Emmerson Share Discussion Threads

[bobby1904] 21/11/2018 08:25

It's all about low capex & high margin. In every sector on the planet there's lots of competition but if your costs to produce product is lower than your competitors it is a big advantage and gives them a big margin advantage. Listen to Hayden Locke Vox podcast from yesterday. NPV10 for this project is in the $1billion range with20year life of mine. Exploration continues also to increase resource further. The current £20m mkt cap is totally out of kilter with the underlying value hence imo a multibagger opp.

[cpap man] 20/11/2018 08:50

No but perhaps time for a new thread as EML are not a cash shell any more!

Could a PREMIUM [BLUE] poster please set up a new EML thread with a catchy title?

[a1samu] 20/11/2018 08:48

Nothing hidden and all very obvious. How will the $405M capital expenditure be financed and when? I guess, we will hear further, later in the week. How will IPs be diluted, for the directors and institutions, if any, will be able to take advantage ( as always ) to the detriment of the small punters.

( No notifiable institutions.)

The market place appears to be crowded with all the existing potash companies like the Russian and Canadian companies, BHP Jansen, Kp2 Congo and HMI Brazil and no doubt many others like Highfield Resources !

This appears to be far removed from ever becoming a multibagger!

[rakepat37] 20/11/2018 08:48

This is deffo a gem of a share, low shares in issues and great potential, we should be sitting at 6 to 7p at least .. happy to wait

[takethat] 20/11/2018 08:30

Is there a catch to this share?....It almost looks too good to be true.
It has cash of circa £4M and a low Mkt Cap and on the surface a hugely profitable future ahead.
Taken 50K shares and will tuck them away.
Can anyone see any hidden gremlins here?

[neo26] 20/11/2018 08:18

They have a long way to go yet but certainly will be worthy investment.Kp2 on verge of releasing dfs, they are slightly ahead.

[cpap man] 20/11/2018 08:00

How ever you look at it you have to say that EML is a proper investment that has all the hallmarks of a serious multi bagger!

[adorling] 20/11/2018 07:50

In one sentence Hayden Locke CEO sums up the investment case for EML in today’s RNS...

“The Scoping Study has confirmed our belief as a team that Khemisset has the potential to be a low capital cost, high margin potash mine, which is a very rare asset in the industry.”

[cpap man] 20/11/2018 07:35

Emmerson Plc / Ticker: EML / Index: LSE / Sector: Mining

20 November 2018

Emmerson Plc ("Emmerson" or the "Company")

Scoping Study Confirms Potential for Low Capex, High Margin Potash Mine



Emmerson Plc, the Moroccan focused potash development company, is pleased to release a summary of the results of its recently completed Scoping Study for the Company's 100% owned Khemisset Potash Project located in northern Morocco ("Khemisset" or "the Project"). A report detailing the full findings of the Scoping Study is available to view on the Company website here: hxxps://www.emmersonplc.com/investors/corporate-documents/.



The Scoping Study was managed by global independent mining and engineering consultant, Golder Associates ("Golder") and designs and estimates have been prepared in line with guidelines provided by the Australasian Institute of Mining and Metallurgy ("AusIMM"). Economic metrics of the Project have been calculated by the Company using the technical outputs of the Scoping Study: such metrics have been reviewed and approved by Golder.



Emmerson will be hosting an Analyst and Shareholder conference call on Thursday 22 November at 11.00am GMT to discuss the Scoping Study results. Further information can be found below.



To view the detailed press release with the illustrative maps and diagrams please use the following link:



Highlights

· Post Tax NPV10 of US$795 million[1] and IRR of 29.8% over 20 year mine life

o Assumes flat real price of US$360/tonne CFR Brazil price (today's price in Brazilian market)

· Using forecast prices from Independent Market Consultant Argus Media, NPV10 increases to US$1.14 billion over 20 year mine life

· Bottom quartile projected all-in-sustaining delivered cost to all Emmerson's target markets including Brazil, NW Europe, Morocco, South Africa

· Top quartile projected cash margins according to analysis conducted by Argus FMB

o Average, steady state post-tax cash margins of 50% at current potash prices

o Average, steady state, EBITDA margins of nearly 64% at current potash prices

· Robust cashflow generation at a broad range of potash price assumptions

o Average, steady state, post-tax cashflow of US$184 million per annum assuming a flat, real, potash price of US$360/tonne CFR Brazil

o Less than 3.25yr capital payback

· Initial mine life of 20 years with significant potential to increase from existing in-situ resource (outside of Inferred Mineral Resource Estimate) and ongoing exploration in North East Khemisset

o 6Mtpa run of mine ore delivering nearly 800,000 tonnes of K60 MOP per annum on average over life of mine

· Total pre-production capital cost US$405 million including US$90 million of contingency

o Bottom quartile capital intensity per tonne of product produced, less than half of global peer average capital intensity

· Design and estimates completed by independent engineers according to AusIMM guidelines for capital and operating cost estimates

· Emmerson cash position, as at 31 October 2018, of £3.8 million

o Fully funded through until at least Q1 2020 based on current planned work streams



Hayden Locke, CEO of Emmerson, commented:

"The Scoping Study has confirmed our belief as a team that Khemisset has the potential to be a low capital cost, high margin potash mine, which is a very rare asset in the industry. Potash is controlled by a small handful of companies and is an industry with high barriers to entry, predominantly in the form of extremely high capital cost. This means that few new players, if any, can ever enter the market. Khemisset, which has an estimated capital intensity less than half of the global peer average, and less than a third of the average Canadian development, gives Emmerson a clear opportunity to be one of the few junior companies in the space.



"The economic sensitivity analysis we have conducted, based on the results of the Scoping Study, indicates that the Project will generate extremely robust returns, regardless of potash price, and supports our strong belief that it will be financeable in any market conditions. This is a hurdle that very few potash projects globally can clear.



"Assuming a flat US$240/tonne CFR Brazil potash price, which is close to the lowest price seen in the Brazilian market in last twelve to fifteen years - and a price which industry performance has shown is not sustainable - the Khemisset Project is still forecast to deliver average annual, post-tax, cashflows of nearly US$80 million per annum over the life of mine. At today's potash price, which is still too low to incentivise the financing and construction of any of the mega potash projects, including BHP's Jansen Project, Khemisset is forecast to deliver post-tax cashflows of over US$180 million per annum and deliver unlevered IRRs of nearly 30%.



"Since acquiring the Project in June we have made strong progress and, thanks to the dedication of our team, I am delighted to be delivering the Scoping Study months ahead of schedule. Our team of independent experts, led by Golder and Ercosplan, have done an outstanding job moving the Project quickly forward, addressing all the key workstreams and risks associated with a Project like this. We believe there is further upside to the economics for Khemisset and we have already identified a number of areas where improvements can be made and where conservative assumptions have been used, which we will seek to refine in the coming studies.



"The next steps will include the completion of drilling, a bankable metallurgical testwork programme and then commencement of more detailed option and feasibility studies. The results of the Scoping Study give our team a clear path to continue to move the Khemisset Potash Project through the various de-risking milestones ahead and our cash balance of £3.8 million, which funds us through until at least Q1 2020, puts us in an enviable position to execute on our strategy quickly."

[parob] 20/11/2018 07:31

Highlights -- Post Tax NPV(10) of US$795 million[1] and IRR of 29.8% over 20 year mine life o Assumes flat real price of US$360/tonne CFR Brazil price (today's price in Brazilian market)-- Using forecast prices from Independent Market Consultant Argus Media, NPV(10) increases to US$1.14 billion over 20 year mine life-- Bottom quartile projected all-in-sustaining delivered cost to all Emmerson's target markets including Brazil, NW Europe, Morocco, South Africa -- Top quartile projected cash margins according to analysis conducted by Argus FMB o Average, steady state post-tax cash margins of 50% at current potash priceso Average, steady state, EBITDA margins of nearly 64% at current potash prices -- Robust cashflow generation at a broad range of potash price assumptions o Average, steady state, post-tax cashflow of US$184 million per annum assuming a flat, real, potash price of US$360/tonne CFR Brazilo Less than 3.25yr capital payback-- Initial mine life of 20 years with significant potential to increase from existing in-situ resource (outside of Inferred Mineral Resource Estimate) and ongoing exploration in North East Khemisseto 6Mtpa run of mine ore delivering nearly 800,000 tonnes of K60 MOP per annum on average over life of mine -- Total pre-production capital cost US$405 million including US$90 million of contingency o Bottom quartile capital intensity per tonne of product produced, less than half of global peer average capital intensity-- Design and estimates completed by independent engineers according to AusIMM guidelines for capital and operating cost estimates -- Emmerson cash position, as at 31 October 2018, of GBP3.8 million o Fully funded through until at least Q1 2020 based on current planned work streams

[parob] 20/11/2018 07:17

Very quiet here! Excellent RNS. Let the re-rate commence!

[cpap man] 20/11/2018 07:17

From todays Daily Mail Market report....



Back in the UK, fertiliser company Emmerson will reveal a study today that shows its flagship potash mine in Morocco will be cheap to run compared to similar projects.

'Outstanding' infrastructure in the area will help keep costs down and the mine is expected to deliver cashflows of more than £140m a year.

The company yesterday closed down 2.7 per cent, or 0.1p, at 3.6p.

[parob] 14/11/2018 18:25

Emmerson tweet today:Nutrien has delivered record #potash sales in its most recent quarter and forecasts record global demand of 66-67MT in 2018, up ~5% from the previous record in 2017. Prices in Brazil now up ~60% from 2016 lows. Strength continues in the potash market, positive for @emmerson_plc

[parob] 14/11/2018 11:46

Hope to see a KP2 type move here soon!

[adorling] 13/11/2018 16:14

Just added another 100k at 3.62p

[cpap man] 12/11/2018 14:16

Current BROKER BUY share price target for EML is 11p

New BROKER BUY share price target for EML will be some where in the 15p to 25p range

[bobby1904] 12/11/2018 14:14

Can't see the target being lower than 10p..!

[parob] 12/11/2018 14:07

Looks like the stock is finally getting noticed. Scoping study RNS in the next 6 weeks.

[parob] 12/11/2018 12:10

It will be interesting to see the broker's new price target once the scoping study is released.

[bobby1904] 12/11/2018 08:48

Imo the mkt cap here is at least 3x-5x undervalued at the moment. On release of the Scoping Study, which is now imminent, we ought to have been at 9-10p minimum if the wider mkt had not wobbled in Oct. The key point they have made right since the RTO is the very low Capex angle. The situation they have is unique! No aquifer in particular is a massive saving. Literally $billions! It ticks an awful lot of boxes & to get into a project this significant for a mkt cap of only c.£20m is frankly a one off opportunity imo!

[mad foetus] 12/11/2018 08:10

I think one of the key points is that the site is in Morocco and Africa, particularly the North-West quarter, will need to massively increase agricultural production over the near future. So it feels like this site is right place, right time.

[bazildonbond] 12/11/2018 08:08

Agreed, the RNS contains more good news, tho the comparing with other projects is a little confusing/misleading imho, those projects are huge by comparison and require much larger infrastructure, take Sirius for example, they plan for a "minimum" 10mtpa!
Tho if we were to compare the mkt caps for instance, 1.4bn sterling (SXX) to 21.5mil mkt cap for EML for 2 companies is a similar product/marketplace/timeline i think there is more upside potential in EML at this stage.

[cpap man] 12/11/2018 07:55

Hayden Locke, CEO of Emmerson, commented:

"The Khemisset Project benefits from its proximity to a number of existing and planned port options when the Project commences production. Access to existing port facilities, with minimal upgrades required, result in significant capital cost savings for the Project. Morocco has invested heavily in all facets of infrastructure, including world-class ports, which are already resulting in significant benefits for Emmerson.

"Our initial discussions with authorities at the Port of Mohammedia have confirmed that there is expected to be capacity for the export of potash produced from Khemisset. Cost estimates include construction of a storage warehouse and loading facility for the handling of at least 800,000 tonnes of potash product per annum.

"The already completed design and cost estimates for the access to mineralisation, connection to logistics, and connection to electricity and gas supply and port facilities have highlighted the significant cost savings available to the Khemisset Project, which are estimated to amount to over US$1.2 billion compared to Canadian peers. This announcement further enhances our belief that the Scoping Study for Khemisset will present a low capital cost, high margin proposition which should result in compelling economic metrics.

"The Scoping Study is well ahead of schedule and we are excited to release the results to the market as soon as it is finalised, which we expect to be imminently."