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

30 June 2025

Emmerson PLC ("Emmerson" or the "Company")

2024 Financial Results

Emmerson, the Moroccan-focused potash development company, is pleased to announce its 2024 audited results.

The Company's 2024 Annual Report and Accounts will be available on the Company's website at www.emmersonplc.com. Hard copies will be posted to the Company's shareholders.

2024 Highlights:

·     A Scoping Study on the Khemisset Multi-mineral Process was completed at the beginning of 2024 with subsequent test work to optimise high value products and re-calculate the mineral resource accordingly.

·     Despite addressing the environmental concerns previously raised, the Environmental and Social Impact Assessment which had been submitted to the Commission Régionale Unifiée d'Investissement following referral from the Ministerial Committee resulted in another unfavourable recommendation.

·     In early November 2024, the Company announced that it had informed the Government of The Kingdom of Morocco that there was an investment dispute between the Company and the Government.

·     The Company appointed Boies Schiller Flexner LLP as its legal counsel.

·     Funds raised in December 2024 provided gross proceeds of US$1.1 million to provide sufficient time for the Company to secure litigation funding and to cover corporate costs.

·     The 2024 results include an impairment of the Khemisset asset of US$21.1 million, and an overall loss after tax for the year of US$25.7 million.

·     Company overheads have been reduced significantly to conserve cash pending legal proceedings.

2025 Updates:

·    On 2 January 2025 Emmerson announced it had signed a Capital Provision Agreement with a specialist litigation funding firm to provide up to US$11,000,000 in both litigation finance capital and working capital for the Company and confirmed Boies Schiller Flexner LLP as its legal counsel.

·    On 1 May 2025 Emmerson provided an update on the dispute with the Kingdom of Morocco:

o  A Request for Arbitration was submitted to the International Centre for the Settlement of Investment Disputes.

o  Emmerson is bringing a claim for full compensation in respect of the Khemisset Potash Project, which it has valued internally at US$2.2 billion.

·    The clear priority for 2025 is to work with our legal advisors and proceed with the legal process with regard to the arbitration.

Graham Clarke, CEO, commented:

"The rejection of our ESIA during the year was extremely disappointing and we have initiated arbitration proceedings against the Kingdom of Morocco. This is now the Company's primary focus, and we are confident of a successful outcome. In the meantime, we are also exploring ways to valorise our proprietary potash processing methodology, known as the KMP, while remaining focused on minimising expenditure. We will provide updates on the progress of our activities during 2025".

**ENDS**

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

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.

CHIEF EXECUTIVE OFFICER'S STATEMENT

2024 started positively with the announcement of the Khemisset Multi-mineral Process ("KMP") and progress with the environmental approval, as this was successfully referred back to the Centre Régional d'Investissement ("CRI") for review following the appeal to the Ministerial Committee. However, in spite of the Company`s best efforts, the innovation of the Khemisset Multi-mineral Process, interaction with the relevant authorities and the addressing of the environmental issues previously raised, the Company received a second unfavourable outcome in regard to the approval of the environmental licence in October 2024. Following legal advice and a review of the options open to the Company, the decision was taken at the beginning of November to inform the Government of The Kingdom of Morocco that there was an investment dispute between the Company and the Government. The Company appointed Boies Schiller Flexner LLP as its litigation counsel and commenced investigating routes for litigation funding. 

The ESIA and Litigation

The primary focus for the Company at the beginning of 2024 was to obtain the approval of the Environmental and Social Impact Assessment ("ESIA").

The Company, having sent an appeal to the Ministerial Committee in 2023 was still awaiting progress at the beginning of the 2024 financial year. The Committee was unable to sit before late January 2024; government priorities were impacted in the intervening period by more pressing matters such as the tragic earthquake in September 2023.

During January 2024, the Company announced that it had been working on a new process, the KMP, which further addressed many of the concerns regarding the environment that had been previously raised by the authorities. And, with the huge reduction in water consumption and removal of any need for waste brine disposal, delivered an excellent solution to the main issues. Emmerson has always maintained that the Khemisset Project has adhered to the highest international standards in terms of environmental compliance, including its water use, and the responsible management of waste brines and tailings. The introduction of the KMP further supported the environmental credentials of the Company. 

In March 2024, the Company was informed that the Ministerial Committee had upheld its appeal and referred the matter back to the CRI of the region Rabat-Salé-Kénitra for reconsideration, inviting the Company to include optimisations into its latest ESIA submission.

In April, the Company submitted an updated ESIA, including the optimisations from the KMP related to water usage and waste management.

Following the submission of the updated ESIA the Company continued to engage with the authorities and had expected that the CRI would call a meeting within a matter of weeks but subsequently were informed that a sub-committee had been formed at Ministry level to further analyse the updated ESIA prior to the CRI being able to make any decision.

In mid-October the Company was informed that the CRI had in fact called a meeting of the Commission Régionale Unifiée de l'Investissement ("CRUI") and that the committee had returned a second unfavourable recommendation in regard to the ESIA for the project.

Following a review of regulatory and legal options, the Company announced on 1 November 2024 it had informed the Government of The Kingdom of Morocco ("the Government") that there was an investment dispute between the Company and the Government, arising out of various breaches by the Government and its Agents of the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Kingdom of Morocco for the Promotion and Protection of Investments, which was signed on 30 October 1990 and entered into force on 14 February 2002, the Bilateral Investment Treaty ("BIT").

The Company appointed Boies Schiller Flexner LLP as its litigation counsel.

The Company was able to secure litigation funding in a relatively short period of time, and on 2 January 2025 announced that funding of US$11 million had been secured from a leading litigation funder and was now available.

Following the securing of the funding, work commenced on the case and the formal Request for Arbitration was submitted to the International Centre for the Settlement of Investment Disputes at the beginning of May 2025.

Updated Financial Estimates and Financing

In February 2024, the Company was able to announce the results of a Scoping Study which outlined the KMP process enhancements, whereby magnesium and iron chlorides in the brines would be precipitated out as struvite and vivianite respectively, after reaction with phosphates and ammonia.

This process would then allow the brines to be recirculated back into the plant, instead of disposed of through Deep Water Injection ("DWI"), yielding a number of significant benefits.

The most significant of these benefits relate to water, as the recirculation of brines reduces the overall consumption of raw water by 50% compared with the 2020 Feasibility Study, and addressed the primary environmental issues raised by the Government in its earlier assessment of the ESIA application.

The financial benefits to the project were significant and summarised below -

It is also worthy of note that the signed mandates with a syndicate of international and Moroccan banks for a debt facility US$310 million, of which US$230 million would be a tranche covered by a UK Export Finance guarantee, were renewed for a further year at the end of 2023 so were still in place at the point at which the Company had to announce that it was in dispute with the Moroccan Government.

In April 2024, the Company announced the results of a successful share placing, bringing in gross proceeds of US$2.5 million. Of this, Global Sustainable Minerals Pte Ltd ("GSM") and Gold Quay Capital Pte Ltd ("GQC") (together the "Strategic Investors") contributed US$2.0 million and US$0.2 million respectively, at a price of 1.75 pence per share. The Strategic Investors also received 1:1 warrants at 3 pence per share, expiring on 31 December 2024 and this signified the continuing support the Company had from its Strategic Investor at the time.

In addition, the Company also raised US$0.3 million from its wider shareholder base at the same price, through the REX retail platform. This offering was significantly oversubscribed.

These funds strengthened the Company's balance sheet and enabled work to continue on the KMP, the ESIA process, and for general working capital.

Post the unfavourable recommendation from the CRUI and the announcement of the dispute with the Government of Morocco the Company raised £0.85million (USD1.07million) in early December 2024 to provide funds to ensure that the Company had time to pursue the various options for litigation funding, as well as continuing to develop the KMP process as a standalone area of intellectual property under patent protection.

Outlook for 2025

The clear priority for 2025 is to work with our legal advisors and proceed with the legal process with regard to the dispute and future arbitration.

I look forward to providing further updates as 2025 progresses.

Graham Clarke

Chief Executive Officer

30 June 2025

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2024

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT

31 DECEMBER 2024                     

These financial statements were approved by the Board on 30 June 2025 and signed on their behalf by

Graham Clarke

Director                              

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024

The nature of the share-based payment and reverse acquisition reserves are described in note 13 and 14.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2024

Significant non-cash transactions in respect of share issues and options are disclosed within notes 12 and 13, while the non-cash impairment of assets are set out in notes 7 and 8.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024

1.    General information

Emmerson PLC (the "Company") is a company incorporated and domiciled in the Isle of Man, whose shares have since 27 April 2021 been listed on AIM.

The principal activity of the Group is the pursuance of a dispute with the Moroccan Government regarding the Khemisset Potash project, and the development of the Company's proprietary potash processing technology known as KMP. In previous years, the principal activity was the development of the Khemisset Potash project, however the rejection of the Company's environmental permit application in October 2024 necessitated a change in strategy.

2.    Basis of preparation

2.1.  General

The Company and Group's Financial Statements have been prepared in accordance with UK-adopted international accounting standards ("UK-IAS"). The financial statements have been prepared under the historical cost convention except for the revaluation of certain financial instruments that are measured at fair value.

2.2.  Functional and presentational currency

The financial information of the Group is presented in US dollars to the nearest thousand.

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 they operate (functional currency), these being US dollar and Moroccan Dirhams.

2.3.  Basis of consolidation

The Consolidated Financial Statements comprise the financial statements of the Company and its subsidiaries.

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.

2.4.  Going concern

As at 25 June 2025 the Group had cash and cash equivalents of US$0.5 million. On 2 January 2025, the Company signed a Capital Provision Agreement ("CPA") with a specialist litigation funding firm to provide up to US$11.0 million in both litigation finance capital and working capital for the Company.

The Company has prepared a cashflow forecast to December 2026 setting out the expected financial commitments related to the running of the Group in its reduced scale, and the legal and other advisory expenses related to the ongoing dispute with the Moroccan government.

The outcome of the litigation is expected to take at least 12 months from the date of this report, and possibly significantly longer. Litigation costs can therefore be anticipated with confidence, and ongoing operating costs have been reduced significantly in order to conserve cash.

If the legal case is resolved through negotiation out of court, this may occur sooner, but would be likely to be a favourable outcome for the Company that would likely result in either a cash settlement, or if in the form of an alternative beneficial arrangement, would put the Company in a stronger position such that its ability to raise funds would be significantly improved.

The Company will not commit to further material financial obligations for at least the 12 months from the date of this report in order to protect its Going Concern position.

Should the legal case be decided against the Company, then EML would undoubtedly face a challenge in determining its next course of action. Such options could include continuing to appeal the case, or deciding to focus on other business opportunities, including the marketing of the KMP. However, as such an outcome is not expected to be in the 12 months from the date of this report, it is not considered a risk to the Going Concern basis.

Based on a review of the cashflow forecast, the Board is satisfied that the existing cash and funding facility are more than sufficient to meet the Company's outgoings for at least 12 months from the date of this report, and therefore  believe the Going Concern basis is appropriate for the preparation of the financial statements.

2.5.  Changes in accounting policies

Standards, interpretations and amendments to published standards effective from 1 January 2024

There were no new standards or interpretations effective and adopted for the first time for the year beginning on or after 1 January 2024 that had a significant effect on the Group's or Company's financial statements. 

Standards, interpretations and amendments to published standards not yet effective

At the date of approval of these financial statements, the following standards and interpretations, which have not been applied in these financial statements, were in issue but not yet effective:

·    Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates (effective 1 January 2025)

·    IFRS 18: Presentation and Disclosure in Financial Statements (effective 1 January 2027) ¹

·    IFRS 19: Subsidiaries Without Public Accountability: Disclosures (effective 1 January 2027) ¹

·    Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosure (effective 1 January 2026) ¹

·    Annual Improvements to IFRS Accounting Standards - volume 11 (effective 1 January 2026)

·    IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (effective 1 January 2024) ¹

·    IFRS S2 Climate-related Disclosures (effective 1 January 2024) ¹

¹ These standards have not yet been endorsed in the UK.

The Company is assessing the effect of these new and amended standards and interpretations, which are in issue but not yet mandatorily effective, but their impact is currently not expected to be material.

2.6.  Segment reporting

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 are of the opinion that the Group is engaged in a single segment (2023: single segment) of business being the ongoing dispute with the Moroccan Government over the Khemisset Potash Project.

The Chief Operating Decision Maker is the CEO Graham Clarke, reporting to the Board of Directors.

2.7.  Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another.

(a) Financial assets

Initial recognition and measurement

Financial assets are classified at initial recognition, and subsequently measured at amortised cost, fair value through other comprehensive income ("OCI"), or fair value through profit and loss.

The classification of financial assets at initial recognition that are debt instruments depends on the financial asset's contractual cash flow characteristics and the Group's business model for managing them. The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.

In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are 'solely payments of principal and interest ("SPPI")' on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.

The Group's business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

·    Financial assets at amortised cost (debt instruments)

·    Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)

·    Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)

·    Financial assets at fair value through profit or loss

Financial assets at amortised cost (debt instruments)

This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met:

·    The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and

·    The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortised cost are subsequently measured using the effective interest rate ("EIR") method and are subject to impairment. Interest received is recognised as part of finance income in the statement of profit or loss and other comprehensive income. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group's financial assets at amortised cost include trade receivables (not subject to provisional pricing) and other receivables.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group's consolidated statement of financial position) when:

·    The rights to receive cash flows from the asset have expired; or

·    The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets

The Group recognises an allowance for expected credit losses ("ECLs") for all debt instruments not held at fair value through profit and loss. For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Group applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset's lifetime ECL at each reporting date.

The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group.

A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to enforcement activity. At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

 (b) Financial liabilities

Financial liabilities are classified at initial recognition as financial liabilities at fair value through profit or loss, or as appropriate. All financial liabilities are recognised initially at fair value and net of directly attributable transaction costs. The Group's financial liabilities include trade and other payables and loans.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

·      Financial liabilities at amortised cost

After initial recognition, interest-bearing loans and borrowings and trade and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are derecognised, as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss and other comprehensive income. This category generally applies to trade and other payables.

Derecognition

A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss and other comprehensive income.

2.8.  Taxation

Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements, determined using tax rates that are expected to apply when the related deferred tax asset or liability is realised or settled. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

2.9.  Intangible assets - exploration and evaluation expenditure

Exploration expenditure comprises all costs which are directly attributable to the exploration of a project area and research costs. 

When it has been established that a mineral deposit has development potential and the Group has the rights to explore, all costs (direct and applicable overheads) incurred in connection with the exploration and development of the mineral deposits are capitalised until either production commences, or the project is not considered economically viable.

In the event of production commencing, capitalised costs in respect of the asset are transferred into Tangible Fixed Assets, and are depreciated over the expected life of the mineral reserves on a unit of production basis. Other pre-trading expenses are written off as incurred.

For the purposes of impairment testing, intangible assets are allocated to specific projects with each licence and reviewed annually. Where a project is abandoned or is considered to be of no further interest, the related costs are written off.

Intangible assets are subject to amortisation and are tested annually for impairment, where indicators of impairment are considered to be present in accordance with IFRS 6. The recoverability of all exploration costs, licenses and mineral resources is dependent on the ability of the Group to obtain necessary financing to complete the development of reserves and future profitable production, or proceeds from the disposition thereof.

Expenditure on research and development, such as for the KMP, including testwork and patent applications, is recognised as an intangible asset under IAS 38 once both the technical and economic viability of such research can be demonstrated. Until that time, costs are expensed as incurred.

Capitalised intellectual property costs will be amortised over their economic life, once that period has been realistically established.

2.10.      Contingent assets

Contingent assets are assets that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of future events not wholly within the control of the Company. Contingent assets are not recognised in the Statement of Financial Position but are disclosed in the notes to the financial statements when an inflow of economic benefit is probable.

2.11.      Contingent liabilities

A contingent liability is a possible or present obligation that does not meet the criteria for recognising in the accounts because it is either:

a)    A possible obligation (i.e. one not yet confirmed to actually be a present obligation, with any degree of certainty) that arises from past events and where the final outcome will be contingent on one or more uncertain future events, not wholly within the control of the entity; or

b)    A present obligation that arises from past events but is not recognised because the loss is not probable or the amount of the obligation cannot be measured with sufficient reliability.

2.12.      Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand and deposits held at call with financial institutions.

2.13.      Foreign currencies

Assets and liabilities in foreign currencies are translated into US$ at the rates of exchange ruling at the Statement of Financial Position date.  Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction.  Exchange differences are taken into account in arriving at the operating result.

On consolidation of a foreign operation, assets and liabilities are translated at the closing rate at the date of the Statement of Financial Position. Income and expenses for each Statement of Comprehensive Income presented are translated at average exchange rates. All resulting exchange differences are recognised in other comprehensive income and accumulated in equity.

2.14.      Share-based payment arrangements

The Group operates equity-settled, share-based compensation plans, under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of employee services received in exchange for the grant of share options are recognised as an expense. The total expense to be apportioned over the vesting period is determined by reference to the fair value of the options granted:

·       including any market performance conditions;

·       excluding the impact of any service and non-market performance vesting conditions; and

·       including the impact of any non-vesting conditions.

Any non-market performance and service conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period the Group revises its estimate of the number of options that are expected to vest.

The Group recognises the impact of the revision of original estimates, if any, in profit or loss, with a corresponding adjustment to equity.

When options are exercised, the Company issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium.

The fair value of goods or services received in exchange for shares is recognised as an expense and included within administrative expenses.

2.15.      Critical accounting estimates and judgements

The preparation of financial statements in conformity with UK-IAS requires the use of certain critical accounting estimates.  It also requires management to exercise its judgement in the process of applying the Group's accounting policies.  The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed below:

a)            Recoverability of intangible assets

The Group tests annually for impairment or more frequently if there are indications that the intangible assets might be impaired.

IFRS 6 requires entities recognising exploration and evaluation assets to perform an impairment test on those assets when specific facts and circumstances indicate an impairment test is required. The assessment involves judgement as to the status of licenses and the likelihood of renewal of exploration licenses which expire in the near future. Where impairment indicators are present, the Group is required to evaluate the future cash flows expected to arise from the cash-generating unit and the suitable discount rate in order to calculate the present value.

The Directors therefore undertook an assessment of the following areas and circumstances that could indicate the existence of impairment in accordance with IFRS 6:

·    The Group's right to explore in an area has expired, or will expire in the near future without renewal;

·    No further exploration or evaluation is planned or budgeted for;

·    A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the absence of a commercial level of reserves; or

·    Sufficient data exists to indicate that the book value will not be fully recovered from future development and production.

In October 2024, the Company received the news that its ESIA application had been rejected and that no further appeals could be made. The Company believes that this decision, and its treatment over the preceding years by the Moroccan authorities, to have been contrary to its legal rights, and has thus initiated a dispute in this matter.

Notwithstanding the Board's confidence in its position, and the expectation that this dispute will be resolved in a positive way (whether through an amicable settlement or through litigation), the final rejection of the ESIA represents a clear indicator of impairment in the context of several of the criteria under IFRS 6, and accordingly the Company has recognised an impairment provision of US$20.4 million, the full carrying value of the Fixed Assets in respect of the Khemisset Project, at the time of the rejection.

Following this impairment, the carrying value of Group's exploration and evaluation intangible assets in relation to the Khemisset Project at 31 December 2024 was US$nil (2023: US$20.4 million).

b)           Share-based payments

The Group has made awards of options on its unissued share capital to certain Directors and employees as part of their remuneration package.

The valuation of these options involved making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and interest rates.  These assumptions are described in more detail in note 13.

There was a charge to the Statement of Comprehensive Income during the year in relation to share based payments of US$270k (2023: US$335k).

3.    Expenses by nature

Other costs include restructuring costs and other expenditure in Morocco that have been expensed to the income statements in the year following the suspension of activities in that country. In prior years, a large portion of costs in Morocco related to the development of the Khemisset project and had therefore been capitalised in accordance with the Company's policies.

4.    Directors' remuneration

Details of Directors' remuneration during the year are as follows:

¹ James Kelly and Rupert Joy both stood down on 28 October 2024

During 2024, certain directors were awarded shares in order to ensure their continued engagement and alignment with shareholders' interests, while preserving cash.

Graham Clarke and Robert Wrixon received consultancy fees received fees for consultancy services which are disclosed within note 15. During 2024, certain Directors received share options as part of their remuneration (see note 13).

5.    Income tax

Reconciliation of income tax                                                                                                                 

The weighted average applicable tax rate was 13.96% (2023: 19.2%). Emmerson PLC is registered for taxation in the United Kingdom, where the corporation tax rate was 19%.  Morocco has a 20% tax rate applicable to mining companies, including Emmerson's Moroccan subsidiaries, while the British Virgin Islands have a tax rate of 0%.

A deferred tax asset has not been recognised in respect of deductible temporary differences relating to certain losses carried forward at the year end, as there is insufficient evidence that taxable profits will be available in the foreseeable future against which the deductible temporary difference can be utilised.

The unrecognised deferred tax asset for the Group was approximately US$6,154k (2023: US$2,361k). The unrecognised deferred tax asset relating to Moroccan tax losses amounted to approximately US$2,004k (2023: US$97k).

6.    Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

The potential number of shares which could be issued following the exercise of options and warrants currently outstanding amounts to 114,352,743 (see note 13). Dilutive earnings per share equals basic earnings per share as, due to the losses incurred, there is no dilutive effect from the existing share options and warrants.

7.    Intangible assets

The intangible assets consist of capitalised exploration and evaluation expenditure in respect of the Company's potash interests in Morocco (the Khemisset project).

During the year, the Company fully impaired the capitalised exploration and evaluation costs in respect of the Khemisset project, following the rejection of the ESIA in October 2024. See note 2.13 detailing the Company's judgement in this area.

8.    Trade and other receivables

Other receivables at 31 December 2024 included US$0.6 million in respect of the equity placing in December 2025 whose proceeds were not received until shortly after year end.

It also included recoverable VAT and other taxes. The recoverable VAT in Morocco of US$0.8 million was fully impaired in the year, as its recovery was dependent on the Khemisset project entering production and generating third party sales, which is no longer expected to occur following the rejection of the ESIA.

9.    Trade and other payables

Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Other payables consist of supplier invoices for administration expenses.

Included on Other payables are $73,000 which relates to the legal settlement agreement, please see note 10.

10.  Long-term liabilities

On 30 April 2025, the Company reached a legal settlement agreement related to a contract dated 29 November 2021 to which the consultant agreed to provide a basic engineering package for the Company's Khemisset Potash Project.

As at 31 December 2024, the Company has recognised long-term liabilities related to the legal settlement obligations as follows:

*The first payment of $73,000 is included within the trade and other payables due to the payment being required within a year from the year end.

11.  Financial instruments

Categories of financial instruments

Financial risk management objectives and policies

The Company is exposed through its operations to credit risk and liquidity risk. In common with all other businesses, the Company is exposed to risks that arise from its use of financial instruments. This note describes the Company's objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout this financial information.

General objectives, policies and processes

The Directors have overall responsibility for the determination of the Company's risk management objectives and policies. Further details regarding these policies are set out below:

Capital management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The capital structure of the Group consists of issued capital, reserves and retained earnings.  The Directors reviews the capital structure on a semi-annual basis. As a part of this review, the Directors consider the cost of capital, the risks associated with each class of capital and overall capital structure risk management through the new share issues and share buy-backs as well as the issue of new debt or the redemption of existing debt.

Credit risk

The Company's credit risk arises from cash and cash equivalents with banks and financial institutions. For banks and financial institutions, only independently rated parties with minimum rating "A" are accepted.

Liquidity risk

Liquidity risk arises from the Directors' management of working capital. It is the risk that the Company will encounter difficulty in meeting its financial obligations as they fall due.

The Directors' policy is to ensure that the Company will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, the Directors seek to maintain a cash balance sufficient to meet expected requirements.

The Directors have prepared cash flow projections on a monthly basis through to 31 December 2026. At the end of the period under review, these projections indicated that the Group is expected to have sufficient liquid resources to continue in operational existence and meet its obligations under all reasonably expected circumstances.

Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures. However since the Company's strategy changed from developing the Khemisset project to pursuing a dispute with the Moroccan authorities, the exposure to forex risk has reduced significantly and is now limited to cash balances and outgoings in GBP. 

12.  Share capital

The Ordinary Shares issued by the Company have no par value and are fully paid. Each Ordinary Share carries one vote on a poll vote. The Company does not have a limited amount of authorised capital.

In April 2024, the Company allotted 112 million shares at a price of 1.75 pence per share, raising net proceeds of US$2.4 million. In December 2024, the Company raised further funds through the allotment of 131 million shares at price of 0.65 pence per share, raising US$1.0 million after costs (of which US$0.6 million was received on 3 January 2025).

In December 2024, the Company awarded 12 million shares with a value of US$0.1 million to Board members who were taking no, or reduced, cash remuneration following the downsizing of the Group's workforce. Robert Wrixon was awarded 3,000,000 shares, Hayden Locke was awarded 3,000,000 shares and Graham Clarke 6,000,000 shares.

13.  Share-based payments

The following is a summary of the share options as at 31 December 2024:

The weighted average remaining contractual life of the options at year-end was 2.92 years (2023: 2.74 years).

The options issued were valued using the Black-Scholes valuation method and the assumptions used are detailed above.  The expected future volatility has been determined by reference to the historical volatility.

On 8 April 2024, 98,639,456 warrants were issued, which expired on 31 December 2024. On 12 December 2024, 43,589,743 warrants with an exercise price of 3 pence and an expiry date of 12 December 2031 were issued as part of the equity placing at that date.

The Group operates equity-settled, share-based compensation plans, under which the entity receives services from Directors and employees as consideration for equity instruments (options) of the Group.

The total share-based payment recognised in the Statement of Changes in Equity during the year was a US$270k (2023: US$335k) in respect of the fair value of employee share options.

There were 42,321,000 (2023: 47,263,000) share options held by current Directors and employees at year end.  Vesting of the options is subject to the option holder providing continuous service during the vesting period and there are no other performance conditions attached to the options.

14.  Reserves

The following table describes the nature and purpose of various reserves within owner's equity:

15.  Related party transactions

Directors' consultancy fees

Graham Clarke is a Director of the Company and also provides consulting services to the Company. During the year, Graham Clarke received fees of US$34k (2023: US$ nil). There are no outstanding fees as at the year-end.

Robert Wrixon is a Director of the Company and also provides consulting services to the Company. During the year, Robert Wrixon received fees of US$26k (2023: US$30k). The amount outstanding as at the year-end was US$ nil (2023: US$ nil).

Details of Directors' remuneration during the year are given in note 4.

There were no other related party transactions.

16.  Ultimate controlling party

The Directors consider that there is no controlling or ultimate controlling party of the Company.

17.  Events after the reporting date

Litigation funding

On 2 January 2025, the Company announced that it had signed a Capital Provision Agreement ("CPA") with a specialist litigation funding firm to provide up to US$11.0 million in both litigation finance capital and working capital for the Company (the "Funding"), and confirmed Boies Schiller Flexner LLP ("BSF") as its litigation counsel.

The Funding is to be primarily used to progress the Company's dispute with the Government of the Kingdom of Morocco under the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Kingdom of Morocco for the Promotion and Protection of Investments, which entered into force on 14 February 2002, being a Bilateral Investment Treaty.

Deed of Settlement and Release

On 30 April 2025, the Company reached a legal settlement agreement related to a contract dated 29 November 2021 to which the consultant agreed to provide a basic engineering package for the Company's Khemisset Potash Project. The settlement amount agreed between both parties is US$427k, payable in 3 instalments with the final payment due on 27 May 2027. See note 10.