REG - Emmerson PLC - 2024 Financial Results
30/06/2025 15:45
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RNS Number : 0388P Emmerson PLC 30 June 2025
Emmerson PLC / Ticker: EML / Index: AIM / Sector: Mining
30 June 2025
Emmerson PLC ("Emmerson" or the "Company")
2024 Financial Results
Emmerson, the Moroccan-focused potash development company, is pleased to
announce its 2024 audited results.
The Company's 2024 Annual Report and Accounts will be available on the
Company's website at www.emmersonplc.com (http://www.emmersonplc.com) . Hard
copies will be posted to the Company's shareholders.
2024 Highlights:
· A Scoping Study on the Khemisset Multi-mineral Process was
completed at the beginning of 2024 with subsequent test work to optimise high
value products and re-calculate the mineral resource accordingly.
· Despite addressing the environmental concerns previously raised,
the Environmental and Social Impact Assessment which had been submitted to the
Commission Régionale Unifiée d'Investissement following referral from the
Ministerial Committee resulted in another unfavourable recommendation.
· In early November 2024, the Company announced that it had informed
the Government of The Kingdom of Morocco that there was an investment dispute
between the Company and the Government.
· The Company appointed Boies Schiller Flexner LLP as its legal
counsel.
· Funds raised in December 2024 provided gross proceeds of US$1.1
million to provide sufficient time for the Company to secure litigation
funding and to cover corporate costs.
· The 2024 results include an impairment of the Khemisset asset of
US$21.1 million, and an overall loss after tax for the year of US$25.7
million.
· Company overheads have been reduced significantly to conserve cash
pending legal proceedings.
2025 Updates:
· On 2 January 2025 Emmerson announced it had signed a Capital
Provision Agreement with a specialist litigation funding firm to provide up to
US$11,000,000 in both litigation finance capital and working capital for the
Company and confirmed Boies Schiller Flexner LLP as its legal counsel.
· On 1 May 2025 Emmerson provided an update on the dispute with the
Kingdom of Morocco:
o A Request for Arbitration was submitted to the International Centre for
the Settlement of Investment Disputes.
o Emmerson is bringing a claim for full compensation in respect of the
Khemisset Potash Project, which it has valued internally at US$2.2 billion.
· The clear priority for 2025 is to work with our legal advisors and
proceed with the legal process with regard to the arbitration.
Graham Clarke, CEO, commented:
"The rejection of our ESIA during the year was extremely disappointing and we
have initiated arbitration proceedings against the Kingdom of Morocco. This is
now the Company's primary focus, and we are confident of a successful outcome.
In the meantime, we are also exploring ways to valorise our proprietary potash
processing methodology, known as the KMP, while remaining focused on
minimising expenditure. We will provide updates on the progress of our
activities during 2025".
**ENDS**
For further information, please visit www.emmersonplc.com
(http://www.emmersonplc.com/) , follow us on Twitter (@emmerson_plc), or
contact:
Panmure Liberum Limited (Nominated Advisor and Broker) +44 (0)20 3100 2000
Scott Mathieson / Will King
Market Abuse Regulation (MAR) Disclosure
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.
CHIEF EXECUTIVE OFFICER'S STATEMENT
2024 started positively with the announcement of the Khemisset Multi-mineral
Process ("KMP") and progress with the environmental approval, as this was
successfully referred back to the Centre Régional d'Investissement ("CRI")
for review following the appeal to the Ministerial Committee. However, in
spite of the Company`s best efforts, the innovation of the Khemisset
Multi-mineral Process, interaction with the relevant authorities and the
addressing of the environmental issues previously raised, the Company received
a second unfavourable outcome in regard to the approval of the environmental
licence in October 2024. Following legal advice and a review of the options
open to the Company, the decision was taken at the beginning of November to
inform the Government of The Kingdom of Morocco that there was an investment
dispute between the Company and the Government. The Company appointed Boies
Schiller Flexner LLP as its litigation counsel and commenced investigating
routes for litigation funding.
The ESIA and Litigation
The primary focus for the Company at the beginning of 2024 was to obtain the
approval of the Environmental and Social Impact Assessment ("ESIA").
The Company, having sent an appeal to the Ministerial Committee in 2023 was
still awaiting progress at the beginning of the 2024 financial year. The
Committee was unable to sit before late January 2024; government priorities
were impacted in the intervening period by more pressing matters such as the
tragic earthquake in September 2023.
During January 2024, the Company announced that it had been working on a new
process, the KMP, which further addressed many of the concerns regarding the
environment that had been previously raised by the authorities. And, with the
huge reduction in water consumption and removal of any need for waste brine
disposal, delivered an excellent solution to the main issues. Emmerson has
always maintained that the Khemisset Project has adhered to the highest
international standards in terms of environmental compliance, including its
water use, and the responsible management of waste brines and tailings. The
introduction of the KMP further supported the environmental credentials of the
Company.
In March 2024, the Company was informed that the Ministerial Committee had
upheld its appeal and referred the matter back to the CRI of the region
Rabat-Salé-Kénitra for reconsideration, inviting the Company to include
optimisations into its latest ESIA submission.
In April, the Company submitted an updated ESIA, including the optimisations
from the KMP related to water usage and waste management.
Following the submission of the updated ESIA the Company continued to engage
with the authorities and had expected that the CRI would call a meeting within
a matter of weeks but subsequently were informed that a sub-committee had been
formed at Ministry level to further analyse the updated ESIA prior to the CRI
being able to make any decision.
In mid-October the Company was informed that the CRI had in fact called a
meeting of the Commission Régionale Unifiée de
l'Investissement ("CRUI") and that the committee had returned a second
unfavourable recommendation in regard to the ESIA for the project.
Following a review of regulatory and legal options, the Company announced on 1
November 2024 it had informed the Government of The Kingdom of Morocco ("the
Government") that there was an investment dispute between the Company and the
Government, arising out of various breaches by the Government and its Agents
of the Agreement between the Government of the United Kingdom of Great Britain
and Northern Ireland and the Government of the Kingdom of Morocco for the
Promotion and Protection of Investments, which was signed on 30 October 1990
and entered into force on 14 February 2002, the Bilateral Investment Treaty
("BIT").
The Company appointed Boies Schiller Flexner LLP as its litigation counsel.
The Company was able to secure litigation funding in a relatively short period
of time, and on 2 January 2025 announced that funding of US$11 million had
been secured from a leading litigation funder and was now available.
Following the securing of the funding, work commenced on the case and the
formal Request for Arbitration was submitted to the International Centre for
the Settlement of Investment Disputes at the beginning of May 2025.
Updated Financial Estimates and Financing
In February 2024, the Company was able to announce the results of a Scoping
Study which outlined the KMP process enhancements, whereby magnesium and iron
chlorides in the brines would be precipitated out as struvite and vivianite
respectively, after reaction with phosphates and ammonia.
This process would then allow the brines to be recirculated back into the
plant, instead of disposed of through Deep Water Injection ("DWI"), yielding a
number of significant benefits.
The most significant of these benefits relate to water, as the recirculation
of brines reduces the overall consumption of raw water by 50% compared with
the 2020 Feasibility Study, and addressed the primary environmental issues
raised by the Government in its earlier assessment of the ESIA application.
The financial benefits to the project were significant and summarised below -
Parameter (real unless stated) 2020 Feasibility Study 2023 Updates
Original Design updated KMP Process Solution
Capex US$411m US$539m US$525m
MOP Cash Cost FOB Casablanca US$147/t US$164/t US$156/t
MOP Cash Cost CFR Brazil net of salt credit US$110/t US$139/t US$133/t
All-in-Sustaining Cash Cost CFR Brazil net of salt credit US$136/t US$171/t US$163/t
Annual EBITDA (nominal) US$286m US$258m US$440m
Post Tax Cash Flow (nominal) US$3.8bn US$3.0bn US$5.9bn
Post Tax NPV(8) (nominal) US$1.4bn US$1.0bn US$2.2bn
Post Tax IRR (nominal) 40% 26% 40%
It is also worthy of note that the signed mandates with a syndicate of
international and Moroccan banks for a debt facility US$310 million, of which
US$230 million would be a tranche covered by a UK Export Finance guarantee,
were renewed for a further year at the end of 2023 so were still in place at
the point at which the Company had to announce that it was in dispute with the
Moroccan Government.
In April 2024, the Company announced the results of a successful share
placing, bringing in gross proceeds of US$2.5 million. Of this, Global
Sustainable Minerals Pte Ltd ("GSM") and Gold Quay Capital Pte Ltd ("GQC")
(together the "Strategic Investors") contributed US$2.0 million and US$0.2
million respectively, at a price of 1.75 pence per share. The Strategic
Investors also received 1:1 warrants at 3 pence per share, expiring on 31
December 2024 and this signified the continuing support the Company had from
its Strategic Investor at the time.
In addition, the Company also raised US$0.3 million from its wider shareholder
base at the same price, through the REX retail platform. This offering was
significantly oversubscribed.
These funds strengthened the Company's balance sheet and enabled work to
continue on the KMP, the ESIA process, and for general working capital.
Post the unfavourable recommendation from the CRUI and the announcement of the
dispute with the Government of Morocco the Company raised £0.85million
(USD1.07million) in early December 2024 to provide funds to ensure that the
Company had time to pursue the various options for litigation funding, as well
as continuing to develop the KMP process as a standalone area of intellectual
property under patent protection.
Outlook for 2025
The clear priority for 2025 is to work with our legal advisors and proceed
with the legal process with regard to the dispute and future arbitration.
I look forward to providing further updates as 2025 progresses.
Graham Clarke
Chief Executive Officer
30 June 2025
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2024
2024 2023
Note US$'000 US$'000
Continuing operations
Administrative expenses 3 (4,438) (2,664)
Impairment 2.15, 7, 8 (21,103) -
Share-based payment expense 13 (270) (335)
Net foreign exchange (loss)/gain (18) 18
Operating loss (25,829) (2,981)
Finance cost (5) (11)
Loss before tax (25,834) (2,992)
Income tax 5 64 -
Loss for the year attributable to equity owners (25,770) (2,992)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Exchange (loss)/gain on translating foreign operations (306) 117
Total comprehensive loss attributable to equity owners (26,076) (2,875)
Earnings per share (cents)
Basic and diluted 6 (2.319) (0.293)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT
31 DECEMBER 2024
2024 2023
Note US$'000 US$'000
Non-current assets
Intangible assets 2.9,7 - 20,457
Property, plant and equipment - 31
Total non-current assets - 20,488
Current assets
Trade and other receivables 8 762 1,080
Cash and cash equivalents 923 1,937
Total current assets 1,685 3,017
Total assets 1,685 23,505
Non-current liabilities
Long-term liabilities 10 (354) -
Total non-current liabilities (354) -
Current liabilities
Trade and other payables 9 (472) (346)
Total current liabilities (472) (346)
Net assets 859 23,159
Shareholders equity attributable to equity owners
Share capital 12 38,464 34,958
Share-based payment reserve 13 1,202 1,633
Reverse acquisition reserve 2,234 2,234
Retained earnings (40,520) (15,451)
Translation reserve (521) (215)
Total equity 859 23,159
These financial statements were approved by the Board on 30 June 2025 and
signed on their behalf by
Graham Clarke
Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024
US$'000 Share Capital Share-based payment reserve Reverse Acquisition reserve Retained earnings Translation reserve Total equity
Balance at 1 January 2023 34,733 2,470 2,234 (13,636) (332) 25,469
Loss for the year - - - (2,992) - (2,992)
Other comprehensive income:
FX loss translating foreign operations - - - - 117 117
Total comprehensive loss - - - (2,992) 117 (2,875)
Fair value of share options - 335 - - - 335
Options/warrants exercised for cash 225 (62) - 60 - 223
Options exercised cashless - (187) - 187 - -
Warrants expired - (930) - 930 - -
Net adjustment for options cancelled - 7 - - - 7
Total transactions with owners 225 (837) - 1,177 - 565
Balance at 31 December 2023 34,958 1,633 2,234 (15,451) (215) 23,159
Loss for the year - - - (25,770) - (25,770)
Other comprehensive income:
FX gain translating foreign operations - - - - (306) (306)
Total comprehensive loss - - - (25,770) (306) (26,076)
Fair value of share options/warrants - 270 - - - 270
Shares issued in year 3,629 - - - - 3,629
Cost of issuing shares (123) - - - - (123)
Options/warrants expired - (701) - 701 - -
Total transactions with owners 3,506 (431) - 701 - 3,776
Balance at 31 December 2024 38,464 1,202 2,234 (40,520) (521) 859
The nature of the share-based payment and reverse acquisition reserves are
described in note 13 and 14.
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2024
Notes 2024 2023
US$'000 US$'000
Cash flows from operating activities
Loss before tax (25,834) (2,992)
Adjustments
Foreign exchange 18 (18)
Taxation 5 64 -
Intangible asset impairment 7 20,352 -
VAT receivable impairment 8 751 -
Directors' remuneration settled in shares 90 -
Share-based payment - fair value of options 13 270 335
Depreciation 3 16 19
Changes in working capital
Decrease in trade and other receivables 212 101
Increase/(decrease) in trade and other payables 477 (683)
Net cash flows used in operating activities (3,584) (3,238)
Cash flows from investing activities
Exploration expenditure 7 (201) (1,726)
Purchase of property, plant and equipment - (7)
Net cash flows used in investing activities (201) (1,733)
Cash flows from financing activities
Net proceeds from allotment of shares 12 2,771 225
Net cash flows generated from financing activities 2,771 225
Decrease in cash and cash equivalents (1,014) (4,746)
Cash and cash equivalents at beginning of year 1,937 6,670
Foreign exchange on cash and cash equivalents - 13
Cash and cash equivalents at end of year 923 1,937
Significant non-cash transactions in respect of share issues and options are
disclosed within notes 12 and 13, while the non-cash impairment of assets are
set out in notes 7 and 8.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
1. General information
Emmerson PLC (the "Company") is a company incorporated and domiciled in the
Isle of Man, whose shares have since 27 April 2021 been listed on AIM.
The principal activity of the Group is the pursuance of a dispute with the
Moroccan Government regarding the Khemisset Potash project, and the
development of the Company's proprietary potash processing technology known as
KMP. In previous years, the principal activity was the development of the
Khemisset Potash project, however the rejection of the Company's environmental
permit application in October 2024 necessitated a change in strategy.
2. Basis of preparation
2.1. General
The Company and Group's Financial Statements have been prepared in accordance with UK-adopted international accounting standards ("UK-IAS"). The financial statements have been prepared under the historical cost convention except for the revaluation of certain financial instruments that are measured at fair value.
2.2. Functional and presentational currency
The financial information of the Group is presented in US dollars to the
nearest thousand.
The individual financial statements of each of the Company's wholly-owned
subsidiaries are prepared in the currency of the primary economic environment
in which they operate (functional currency), these being US dollar and
Moroccan Dirhams.
2.3. Basis of consolidation
The Consolidated Financial Statements comprise the financial statements of the
Company and its subsidiaries.
Subsidiaries are fully consolidated from the date of acquisition, being the
date on which the Group obtains control. Control is achieved when the Group is
exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over
the investee.
Generally, there is a presumption that a majority of voting rights result in
control. To support this presumption and when the Group has less than a
majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an
investee, including:
· The contractual arrangement with the other vote holders of the
investee;
· Rights arising from other contractual arrangements; and
· The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the
date that control ceases. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the period are included in the Group
Financial Statements from the date the Group gains control until the date the
Group ceases to control the subsidiary.
All intra-group balances, transactions, income and expenses and profits and
losses resulting from intra-group transactions that are recognised in assets,
are eliminated in full.
All the Group's companies have 31 December as their year-end. Consolidated
financial statements are prepared using uniform accounting policies for like
transactions.
2.4. Going concern
As at 25 June 2025 the Group had cash and cash equivalents of US$0.5 million.
On 2 January 2025, the Company signed a Capital Provision Agreement ("CPA")
with a specialist litigation funding firm to provide up to US$11.0 million in
both litigation finance capital and working capital for the Company.
The Company has prepared a cashflow forecast to December 2026 setting out the
expected financial commitments related to the running of the Group in its
reduced scale, and the legal and other advisory expenses related to the
ongoing dispute with the Moroccan government.
The outcome of the litigation is expected to take at least 12 months from the
date of this report, and possibly significantly longer. Litigation costs can
therefore be anticipated with confidence, and ongoing operating costs have
been reduced significantly in order to conserve cash.
If the legal case is resolved through negotiation out of court, this may occur
sooner, but would be likely to be a favourable outcome for the Company that
would likely result in either a cash settlement, or if in the form of an
alternative beneficial arrangement, would put the Company in a stronger
position such that its ability to raise funds would be significantly improved.
The Company will not commit to further material financial obligations for at
least the 12 months from the date of this report in order to protect its Going
Concern position.
Should the legal case be decided against the Company, then EML would
undoubtedly face a challenge in determining its next course of action. Such
options could include continuing to appeal the case, or deciding to focus on
other business opportunities, including the marketing of the KMP. However, as
such an outcome is not expected to be in the 12 months from the date of this
report, it is not considered a risk to the Going Concern basis.
Based on a review of the cashflow forecast, the Board is satisfied that the
existing cash and funding facility are more than sufficient to meet the
Company's outgoings for at least 12 months from the date of this report, and
therefore believe the Going Concern basis is appropriate for the preparation
of the financial statements.
2.5. Changes in accounting policies
Standards, interpretations and amendments to published standards effective
from 1 January 2024
There were no new standards or interpretations effective and adopted for the
first time for the year beginning on or after 1 January 2024 that had a
significant effect on the Group's or Company's financial statements.
Standards, interpretations and amendments to published standards not yet
effective
At the date of approval of these financial statements, the following standards
and interpretations, which have not been applied in these financial
statements, were in issue but not yet effective:
· Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates
(effective 1 January 2025)
· IFRS 18: Presentation and Disclosure in Financial Statements
(effective 1 January 2027) (1)
· IFRS 19: Subsidiaries Without Public Accountability: Disclosures
(effective 1 January 2027) (1)
· Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial
Instruments: Disclosure (effective 1 January 2026) (1)
· Annual Improvements to IFRS Accounting Standards - volume 11
(effective 1 January 2026)
· IFRS S1 General Requirements for Disclosure of Sustainability-related
Financial Information (effective 1 January 2024) (1)
· IFRS S2 Climate-related Disclosures (effective 1 January 2024) (1)
(1) These standards have not yet been endorsed in the UK.
The Company is assessing the effect of these new and amended standards and
interpretations, which are in issue but not yet mandatorily effective, but
their impact is currently not expected to be material.
2.6. Segment reporting
A business segment is a group of assets and operations engaged in providing
products or services that are subject to risks and returns that are different
from those of other business segments. A geographical segment is engaged in
providing products or services within a particular economic environment that
are subject to risks and returns that are different from those of segments
operating in other economic environments.
The Directors are of the opinion that the Group is engaged in a single segment
(2023: single segment) of business being the ongoing dispute with the Moroccan
Government over the Khemisset Potash Project.
The Chief Operating Decision Maker is the CEO Graham Clarke, reporting to the
Board of Directors.
2.7. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another.
(a) Financial assets
Initial recognition and measurement
Financial assets are classified at initial recognition, and subsequently
measured at amortised cost, fair value through other comprehensive income
("OCI"), or fair value through profit and loss.
The classification of financial assets at initial recognition that are debt
instruments depends on the financial asset's contractual cash flow
characteristics and the Group's business model for managing them. The Group
initially measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss, transaction costs.
In order for a financial asset to be classified and measured at amortised cost
or fair value through OCI, it needs to give rise to cash flows that are
'solely payments of principal and interest ("SPPI")' on the principal amount
outstanding. This assessment is referred to as the SPPI test and is performed
at an instrument level.
The Group's business model for managing financial assets refers to how it
manages its financial assets in order to generate cash flows. The business
model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in
four categories:
· Financial assets at amortised cost (debt instruments)
· Financial assets at fair value through OCI with recycling of
cumulative gains and losses (debt instruments)
· Financial assets designated at fair value through OCI with no
recycling of cumulative gains and losses upon derecognition (equity
instruments)
· Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial
assets at amortised cost if both of the following conditions are met:
· The financial asset is held within a business model with the
objective to hold financial assets in order to collect contractual cash flows;
and
· The contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the
effective interest rate ("EIR") method and are subject to impairment. Interest
received is recognised as part of finance income in the statement of profit or
loss and other comprehensive income. Gains and losses are recognised in profit
or loss when the asset is derecognised, modified or impaired. The Group's
financial assets at amortised cost include trade receivables (not subject to
provisional pricing) and other receivables.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part
of a group of similar financial assets) is primarily derecognised (i.e.,
removed from the Group's consolidated statement of financial position) when:
· The rights to receive cash flows from the asset have expired; or
· The Group has transferred its rights to receive cash flows from the
asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a 'pass-through' arrangement;
and either (a) the Group has transferred substantially all the risks and
rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred
control of the asset.
Impairment of financial assets
The Group recognises an allowance for expected credit losses ("ECLs") for all
debt instruments not held at fair value through profit and loss. For trade
receivables (not subject to provisional pricing) and other receivables due in
less than 12 months, the Group applies the simplified approach in calculating
ECLs, as permitted by IFRS 9. Therefore, the Group does not track changes in
credit risk, but instead, recognises a loss allowance based on the financial
asset's lifetime ECL at each reporting date.
The Group considers a financial asset in default when contractual payments are
90 days past due. However, in certain cases, the Group may also consider a
financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual
amounts in full before taking into account any credit enhancements held by the
Group.
A financial asset is written off when there is no reasonable expectation of
recovering the contractual cash flows and usually occurs when past due for
more than one year and not subject to enforcement activity. At each reporting
date, the Group assesses whether financial assets carried at amortised cost
are credit-impaired. A financial asset is credit-impaired when one or more
events that have a detrimental impact on the estimated future cash flows of
the financial asset have occurred.
(b) Financial liabilities
Financial liabilities are classified at initial recognition as financial
liabilities at fair value through profit or loss, or as appropriate. All
financial liabilities are recognised initially at fair value and net of
directly attributable transaction costs. The Group's financial liabilities
include trade and other payables and loans.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as
described below:
· Financial liabilities at amortised cost
After initial recognition, interest-bearing loans and borrowings and trade and
other payables are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in the statement of profit or loss and
other comprehensive income when the liabilities are derecognised, as well as
through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the statement of profit or loss
and other comprehensive income. This category generally applies to trade and
other payables.
Derecognition
A financial liability is derecognised when the associated obligation is
discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognised in
profit or loss and other comprehensive income.
2.8. Taxation
Current taxes are based on the results shown in the financial statements and
are calculated according to local tax rules, using tax rates enacted or
substantively enacted by the balance sheet date.
Deferred tax is recognised on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial
statements, determined using tax rates that are expected to apply when the
related deferred tax asset or liability is realised or settled. Deferred tax
assets are recognised only to the extent that it is probable that future
taxable profit will be available against which the temporary differences can
be utilised.
2.9. Intangible assets - exploration and evaluation expenditure
Exploration expenditure comprises all costs which are directly attributable to
the exploration of a project area and research costs.
When it has been established that a mineral deposit has development potential
and the Group has the rights to explore, all costs (direct and applicable
overheads) incurred in connection with the exploration and development of the
mineral deposits are capitalised until either production commences, or the
project is not considered economically viable.
In the event of production commencing, capitalised costs in respect of the
asset are transferred into Tangible Fixed Assets, and are depreciated over the
expected life of the mineral reserves on a unit of production basis. Other
pre-trading expenses are written off as incurred.
For the purposes of impairment testing, intangible assets are allocated to
specific projects with each licence and reviewed annually. Where a project is
abandoned or is considered to be of no further interest, the related costs are
written off.
Intangible assets are subject to amortisation and are tested annually for
impairment, where indicators of impairment are considered to be present in
accordance with IFRS 6. The recoverability of all exploration costs, licenses
and mineral resources is dependent on the ability of the Group to obtain
necessary financing to complete the development of reserves and future
profitable production, or proceeds from the disposition thereof.
Expenditure on research and development, such as for the KMP, including
testwork and patent applications, is recognised as an intangible asset under
IAS 38 once both the technical and economic viability of such research can be
demonstrated. Until that time, costs are expensed as incurred.
Capitalised intellectual property costs will be amortised over their economic
life, once that period has been realistically established.
2.10. Contingent assets
Contingent assets are assets that arise from past events and whose existence
will be confirmed only by the occurrence or non-occurrence of future events
not wholly within the control of the Company. Contingent assets are not
recognised in the Statement of Financial Position but are disclosed in the
notes to the financial statements when an inflow of economic benefit is
probable.
2.11. Contingent liabilities
A contingent liability is a possible or present obligation that does not meet
the criteria for recognising in the accounts because it is either:
a) A possible obligation (i.e. one not yet confirmed to actually be a
present obligation, with any degree of certainty) that arises from past events
and where the final outcome will be contingent on one or more uncertain future
events, not wholly within the control of the entity; or
b) A present obligation that arises from past events but is not
recognised because the loss is not probable or the amount of the obligation
cannot be measured with sufficient reliability.
2.12. Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash
equivalents includes cash on hand and deposits held at call with financial
institutions.
2.13. Foreign currencies
Assets and liabilities in foreign currencies are translated into US$ at the
rates of exchange ruling at the Statement of Financial Position date.
Transactions in foreign currencies are translated into sterling at the rate of
exchange ruling at the date of the transaction. Exchange differences are
taken into account in arriving at the operating result.
On consolidation of a foreign operation, assets and liabilities are translated
at the closing rate at the date of the Statement of Financial Position. Income
and expenses for each Statement of Comprehensive Income presented are
translated at average exchange rates. All resulting exchange differences are
recognised in other comprehensive income and accumulated in equity.
2.14. Share-based payment arrangements
The Group operates equity-settled, share-based compensation plans, under which
the entity receives services from employees as consideration for equity
instruments (options) of the Group. The fair value of employee services
received in exchange for the grant of share options are recognised as an
expense. The total expense to be apportioned over the vesting period is
determined by reference to the fair value of the options granted:
· including any market performance conditions;
· excluding the impact of any service and non-market performance
vesting conditions; and
· including the impact of any non-vesting conditions.
Any non-market performance and service conditions are included in assumptions
about the number of options that are expected to vest. The total expense is
recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the end of each reporting
period the Group revises its estimate of the number of options that are
expected to vest.
The Group recognises the impact of the revision of original estimates, if any,
in profit or loss, with a corresponding adjustment to equity.
When options are exercised, the Company issues new shares. The proceeds
received net of any directly attributable transaction costs are credited to
share capital (nominal value) and share premium.
The fair value of goods or services received in exchange for shares is
recognised as an expense and included within administrative expenses.
2.15. Critical accounting estimates and judgements
The preparation of financial statements in conformity with UK-IAS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated
financial statements, are disclosed below:
a) Recoverability of intangible assets
The Group tests annually for impairment or more frequently if there are
indications that the intangible assets might be impaired.
IFRS 6 requires entities recognising exploration and evaluation assets to
perform an impairment test on those assets when specific facts and
circumstances indicate an impairment test is required. The assessment involves
judgement as to the status of licenses and the likelihood of renewal of
exploration licenses which expire in the near future. Where impairment
indicators are present, the Group is required to evaluate the future cash
flows expected to arise from the cash-generating unit and the suitable
discount rate in order to calculate the present value.
The Directors therefore undertook an assessment of the following areas and
circumstances that could indicate the existence of impairment in accordance
with IFRS 6:
· The Group's right to explore in an area has expired, or will expire
in the near future without renewal;
· No further exploration or evaluation is planned or budgeted for;
· A decision has been taken by the Board to discontinue exploration and
evaluation in an area due to the absence of a commercial level of reserves; or
· Sufficient data exists to indicate that the book value will not be
fully recovered from future development and production.
In October 2024, the Company received the news that its ESIA application had
been rejected and that no further appeals could be made. The Company believes
that this decision, and its treatment over the preceding years by the Moroccan
authorities, to have been contrary to its legal rights, and has thus initiated
a dispute in this matter.
Notwithstanding the Board's confidence in its position, and the expectation
that this dispute will be resolved in a positive way (whether through an
amicable settlement or through litigation), the final rejection of the ESIA
represents a clear indicator of impairment in the context of several of the
criteria under IFRS 6, and accordingly the Company has recognised an
impairment provision of US$20.4 million, the full carrying value of the Fixed
Assets in respect of the Khemisset Project, at the time of the rejection.
Following this impairment, the carrying value of Group's exploration and
evaluation intangible assets in relation to the Khemisset Project at 31
December 2024 was US$nil (2023: US$20.4 million).
b) Share-based payments
The Group has made awards of options on its unissued share capital to certain
Directors and employees as part of their remuneration package.
The valuation of these options involved making a number of critical estimates
relating to price volatility, future dividend yields, expected life of the
options and interest rates. These assumptions are described in more detail
in note 13.
There was a charge to the Statement of Comprehensive Income during the year in
relation to share based payments of US$270k (2023: US$335k).
3. Expenses by nature
2024 2023
US$'000 US$'000
Directors' fees (note 4) 599 581
Depreciation 16 19
Travel and accommodation 2 30
Auditor's remuneration 63 51
Employment costs 702 837
Professional and consultancy fees 1,055 776
Other costs 2,001 370
Administrative expenses 4,438 2,664
Other costs include restructuring costs and other expenditure in Morocco that
have been expensed to the income statements in the year following the
suspension of activities in that country. In prior years, a large portion of
costs in Morocco related to the development of the Khemisset project and had
therefore been capitalised in accordance with the Company's policies.
4. Directors' remuneration
Details of Directors' remuneration during the year are as follows:
US$'000 2024 2023
Salary Bonus Shares Total Salary Bonus Shares Total
Graham Clarke 286 - 50 336 332 - - 332
James Kelly(1) 85 - - 85 99 - - 99
Rupert Joy(1) 43 - - 43 50 - - 50
Hayden Locke 43 - 25 68 50 - - 50
Robert Wrixon 42 - 25 67 50 - - 50
Total 499 - 100 599 581 - - 581
(1) James Kelly and Rupert Joy both stood down on 28 October 2024
During 2024, certain directors were awarded shares in order to ensure their
continued engagement and alignment with shareholders' interests, while
preserving cash.
Graham Clarke and Robert Wrixon received consultancy fees received fees for
consultancy services which are disclosed within note 15. During 2024, certain
Directors received share options as part of their remuneration (see note 13).
5. Income tax
2024 2023
US$'000 US$'000
Current tax:
Tax 64 -
Total taxation charge - -
Reconciliation of income
tax
2024 2023
US$'000 US$'000
Loss before tax (25,834) (2,992)
Loss before tax multiplied by domestic tax rates applicable to losses in the (3,591) (573)
respective countries
Effects of:
Impairment 2,946 -
Adjustments to align Moroccan GAAP with IFRS (127) 11
Disallowed expenditures 8 3
Tax losses used up 131 (14)
R&D tax received 64 -
Other losses on which no deferred tax is recognised 633 573
Total taxation charge 64 -
The weighted average applicable tax rate was 13.96% (2023: 19.2%). Emmerson
PLC is registered for taxation in the United Kingdom, where the corporation
tax rate was 19%. Morocco has a 20% tax rate applicable to mining companies,
including Emmerson's Moroccan subsidiaries, while the British Virgin Islands
have a tax rate of 0%.
A deferred tax asset has not been recognised in respect of deductible
temporary differences relating to certain losses carried forward at the year
end, as there is insufficient evidence that taxable profits will be available
in the foreseeable future against which the deductible temporary difference
can be utilised.
The unrecognised deferred tax asset for the Group was approximately US$6,154k
(2023: US$2,361k). The unrecognised deferred tax asset relating to Moroccan
tax losses amounted to approximately US$2,004k (2023: US$97k).
6. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
2024 2023
Loss from continuing operations for the year attributable to the equity (25,770) (2,992)
holders of the Company (US$'000)
Number of shares
Weighted average number of ordinary shares for the purpose of basic and 1,111,428,463 1,021,272,676
diluted earnings per share
Basic and diluted loss per share 2.319 cents 0.293 cents
The potential number of shares which could be issued following the exercise of
options and warrants currently outstanding amounts to 114,352,743 (see note
13). Dilutive earnings per share equals basic earnings per share as, due to
the losses incurred, there is no dilutive effect from the existing share
options and warrants.
7. Intangible assets
The intangible assets consist of capitalised exploration and evaluation
expenditure in respect of the Company's potash interests in Morocco (the
Khemisset project).
2024 2023
Cost: US$'000 US$'000
At the beginning of the year 20,457 18,607
Additions 201 1,726
Impairment (20,353) -
FX (305) 124
Total - 20,457
During the year, the Company fully impaired the capitalised exploration and
evaluation costs in respect of the Khemisset project, following the rejection
of the ESIA in October 2024. See note 2.13 detailing the Company's judgement
in this area.
8. Trade and other receivables
2024 2023
US$'000 US$'000
Other receivables 719 1,010
Prepayments 43 70
Total 762 1,080
Other receivables at 31 December 2024 included US$0.6 million in respect of
the equity placing in December 2025 whose proceeds were not received until
shortly after year end.
It also included recoverable VAT and other taxes. The recoverable VAT in
Morocco of US$0.8 million was fully impaired in the year, as its recovery was
dependent on the Khemisset project entering production and generating third
party sales, which is no longer expected to occur following the rejection of
the ESIA.
9. Trade and other payables
2024 2023
US$'000 US$'000
Other payables 319 217
Accruals 153 129
Total 472 346
Trade and other payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business. Accounts payable are
classified as current liabilities if payment is due within one year or less
(or in the normal operating cycle of the business if longer). If not, they are
presented as non-current liabilities. Other payables consist of supplier
invoices for administration expenses.
Included on Other payables are $73,000 which relates to the legal settlement
agreement, please see note 10.
10. Long-term liabilities
On 30 April 2025, the Company reached a legal settlement agreement related to
a contract dated 29 November 2021 to which the consultant agreed to provide a
basic engineering package for the Company's Khemisset Potash Project.
As at 31 December 2024, the Company has recognised long-term liabilities
related to the legal settlement obligations as follows:
Description Payment Due Date US$'000
First payment* Paid June 2025 73
Second Payment 27 May 2026 165
Third Payment 27 May 2027 189
Total 427
*The first payment of $73,000 is included within the trade and other payables
due to the payment being required within a year from the year end.
11. Financial instruments
Categories of financial instruments
2024 2023
US$'000 US$'000
Financial assets measured at amortised cost
Other receivables 728 1,080
Cash and cash equivalents 923 1,937
1,651 3,017
Financial liabilities measured at amortised cost
Other payables 319 217
Accruals 135 129
472 346
Financial risk management objectives and policies
The Company is exposed through its operations to credit risk and liquidity
risk. In common with all other businesses, the Company is exposed to risks
that arise from its use of financial instruments. This note describes the
Company's objectives, policies and processes for managing those risks and the
methods used to measure them. Further quantitative information in respect of
these risks is presented throughout this financial information.
General objectives, policies and processes
The Directors have overall responsibility for the determination of the
Company's risk management objectives and policies. Further details regarding
these policies are set out below:
Capital management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
The capital structure of the Group consists of issued capital, reserves and
retained earnings. The Directors reviews the capital structure on a
semi-annual basis. As a part of this review, the Directors consider the cost
of capital, the risks associated with each class of capital and overall
capital structure risk management through the new share issues and share
buy-backs as well as the issue of new debt or the redemption of existing debt.
Credit risk
The Company's credit risk arises from cash and cash equivalents with banks and
financial institutions. For banks and financial institutions, only
independently rated parties with minimum rating "A" are accepted.
Liquidity risk
Liquidity risk arises from the Directors' management of working capital. It is
the risk that the Company will encounter difficulty in meeting its financial
obligations as they fall due.
The Directors' policy is to ensure that the Company will always have
sufficient cash to allow it to meet its liabilities when they become due. To
achieve this aim, the Directors seek to maintain a cash balance sufficient to
meet expected requirements.
The Directors have prepared cash flow projections on a monthly basis through
to 31 December 2026. At the end of the period under review, these projections
indicated that the Group is expected to have sufficient liquid resources to
continue in operational existence and meet its obligations under all
reasonably expected circumstances.
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk
arising from various currency exposures. However since the Company's strategy
changed from developing the Khemisset project to pursuing a dispute with the
Moroccan authorities, the exposure to forex risk has reduced significantly and
is now limited to cash balances and outgoings in GBP.
12. Share capital
The Ordinary Shares issued by the Company have no par value and are fully
paid. Each Ordinary Share carries one vote on a poll vote. The Company does
not have a limited amount of authorised capital.
Number of shares US$'000
As at 1 January 2024 1,026,743,224 34,958
Share issued - cash received in year 163,892,203 2,894
Shares issued - cash received after year end 79,230,768 645
Share awards issued to management 12,000,000 90
Share issue costs - (123)
As at 31 December 2024 1,281,866,195 38,464
In April 2024, the Company allotted 112 million shares at a price of 1.75
pence per share, raising net proceeds of US$2.4 million. In December 2024, the
Company raised further funds through the allotment of 131 million shares at
price of 0.65 pence per share, raising US$1.0 million after costs (of which
US$0.6 million was received on 3 January 2025).
In December 2024, the Company awarded 12 million shares with a value of US$0.1
million to Board members who were taking no, or reduced, cash remuneration
following the downsizing of the Group's workforce. Robert Wrixon was awarded
3,000,000 shares, Hayden Locke was awarded 3,000,000 shares and Graham Clarke
6,000,000 shares.
13. Share-based payments
The following is a summary of the share options as at 31 December 2024:
Date of grant Expiry date Vesting date Exercise Price No of Options Share price at grant Risk Free rate Volatility Option Value
01-Aug-20 31-Jul-25 01-Aug-20 0.0600 9,500,000 £0.0435 1.10% 71% £0.0219
01-Aug-20 31-Jul-25 01-Aug-20 0.1000 9,250,000 £0.0435 1.10% 71% £0.0169
01-Aug-20 31-Jul-25 01-Aug-21 0.0010 500,000 £0.0435 1.10% 71% £0.0177
01-Aug-20 31-Jul-25 01-Aug-21 0.0500 1,000,000 £0.0435 1.10% 71% £0.0177
01-Aug-20 31-Jul-25 01-Aug-21 0.0600 7,000,000 £0.0435 1.10% 71% £0.0091
01-Aug-20 31-Jul-25 01-Aug-21 0.0700 2,000,000 £0.0435 1.10% 71% £0.0085
01-Aug-20 31-Jul-25 01-Aug-22 0.1000 10,083,333 £0.0435 1.10% 71% £0.0070
01-Aug-20 31-Jul-25 01-Aug-22 0.0010 1,000,000 £0.0435 1.10% 71% £0.0089
01-Aug-20 31-Jul-25 01-Aug-22 0.0500 1,000,000 £0.0435 1.10% 71% £0.0049
01-Aug-20 31-Jul-25 01-Aug-22 0.0700 2,000,000 £0.0435 1.10% 71% £0.0042
01-Aug-20 31-Jul-25 01-Aug-22 0.1000 3,333,333 £0.0435 1.10% 71% £0.0035
01-Aug-20 31-Jul-25 01-Aug-22 0.1000 3,333,334 £0.0435 1.10% 71% £0.0023
21-Jul-22 20-Jul-27 20-Jul-24 0.0700 1,500,000 £0.0700 2.05% 55% £0.0342
21-Jul-22 20-Jul-32 20-Jul-24 0.0700 3,838,000 £0.0700 2.05% 55% £0.0457
29-May-24 20-Jul-32 20-Jul-24 0.0700 425,000 £0.0700 2.05% 55% £0.0457
30-May-24 30-May-34 30-May-25 0.0300 7,500,000 £0.0195 4.38% 93% £0.0167
30-May-24 30-May-34 30-May-26 0.4500 7,500,000 £0.0195 4.38% 93% £0.0162
Options outstanding at 31 December 2024 70,763,000
Share options Warrants Total
At 1 January 2023 98,413,000 132,391,714 230,804,714
Issued in year (25,000,000) - (25,000,000)
Exercised in year (250,000) (132,391,714) (132,641,714)
At 31 December 2023 73,163,000 - 73,163,000
Issued in year 21,524,999 142,229,199 163,754,198
Lapsed/expired in year (23,924,999) (98,639,456) (122,564,455)
At 31 December 2024 70,763,000 43,589,743 114,352,743
The weighted average remaining contractual life of the options at year-end was
2.92 years (2023: 2.74 years).
The options issued were valued using the Black-Scholes valuation method and
the assumptions used are detailed above. The expected future volatility has
been determined by reference to the historical volatility.
On 8 April 2024, 98,639,456 warrants were issued, which expired on 31 December
2024. On 12 December 2024, 43,589,743 warrants with an exercise price of 3
pence and an expiry date of 12 December 2031 were issued as part of the equity
placing at that date.
The Group operates equity-settled, share-based compensation plans, under which
the entity receives services from Directors and employees as consideration for
equity instruments (options) of the Group.
The total share-based payment recognised in the Statement of Changes in Equity
during the year was a US$270k (2023: US$335k) in respect of the fair value of
employee share options.
There were 42,321,000 (2023: 47,263,000) share options held by current
Directors and employees at year end. Vesting of the options is subject to
the option holder providing continuous service during the vesting period and
there are no other performance conditions attached to the options.
Share options 2024 2023
Number issued Expiry Number issued Expiry
Graham Clarke (Director) 27,321,000 1 to 12 years 19,321,000 1 to 8 years
Hayden Locke (Director) 10,000,000 1 year 10,000,000 1 year
Robert Wrixon (Director) 5,000,000 1 year 5,000,000 1 year
Jim Wynn (PDMR) - - 9,000,000 1 to 8 years
Other employees - - 3,942,000 1 to 8 years
Total 42,321,000 47,263,000
14. Reserves
The following table describes the nature and purpose of various reserves
within owner's equity:
Share-based payment reserve Credits related to share-based payment
Reverse acquisition reserve Values related to the reverse acquisition of Emmerson PLC by Moroccan Salts
Ltd in 2018
Translation reserve Gain or losses from the translation of foreign subsidiaries
15. Related party transactions
Directors' consultancy fees
Graham Clarke is a Director of the Company and also provides consulting
services to the Company. During the year, Graham Clarke received fees of
US$34k (2023: US$ nil). There are no outstanding fees as at the year-end.
Robert Wrixon is a Director of the Company and also provides consulting
services to the Company. During the year, Robert Wrixon received fees of
US$26k (2023: US$30k). The amount outstanding as at the year-end was US$ nil
(2023: US$ nil).
Details of Directors' remuneration during the year are given in note 4.
There were no other related party transactions.
16. Ultimate controlling party
The Directors consider that there is no controlling or ultimate controlling
party of the Company.
17. Events after the reporting date
Litigation funding
On 2 January 2025, the Company announced that it had signed a Capital
Provision Agreement ("CPA") with a specialist litigation funding firm to
provide up to US$11.0 million in both litigation finance capital and working
capital for the Company (the "Funding"), and confirmed Boies Schiller Flexner
LLP ("BSF") as its litigation counsel.
The Funding is to be primarily used to progress the Company's dispute with the
Government of the Kingdom of Morocco under the Agreement between the
Government of the United Kingdom of Great Britain and Northern Ireland and the
Government of the Kingdom of Morocco for the Promotion and Protection of
Investments, which entered into force on 14 February 2002, being a Bilateral
Investment Treaty.
Deed of Settlement and Release
On 30 April 2025, the Company reached a legal settlement agreement related to
a contract dated 29 November 2021 to which the consultant agreed to provide a
basic engineering package for the Company's Khemisset Potash Project. The
settlement amount agreed between both parties is US$427k, payable in 3
instalments with the final payment due on 27 May 2027. See note 10.
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