Business Update

Emmerson Plc / Ticker: EML / Index: LSE / Sector: Mining

23 March 2020

Emmerson Plc ("Emmerson" or the "Company") 

Business Update

Emmerson Plc, the Moroccan focused potash development company, is pleased to provide an update on its ongoing operations, which are focused on the development of its world class Khemisset Potash Project in Northern Morocco ("Khemisset" or "the Project"). The Project benefits from an industry-leading cost profile in terms of both capital costs and bottom quartile all-in delivered cost to customer, which together yield outstanding economic metrics including average annual life of mine EBITDA of US$236 million and a post-tax NPV₁₀ of US$1.14 billion¹.

Highlights

·   Due to the current stage of project development, the COVID-19 outbreak and related global mitigation actions are so far having a limited impact on the Khemisset Potash Project

·   Progress on finalising the Feasibility Study with the independent consultants continues, with only minor, if any, delays to the delivery timetable expected

·   The Company has a robust contingency plan to reduce costs and focus on maintaining shareholder value should the current market instability continue into the latter half of the year. As a precautionary measure, staff in Morocco are predominantly working from home, with a skeleton workforce in place in the office or at site when necessary

·   All non-essential activity, including travel, has been ceased or reduced to protect the Company's employees and assets, and conserve capital

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¹ Based on industry expert Argus FMB price forecasts 

Hayden Locke, CEO of Emmerson, commented: 

"While the current market situation is unprecedented, we have already taken steps to ensure that the safety of our employees and assets is ensured, and that our strong cash position is preserved should the volatility and uncertainty continue in the future.

"We are fortunate in terms of our ongoing work programmes, the majority of which are now focused on desktop reviews and report writing, which can continue regardless of working location.  At this stage, the Feasibility Study is well progressed, and we continue to expect to be able to meet the timelines we have previously provided to the market, subject to the continuing availability of our independent engineers.

"The environmental and social impact assessment ("ESIA") is underway, and we will continue to move this key item forward to ensure our aggressive permitting lines will still be achieved, assuming some stability and normality return in the latter part of the year. If the disruptions continue past that point, a mitigation strategy is already in place.

"Despite the volatility in the market, we continue to engage with the various interested strategic financing partners, moving forward with initial technical reviews, to ensure that our financing strategy is progressing.  We remain confident of the value of the Khemisset Project, and look forward to updating the market on further developments."

Notes to Editors

Emmerson's primary focus is on developing the Khemisset Potash Project located in Northern Morocco.  The project has a large JORC Resource Estimate (2012) of 537Mt @ 9.24% K₂O and significant exploration potential with an accelerated development pathway targeting a low capex, high margin mine.  Khemisset is perfectly located to capitalise on the expected growth of African fertiliser consumption whilst also being located on the doorstep of European markets. This unique positioning means the project will receive a premium netback price compared to existing potash producers. The need to feed the world's rapidly increasing population is driving demand for potash and Emmerson is well placed to benefit from the opportunities this presents.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.