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Emerson signs offtake, sales, marketing agreement with global fertiliser group for Khemisset potash project

Monday, 15th April 2019
Emerson said it had signed an offtake, sales and marketing agreement with a global fertiliser group for the entire production from the company's Khemisset potash project.

Under the heads of agreement, both Emmerson and the counterparty would work towards a long-term sales agreement for 100% of Khemisset's production, focusing on the Brazilian, African and North West European markets.

Once in production, Khemisset would be the closest producing potash mine to each of these key markets and, as a result of this advantageous location, Emmerson was expected to become 'one of the highest margin potash producers in the world,' the company said.

This comes after the company recently released scoping study confirmed Khemisset's potential for sector leading capital intensity and margins, which provided a post-tax NPV10 of US$1.14bn using independent industry expert price forecasts.

'Signing a Heads of Agreement is an important step for the Company as we commence early engagement with sales and marketing partners for product from the world class Khemisset Potash Project,' said Hayden Locke, CEO of Emmerson.

'We believe potash produced in Morocco will be in significant demand for a number of important consuming markets, and this Heads of Agreement reinforces that belief.'

'Our partner's footprint in the fast growing Brazilian and more mature North West European markets makes them an ideal partner for Emmerson as we focus on those markets where we would have a strong transport and logistics advantage.'

'Strong sales and marketing partners will be fundamental to supporting our eventual discussions with financing partners and we believe our sales partner will provide significant confidence to all potential lending syndicates for the Project.'

At 10:10am: (LON:EML) Emmerson Plc share price was +0.43p at 4.28p

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