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Emmerson releases interim results for 1H19

Published by
World Fertilizer,


Emmerson Plc has announced its interim results for the six-month period ended 30 June 2019.

Highlights during And immediately post period end

  • Maintained strategy of rapidly advancing the Khemisset potash Project ('Khemisset' 'the Project') towards development.
  • Scoping Study confirmed that Khemisset has the potential to be amongst the lowest capital cost potash projects in the world, and to deliver EBITDA margins in excess of 60% over a minimum mine life of 20 years with outstanding project economics including an NPV10, using industry expert Argus FMB's price forecasts, of more than US$1.1billion.
  • Opportunities to potentially further improve project economics identified in the period including:
  • - Potential CAPEX saving of US$7.5m compared to the Scoping Study by utilising existing storage and loading facilities in Port of Casablanca as opposed to the Port of Mohammedia
    - Simplification and optimisation of the process flow design, which have the potential to reduce capital and operating costs, as identified by world renowned potash processing expert Don Lamour, who was appointed during the period
    - Memorandum of Understanding signed with Afriquia Gaz to establish a sustainable partnership including the identification of options for the economical supply of gas to Khemisset resulting in potential cost savings
  • Positive early engagement on offtake and financing including:
  • - Heads of Agreement signed with a global fertiliser group covering offtake for 100% of production for an initial five year period
    - Indication of project finance debt of up to US$230m from a major international bank
  • Comprehensive Environmental and Social Impact Assessment baseline study completed, identifying no areas of concern that could impact the scale, location, cost, or profitability of the Project.
  • Commenced Feasibility Study and appointed Golder Associates, a global, independent engineering firm with deep experience in the delivery of feasibility studies for complex mining projects.
  • - Barr Engineering Co. ('Barr') appointed as Process Design Engineers responsible for the process plant components of Feasibility Study
  • Commenced and completed a comprehensive metallurgical test work programme as a key input to the Feasibility Study.
  • - Confirmed the technical viability of the proposed processing flowsheet used in the Scoping Study
    - Identified areas for potential simplification and optimisation from an operating cost and CAPEX perspective
    - Validated the recovery rate assumptions used in the Scoping Study
  • Completed a permitting road map for the development of the Project confirming that construction of Khemisset can begin shortly after completion of engineering and financing workstreams.
  • Preliminary Economic Assessment for the sale of by-product de-icing salt into the East Coast US market highlighted potential to deliver additional nominal post tax NPV10 of up to US$133 million based on historical US de-icing salt prices.
  • Raised £2.25 million (before expenses) through an oversubscribed share placement enabling the continued rapid development of Khemisset and discussions with potential strategic partners.
  • Appointed Shard Capital Partners to act as joint broker to the company.

Hayden Locke, CEO of Emmerson, commented:

"Following the validation of the Project's outstanding potential in the Scoping Study, delivered ahead of schedule in 2018, we have continued to progress apace, delivering key milestones and strategic agreements that serve to advance and de-risk the development of Khemisset. In particular, the completion of metallurgical testing, which confirmed the technical viability of the processing methods proposed for Khemisset, is a significant de-risking milestone for the company. In addition, the early indication of considerable debt financing availability and the signing of an MOU for the sales of 100% of product produced at Khemisset, are outstanding achievements at such an early stage and are a testament to the Project's potential. I look forward to continuing to update shareholders with our progress as we deliver a robust Feasibility Study in the upcoming months."

Read the article online at: https://www.worldfertilizer.com/potash/10092019/emmerson-releases-interim-results-for-1h19/

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