Emmerson Plc · LSE:EML
Emmerson — Investor Presentation (January 2019)
27 slides from Emmerson's investor presentation, January 2019
Slide 1: Developing one of the lowest capital cost potash projects in the world
Developing one of the lowest capital cost potash projects in the world January 2019
Slide 2: Bill Gates quote on fertiliser and crop outputs
“Two out of every five people on Earth today owe their lives to the higher crop outputs that fertiliser has made possible.” -Bill Gates- 1
Slide 3: Feeding a Growing Population
Feeding a Growing Population Over the next 30 years population will increase by approximately 2.2bn Adding 9 cities the size of London every year for 30 years = 2020 2050 200% growth in Africa’s population… …accounting for over 50% of world’s population growth 2020 2050 Corporate Presentation Q1 201
Slide 4: Africa has 60% of the world's uncultivated arable land
Africa has 60% of the world’s uncultivated arable land and among the worlds lowest fertiliser application rates The Khemisset Project The Khemisset Potash Project Northern Morocco Northern Morocco Fertiliser Application (kg per hectare of arable land) 2014 (group) <25kg/ha 25-50kg/ha 50-100kg/ha >10
Slide 5: Morocco is a Top 5 Fastest Growing Import Market for Potash
Morocco is a Top 5 Fastest Growing Import Market for Potash MOP IMPORTS TO MOROCCO ~500Kt 500,000 375,000 250,000 125,000 0 2012 2013 2014 2015 2016 2017 2018 F Global Potash Demand Growth – 2-3% per annum Corporate Presentation Q1 2019 4 Source: www.oc.gov.ma/DataBase/CommerceExterieur/requete.htm,
Slide 6: Only Two Things Matter in Potash Development
Only Two Things Matter 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 Q1 2019 5
Slide 7: Khemisset among the lowest capital cost projects in the world
Khemisset among the lowest capital cost projects in the world and very close to end markets CAPITAL INTENSITY - US$/TONNE PRODUCTION Bethune Jansen Hatch Estimate for Canada Volgakaliy Rio Colorado Usolskiy Global Peer Mengo Average Capital Intensity Garlyk US$1,142/tonne Muskowekwan Autazes Sintouk
Slide 8: Outstanding Project Fundamentals
Outstanding Project Fundamentals A rare combination of very low capital cost and very high margins US$1.14bn 29.8%* 20 years Post Tax NPV10 Initial (using industry expert Argus Media IRR forecast prices) Life of Mine Ave. post tax cashflow of Ave. steady state annual EBITDA margins production rate U
Slide 9: Significant Potential to Expand
Significant Potential to Expand Drilling underway at Khemisset to upgrade existing JORC Resource JORC Exploration Target* Tonnage Range Grade Range (Mt) (K2O %) 264-616 5.0-14.0 *The potential quantity and grade of the Exploration Target expressed in this release is conceptual in nature, there has b
Slide 10: World Class Asset with High Strategic Value
World Class Asset with High Strategic Value Fertiliser Companies with limited downstream exposure to K LARGE SCALE ASSET AMONG THE LOWEST CAPITAL COST PROJECTS GLOBALLY EBITDA MARGINS ESTIMATED TO BE >60% GLOBAL OLIGOPOLY MARKET WITH INCUMBENTS TIGHTLY CONTROLLING SUPPLY Corporate Presentation Q1 20
Slide 11: The Next Steps
The Next Steps 2019 will be a year of significant news flow for Emmerson Completion Bankable Deliver Commence of drilling metallurgical Scoping Feasibility and upgrade test work Study Study resource programme Corporate Presentation Q1 2019 10
Slide 12: The Khemisset Project
The Khemisset Project 11
Slide 13: Geology
DEAD SEA WORKS (ICL & ARAB PO Geology ANNUAL PRODUCTION ~ 6MT General ‣ Sedimentary deposits ‣ Typically formed by inland seas being cut-off from oceans and evaporating causing precipitation ‣ Basins can extend for thousands of km 2 ‣ Most potash basins have large sandstone sequences that contain fr
Slide 14: 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 1) Highfield DFS 30 Mar 2015 with 30% contingency added 4) Passport Potash NI43-101 17 October 2013 with 30% contingency added 2) Emmerson PLC RNS: “Decl
Slide 15: 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 16: Processing
Processing Potash Ore ‣ Processing via Hot Leaching and KCI Screening/Milling Milled Ore (optional) Milled Ore Crystallisation Magnetic Separation Rinneite Fraction Decomposition Sylvite/Halite Fraction Mother Liquor Slurry ‣ Flotation also evaluated, Crystallisation Mashing/Washing Wet Halite/Sylvi
Slide 17: Utilities and Infrastructure
Utilities and Infrastructure ‣ Short connections to existing roads (1.2km) and electrical infrastructure (5.5km) ‣ Port with existing capacity 150km from site requires only minor upgrades Proposed new mine access road Approximate location of connection points in relation to mine infrastructure area
Slide 18: Why is Location so Important?
Why is Location so Important? Royalties, transport and logistics make up 60% to 70% of Canadian delivered cost to Brazil Nearly 70% of global potash supply is very Saskatchewan remote from end Royalties markets US$20-30/tonne 1,700km by Rail Saskatoon US$40-45/tonne 90km Truck to Port Nominal Royalt
Slide 19: Industry All-in-Sustaining Delivered Cost Curve to CFR Brazil
Industry All-in-Sustaining Delivered Cost Curve to CFR Brazil Transport and logistics typically accounts for more than 50% of delivered 300 cost to customer 250 200 $US/Tonne 150 100 50 0 Mining Processing Royalties, Sustaining Capital, and S,G&A Freight Source: Argus, November 2018 Corporate Presen
Slide 20: Scoping Study: Key Assumptions and Results
Scoping Study: Key Assumptions and Results Key Assumptions and Results NPV Sensitivity to Potash Price and Discount Rate Parameter Value MOP CFR Brazil Initial Operating Life 20 years US$300 US$320 US$340 US$360 US$380 US$400 US$420 Discount Rate Annual ROM Extraction Rate 6Mtpa 5.0% 929 1,121 1,312
Slide 21: Morocco: An Attractive Investment Jurisdiction
Morocco: An Attractive Investment Jurisdiction Morocco has been recognised for its supportive fiscal regime, stability and geological potential Morocco voted number one overall Investment Risk Index (higher = better) jurisdiction for mining in Africa in 2018 India China 1st – Lowest Investment Risk
Slide 22: Stakeholder Support
Stakeholder Support Developing a social licence to operate in the Khemisset Region A Stakeholder day was held aimed at increasing the Project awareness and stakeholder engagement which are key facets of the IFC Performance Standards for the Project development Stakeholder meeting in the offices of t
Slide 23: Highly Experienced Team
Highly Experienced Team BOARD MANAGEMENT Mark Connelly– Non Executive Chairman An internationally experienced financial and commercial Phil Cleggett – Head of Corporate Development executive with 30 years’ experience in the financing and A qualified accountant with ~10 years’ experience in mining an
Slide 24: Summary
Summary Well funded with a cash balance of over £3.5 million to execute strategy quickly Potential for low capital cost, high margin Experienced Board and development confirmed Management by Scoping Study Number 1 African Strong potash demand investment jurisdiction against rebalancing supply in 201
Slide 25: Contacts
Contacts Emmerson PLC Hayden Locke – Executive Director hayden.locke@emmersonplc.com Registered Office London Office IOMA House Third Floor Phil Cleggett – Corporate Development Hope Street 47 Charles Street phil.cleggett@emmersonplc.com Douglas Mayfair Isle of Man IM1 1AP London W1J 5EL Optiva Secu
Slide 26: Corporate Structure
Corporate Structure Emmerson acquired the assets via a Reverse Takeover Share Price Performance and Volume KEY DATA * 5.0 35 Ticker EML.L 4.5 30 4.0 Shares in Issue 626,132,385 Ordinary Shares Vooume Trade (millions) 3.5 25 Share Price - Pence 3.0 Market Cap £18.15 million 20 2.5 Share Price 3p 15 2
Slide 27: 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