Name of the Project
Khemisset potash project.

Location
The project is located in northern Morocco.

Project Owner/s
Emmerson PLC.

Project Description
A feasibility study has confirmed the project as a world-class, low capital cost, high margin potash mine.

The feasibility study is based on 43% of the Joint Ore Reserves Committee-compliant mineral resource estimate of 537-million tonnes at an average grade of 9.24% potassium oxide, delivering an initial mine life of 19 years.

The feasibility study is estimated to produce about six-million tonnes a year of run-of-mine ore to produce muriate of potash (MoP) at steady-state production of about 735 000 t/y and de-icing salt at one-million tonnes a year. Peak production is estimated at 810 000 t/y of K60 MoP and one-million tonnes a year of de-icing salt.

The mine is proposed to be accessed through twin declines from the surface, which will allow for ore to be extracted using a conventional room-and-pillar mining methodology using continuous miners. Ore will be processed using hot leaching and cold crystallisation to produce the generic K60 MoP product, which is standard in the industry. The feasibility study assumes all MoP and salt product is exported through the Port of Casablanca using trucks from the mine site, to be sold in Emmerson’s target markets in the Atlantic corridor. Significant potential remains to increase the mine life by including additional resources, notably in the south-west of the pro­ject area, and through further exploration work.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at an 8% nominal discount rate, of $1.4-billion and an internal rate of return of 38.5%, with a 2.6-year payback.

Capital Expenditure
The capital cost of the project, including a $45.5-million contingency, is estimated at $387-million. About $24-million, including contingency, has been allocated to a salt plant designed to produce de-icing specification salt.

Planned Start/End Date
Not stated.

Latest Developments
Khemisset is a step closer to construction, with a detailed risk analysis having been completed to identify the areas that need further work to mitigate the risks and prepare the project for funding due diligence.

This work is now being completed and guides the priorities for expenditure, with existing funds being used to increase impact and to be fully prepared for a high level of due diligence from funding partners.

Workstreams that have started using the existing funds include geological work that will prepare for and finalise the scope of general site investigation and the derisking of the declines, a further seismic survey and additional drilling to further prove out the early mining blocks.

Ventilation modelling, cuttability testing and a technical review of the mine plan are being undertaken, with further process work also under way. The miner has noted that, where necessary, independent experts have been engaged.

In addition, work is being done to confirm the opportunities for phased development of the project, which will present an advantage during financing discussions.

Emmerson has stated that the options being assessed have the potential to materially reduce the upfront capital cost, with flexibility regarding the potentially phased development. This, in turn, means that financing can be considered at different levels.

The permitting process remains on track for completion of the environmental- and social-impact assessment in the coming weeks, with submission of the application expected in the fourth quarter of the year and successful granting of the permit in the first half of 2021.

The decision was made to produce an environmental survey that is much more robust than the minimum standard required, and at a level set out by the International Finance Corporation Performance Standards and Equator Principles, Emmerson has said.

The company is investigating the opportunity to accelerate the process of securing the mining permit and the environmental permit.

In this regard, Emmerson notes that the Moroccan mining ministry and other relevant authorities are helpful with regard to the permitting process, providing confidence that the company will successfully achieve the target of having the environmental and mining permits in place during the first half of 2021.

Further, according to Emmerson, because the valuable product offtake has not yet been allocated, in a potash market dominated by a handful of majors, this independence of supply is a major attraction to various potential partners.

Key Contracts, Suppliers and Consultants
Golder Associates (feasibility study); including Moroccan Salts (consultant and resource geologists) Global Potash Solutions and Barr Associates (processing design); DeltaBEC (project infrastructure).

Contact Details for Project Information
Emmerson PLC, tel +44 207 236 1177.