REG - Emmerson PLC - ESIA Process, Board Changes, and Cash Management

EmmersonAnnouncement

28/10/2024 07:00

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RNS Number : 7737J  Emmerson PLC  28 October 2024

Emmerson PLC / Ticker: EML / Index: AIM / Sector: Mining

28 October 2024

Emmerson PLC

("Emmerson" or the "Company")

 

ESIA Approval Process, Changes to the Board and Cash Management Initiatives

 

Emmerson, the Moroccan focused potash development company, provides an update
on the ESIA approval process, changes to its Board and various cash management
initiatives.

 

ESIA Approval

 

As previously announced, the Company was made aware of an unfavourable
recommendation regarding its ESIA application.

 

Following discussions with the Company's Moroccan advisors, the Company filed
an appeal with the Wali of Rabat-Salé-Kénitra region (which encompasses the
province of Khemisset) with respect to the unfavourable recommendation from
the Commission Régionale Unifiée de l'Investissement ("CRUI").

 

The Centre Régional d'Investissement of the region Rabat-Salé-Kénitra
("CRI") has subsequently responded that the CRUI does not have the ability to
examine the ESIA submission again and it did not provide any indication of
further avenues of appeal to the Company.

 

Emmerson continues to examine its options with respect to the approvals
process and will update the market shortly on its next steps.

 

Changes to the Board

 

James Kelly (Non-Executive Chairman) and Rupert Joy (Non-Executive Director)
will both step down from the Board of Directors, with immediate effect.

Hayden Locke will assume the role of Chairman to support management during the
next phase of work.

 

Cash Management Initiatives

 

The permitting delays have put Emmerson's balance sheet under pressure and
limited its future financing options. As a result, the Company has implemented
a comprehensive review to significantly reduce its cash burn rate while it
assesses its strategic and appeal options with respect to the recent
unfavourable recommendation.

 

In addition to the streamlining of the Board, from 1 November 2024, the two
remaining non-executive directors (Mr Locke and Mr Wrixon) will suspend taking
their cash fees and will, instead, take fees in the form of shares to continue
to align them with the interests of other shareholders.

 

Graham Clarke, the Managing Director and CEO, will reduce his base cash
compensation by 40%, which will be reviewed on an ongoing quarterly basis with
respect to the Company's financial position and ongoing prospects. Mr Clarke
will also take a portion of the reduction in shares.

The majority of the remaining ongoing costs within the business, with the
exception of core administrative and regulatory functions, are being reviewed
and will be significantly reduced. Unfortunately, this will mean, for the time
being, that virtually no further progress can be made on the various
value-adding project development workstreams underway.

 

Hayden Locke, in-coming Chairman of Emmerson, commented:

 

"I would like to thank both James and Rupert for their wise counsel and
commitment to Emmerson during what has been a very challenging period for the
Company. Both are disappointed with the outcome and are reticent to leave at
this important juncture, but they also recognise a restructuring is necessary
to preserve optionality for the Company, and any remaining potential for value
for our stakeholders.

 

"Thank you to Graham for his continued commitment to the Company, taking a
significant reduction in remuneration while continuing to work incredibly hard
as we assess our options. Many investors mistake silence for lack of activity
but, in our current situation, it is difficult to make appropriate and
conclusive statements when we have no clarity on our position, without
prejudicing our potential future options.

 

"Graham, Rob and I are working hard to assess our next steps, and I look
forward to updating the market when our path becomes clear.

 

"We thank our remaining shareholders for their patience."

 

Market Abuse Regulation (MAR) Disclosure

This announcement contains inside information for the purposes of
the UK Market Abuse Regulation and the Directors of the Company are
responsible for the release of this announcement.

 

**ENDS**

 

For further information, please visit www.emmersonplc.com
(http://www.emmersonplc.com/) , follow us on Twitter (@emmerson_plc), or
contact:

 

 Emmerson PLC                                                  +44 (0) 207 138 3204

 Graham Clarke / Charles Vaughan

 Panmure Liberum Limited (Nominated Advisor and Joint Broker)  +44 (0)20 3100 2000

 Scott Mathieson / Matthew Hogg

 Shard Capital (Joint Broker)                                  +44 (0)20 7186 9927

 Damon Heath / Isabella Pierre

 BlytheRay (Financial PR and IR)                               +44 (0) 207 138 3204

 Tim Blythe / Megan Ray / Said Izagaren

 

Notes to Editors

Emmerson is focused on advancing the Khemisset project ("Khemisset" or the
"Project") in Morocco into a low cost, high margin supplier of potash, and the
first primary producer on the African continent. With an initial 19-year life
of mine, the development of Khemisset is expected to deliver long-term
investment and financial contributions to Morocco including the creation of
permanent employment, taxation, and a plethora of ancillary benefits. As a
UK-Moroccan partnership, the Company is committed to bringing in significant
international investment over the life of the mine.

 

Morocco is widely recognised as one of the leading phosphate producers
globally, ranking third in the world in terms of tonnes produced annually, and
the development of this mine is set to consolidate its position as the most
important fertiliser producer in Africa. The Project has a large JORC Resource
Estimate (2012) of 537Mt @ 9.24% K2O, with significant exploration potential,
and is perfectly located to support the expected growth of African fertiliser
consumption whilst also being located on the doorstep of European markets. The
need to feed the world's rapidly increasing population is driving demand for
potash and Khemisset is well placed to benefit from the opportunities this
presents. The Feasibility Study released in June 2020 indicated the Project
has the potential to be among the lowest capital cost development stage potash
projects in the world and also, as a result of its location, one of the
highest margin projects. This delivered outstanding economics, including a
post-tax NPV(8) of approximately US$1.4 billion using industry expert Argus'
price forecasts.

 

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