Following the release of its feasibility study, LSE-listed Emmerson is now keenly focused on advancing its Khemisset potash project in Morocco.
Morocco – Emmerson’s focus now shifts to moving Khemisset towards “shovel ready” status including operational capability build-out, Front End Engineering and Design (FEED), detailed design and financing.
The permitting process is also underway including stakeholder engagement, socio-economic impact assessments and the Environmental and Social Impact Assessment (ESIA). The feasibility study provides the catalyst for engagement with various potential financing groups to commence detailed due diligence.
Key workstreams ongoing
Emmerson CEO, Hayden Locke 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 impact 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 for Khemisset. Our objective is to have it ready for final submission to the government by the end of Q3 2020, 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. 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 Emmerson in the development of Khemisset.”
Other projects being considered
The feasibility study confirmed the world class characteristics of Khemisset including industry leading capital cost to production and a post-tax NPV8 of US$1.4bn based on industry expert Argus FMB price forecasts. Perhaps more importantly, it confirmed robust cashflow generation (over US$130m in EBITDA) and IRRs (nearly 15%) at potash prices well below the current contracted potash price in its target markets of Brazil, North West Europe, USA, central America and Morocco.
In addition, Emmerson will re-examine the potential of the various growth and expansion options available to it including the SOP project, de-icing salt expansion potential and Khemisset’s mine life extension.