27 September 2024
Emmerson PLC ("Emmerson" or the "Company")
Interim Results for the six months ended 30 June 2024 and Q3 update
Emmerson, which is developing the world class Khemisset Potash Project in
Q3 2024 highlights
· Updated Environmental & Social Impact Assessment (''ESIA'') submitted in Q2 2024, incorporating the optimisations from the Khemisset Multi-mineral Process ("KMP"). Awaiting final examination by the Commission Régionale Unifiée de l'Investissement ("CRUI").
· Re-evaluation of JORC Resource taking account of the impact of the KMP is underway, targeted to be complete during Q4 2024.
· Second crop trials completed successfully, with final results pending.
· Cash balance at 30 June 2024 was
Environmental approval
As previously announced, in March 2024, the Commission Ministérielle de Pilotage (The "Ministerial Committee") invited the Company to update its ESIA to incorporate the optimisations arising from the KMP changes, which include a significant reduction in water consumption and the elimination of the need to dispose of waste brines concurrently with its positive transformational impact on the Project economics, and to resubmit this to the Centre Regional de l'Investissement ("CRI") for review by the CRUI. In April 2024, the Company completed these updates and resubmitted what it expects to be the final version of the ESIA.
During Q3, the Company continued to engage with the relevant Moroccan authorities to ensure there is acceptance that all technical issues previously raised by the authorities, mainly around preservation of water resources, have now been properly addressed prior to a final examination by the CRUI.
It is now understood that the approval process is reaching its conclusion, and the Company hopes to be able to announce the outcome, which it is confident will be positive, during this quarter.
Crop trials
After the successful completion of the first crop trials, a second round of agronomic trials looking at how effective the KMP products are at providing phosphates to lettuces was completed in September. Final laboratory results are expected in the coming weeks, but visual indications are that the new products perform in line with traditional phosphate sources, and considerably better than controls with no phosphate provided.
These trials are important to confirm the large body of research into struvite and vivianite. First and foremost, farmers require the products to provide phosphates for their crops. However, the KMP products also offer the additional advantages of being multi-nutrient and slow-release, allowing for lower usage rates and counteracting the negative environmental effects of phosphate run-off, which sets them apart as a higher-value product.
Other KMP upsides
Although the KMP enhancements arose from investigations to address brine management, the economic benefits of the new products (struvite and vivianite) have transformed the value of the Project compared with the original design (more than doubling the NPV8 to
This increase was based on the economic contribution of the new products, but the KMP offers further benefits over and above those included in the February 2024 estimates. In particular, the Company has begun work on a revised Resource, as the improvements in recovery of potash and the ability to monetise the other micro-nutrients previously considered waste elements should allow a considerable increase in economically extractable ore. An updated JORC Mineral Resource Estimate is targeted to be announced during Q4 2024.
As well as increasing the size of the Resource (and extending the mine life), the KMP offers the potential to re-visit the mine sequencing, as areas high in magnesium and iron, which were previously considered deleterious elements, could be more profitable than pure potash zones, allowing the mine plan to be fundamentally reworked and improved. This work will follow once the Resource update has been confirmed.
In addition, the KMP process changes will mean that a portion of the salt produced as a by-product will be at industrial grade, which is more valuable than de-icing salt, and commands a higher price. This will provide an additional revenue stream for minimal marginal cost, and will also reduce further the quantity of salt to be disposed on the dry tailings.
Further value-adding optimisations enabled by the KMP are also being considered, although some of these may form modular enhancements later in the project. The overall impact of the KMP on Khemisset cannot be overstated, from an environmental or economic perspective, and will undoubtedly make the Project more attractive to investors and project financiers.
Resignation of CFO
Jim Wynn, the CFO of the Company, has announced that he has accepted another opportunity elsewhere, and will be leaving Emmerson on 30 September 2024. The company thanks Jim for his contribution since joining in February 2022. The process for identifying a successor will take place once the ESIA approval has been received, as a cost-saving measure.
Jim said: "Although the past couple of years have been frustrating for shareholders and management, I believe that Khemisset, particularly with the optimisations brought about through the KMP, is a unique Project that combines compelling economics with technical innovation, and strong sustainability credentials through contributing to African self-reliance and food security. I am genuinely confident the Project will proceed and remain a committed shareholder. I would like to wish Graham and his team the very best for the future".
Financial review
With the focus on obtaining the ESIA, external consultancy costs have been minimised and fieldwork in the period was limited to specific low-cost workstreams including crop trials for some of the new KMP products, and work related to the filing of patent applications. The loss for the period of
After accounting for net proceeds after costs from the equity placing of
Outlook for 2024
For the balance of the year, the Company's focus will remain on obtaining the environmental approval for the Project, as well as advancing the various technical studies, including a Resource update, targeted for announcement during Q4 2024.
Chief Executive Graham Clarke said: "We have continued to prioritise engagement with the Moroccan authorities towards the granting of the ESIA approval while pursuing technical workstreams to maximise integration of the KMP's benefits into the Project design. We have continued engaging with relevant authorities to ensure acceptance that the technical issues previously raised are well addressed by the optimisations adopted for the project, mainly from the KMP.
"Water is a precious resource in
"We understand that the approval process is reaching its conclusion, and we are hopeful to be able to announce the outcome, which we are confident will be favourable, within this quarter.
"I wanted to say thank you to Jim on behalf of the Board. We are grateful to Jim for all of the work carried out whilst he has served as CFO and wish him all the best in his future endeavours.
"As ever, thank you for your patience, and I look forward to providing further updates as and when appropriate."
For further information, please visit www.emmersonplc.com, follow us on Twitter (@emmerson_plc), or contact:
Emmerson PLC Graham Clarke / Jim Wynn / Charles Vaughan
|
+44 (0) 207 138 3204 |
Panmure Liberum Limited (Nominated Advisor and Joint Broker) Scott Mathieson / Matthew Hogg
|
+44 (0)20 3100 2000 |
Shard Capital (Joint Broker) Damon Heath / Isabella Pierre
|
+44 (0)20 7186 9927
|
BlytheRay (Financial PR and IR) Tim Blythe / Megan Ray / Said Izagaren
|
+44 (0) 207 138 3204 |
Notes to Editors
Emmerson is focused on advancing the Khemisset Project ("Khemisset" or the "Project") in
For further information, please visit www.emmersonplc.com, follow us on Twitter (@emmerson_plc), or contact:
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2024
US |