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"We're pretty proud of its sector-leading low capital cost to production"

Emmerson's Hayden Locke on the people and cost structure that underpins the Khemisset potash project

Mining Journal

Emmerson chief executive Hayden Locke is an experienced mining executive and former mining private equity investor, straddling both the technical and commercial aspects of project development.

He was head of corporate at Papillon Resources (sold to B2Gold for US$600 million) and Highfield Resources. He studied engineering and commerce before completing a degree in geology.

The Khemisset development project in Morocco is one of two standout potash plays globally likely to find a way into the tightly controlled fertilisers market, according to Emmerson chief executive Hayden Locke.

Emmerson delivered a scoping study for Khemisset in November last year, which outlined an 800,000 tonne per annum muriate of potash operation, with an NPV (10% discount; post-tax) of US$795 million and an IRR of 30%. Work has started on the full feasibility study, which was expected in the first half of next year.

The key numbers that hold the overall economic argument together are the project costings, according to Locke. Khemisset is planning for US$406 million in up-front construction costs and operating costs of $115.40/t.

"We're pretty proud it's sector-leading low capital cost to production," he told Mining Journal. 

"That's a very important point we try to drive home to the market about potash: capital cost is the key hurdle you have to get over before you consider everything else. 

"To put [the capex] into perspective, it's still a large project but it's less than 10% of the capex for the last potash mine built and that was in Canada. We're about a quarter of the capex of most other potash development projects in the market.

"The operating costs in terms of delivered product to customers were outstanding and put us in the lowest quartile for all our target markets, so that's another big tick of approval. As a result, the economics are outstanding."

Locke said the only other potash project with similarly strong economics, led by low capex and opex figures, was Muga-Vipasca in Spain, which was owned by ASX-listed Highfield Resources and recently received its long-awaited environmental permit.

He said a large contingency in what was a high-level piece of work at a scoping stage meant the Khemisset feasibility study was unlikely to show up material changes. Emmerson is funded through to the end of that work.