Emmerson raises cash for Moroccan potash project
LONDON – Shares in Emmerson jumped more than 60% on their return to trade on Monday after the London-listed miner raised 6-million pounds ($8.04-million) by issuing 200-million new shares.
The shares were halted last October when Emmerson became 100% owner of the Khemisset Potash Project in northern Morocco.
By 0930 GMT, shares were trading up 62%.
Potash prices collapsed two years ago but have started to recover as mine closures have limited supply.
Emmerson said it initially planned to raise 4-million pounds but the issue was oversubscribed.
It said the Khemisset project's advantages include shallow, cheap-to-exploit resources and a location in Morocco, where demand for potash is expected to climb, which offers access to Europe and other major markets.
"From a transport perspective, we have an unassailable competitive advantage," CEO Hayden Locke told Reuters.
He said the project is in the late stages of development and $20-million has already been spent on it, meaning it could be producing four years from now.
By then, Locke is expecting potash prices to have rallied and predicts escalating demand based on population trends.
"Global food security goals cannot be achieved without the significant use of fertilisers," he said.
The economics of potash can be challenging even for the biggest players.
The world's biggest listed miner BHP is considering selling a stake in its Canadian potash mine, which analysts say would help it share the development risk of a very deep deposit.
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