Potash junior Emmerson plc, Isle of Man, this week said it is assessing a conceptual, staged, development for its 100 percent-owned Khemisset Potash Project in northern Morocco, aimed at reducing upfront capital costs and incorporating expansion options into the development plan of the project.
Emmerson recently received the mining license (ML) for the Khemisset project from the Moroccan Ministry of Energy, Mines, and the Environment, providing the company with the exclusive right to develop and mine the potash deposit, within the perimeter of the ML, in the Khemisset basin (GM Feb. 12, p. 37).
The key elements now being assessed are: to increase potash production by up to 50 percent; to incorporate potassium sulfate (SOP) as part of the larger project development; to increase salt sales to up to 4 million mt/y; and to increase the mine life, the company said.
“Khemisset is a project of enormous potential, and we see several opportunities to improve upon the mine plan presented in the 2020 feasibility study,” said Emmerson CEO Graham Clarke.
The existing project plant proposes potash production of up to 800,000 mt/y, with a current 19-year mine plan. However, the plan is based on only 43 percent of the total mineral resource estimate of 537 million mt with an average grade of 9.24 percent K2O (GM June 5, 2020).
The company previously has presented a scoping study for an SOP project, which indicated a project that could deliver an additional US$70m of EBITDA for the company for minimal capital expenditure, said Emmerson. The scoping study to assess the viability of converting 25 percent of its potash to produce 240,000 mt/y of SOP was completed in November 2019 (GM Dec. 6, 2019).
“The SOP market, especially our target U.S. sales market, continues to show strength in pricing, which drives a strategy to accelerate the development of that project, which provides increased cash flow generation, but also diversity of end-product,” said Clarke.
“We have also previously discussed the potential to increase our salt sales and our ongoing investigations into the global de-icing salt market and, in particular, the U.S. market gives us a high level of confidence in our ability to upscale our salt production significantly,” said the CEO.
During the project feasibility study, completed last June, the company confirmed its ability to manufacture significant quantities of de-icing salt and designed the project to produce 1 million mt/y for sale into the U.S. market (GM June 5, 2020).
“Following the completion of the feasibility study, Emmerson has continued to assess the market opportunity for de-icing salt and has concluded that there is likely to be a much larger market opportunity for this product,” said Clarke.
The potash junior said it will examine the technical and economic viability of initially constructing a project that mines at approximately half the rate assumed in the feasibility study. Following this phase 1 development, the project will then run through several expansion phases, the company said.
The earlier-than-expected receipt of the ML for Khemisset puts the company in the position to commence construction during 2021, and ahead of the anticipated initiation of construction by the end of 2021, “finance permitting,” Emmerson said.