An immediate US$6.75m equity investment will allow Emmerson to move into the execution phase on Project Financing discussions for debt to support project development with the aim to close in the middle of 2022, as well as immediately commence basic design and engineering for the project to prepare to commence full construction during 2022.
The US$40 million of convertible loan notes will allow Emmerson to further discussions with other providers of funding including project finance banks, sovereign wealth funds and royalty and streaming providers as the company seeks the optimal overall funding solution for the project.
Graham Clarke, CEO of Emmerson commented: "A major investment, at a premium to our current valuation, and long-term strategic commitment by an investment group of this calibre, is a major endorsement of the Khemisset Project. We have already formed a strong partnership with the investors who share our vision of creating a new, independent, and highly profitable and environmentally sustainable potash company. We look forward to working closely with them to achieve our shared vision.
"Potash markets have strengthened considerably since we released our Feasibility Study, with prices in Brazil now over US$800/t, effectively double the base case assumptions from our previous studies. The strength in potash clearly improves its already outstanding economics and, using current spot price assumptions, it would push our post-tax NPV8 from a very respectable US$1.4 billion to US$3.9 billion and IRR of over 85.4%, while average life of mine post tax cashflow increases to US$558 million per annum for an initial 19-year life of mine.
"Our attention now moves quickly to the task at hand, which is to get the project into production as quickly as possible. Our advisors are well advanced in their engagement with numerous potential banking partners, and we will move to mandating banks as quickly as possible. We have also engaged with our established engineering partners and will commence the basic design of the key components of the Project while, in parallel, preparing work packages for eventual tender with our EPCM partners. We have already made substantial progress in pre-qualifying the groups who will eventually partner with us in building Khemisset."