REG - Emmerson PLC - Q4 Update

EmmersonAnnouncement

08/01/2024 07:00

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RNS Number : 8698Y  Emmerson PLC  08 January 2024

8 January 2024

 

Emmerson PLC ("Emmerson" or the "Company")

Q4 2023 Update

 

Emmerson, which is developing the world class Khemisset Potash Project in
Morocco ("Khemisset" or the "Project"), is pleased to provide an update on
activities during Q4 2023.

 

Highlights

·    Emmerson is still awaiting the session of the Commission
Ministérielle de Pilotage (''Ministerial Committee'' or the ''Committee'') to
obtain environmental approval

·   Bank mandates extended for a further 12 months with a syndicate of
international and Moroccan banks, demonstrating the ongoing support for the
Khemisset Project

·   Important process optimisation work on the Project under final review
with a potential for significant environmental and economic upside

·     Other technical work reduced to a minimum

 

Environmental Approval

The next step with regards to obtaining approval for the Environmental &
Social Impact Assessment (''ESIA'') for the Khemisset Project remains a
meeting of the Ministerial Committee, chaired by the Moroccan Head of
Government. This Committee was unable to meet during the second half of 2023.
The Company understands that this was a result of a number of matters taking
priority at governmental level, not least the co-ordination of relief efforts
related to the earthquake in September 2023.

 

The Company continues to lobby to ensure this meeting takes place as soon as
possible, and that its application will be considered favourably, while at all
times respecting due protocols and procedures.

 

The Company has repeatedly been assured that the meeting will take place soon,
and that no further significant issues remain. However, the timing of the
meeting and its outcomes are not within the Company's control. Any substantive
updates on the approval process will be reported without delay.

 

Bank Mandates

In December 2023, the Company announced the extension of the appointment of a
syndicate of leading international and Moroccan banks as initial mandated lead
arrangers ("MLAs") to co-ordinate and fund dual-tranche debt financing
facilities for the development of the Project for a further 12 months until 31
December 2024.

 

The debt facility under discussion amounts to US$310 million, including an
ECA-covered tranche of US$230 million supported by UK Export Finance, and a
dual currency (US$ and Moroccan Dirham) commercial tranche of US$80 million.

 

The extension of the mandates demonstrates the ongoing support for the
Khemisset Project by the syndicate.

 

Other Workstreams

The basic engineering workstreams for the Khemisset Project are now at the
stage where only the final documents are expected. No further exploration or
engineering work in respect of the basic design is being undertaken pending
the ESIA approval.

 

Separately, the Company has continued to examine process design and
optimisations with a specific focus on improving the Project's environmental
footprint, which also offer considerable economic upside. Details of these
enhancements are being finalised and will be announced in due course.

 

Chief Executive Graham Clarke said: "The final quarter of 2023 has been
frustrating in that we continue to await the session of the Ministerial
Committee, which is the next step towards the approval of our environmental
permit. Discussions with various parties and advisors have continued to be
positive, offering understanding for our frustration while explaining that
governmental attention has been focused on various other matters. We believe
the matter will be dealt with soon, based on feedback, but we are unable to
provide any confirmed dates as the matter is in the hands of the government.

 

"The extension of the bank mandates was a positive development, and a reminder
of the fact that we continue to enjoy the support of international and
Moroccan banks, the UK government (both through UK Export Finance and the work
of the British Embassy in Rabat), and our largest shareholder Global
Sustainable Minerals Pte Ltd.

 

"While we have been continuing with our lobbying activities, we have limited
our technical activities appropriately in order to preserve the Company's cash
for as long as possible, although some important work has been undertaken to
examine opportunities for further optimising and enhancing the project
economically and more importantly, environmentally.

 

"Once we have the ESIA approval, we will be in a position to move forward
quickly with fundraising and technical work. We will of course provide updates
as soon as we are able in all these matters.

 

"In the meantime, I am grateful to our shareholders for their continued
support, particularly in the context of unforgiving market conditions."

 

 

**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 / Jim Wynn / Charles Vaughan

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

 Scott Mathieson / Matthew Hogg / Kane Collings

 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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