Emmerson Plc · LSE:EML
Emmerson — Investor Presentation (July 2020)
27 slides from Emmerson's investor presentation, July 2020
Slide 1: Corporate Presentation July 2020
Developing a low capex, high margin potash project in Morocco Corporate Presentation July 2020
Slide 2: Disclaimer
DISCLAIMER This presentation (“Presentation”) is being provided to you (the “Recipient”) by Emmerson PLC (the “Company”) for information purposes only and does not constitute or form part of, and should not be construed as, an offer or invitation to sell or any solicitation of any offer to purchase
Slide 3: Introduction to Emmerson
INTRODUCTION TO EMMERSON Corporate Presentation Q3 2020 2
Slide 4: Morocco is an attractive investment jurisdiction
MOROCCO IS AN ATTRACTIVE INVESTMENT JURISDICTION “Our recent site visit confirmed the quality of infrastructure in Morocco and the key advantages afforded by the Project’s location…” Phil Swinfen, Analyst, Shard Capital Voted number one overall jurisdiction for mining in Africa in 2018 Favourable fi
Slide 5: Overview
OVERVIEW Emmerson PLC (EML.L) has recently completed its Feasibility Feasibility Study Snapshot Study and is well funded with over £2.5m in the bank • Post Tax NPV8 of US$1.4 billion and IRR of 38.5% over an initial 19 year mine life • Total pre-production capital cost (potash only) US$387 million i
Slide 6: Highly experienced team
HIGHLY EXPERIENCED TEAM BOARD Edward McDermott – Non-Executive Director Mark Connelly – Non Executive Chairman 15 years’ experience in the management and financing of An internationally experienced financial and commercial small companies. Currently a Non-Executive Director of AIM executive with 30
Slide 7: Morocco: an attractive investment jurisdiction
MOROCCO: AN ATTRACTIVE INVESTMENT JURISDICTION Morocco has been recognised for its supportive Morocco voted number one overall jurisdiction for fiscal regime, stability and geological potential mining in Africa in 2018 Investment Risk Index (higher = better) 1st – Lowest Investment Risk in Africa In
Slide 8: Two key drivers in potash development
TWO KEY DRIVERS IN POTASH DEVELOPMENT 1 Capital Cost to Production Can you make an economic return in a low or “normal” price environment? 2 Location Relative to Customer and End Prices Do you have a competitive advantage over your producing peers? Corporate Presentation Q3 2020 7
Slide 9: Khemisset: one of the lowest capital cost potash projects
KHEMISSET: ONE OF THE LOWEST CAPITAL COST POTASH PROJECTS “The Scoping Study confirmed that the Project has the potential to be one of the lowest capital cost (and capital intensity), and highest margin potash projects globally.” Phil Swinfen, Analyst, Shard Capital CAPITAL INTENSITY - US$/TONNE PRO
Slide 10: Access to mineralisation a key to low capex
ACCESS TO MINERALISATION A KEY TO LOW CAPEX Decline Long Section with Lithology Comparison of Costs of Decline or Shaft Access at Various Projects Corporate Presentation Q3 2020 9
Slide 11: Khemisset project cost savings
KHEMISSET PROJECT COST SAVINGS Identified pre-production capital cost savings of over US$1.4 billion1 Over 90% cost savings against peers on key mine access and infrastructure Estimated decline Estimated road Estimated cost of No additional cost costs of US$35m construction cost of US$10.6m (incl. t
Slide 12: Why is location so important
WHY IS LOCATION SO IMPORTANT Nearly 70% of global potash supply is very Saskatchewan remote from end Royalties markets ~US$25/tonne 1,700km by Rail Saskatoon ~US$45/tonne 135km Truck to Nominal Royalties Port US$0.10/tonne US$14/tonne Shipping Vancouver - Brazil ~US$30/tonne Shipping Morocco – Brazi
Slide 13: The Khemisset Feasibility Study
The Khemisset Feasibility Study Corporate Presentation Q3 2020 12
Slide 14: Outstanding economics
OUTSTANDING ECONOMICS Demonstrates a financially robust project that delivers strong NPVs & cashflows through a range of potash prices US$1.4bn** 19 years Post Tax NPV8 38.5%* Initial IRR Life of Mine Average, steady state post- Total pre-production capital cost Peak production of tax Cash margins U
Slide 15: Feasibility Study: positive economics
FEASIBILITY STUDY: POSITIVE ECONOMICS Key assumptions and results Parameter Value NPV (US$m) Sensitivity to Potash Price and Discount Rate Initial Operating Life 19 years NPV - US$ millions MOP Price - US$/tonne Annual ROM Extraction Rate 6Mtpa 288 350 412 474 536 Average Life of Mine Grade to Mill
Slide 16: Strong progress to date
STRONG PROGRESS TO DATE Emmerson has delivered multiple de-risking milestones since listing Year 2017 2018 2019 2020 Quarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Stakeholder Engagement Drilling Surface Geology Digitise Geological Database Maiden Mineral Resource Estimate Metallurgical tes
Slide 17: Resource upgrade to extend mine life
RESOURCE UPGRADE TO EXTEND MINE LIFE 72% increase in resource tonnes with approximately 70% in the Indicated category Maiden Mineral Resource Estimate (May 2018) Million Tonnes (potash K2O (%) seam) Indicated Category 0.0 n/a Inferred Category 311.0 10.20 Total (Indicated & Inferred) 311.0 10.20 70%
Slide 18: Mining
MINING Conventional mining is lowest technical risk and most flexible extraction method ‣ Potash to be mined by Conventional Room and Pillar Mining ‣ Solution Mining and Longwall Mining were also evaluated, Room and Pillar selected because: High production rate Multiple working faces Lower upfront c
Slide 19: Simplified and optimised processing circuit
SIMPLIFIED AND OPTIMISED PROCESSING CIRCUIT Simple processing ‣ Processing via Hot Leaching and KCI Crystallisation ‣ Crystallisation selected due to: Lower technical, metallurgical and operational risk Well understood from a capital and operating cost perspective ‣ Mass and energy balances, detaile
Slide 20: Metallurgical testing optimises process
METALLURGICAL TESTING OPTIMISES PROCESS ‣ Comprehensive Metallurgical Testing program commenced in April 2019 ‣ First Phase testing completed in June 2019 Brine Equilibria Showing Strong FeCl2 Decomposition Result confirm the scoping study flowsheet can produce saleable K60 MOP from Khemisset ores 3
Slide 21: Utilities and infrastructure
UTILITIES AND INFRASTRUCTURE Khemmiset has a significant local infrastructure advantage ‣ Preferred Mine Infrastructure Area (“MIA) selected considering optimal decline location and simplest connection to local infastructure ‣ Short connections to existing roads (<1.0km) and electrical infrastructur
Slide 22: Bottom quartile all-in-sustaining cost to Brazil
BOTTOM QUARTILE ALL-IN-SUSTAINING COST TO BRAZIL Transport and logistics typically accounts for more than 50% of delivered cost to customer Source: Argus, November 2018 Notes: Emmerson AISC net of salt by-product credits Corporate Presentation Q3 2020 21
Slide 23: Africa: unrealised potential
Africa has 60% of the AFRICA: UNREALISED POTENTIAL world’s uncultivated arable land and among the world’s A key driver for food security and fertiliser demand lowest fertiliser application rates Moroccan fertiliser producer OCP is pursuing an aggressive African NPK strategy 2014 (group) <25kg/ha 25-
Slide 24: Africa is the future for fertiliser
AFRICA IS THE FUTURE FOR FERTILISER MOP IMPORTS TO MOROCCO 748Kt 500,000 375,000 250,000 125,000 0 2012 2013 2014 2015 2016 2017 2018 Average Global Potash Demand Growth – 2-3% per annum Source: www.oc.gov.ma/DataBase/CommerceExterieur/requete.htm, Company Estimates Corporate Presentation Q3 2020 23
Slide 25: Summary
SUMMARY Well funded with a cash balance of over £2.5 million to execute strategy quickly Potential for low capital cost, Experienced Board and high margin development Management confirmed by Feasibility Study Number 1 African Strong potash demand against investment jurisdiction in tightening supply
Slide 26: Contacts
CONTACTS Emmerson PLC Hayden Locke – Executive Director hayden.locke@emmersonplc.com Registered Office London Office Phil Cleggett – Corporate Development IOMA House Third Floor Hope Street 47 Charles Street phil.cleggett@emmersonplc.com Douglas Mayfair Isle of Man IM1 1AP London W1J 5EL Shard Capit
Slide 27: Corporate structure
CORPORATE STRUCTURE 0.07 25000000 KEY DATA 0.06 Ticker EML.L 20000000 0.05 Shares in Issue 686,132,385 Ordinary Shares 15000000 Market Cap (undiluted) £40.38 million 0.04 Share Price 5.8p 0.03 10000000 Ave Volume (3 mths) 2.98 million shares 0.02 5000000 0.01 0 0 KEY SHAREHOLDERS Management and Asso