Morocco-focused potash development company Emmerson’s assessment of a conceptual, phased development plan for its 100%-owned Khemisset potash project, aimed at reducing upfront capital costs and incorporating expansion options, has been completed, resulting in major value enhancing opportunities.

Building on the feasibility study, the company has completed a concept study to examine the potential to develop Khemisset using a four-phased approach to reduce upfront capital costs and execution risk, and plan additional expansion stages to ensure that its economic value is fully developed.

The intention of the company remains to build the full-scale project as identified in the feasibility study; however, the report, undertaken to scoping study levels, identifies the opportunity to start with a smaller scale startup operation producing muriate of potash (MoP).

This will be followed by a series of expansion phases to increase the level of MoP produced, and add in the production of de-icing salt in increasing quantities as well as premium potash product - sulphate of potash (SoP).

The upfront capital expenditure (capex) for this strategy, including contingency, is estimated at $287-million. Subsequent phases through to full production will likely be financed from internal cash flows.

In full production, the Khemisset project could produce 800 000 t/y of MoP, 240 000 t/y of SoP and four-million tonnes a year of de-icing salt, resulting in earnings before interest, taxes, depreciation and amortisation of $491-million in the first year of full production.

This production rate is a significant increase on the existing feasibility study, which the company believes is justified given the scale and quality of the Khemisset orebody.

Emmerson will continue project development using outputs of this phased approach study.

“This work demonstrates that the project has the flexibility to be developed in phases, whilst further proving the world class nature of Khemisset,” says CEO Graham Clarke.

“With significant expansion potential that adds huge value to the project, we are now confident that we could develop Khemisset using a staged approach potentially reducing upfront capital costs and equity requirements from the market and, therefore, dilution to our existing shareholders as we grow to our full potential.

“2021 continues to be a pivotal year for Emmerson as we move forward in the development of what is to become the first large scale potash mine in Africa,” he adds.