The announcement comes following the recent release of a feasibility study (FS) for the project.
The company has said the permitting process is well underway, including stakeholder engagement, socio-economic impact assessments and the Environmental and Social Impact Assessment (ESIA).
The FS, which confirmed a post-tax NPV8 of US$1.4 billion and robust financials including over US$300 million per annum in EBITDA, provides the catalyst for engagement with various potential financing groups to commence detailed due diligence.
Detailed examination of various complementary growth options are taking place, including:
- Developing a scope of work for a pre-feasibility study (PFS) for the project, which could take the combined post-tax NPVs for the company’s suite of projects to over US$1.8 billion.
- Technical and market impact of upscaled production of the salt by-product in the first five years of operations at Khemisset.
- Bringing the vast remaining resources at Khemisset into the mine plan by extending the overall mine life or offering the option of increasing production in the first five years of operations.
Hayden Locke, CEO of Emmerson, commented: “We are pleased with the results of the feasibility study, but now our attention must turn to the next phase of development as we seek to move the project one step further towards our goal of becoming an independent potash producer.
“Despite the impacts of the coronavirus pandemic, we continue to make progress with our ESIA, which is one of the key workstreams required to be completed prior to our application for a mining permit at Khemisset. Our objective is to have it ready for final submission to the Government authorities by the end of 3Q20, in line with our original schedule. While we know this will be a challenge, our team has proven itself to be adept at continuing to move key workstreams forward regardless of the circumstances and I am sure this will be no exception. Once the ESIA is signed off by the Government, we will be able to apply for our mining permits.
“Financing will continue to be a focus for Emmerson. The feasibility study is the catalyst for various discussions, across debt, equity and non-traditional financing products, to commence in earnest. Over the last two years, we have engaged with numerous potential funding partners and have identified several which we believe would make excellent partners for the company in the development of Khemisset. We look forward to updating the market as these discussions progress.
“Building out a team with the operational capability to construct and operate a large scale mine is a challenge for any junior mining company, and I see this as one of the main execution risks to address. We will look to add additional members to our team in the coming months as we start this especially important next phase of our development.
“Clearly, our focus must be on Khemisset, but we are also aware that we have several growth options available to the company, which can add significant value to our shareholders over the life of the project. One of the most pleasing aspects of the recent feasibility study was the profitability of the salt by-product. Given the 1 million tpy of sales assumed in the study represents less than a third of our total de-icing salt production – the remainder is left as waste – there is a clear opportunity for further improvement to our already first-class economics by increasing the quantity of salt sold. In addition, we intend to move our sulfate of potash project from a scoping study level of definition to a PFS level. And finally, as our current mine life of 19 years is based on only 43% of our total mineral resource estimate, we will examine the potential timing with respect to bringing the significant remaining resource into the project’s mine plan, which could more than double our current mine life."
Read the article online at: https://www.worldfertilizer.com/project-news/19062020/emmerson-focusing-on-bringing-khemisset-project-to-shovel-ready-status/
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