TIDMEML
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 ,
follow us on Twitter (@emmerson_plc), or contact:
Emmerson PLC +44 (0) 207 138
Graham Clarke / Jim Wynn / Charles Vaughan 3204
Liberum Capital Limited (Nominated Advisor
and Joint Broker) +44 (0)20 3100
Scott Mathieson / Matthew Hogg / Kane Collings 2000
Shard Capital (Joint Broker) +44 (0)20 7186
Damon Heath / Isabella Pierre 9927
BlytheRay (Financial PR and IR) +44 (0) 207 138
Tim Blythe / Megan Ray / Said Izagaren 3204
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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END
UPDUBVARSVUARUR
(END) Dow Jones Newswires
January 08, 2024 02:00 ET (07:00 GMT)
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