Emmerson Plc / Ticker: EML / Index: LSE / Sector: Mining

6 December 2024

Emmerson PLC

("Emmerson" or the "Company")

Fundraising of £0.85 million to finance the ongoing strategic initiatives of the Company

Emmerson Plc ("Emmerson" or the "Company"), the Moroccan focused potash development company, has raised £0.85 million (before expenses) through an oversubscribed placing and subscription of 130,769,229 new ordinary shares of no-par value each in the share capital of the Company ("Placing Shares") at a price of 0.65 pence per share (the "Issue Price") and 43,589,743 attaching warrants with an exercise price of 3 pence per share and a term of seven years from the date of issuance (collectively the "Fundraising").

The Fundraising was led by Shard Capital Partners LLP ("Shard"). The net proceeds of the fundraising will primarily support the Company as it looks at its various options with respect to the dispute with the Moroccan Government, referred to in the Company's announcement dated 1 November 2024.

Certain of the Directors, including Hayden Locke, Robert Wrixon and Graham Clarke have also participated in the Fundraising (the "Director Participation"), comprising £0.02 million (in aggregate) through the issue of 3.2 million Placing Shares.

Director Participation and Related Party Transaction

The participation in the Fundraising by Hayden Locke, Robert Wrixon and Graham Clarke, all existing Directors of the Company, constitutes a related party transaction pursuant to Rule 13 of the AIM Rules for Companies (the "Directors' Related Party Transaction").

In the absence of any independent Directors (as they all intend to participate in the Fundraising) the Company's nominated adviser, Panmure Liberum, confirms that the participation in the Fundraising by Hayden Locke, Robert Wrixon and Graham Clarke is fair and reasonable insofar as Shareholders are concerned.

Existing Authorities

The Fundraising is being conducted using the Company's existing authorities to issue and allot new shares granted to the Directors by Shareholders at the Company's annual general meeting held on 26 June 2024 (the "2024 Annual General Meeting"). Accordingly, the issue of the Placing Shares is not subject to the approval of Shareholders.

Hayden Locke, Chairman of Emmerson, commented:

"The Government of the Kingdom of Morocco has failed to respond to our notice of dispute. Accordingly, working with our specialist arbitration legal team, Boies Schiller Flexner, we have presented our case to funders of potential arbitration claims and have received significant interest."

"As we expected, the merits present extremely well with these litigation experts, and we are aiming to close our funding agreement as soon as we possibly can. Given the complete lack of engagement, we expect to request arbitration via ICSID."

"A core group of investors, which were involved in the recent, successful, GreenX arbitration victory over the Polish Government, are taking up a position in this capital raise. These investors are well versed in international arbitration and have worked extensively with our legal counsel. They share our view on the strength of our case."

Details of the Fundraising

Use of proceeds

It is intended that the net proceeds of the Fundraising will principally be used for general and administrative expenses including redundancy costs, core listing expenses, legal fees associated with the dispute with the Kingdom of Morocco and base remuneration for the key witnesses in our expected arbitration.

Advisor Options

To assist with its ongoing arbitration, the Company has engaged with several groups linked with the successful GreenX claim to assist from a commercial standpoint and with various strategic matters.

The Company will issue these advisors, or their nominees, a total of 17 million options, on the same terms as the warrants for the capital raise, to align and incentivise their continued involvement with Emmerson PLC.

Admission and Total Voting Rights

The Company has raised £0.85 million, before expenses, through the issue of the Placing Shares with participation from certain existing Shareholders and new investors.

Accordingly, an application has been made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM ("Admission") and it is expected that Admission will become effective and dealing in the Placing Shares will commence on or around the 12 December 2024.  The Placing Shares will rank pari passu with the existing ordinary shares of the Company. 

Following Admission, the enlarged issued share capital of the Company will comprise of 1,269,866,195 ordinary shares of no-par value each. No ordinary shares are held in Treasury. The total number of voting rights in the Company is therefore 1,269,866,195.

The above figure of 1,269,866,195 ordinary shares may be used by shareholders of the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

**ENDS**

Notes to Editors

Emmerson's primary focus is on developing the Project located in Northern Morocco.  The Project has a large JORC Resource Estimate (2012) of 311.4Mt @ 10.2% K₂O and significant exploration potential with an accelerated development pathway targeting a low capex, high margin mine. Khemisset is perfectly located to capitalise on the expected growth of African fertiliser consumption whilst also being located on the doorstep of European markets. This unique positioning means the Project will receive a premium netback price compared to existing potash producers. The need to feed the world's rapidly increasing population is driving demand for potash and Emmerson is well placed to benefit from the opportunities this presents. The Scoping Study released in November 2018 indicated Khemisset 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 NPV₁₀ of US$1.14 billion using industry expert, Argus', price forecasts.

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.