Emmerson Plc has turned the Khemisset potash project to its flagship program. The deal was finalized at an annual gathering earlier this month at which shareholders said ‘yes’ to the proposed issuing of more than 333 million shares to secure the asset, as well as a further 200 million shares to provide cash to start work on the ground. “The valuation is very compelling,” Hayden Locke, Emmerson’s CEO, says. “It’s a development stage potash asset with a resource already in place, and that resource will support a 20 year mine life.” Potash projects as a rule mine ore that is deep and expensive to extract. But at Khemisset the ore is relatively shallow, at just 400 meters.
Most potash projects are very capital-intensive until they start producing. In this case, though, the cost is expected to be lower since Morocco already has the first class infrastructure in place. Given the location Mr. Locke also expects to be competitive, meaning that in the unlikely event major producers boost supply and prices drop, the project will still be financially sound. With the fresh funding, the plan now is to initiate what Locke calls “high-level technical studies.” The planned work will include drilling to upgrade the resource and get material for a metallurgical testing program. Emmerson also needs more time to get familiar with the available infrastructure. The plan is to finalize the scoping study by the first quarter of 2019.
“At that stage we’ll have finished drilling,” says Mr. Locke, adding that subsequently “we’ll kick off the metallurgical test work program. And in parallel to that we’ll also kick of a pre-feasibility or a definitive feasibility study. The £6 million will take us all the way to the end of next year.” A lot is already known about Khemisset since the project was extensively drilled in the past by the Moroccan arm of the French Geological Survey but Emmerson stresses that it will benefit from some further drilling to acquire more information on the mineralogy of the site.