Emmerson PLC / Ticker: EML / Index: AIM / Sector: Mining

8 April 2024

Emmerson PLC

("Emmerson" or the "Company")

Q1 2024 update, US$2.175 million Equity Placing with Strategic Investors & Retail Offering

Emmerson, the Moroccan focused potash development company, is pleased to provide an update on its activities in Q1 2024 in relation to its 100% owned Khemisset Potash Project ("Khemisset" or the "Project"), and has announced it has raised US$2.175 million from the issuance of new ordinary shares ("Shares") to its strategic investors. In addition, the Company will shortly launch a retail offer to existing shareholders on the REX platform.

Q1 2024 update

Environmental approval

On 11 March 2024, the Company announced that the Commission Ministérielle de Pilotage ("Ministerial Committee" or the "Committee"), to whom the Company referred the decision of the Commission Régionale Unifiée d'Investissement ("CRUI") regarding the Project's environmental approval in July 2023, had upheld the Company's referral and asked that the matter be returned to the CRUI for reconsideration.

As part of this, the Committee invited the Company to resubmit an Environmental Impact Assessment ("EIA"), including any environmental optimisations. The Company and its consultants have therefore been preparing a revised EIA to address the concerns previously raised by the CRUI including the improvements arising from the Khemisset Multi-mineral Process ("KMP"), and this document will be submitted in the coming days.

The Company believes that the improvements resulting from the incorporation of the KMP into the design, notably the reduction in water consumption and the elimination of brine disposal, are considerable, and address the major concerns related to water identified by the CRUI. Whilst the Company considers that its previous EIA was adequate and met all relevant criteria required by the CRUI and other relevant authorities, it is excited to introduce its new proprietary KMP technology into the development of the Project.

The CRUI is expected to review the EIA submission, particularly focusing on the amendments, over the coming weeks, and any updates will be announced in due course.

KMP

On 1 February 2024, the Company announced that it had completed a scoping study on a new processing route known as KMP. Full details of the benefits of KMP can be found in the announcement from that date which is available here.

US$2.175 million subscription with GSM and GQC

Emmerson is pleased to announce that it has entered into a subscription agreement with Global Sustainable Minerals Pte Ltd ("GSM") and Gold Quay Capital Pte Ltd ("GQC") (together the "Strategic Investors"), whereby GSM will subscribe for US$2.0 million of new Shares and GQC will subscribe for US$175k of new Shares, at a placing price of 1.75 pence per Share (the "Placing Price"). The Placing Price represents a discount of 16.4% to the Company's 5-day VWAP of 2.09 pence.

Pursuant to legally binding subscription agreements, GSM has subscribed for 90,702,948 Shares and GQC has subscribed for 7,936,508 Shares at the Placing Price (the "Subscriptions"). On completion of the Subscriptions, GSM and GQC will be beneficially interested in 20.30% and 2.64% respectively of the Company's issued share capital.

In addition, the Strategic Investors will receive a warrant to subscribe for new Shares ("Warrants") for each Share subscribed for pursuant to the Subscription Agreements. The Warrants have an exercise price of 3 pence and an expiry date of 31 December 2024.

GSM Board Seat

On completion of the Subscriptions, and as a result of its shareholding exceeding 20%, GSM will have the right to appoint a representative to Emmerson's board of directors, under the terms of the relationship agreement signed in November 2021 between the Company and GSM. GSM have indicated to Emmerson that they intend to exercise this right and details of any appointment, which will be subject to the usual regulatory approvals, will be announced in due course.

Use of proceeds

The funds will be utilized by the Company to advance its studies in respect of KMP towards feasibility level alongside the progression of the EIA process in Morocco, as well as for general working capital requirements.

Retail Offer on REX platform

To enable the Company's existing shareholders to participate at the same Placing Price, the Company intends to make an offer of Shares at a price of 1.75 pence per Share available on the REX platform (the "Retail Offer"). The Retail Offer will be the subject of a separate announcement to be made shortly.

Graham Clarke, CEO of Emmerson commented: "Following the news last month that the Ministerial Committee had upheld the referral of our environmental approval, we have been working to update the EIA to incorporate the various improvements that the KMP has enabled. While we maintain the previous EIA submission was adequate, we believe this, in addition to the previous optimisations, makes the revised EIA even more environmentally robust, and addresses all material concerns related to water that have been raised in the past.

"The US$2.175 million subscription with our Strategic Investors is a sign of their continued support for the Project. In September 2023, we announced to the market that the original funding agreement from 2021 was no longer suitable, and had been allowed to expire, but that GSM, as our largest shareholder, remained supportive. By providing this additional funding alongside GQC, even ahead of environmental approval, GSM has demonstrated their confidence in the Project, and particularly in the advantages of the KMP.

"This cornerstone funding has strengthened our balance sheet, thus allowing us to continue our work advancing the KMP towards Feasibility Level, while we work with the authorities to obtain the approval for the EIA. We are also pleased to offer shares at the same placing price to existing investors via the REX platform, should they wish to participate.

"Khemisset is a world-class potash project, but with the addition of the KMP processing route, it represents a truly unique multi-nutrient producer. By offering a full suite of fertilisers containing potash, phosphates, and nitrogen, as well as magnesium and iron, all from a single deposit, it represents a solution to the challenges of food security and African self-reliance, unlike any other mine in the world."

Mark Zhou, CEO of GSM, said: "We are delighted to be able to demonstrate our commitment to Khemisset, which we believe is an outstanding project. We look forward to working even more closely with the Emmerson team in the future."

Admission of Shares

Application will be made for the Shares issued pursuant to the Subscriptions and those Shares to be issued pursuant to the Retail Offer (together the "Fundraising Shares") to be admitted to trading on AIM ("Admission"). Admission is expected to occur at 8.00 a.m. on 22 April 2024. The Fundraising Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the Company's existing issued Shares.

The Company will provide an update as to Total Voting Rights, and to confirm the timing of Admission, following the completion of the Retail Offer.

Related Party Transaction

By nature of the Substantial Shareholding (as defined by the AIM Rules for Companies) in the Company, GSM's participation in the Subscriptions constitutes a related party transaction for the purposes of the AIM Rules for Companies. The directors consider, having consulted with Liberum, the Company's nominated adviser, that the terms of the Subscription are fair and reasonable insofar as the Company's shareholders are concerned.

Market Abuse Regulation (MAR) Disclosure

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.

**ENDS**

For further information, please visit  www.emmersonplc.com , follow us on Twitter (@emmerson_plc), or contact:

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 NPV₈ of approximately US$1.4 billion using industry expert Argus' price forecasts.