 7236 1177
|
Notes to Editors
Emmerson's primary focus is on developing the Khemisset project ("Khemisset" or the "Project") located in Northern Morocco. The Project has a large JORC Resource Estimate (2012) of 537Mt @ 9.24% K2O and significant exploration potential with an accelerated development pathway targeting a low capex, high margin mine. Khemisset is perfectly located to capitalise on the expected growth of African fertiliser consumption whilst also being located on the doorstep of European markets. This unique positioning means the Project will receive a premium netback price compared to existing potash producers. The need to feed the world's rapidly increasing population is driving demand for potash and Emmerson is well placed to benefit from the opportunities this presents. The Feasibility Study released in June 2020 indicated Khemisset has the potential to be among the lowest capital cost development stage potash projects in the world and also, as a result of its location, one of the highest margin projects. This delivered outstanding economics including a post-tax NPV10 of approximately US$1.4 billion using industry expert, Argus', price forecasts.