Emmerson: Update on Feasibility Study at Khemisset
Emmerson Plc, the Moroccan focused potash development company, is pleased to announce that it has finalised the Feasibility Study components for the connection to road networks, including design and cost components, for its world class Khemisset Potash Project in Northern Morocco (“Khemisset” or “the Project”). The Project is advantaged by industry leading capital costs and bottom quartile all-in delivered cost to customer, yielding outstanding economic metrics including average annual life of mine EBITDA of US$236 million and a post-tax NPV10 of US$1.14 billion.
- Selection of preferred Project Site completed following comprehensive Options Study.
- Road connection design and costing completed – total budgeted cost for construction of access roads via the A2 toll road is approximately US$2.0 million including a 15% contingency.
- Following confirmation of zero capital cost required at Port (See RNS dated 04 November 2019), the road connection will be the only pre-production capex required for entire logistics solution for Khemisset.
- Selected site location requires only approximately 3.2km of paved roads to be constructed to connect the Project to existing high-quality highway, with an additional approximately 9.6km of gravel internal roads included in the design estimate.
- No requirement to construct expensive rail connections.
- Design and budget completed by independent engineering group, Golder Associates (“Golder”), according to AusIMM guidelines for capital cost estimates.
- Full Feasibility Study on track for delivery in H1 2020, in line with forecasts.
Hayden Locke, CEO of Emmerson, commented:
“We identified the location of the Khemisset project as one of its major strengths from the outset; the proximity to world class existing infrastructure is a key tangible benefit. To be able to select a site which connects to a highway so readily and with such low capital cost allows us to save significant amounts of pre-production spend compared to the majority of potash development projects globally.
“Once connected to the A2 toll road, trucks transporting potash can drive directly to the Port of Casablanca for shipping to our customers throughout the Atlantic corridor. Importantly, the existing roads all the way to Port are in fantastic condition, requiring no additional investment, and have significant capacity for the trucks that Khemisset will require. The ability to have such a simple and cost-effective end-to-end logistics solution will benefit the Project not only through financing and construction, but throughout its lifecycle.
“This is the second completed workstream item from the ongoing Feasibility Study, which continues to progress well and is on schedule. We look forward to continuing to keep the market updated with various parts of the study as we progress towards its final release during the first half of 2020.”
Site Selection & Road Connection
Emmerson completed a detailed options study alongside Golder Associates to determine the optimal site location for the Project installations, and associated connections to existing highways. Options Studies are a crucial part of the Feasibility Study to assess all potential solutions available for the various components of the Project and selected a “go-forward” case to take into the more detailed engineering phase.
The Company completed a comprehensive assessment of the various options for site selection based on a broad range of criteria including:
- Access to orebody
- Proximity to existing infrastructure
- Existing surface land use
- Social and environmental factors
Based on this exhaustive process, the following site was chosen for Project surface installations.
Proximity to existing infrastructure was considered as a factor in site selection, and this has allowed a suitable connection to the world-class A2 highway to be designed. Approximately 3.2km of the main connection to the highway will be paved, along with the slip lanes to be constructed at the connection point. The design of these paved road is as follows:
- 40mm AE-2 asphalt surface wearing course
- 150mm G1 base course layer works
- 150mm cement stabilised sub-base layer works
- 150mm G6 upper selected layer works
- 50mm G9 lower selected layer works
The proposed design of the unpaved roads will allow significant heavy vehicle traffic, and is as follows:
- 150mm G1 natural gravel wearing course layer works
- 150mm cement stabilised sub-base layer works
- 150mm G9 upper selected layer works
- 150mm G9 lower selected layer works
The A2, which is a very high quality four lane toll road, crosses the Project area and passes within a short distance of the selected site location. Once on this highway, transport of finished product will be of similar roads all the way to the export port, the Port of Casablanca.
The total budgeted capital cost required to connect the Khemisset site to existing highway infrastructure is approximately US$2.0 million including a 15% contingency. This is a slight increase on the US$1.3 million for comparable items in the Scoping Study, with the additional cost owing to the decision to construct a full highway connection for local community use.
Emmerson PLC investor relations video
Five Minute Pitch TV recently filmed Hayden Locke, CEO of Emmerson. He provides an investors overview of business in the video below – the interview focuses on Emmerson’s operations, the geopolitical situation in Morocco, the global potash market and the companies forward strategy.
Emmerson PLC Investor Relations