Morocco-focused potash business Emmerson rose (LSE:EML) 1.7pc to 3p on Wednesday morning after revealing a key hire intended to advance its flagship Khemisset project. The company has taken on Don Larmour of Global Potash Solutions to advise on metallurgy and processing at the asset.
Larmour has nearly four decades of experience in potash processing and, according to Emmerson, is one of the world’s leading experts in the crystallisation of potash ores. He spent 28 years with the Potash Corporation of Saskatchewan as its principal process engineer, where he was involved with process and plant design and operations management.
Larmour will also act as a consultant for a feasibility study at the site, which is due to begin in the first half of this year. This follows the publication of a scoping study late last year, which confirmed that Khemisset has the potential to be among the lowest capital cost, highest-margin potash projects in the world. Its forecasted EBITDA margins come in at more than 60pc while its post-tax NPV10 is more than £1.1bn based on industry expert price forecasts. In comparison, Emmerson’s market cap is currently just £18m.
In Tuesday’s update, the company said Larmour has already conducted a detailed review of the Khemisset scoping study as part of his hiring process. Through this, he identified opportunities for the simplification and optimisation of the project’s design. Emmerson believes these have the potential to reduce capital and operating costs. He also suggested potential changes to Khemisset’s brine management strategy and identified several areas of focus for the next, more detailed design phase to further de-risk the project.
Emmerson’s chief executive Hayden Locke said: ‘Don is one of the most experienced potash processing experts globally, with extensive experience in crystallisation plant design and operation. We are delighted he is available to provide us with his expertise at this pivotal time for the Company, and his desire to work on the Khemisset Project reinforces our view that it is a potentially world-class potash project.
‘The Scoping Study and the previous work completed by Ercosplan provides a fantastic basis for us to begin the detailed analytical process of optimising the process flow sheet for Khemisset and then testing it in the laboratory.
‘Through Don’s review, we have successfully identified a number of areas which require attention to further de-risk the project and, notably, a number of areas where we believe there is potential to further reduce our capital and operating costs, especially on the energy consumption side.’
Larmour’s appointment comes just days after Emmerson launched an environmental and social impact assessment (ESIA) baseline study for Khemisset. The work forms the first step towards a detailed ESIA that will be delivered to Morocco’s Ministry of Mines in a bid to convert Khemisset’s exploration permits into a mining licence.
Author: Daniel Flynn
Disclosure: The Author does not own shares in the company mentioned above