Emmerson: Phased Development and Expansion Assessment
Emmerson to Examine Phased Development and Expansion Projects for the
World Class Khemisset Potash Project
Emmerson Plc, the Moroccan focused potash development company, is pleased to announce that it is in the process of assessing a conceptual, staged, development for its 100% owned Khemisset Potash Project (“Khemisset” or “the Project”), aimed at reducing upfront capital costs and incorporating expansion options into the development plan of the Project. Emmerson recently received the Mining Licence (see RNS dated 9 February 2021) for Khemisset providing the Company with the exclusive right to develop and mine the potash deposit, in the Khemisset basin ahead of the anticipated initiation of construction by the end of 2021.
To view the RNS with illustrative diagrams, please use the following link: http://www.rns-pdf.londonstockexchange.com/rns/3998P_1-2021-2-17.pdf
- Updated development strategy to fast-track salt sales expansion, SOP development and MOP expansion utilising the total resource at Khemisset
- Increase salt sales to up to 4Mtpa
- Incorporate SOP as part of the larger project development
- Increase MOP production by up to 50%
- Increase mine life
- Additional potential benefits include reduced financing and execution risk; operating cost, sales, marketing and logistics synergies; and increased diversification of product revenues
- Khemisset Mining Licence puts Emmerson in position to commence construction during 2021, finance permitting
Graham Clarke, Emmerson’s CEO, commented:
“Khemisset is a project of enormous potential and we see several opportunities to improve upon the mine plan presented in the 2020 Feasibility Study. The most obvious is the potential to expand the Project, given it is currently based on less than 50% of our total Mineral Resource Estimate.
“We have also previously discussed the potential to increase our salt sales and our ongoing investigations into the global de-icing salt market and, in particular, the US market gives us a high level of confidence in our ability to upscale our salt production significantly.
“We have previously presented a Scoping Study for an SOP project which indicated a project that could deliver an additional US$70m of EBITDA for the Company for minimal capital expenditure. The SOP market, especially our target US sales market, continues to show strength in pricing, which drives a strategy to accelerate the development of that project, which provides increased cashflow generation, but also diversity of end-product.
“Finally, the capital cost benefits of our project mean that we believe we can develop our project using a staged approach, which reduces upfront capital costs and equity requirements from the market and, therefore, dilution to our existing shareholders as we grow to our full potential.
“With our mining licence in hand, we see 2021 as a pivotal year for our development as we aim to become the only potash producer in Africa and the only independent potash producer globally.”
Emmerson PLC Investor Relations