Emmerson reports progress on Khemisset Potash Project
By Josh White
Date: Friday 27 Sep 2024
(Sharecast News) - Emmerson updated the market on the development of its Khemisset Potash Project in Morocco in its interim results on Friday, having submitted an updated environmental and social impact assessment (ESIA) in the second quarter, incorporating optimisations from the Khemisset multi-mineral process (KMP).
The pre-revenue AIM-traded firm said it was now awaiting final approval from the Moroccan authorities, and expected a positive outcome, with a decision expected in the current quarter.
It said the KMP enhancements had significantly improved the project's economics by reducing water consumption and eliminating the need for waste brine disposal.
The changes had more than doubled the project's net present value (NPV8) to $2.2bn.
A revised JORC resource estimate, taking into account improved potash recovery and monetisation of additional micro-nutrients, was expected in the fourth quarter.
That update could further increase the project's resource size and extend its mine life.
In the third quarter, Emmerson completed a second round of crop trials, testing the efficacy of KMP products in providing phosphates to lettuces.
Preliminary results indicated performance comparable to traditional phosphate sources and superior to controls without phosphate.
The trials supported the potential of KMP products as a higher-value, multi-nutrient solution with environmental benefits, such as reducing phosphate run-off.
Financially, Emmerson reported a stable loss of $1.6m for the period, consistent with the same period last year.
The firm ended June with a cash balance of $2.4m, which had since reduced to $1.7m.
Emmerson also announced the resignation of chief financial officer Jim Wynn, effective 30 September, adding that it would seek a successor following ESIA approval as part of a cost-saving strategy.
For the rest of 2024, Emmerson said its focus would be on securing environmental approval and advancing technical studies, including the JORC resource update.
The company said it believed the KMP optimisations would make the Khemisset Project more attractive to investors and financiers, enhancing its sustainability and economic appeal.
"We have continued to prioritise engagement with the Moroccan authorities towards the granting of the ESIA approval while pursuing technical workstreams to maximise integration of the KMP's benefits into the project design," said chief executive officer Graham Clarke.
"We have continued engaging with relevant authorities to ensure acceptance that the technical issues previously raised are well addressed by the optimisations adopted for the project, mainly from the KMP.
"Water is a precious resource in Morocco particularly in the context of droughts that have affected the country over the recent years, and the benefits of the KMP, together with previous improvements including the use of recycled water and the switch to dry stack tailings, underline the company's commitment to delivering a project with robust environmental and social credentials, thus contributing to the country's efforts in minimising the impact of new projects on water resources."
Clarke said the company understood that the approval process was reaching its conclusion, and was hopeful to be able to announce the outcome, which it was confident will be favourable, within the current quarter.
At 1230 BST, shares in Emmerson were up 26.4% at 1.58p.
Reporting by Josh White for Sharecast.com.
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