TIDMEML
RNS Number : 5838N
Emmerson PLC
26 September 2023
Emmerson PLC / Ticker: EML / Index: AIM / Sector: Mining
26 September 2023
Emmerson PLC ("Emmerson" or the "Company")
Interim Results for the six months ended 30 June 2023
Emmerson, which is developing the world class Khemisset Potash
Project in Morocco ("Khemisset" or the "Project"), is pleased to
announce its Interim Results for the six month period ended 30 June
2023 (the "Period").
Highlights
-- Update on environmental permit and financing set out in Q3
update announcement on 21 September 2023
-- Financial results for the six months to 30 June 2023 reflect
expenditure on technical workstreams and administrative/corporate
support costs
-- Loss for the period of US$1.6 million
-- Cash balance at 30 June 2023 was US$4.2 million, after total
expenditure of US$2.5 million in the period. Cash reserves of
US$3.5 million as at the time of this report.
Activities During the Period
The Company's priority during the Period was advancing
discussions with government officials towards obtaining
environmental approval for the Khemisset Project in Morocco.
Currently, Emmerson is awaiting a session of the Ministerial
Committee to consider the matter, and although management remains
confident of a favourable outcome based on discussions to date, the
timing of the meeting is not certain, particularly following the
devastating earthquake in Morocco, which has, understandably, been
the main focus of government attention.
Financial Review
As the Company continues in its phase of exploration and
development, the results are relatively straightforward, and
reflect a loss for the period of US$1.6 million (30 June 2022:
US$1.5 million), primarily as a result of administration and
corporate costs.
Net cash of US$2.5 million was spent in the period (30 June
2022: US$5.3 million), consisting of the net impact of the
administration costs and working capital movements of US$2.2
million, capitalised development costs of US$0.5 million, and
US$0.2 million net proceeds of employee share option exercises.
Financing and Cash Position
At the time of this report, the Company has cash reserves of
US$3.5 million, sufficient to cover the remaining Basic Engineering
costs and working capital commitments for at least the next 12
months.
Outlook for 2023
For the balance of the year, the Company's focus will remain on
obtaining the environmental approval for the Project, putting in
place a new funding agreement with its Strategic Investors, and
finalising optimisation work ahead of a Bankable Feasibility
Study.
For further information, please visit www.emmersonplc.com ,
follow us on Twitter (@emmerson_plc), or contact:
Emmerson PLC +44 (0) 207 138
Graham Clarke / Jim Wynn / Charles Vaughan 3204
Liberum Capital Limited (Nominated Advisor
and Joint Broker) +44 (0)20 3100
Scott Mathieson / Matthew Hogg / Kane Collings 2000
Shard Capital (Joint Broker) +44 (0)20 7186
Damon Heath / Isabella Pierre 9927
BlytheRay (Financial PR and IR) +44 (0) 207 138
Tim Blythe / Megan Ray / Said Izagaren 3204
Notes to Editors
Emmerson is focused on advancing the Khemisset project
("Khemisset" or the "Project") in Morocco into a low cost, high
margin supplier of potash, and the first primary producer on the
African continent. With an initial 19-year life of mine, the
development of Khemisset is expected to deliver long-term
investment and financial contributions to Morocco including the
creation of permanent employment, taxation, and a plethora of
ancillary benefits. As a UK-Moroccan partnership, the Company is
committed to bringing in significant international investment over
the life of the mine.
Morocco is widely recognised as one of the leading phosphate
producers globally, ranking third in the world in terms of tonnes
produced annually, and the development of this mine is set to
consolidate its position as the most important fertiliser producer
in Africa. The Project has a large JORC Resource Estimate (2012) of
537Mt @ 9.24% K2O, with significant exploration potential, and is
perfectly located to support the expected growth of African
fertiliser consumption whilst also being located on the doorstep of
European markets. The need to feed the world's rapidly increasing
population is driving demand for potash and Khemisset is well
placed to benefit from the opportunities this presents. The
Feasibility Study released in June 2020 indicated the Project has
the potential to be among the lowest capital cost development stage
potash projects in the world and also, as a result of its location,
one of the highest margin projects. This delivered outstanding
economics, including a post-tax NPV(8) of approximately US$1.4
billion using industry expert Argus' price forecasts.
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2023
US$'000 6 months to 6 months to 12 months to
30 Jun 2023 30 Jun 2022 31 Dec 2022
Notes (Unaudited) (Unaudited) (Audited)
Administrative expenses 3 (1,386) (1,244) (2,581)
Share-based payment expense (199) (53) (256)
Net foreign exchange loss (43) (81) (356)
Operating loss (1,628) (1,378) (3,193)
Finance cost (6) - -
Loss before tax (1,634) (1,378) (3,193)
Income tax (1) - (5)
-------------------------------------------------------- ------ ------------- ------------- -------------
Loss for the period attributable to equity owners (1,635) (1,378) (3,198)
-------------------------------------------------------- ------ ------------- ------------- -------------
Other comprehensive income
Exchange gain/(loss) on translating foreign operations 146 (84) (45)
Total comprehensive loss attributable to equity owners (1,489) (1,462) (3,243)
-------------------------------------------------------- ------ ------------- ------------- -------------
Loss per share (cents) 4 (0.16) (0.15) (0.34)
Condensed Consolidated Statement of Financial Position at 30
June 2023
US$'000 30 June 2023 30 June 2022 31 Dec 2022
Notes (Unaudited) (Unaudited) (Audited)
Non-current assets
Intangible assets 5 19,239 16,489 18,607
Property, plant and equipment 38 39 43
--------------------------------------------------- ------ -------------
Total non-current assets 19,277 16,528 18,650
Current assets
Trade and other receivables 1,304 1,126 1,181
Cash and cash equivalents 4,179 4,535 6,670
--------------------------------------------------- ------ ------------- ------------- ------------
Total current assets 5,483 5,661 7,851
Total assets 24,760 22,189 26,501
--------------------------------------------------- ------ ------------- ------------- ------------
Current liabilities
Trade and other payables (351) (1,005) (1,032)
Total current liabilities (351) (1,005) (1,032)
Net assets 24,409 21,184 25,469
--------------------------------------------------- ------ ------------- ------------- ------------
Shareholders equity attributable to equity owners
Share capital 35,145 29,025 34,733
Share-based payment reserve 2,427 2,163 2,470
Reverse acquisition reserve 2,234 2,234 2,234
Retained earnings (15,211) (11,867) (13,636)
Translation reserve (186) (371) (332)
--------------------------------------------------- ------ ------------- ------------- ------------
Total equity 24,409 21,184 25,469
--------------------------------------------------- ------ ------------- ------------- ------------
Condensed Consolidated Statement of Changes in Equity for the
six months ended 30 June 2023
US$'000 Share Share-based Reverse Retained earnings Translation Total equity
Capital payment reserve acquisition reserve
reserve
Balance at 1
January 2022 28,993 2,113 2,234 (10,489) (287) 22,564
Loss for the
period - - - (1,378) - (1,378)
Other
comprehensive
loss:
FX on translating
foreign
operations - - - - (84) (84)
-------- ----------------- ----------------- ----------------- ----------------- ------------
Total
comprehensive
loss - - - (1,378) (84) (1,462)
Fair value of
share options - 53 - - - 53
Share options and
warrants
exercised 3 (3) - - - -
Issue of shares
for cash 29 - - - - 29
-------- ----------------- ----------------- ----------------- ----------------- ------------
Balance at 30
June 2022 29,025 2,163 2,234 (11,867) (371) 21,184
-------- ----------------- ----------------- ----------------- ----------------- ------------
Balance at 1
January 2022 28,993 2,113 2,234 (10,489) (287) 22,564
Loss for the year - - - (3,198) - (3,198)
Other
comprehensive
loss:
FX on translating
foreign
operations - - - - (45) (45)
-------- ----------------- ----------------- ----------------- ----------------- ------------
Total
comprehensive
income - - - (3,198) (45) (3,243)
Fair value of
share options - 256 - - - 256
Share issued to
settle
obligations 25 - - - - 25
Share issued for
cash 6,106 - - - - 6,106
Cost of issuing
shares - cash (267) - - - - (267)
Cost of issuing
shares -
warrants (283) 283 - - - -
Options exercised
for cash 28 - - - - 28
Options exercised
cashless 131 (131) - - - -
Transfer for
options expired
in 2021 - (51) - 51 - -
-------- ----------------- ----------------- ----------------- ----------------- ------------
Balance at 31
December 2022 34,733 2,470 2,234 (13,636) (332) 25,469
-------- ----------------- ----------------- ----------------- ----------------- ------------
Balance at 1
January 2023 34,733 2,470 2,234 (13,636) (332) 25,469
Loss for the
period - - - (1,635) - (1,635)
Other
comprehensive
gain:
FX on translating
foreign
operations - - - - 146 146
-------- ----------------- ----------------- ----------------- ----------------- ------------
Total
comprehensive
loss - - - (1,635) 146 (1,489)
Fair value of
share options - 206 - - - 206
Options exercised
for cash 225 (62) - 60 - 223
Options exercised
cashless 187 (187) - - - -
Balance at 30
June 2023 35,145 2,427 2,234 (15,211) (186) 24,409
-------- ----------------- ----------------- ----------------- ----------------- ------------
Condensed Consolidated Statement of Cash Flows for the six month
period ended 30 June 2023
6 months to 6 months to 12 months to
30 June 2023 30 June 2022 31 Dec 2022
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Cash flows from operating activities
Loss before tax (1,634) (1,378) (3,193)
Adjustments:
Foreign exchange 43 81 (205)
Taxation (1) - (5)
Share-based payment 199 53 256
Directors' remuneration settled in shares - - 25
Depreciation 5 2 (2)
Changes in working capital:
Increase in trade and other receivables (123) (355) (410)
Decrease in trade and other payables (681) (821) (803)
---------------------------------------------------- ------------- ------------------ ------------
Net cash flows used in operating activities (2,192) (2,418) (4,337)
---------------------------------------------------- ------------- ------------------ ------------
Cash flows from investing activities
Exploration expenditure (520) (2,934) (5,052)
Net cash flows used in investing activities (520) (2,934) (5,052)
---------------------------------------------------- ------------- ------------------ ------------
Cash flows from financing activities
Proceeds from issuing shares and warrants - - 6,106
Cost of issuing shares - - (267)
Proceeds from exercise of share options & warrants 230 29 28
Net cash flows generated from financing activities 230 29 5,867
---------------------------------------------------- ------------- ------------------ ------------
Decrease in cash and cash equivalents (2,482) (5,323) (3,522)
Cash and cash equivalents at beginning of period 6,670 10,032 10,032
Foreign exchange on cash and cash equivalents (9) (174) 160
---------------------------------------------------- ------------- ------------------ ------------
Cash and cash equivalents at end of period 4,179 4,535 6,670
---------------------------------------------------- ------------- ------------------ ------------
Notes to the Condensed Consolidated Financial Statements for the
six months ended 30 June 2023
1. General information
Emmerson PLC (the "Company") is a company incorporated and
domiciled in the Isle of Man, whose shares were admitted to the
Standard Listing segment of the Main market of the London Stock
Exchange on 15 February 2017. On 27 April 2021, the Ordinary Shares
of the Company were admitted to trading on AIM and the listing of
the Company's ordinary shares on the Official List and their
trading on the Main Market were cancelled.
The principal activity of the Company and its subsidiaries
(together "the Group") is the exploration, development and
exploitation of a potash development project in Morocco.
2. Basis of preparation
2.1 General
The Condensed Consolidated Financial Statements have been
prepared in accordance with the valuation and recognition
principles of UK-adopted International Accounting Standards. The
Condensed Consolidated Financial Statements for the six months
ended 30 June 2023 are unaudited and have not been reviewed by the
Group's auditor, and do not include all of the information required
for full annual financial statements.
They should be read in conjunction with the Company's annual
financial statements for the year ended 31 December 2022. The
principal accounting policies applied in the preparation of the
Condensed Consolidated Financial Statements are unchanged from
those disclosed in those statements. These policies have been
consistently applied to each of the periods presented.
The financial information of the Group is presented in US
Dollars, which is also the functional currency of the parent
Company and has been prepared under the historical cost convention.
The individual financial statements of each of the Company's wholly
owned subsidiaries are prepared in the currency of the primary
economic environment in which it operates (its functional
currency).
2.2 Basis of consolidation
The Consolidated Financial Statements comprise the financial
statements of the Company, Moroccan Salts Limited, Moroccan Salts
Limited's subsidiaries (the "MSL Group") and Khemisset UK Ltd
("KUK"). KUK, a wholly-owned subsidiary of the Company, was
incorporated in England and Wales under the Companies Act 2006 on 8
February 2023.
Subsidiaries are fully consolidated from the date of
acquisition, being the date on which the Group obtains control.
Control is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the
investee.
Generally, there is a presumption that a majority of voting
rights result in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of
an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including:
-- The contractual arrangement with the other vote holders of the investee;
-- Rights arising from other contractual arrangements; and
-- The Group's voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control ceases.
Assets, liabilities, income and expenses of a subsidiary acquired
or disposed of during the period are included in the Group
Financial Statements from the date the Group gains control until
the date the Group ceases to control the subsidiary.
All intra-group balances, transactions, income and expenses and
profits and losses resulting from intra-group transactions that are
recognised in assets, are eliminated in full.
All the Group's companies have 31 December as their year-end.
Consolidated financial statements are prepared using uniform
accounting policies for like transactions.
2.3 Functional and presentational currency
The financial information of the Group is presented in US
Dollars, which is also the functional currency of the parent
Company, and has been prepared under the historical cost
convention. The individual financial statements of each of the
Company's wholly owned subsidiaries are prepared in the currency of
the primary economic environment in which it operates (its
functional currency).
2.4 Going concern
The Group's cash position at the date of this report is US$3.5
million. This amount is sufficient to cover all committed
expenditures for the twelve months. Additional expenditures related
to the development of the Khemisset Project which are not committed
and would not be covered by cash reserves would need to be financed
by fundraising in the future, however these expenditures are
discretionary, and the Directors are confident that any funds could
be raised from existing and new shareholders for such activities,
which would be value accretive to shareholders. Accordingly, the
Directors have adopted the going concern basis in preparing the
Interim Financial Statements.
2.5 Segment reporting and cyclicality
A business segment is a group of assets and operations engaged
in providing products or services that are subject to risks and
returns that are different from those of other business segments. A
geographical segment is engaged in providing products or services
within a particular economic environment that are subject to risks
and returns that are different from those of segments operating in
other economic environments.
The Directors consider the Group is engaged in a single segment
of business being the exploration activity of potash in one
geographical area, being the Khemisset Project in Morocco.
The interim results for the six months ended 30 June 2023 are
not necessarily indicative of the results to be expected for the
full year ending 31 December 2023. Due to the nature of the entity,
the operations are not affected by seasonal variations at this
stage.
3. Administrative fee and other expenses
US$'000 6 months to 6 months to 12 months to
30 Jun 2023 30 Jun 2022 31 Dec 2022
(Unaudited) (Unaudited) (Audited)
Directors' fees 333 292 601
Travel and accommodation 35 61 99
Auditors' remuneration 32 34 48
Employment costs 404 298 627
Professional and consultancy fees 361 559 715
Other expenses 221 - 491
Total Administrative Expenses 1,386 1,244 2,581
----------------------------------- ------------- ------------- -------------
4. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
US$'000 6 months to 6 months to 12 months to
30 Jun 2023 30 Jun 2022 31 Dec 2022
(Unaudited) (Unaudited) (Audited)
Earnings
Loss from continuing operations for the period attributable to the equity
holders of the Company (1,635) (1,378) (3,198)
Number of shares
Weighted average number of ordinary shares for the purpose of basic and
diluted earnings per
share 1,016,540,028 915,425,829 939,716,598
-------------------------------------------------------------------------- -------------- ------------ ------------
Basic and diluted loss per share 0.16 cents 0.15 cents 0.34 cents
-------------------------------------------------------------------------- -------------- ------------ ------------
5. Intangible assets
The intangible assets consist of capitalised exploration and
evaluation expenditure, including the cost of acquiring the mining
license and research permits held by the Company's
subsidiaries.
30 Jun 2023 30 Jun 2022 31 Dec 2022
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
Cost:
At the beginning of the period 18,607 13,555 13,555
Additions 520 2,934 5,052
Exchange differences 112 - -
As at end of period 19,239 16,489 18,607
-------------------------------- ------------ ------------ ------------
6. Related party transactions
Directors' consultancy fees
Robert Wrixon is a Director of the Company and provided
consulting services to the Company. During the period, Robert
Wrixon received fees of US$12k (year to 31 December 2022: US$71K).
The amount outstanding as at period-end was US$ nil (31 December
2022: US$ nil).
Hayden Locke is a Director of the Company and is a director of
Benson Capital Limited, which previously provided consulting
services to the Company. During the period, Benson Capital Limited
received total fees of US$ nil (year to 31 December 2022: US$95k).
The amount outstanding as at period end was US$ nil (31 December
2022: US$9K).
7. Post-balance sheet events
Moroccan earthquake
On Friday 8 September 2023, a magnitude 6.8 earthquake struck
Morocco. The epicentre was located in the High Atlas mountains,
approximately 70km south of Marrakech. Emmerson's project and
offices are located some distance away, and were not affected
directly.
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END
IR NKPBBABKDQCB
(END) Dow Jones Newswires
September 26, 2023 02:00 ET (06:00 GMT)
Emmerson (LSE:EML)
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