Emmerson PLC (AIM:EML, FRA:4UM) said the recent rise in the price of potash is making the numbers it used for the 2020 feasibility study at its Khemisset project in Morocco look conservative.
Brazil is the most buoyant market currently with demand rising by about 1 million tonnes per year and currently paying around $700/t for granular potash, against consensus long term forecasts of $412/t, which is below the actual price in most markets now it said.
In the medium-term, Emmerson says its best market may well be Africa, but “this strong pricing we are seeing gives us confidence that the numbers we published in our 2020 Feasibility Study are at this point looking decidedly conservative”.
“We have a tailwind, and we intend to use it to move our project into production as efficiently as we can,” said chairman James Kelly.
At Khemisset, the company said it is working towards achieving approval of its Environmental and Social Impact Assessment (ESIA), which has now progressed to its final stage.
Financing piece is a complex aspect of the current work, added Kelly,, however, "we have made very encouraging progress", he said.
Losses for the half-year to June 2021 were £839,000, with Emmerson having cash of £4.6mln at the period end.