HomeFeatures & AnalysisKhemisset ups its mineral resource estimate by 72%

Khemisset ups its mineral resource estimate by 72%

LSE-listed Emmerson, the Moroccan focused potash development company, this week announced an upgraded JORC compliant mineral resource estimate (MRE) for its Khemisset potash project in Northern Morocco, delivering a 72% increase in total resource.

Morocco – The updated MRE indicates Khemisset delivering a total resource to 537 million tonnes of potash with an average grade of 9.24% K2O.

Owned fully by Emmerson, Khemisset is a development stage potash project which, based on its scoping study, has a minimum mine life of 20 years, industry leading capital cost to production, bottom quartile delivered cost to customer, delivering average annual EBITDA of US$236 million and a post-tax NPV10 of $1.14 billion.

Highlights include:

  • 70% of resource upgraded to higher confidence Indicated category;
  • In situ value of contained potash within the MRE of approximately $30 billion; and
  • Economic (breakeven) cut-off grade is substantially below the cut-off used to define the updated MRE, which implies significant further upside potential to MRE and mine life.

Read: New revenue potential from Morocco potash project

[subhead] On track for completion

Emmerson reports that project development continues to progress exceptionally well and the feasibility study is on track for completion in H1 2020.

Hayden Locke, CEO of Emmerson, commented: “Following a successful drilling campaign, it is pleasing to see the overall MRE tonnages increase by over 70%, to more than half a billion tonnes. The recalculation of the economic cut-off grade for Khemisset shows the project can be profitable to a grade as low as 5.2% K2O and, as a result, we continue to believe there is strong potential to increase the mine life at Khemisset. The updated MRE is a further validation of the world class prospects for the project.

“We continue to make exceptional progress on the feasibility study and remain confident it will be delivered within our target timeline of the first half of 2020.

“The significant proportion of the MRE within the higher confidence Indicated resource category will support our ongoing discussions with various potential debt financing institutions which included an indicative proposal for up to $230 million of project finance debt from a major European commercial bank,” he concluded.