Annual Report & Financial Statements
For the year ended 31 December 2023
“Doing the right things and
doing them in the right way”
2 | Emmerson PLC
CONTENTS
01
CHAIRMAN’S STATEMENT
02
CHIEF EXECUTIVE OFFICER’S STATEMENT
07
SUSTAINABILITY
09
DIRECTORS’ REPORT
13
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
14
CORPORATE GOVERNANCE REPORT
18
BOARD OF DIRECTORS
19
INDEPENDENT AUDITOR’S REPORT
23
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
24
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
25
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
26
CONSOLIDATED STATEMENT OF CASH FLOWS
27
NOTES TO THE FINANCIAL STATEMENTS
40
COMPANY INFORMATION
CHAIRMAN’S STATEMENT
It gives me great pleasure to present the 2023 Annual Report for Emmerson PLC
(“Emmerson” or “the Company”).
During 2023 and into 2024, our key priority has remained
magnesium and iron in the case of struvite and vivianite
securing the approval of the Environmental and Social Impact
respectively.
Assessment (“ESIA”) for Khemisset. Whilst we have not yet
received this critical approval, Graham and his team have used
this extended period of time constructively, most notably with
the development of the innovative Khemisset Multi-mineral
Process (“KMP”). It is my belief that this will be seen as a
seminal period for the Company, once the true environmental,
commercial and financial benefits of KMP are more widely
recognised.
As part of the scoping study into KMP, we updated our financial
estimates for the Project, based on the original design, as well
as based on a design incorporating the new process route. Cost
inflation since the 2020 Feasibility Study was mitigated by some
efficiency savings, and the revised estimates for the original
design held up well. However, the design incorporating KMP has
far superior economics, with a Net Present Value at 8% (“NPV8”)
of US$2.2 billion, and an Internal Rate of Return (“IRR”) of close
In early April 2024, we submitted the latest, and we hope final,
to 40%.
version of the ESIA to the Commission Régionale Unifiée de
l’Investissement (the “CRUI”), the body responsible for granting
environmental approval.
In what have been challenging financial markets, with modest
potash prices, it is important that new greenfield projects stand
out. Khemisset incorporates an innovative, patent-pending
We very much hope that we are now at the final stages of the
processing method, which allows mixed potash ore types to be
approval process, which has taken far longer than initially
processed in a highly efficient manner, creating multi-nutrient
envisaged, and involved considerable additional work and
fertilisers as by-products. No other potash project in the world
iterations.
can make such a claim, nor be as efficient with freshwater
Environmental approvals in the mining sector have become
usage.
more demanding in recent years, with an increasing focus on
Furthermore, Khemisset has an advantageous geographical
Environmental, Social, and Governance (“ESG”) issues from
location, being located close to the Atlantic ports of Morocco. It
both investors and regulators. We have never shied away from
is also likely to be Africa’s first potash operation since the mid-
our obligations in this area, incorporating the highest possible
1970s, which is significant as Africa is where the challenges
standards of ESG into our design, and into our culture, from the
of food security and self-reliance are most pressing. With the
outset.
In Morocco, as in many countries, there are concerns regarding
water. Climate change has led to seasonal rains becoming less
reliable, resulting in droughts in recent years, and low water
levels in reservoirs and aquifers.
In the context of this challenge, during 2023 our technical teams
developed an innovative new processing method which we have
called the KMP. We announced the results of our scoping study
into KMP on 1 February 2024, and we have now included KMP
bulk of global population growth in the next 20 years, together
with fertiliser application rates that are a fraction of those in the
developed world, Africa needs to be able to feed itself and then
the rest of the world.
Obtaining our environmental approval has taken time, and we
are extremely grateful to our shareholders for their patience. I
was delighted that Global Sustainable Minerals and Gold Quay
Capital supported our recent fundraise so strongly and that we
continue to enjoy a constructive partnership.
in our updated ESIA, along with various other optimisations
Khemisset is an outstanding potash development project
made in the past three years to the original design.
and the benefits of KMP leave Emmerson well positioned to
KMP arose from the investigation into a means of cleaning and
recycling brines as an alternative to Deep Well Injection (“DWI”)
and resulted in a solution that not only eliminates DWI entirely,
but in so doing reduces water consumption by 50%. We believe
become a uniquely sustainable source of multi-nutrient fertiliser
products, in a country which is already a major global fertiliser
hub, and a gateway to the continent with the most identifiable
growth over the medium term.
that the KMP can unlock significant value in other potash
I look forward to updating you on our progress in 2024, which
deposits and have filed a patent over the process.
we hope will be a transformational year for Emmerson.
The KMP brings more than environmental benefits, considerable
though these are. It also transforms the Project’s economics,
by producing two new saleable fertiliser products: struvite and
vivianite. The existing market for these is relatively small, as
current production levels are modest. However, there is a huge
potential demand for both products, as they are essentially
slow-release multi-nutrient fertilisers, containing macro-
nutrients phosphates and ammonia, and the micro-nutrients
James Kelly
CHAIRMAN
23 May 2024
01 | Emmerson PLC
1 | Emmerson PLC
CHIEF EXECUTIVE OFFICER’S STATEMENT
During 2023, the Company faced challenges, notably in respect of the progress towards obtaining the
environmental approval, but was also able to develop a new, innovative processing route that not only
dramatically improves the environmental credentials of the Khemisset Project, but also transforms its
economics. We believe Khemisset is a genuinely unique project that will produce, from one processing
plant, fertilisers containing potash, phosphates and ammonia, as well as magnesium and iron.
The ESIA Approval
The primary focus for the Company in 2023 remained obtaining
the approval of its ESIA.
Some of Morocco’s most significant environmental sensitivities
relate to water. Climate change has impacted the country by
making seasonal rainfall less reliable. Winter rains in recent
years have been lower than historic averages, resulting in
droughts and low water levels in reservoirs, and threatening
agriculture and availability of potable water. In 2023, His
Majesty King Mohammed VI directed a series of national
In April 2024, the Company submitted an updated ESIA,
including the optimisations from the KMP related to water
usage and waste management. Although the environmental and
economic benefits of the KMP are considerable (as outlined
below), the changes to the processing plant are relatively
modest. The elimination of equipment and infrastructure
related to DWI means that the KMP results in a net reduction in
capex and the overall footprint of the Project, and therefore the
modifications to the ESIA were straightforward.
measures to address this issue, which remains a focal point of
Khemisset Multi-mineral Process (“KMP”)
government policy.
During 2023, the Company began to explore innovative
Taking into account these concerns, the Company has
solutions to the management of waste brines, which, under the
invested significant efforts in this area, engaging in iterative
original design set out in the 2020 Feasibility Study (the “2020
consultations with authorities. The work has led in many
FS”), were proposed to be safely disposed of deep underground
cases to concrete improvements such as switching to dry
in porous/permeable rock structures in a process known as
stack tailings instead of wet, and sourcing grey water from
DWI. DWI is an established process in many other projects, but
the Khemisset Waste Water Treatment Plant, rather than
was new to Morocco, and while technical studies supported the
drawing from nearby rivers or reservoirs as had previously been
robustness of the method, it remained a point of sensitivity.
discussed, in addition to the substantial improvements by the
KMP.
In February 2024, the Company was able to announce
the results of a Scoping Study which outlined a process
In July 2023, we announced that the CRUI had been unable to
enhancement, whereby magnesium and iron chlorides in
approve our ESIA, and the matter was referred up to the national
the brines would be precipitated out as struvite and vivianite
level for review by the Commission Ministérielle de Pilotage
respectively, after reaction with phosphates and ammonia.
(The “Ministerial Committee”). This Ministerial Committee
is a national body chaired by the Head of Government and is
composed of a number of ministers in government.
This process would then allow the brines to be recycled
back into the plant, instead of disposed of through DWI. The
recirculation of brines yields a number of benefits, notably
The Ministerial Committee was unable to sit before late January
a reduction in the overall consumption of raw water by 50%
2024; government priorities were impacted in the intervening
compared with the 2020 FS, and an improvement in potash
period by more pressing matters such as the tragic earthquake
recoveries from 85% to around 91%.
in September 2023.
Both struvite and vivianite are slow-release multi-nutrient
Emmerson has always maintained that the Khemisset Project
fertilisers, that are expected to attract a premium price above
has adhered to the highest international standards in terms
their nutrient value. Updated financial estimates completed as
of environmental compliance, including its water use, and the
part of the KMP Scoping Study pointed to these new products
responsible management of waste brines and tailings. However
more than doubling the NPV of the Project compared to
the Company has continued to explore optimisations to reduce
the original design, based on relatively conservative pricing
further the Project’s environmental footprint, and the KMP arose
estimates from third party market consultants.
from this work.
In March 2024, the Company was informed that the Ministerial
Committee had upheld its appeal and referred the matter back
to the CRUI for reconsideration, inviting the Company to include
optimisations into its latest ESIA submission.
By being slow-release, struvite and vivianite also address
one of the environmental challenges facing farmers applying
phosphates. Most sources of phosphate are highly soluble, and
susceptible to being washed away by rainfall in a process known
as phosphate run-off. Not only does this result in the loss of the
nutrient benefits to farmers (who either reapply or suffer lower
crop yields), but it causes eutrophication of water courses, and
algal blooms, which can be damaging to aquatic life.
Emmerson PLC | 02
By contrast, struvite and vivianite are less soluble, releasing
Khemisset Basic Engineering
their nutrients in line with demand from plants. This allows less
frequent application (a benefit for farmers), while keeping the
nutrient in the fields where it is needed, and not in rivers and
lakes where it is not.
The KMP is at a Scoping Study level, but the changes to the
process plant are relatively simple and use well-established
processes. It is therefore now being adopted as the assumed
production route, and while further testwork remains
(particularly around crop-specific agronomic trials), it will be
included in the planned updated Bankable Feasibility Study
(“BFS”) which will be completed once environmental approval
has been obtained.
The basic engineering work, which commenced in 2022, was
largely completed during 2023. Two engineering firms, Barr
Engineering of the US, and Reminex S.A of Morocco, lead the
workstreams for the processing plant, and the balance of the
Khemisset potash project scope, respectively. At the time of
writing, the only remaining deliverables are the final reports.
Financing
In 2022, the Company announced that it had signed mandates
with a syndicate of international and Moroccan banks for a debt
facility initially expected to be US$310 million, of which US$230
million would be a tranche covered by a UK Export Finance
Updated financial estimates
guarantee.
As part of the KMP Scoping Study, the financial estimates
for the Project, which had been last calculated as part of
the 2020 Feasibility Study, were updated on two bases: the
“Original Design”, assuming substantially the original design
(without KMP but including various other optimisations); and
incorporating KMP into the process route (“KMP Process
Solution”).
Cost inflation which has affected all capital projects inevitably
led to an increase in the capex estimate for the Project, which
rose by 31% for the Original Design, and 28% for the KMP
Process Solution. Updated opex estimates, including revised
pricing assumptions for costs such as electricity, staff costs,
fuel, and transport were also factored in.
A summary of the key financial metrics of the Original Design
These mandates were renewed in December 2023 for a further
year. This facility will be subject to the usual due diligence and
credit committee approvals, and work will commence once the
ESIA approval has been completed and the BFS updated.
Other discussions with equity and royalty/offtake financiers
have continued but at a background level, awaiting the ESIA
approvals before full engagement is expected.
In April 2024, we 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
and the KMP Process Solution, as compared with those in the
December 2024.
2020 Feasibility Study, is shown below. Further details can be
found in the announcement of 1 February 2024.
Parameter (real unless stated)
2020
2023 UPDATES
Feasibility
Original Design
KMP
Study
Updated
Process Solution
Capex
US$411m
US$539m
US$525m
MOP Cash Cost FOB Casablanca
US$147/t
US$164/t
US$156/t
MOP Cash Cost CFR Brazil net of salt credit
US$110/t
US$139/t
US$133/t
All-in-Sustaining Cash Cost CFR Brazil net of salt credit
US$136/t
US$171/t
US$163/t
Annual EBITDA (nominal)
US$286m
US$258m
US$440m
Post Tax Cash Flow (nominal)
US$3.8bn
US$3.0bn
US$5.9bn
Post Tax NPV8 (nominal)
Post Tax IRR (nominal)
03 | Emmerson PLC
US$1.4bn
US$1.0bn
US$2.2bn
40%
26%
40%
“KMP: a new, innovative
processing route that not
only dramatically improves
the environmental credentials
of the Khemisset Project, but
also transforms its economics.”
In addition, we also raised US$0.3 million from our wider
shareholder base at the same price, through the REX retail
platform. This offering was significantly oversubscribed.
These funds strengthen the Company’s balance sheet and will
Potash market
After increasing during 2021 on the back of transportation
issues during the pandemic, potash prices rose sharply during
2022 following the invasion of Ukraine. However, this increase
be used to continue our work on the KMP, the ESIA process, and
led to fertilisers becoming unaffordable, despite crop prices
for general working capital. The funds are sufficient to meet all
also rising, and demand dropped off, leading to a fall in global
existing obligations for over 12 months.
The further contribution from our Strategic Investors underlines
their ongoing confidence in the Project. We expect them to form
a key part of the construction funding package in due course,
once we have received EIA approval.
MOP prices which continued during 2023 and into 2024. Potash
production from sanctioned operations in Russia and Belarus
also began to find ways into new markets, particularly in Asia,
alleviating supply side constrictions.
By April 2024, MOP prices had recovered to around US$315 per
tonne CFR Brazil, relatively low in the context of historic prices
but improving since the start of the year. This led to demand
returning, but weather patterns in 2023 affected agriculture
which moderated the impact this had on prices.
The longer-term demand story for potash remains compelling:
global population growth, changing dietary habits, and pressure
on arable land usage, are all expected to increase the demand
for potash, as well as other nutrients.
Emmerson PLC | 04
Potash prices
1,250
1,150
1,050
950
850
750
650
550
450
350
250
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
Mar-23
Jun-23
Sep-23
Dec-23
Mar-24
Potash Granular MOP bulk cfr Brazil Price
Potash Granular MOP bulk cfr NW Europe Price
Potash Standard MOP bulk fob Vancouver Price
Potash Standard MOP bulk cfr SE Asia Price
New sources of potash, not least the BHP Jansen project, are
Outlook for 2024
expected to come online in the next 5-10 years, but the most
advanced of these are located in the traditional production
centres of central Canada, Russia, and Belarus. Given
transportation distances and ongoing sanctions, these are more
likely to serve the markets of North America and Asia, with
Europe, South America and Africa (Khemisset’s target markets)
likely to remain undersupplied for the foreseeable future.
The priority for 2024 is to obtain approval for our updated ESIA,
incorporating the KMP optimisations, which we submitted to
the Moroccan authorities for approval in April 2024.
Depending on the outcome of the next reviews, we expect to
hear from the CRUI shortly thereafter. In view of the level of
optimisations now incorporated into the ESIA, we very much
hope that approval will be forthcoming soon.
Upon receipt of this approval, we will move forwards with
completing the remaining studies on the KMP, such that it
can then be incorporated into an updated BFS, based on the
original 2020 Feasibility Study, but including all optimisations
and improvements, and revised estimates, completed in
the intervening years including the workstreams completed
under the Basic Engineering. Due diligence with financiers will
commence in parallel as far as possible but will need to await
the completion of the BFS, and review of its findings, before it
can be concluded.
I look forward to providing updates in 2024.
Graham Clarke
CHIEF EXECUTIVE OFFICER
23 May 2024
05 | Emmerson PLC
The longer-term demand
story for potash remains
compelling: global
population growth,
changing dietary habits,
and pressure on arable
land usage, are all
expected to increase the
demand for potash, as
well as other nutrients.
Emmerson PLC | 06
Emmerson PLC | 6
SUSTAINABILITY
Sustainability for Emmerson is at the heart of
who we are, how we work, and how we treat the
people and natural environments around us, at
all times seeking to maximise the benefits we
bring and minimising any negative impact.
Success in this area goes far beyond compliance with
Health and safety
We are committed to targeting zero harm for our workforce.
Critical to achieving this is communicating the message that
safety is our individual responsibility, not just for ourselves but
for others.
Although there was minimal field work during 2023, we
continued to monitor and report on all incidents, including minor
ones and ‘near misses’. These matters are investigated as a
matter of course and reported to the Board in monthly reports.
regulations or laws. It is about working safely, in partnership
with local communities; considering in depth the environmental
and social impact of our activities; building a well-trained and
motivated, locally sourced workforce; and demonstrating
corporate leadership through rigorous governance. It is
encapsulated in the Company’s philosophy of “Doing the right
things in the right way’’.
We broadly categorise sustainability into four areas: health
and safety; environment; community; and governance. As a
Group, we are committed to achieving the highest standards
in these areas, and as the Company grows from developer into
construction and production, we will continue to set targets
and measure our achievements. Throughout the lifetime
of the Project, we are committed to rigorous monitoring of
sustainability metrics, and to working with all Moroccan and
international stakeholders to improve our performance.
We will also report on our performance in sustainability
externally as well as internally.
07 | Emmerson PLC
Environmental
Community
Emmerson’s commitment to the environment is about
The Khemisset Project is a partnership between Emmerson
minimising any negative impacts on the local landscape and
PLC and Morocco. Emmerson is committed to ensuring that
community, such as noise, emissions, and waste management,
Morocco receives the maximum benefit from its investment
while taking steps to restore and rehabilitate wherever possible.
in the Project, and works closely with government agencies
Given the Company’s focus on obtaining environmental
approval for its project, a considerable amount of work has
gone into enhancing the environmental and social aspects of
the proposals, particularly in so far as these relate to water
management.
It was this prioritisation that led to the development of the KMP
processing route, whose environmental benefits include the
reduction in water consumption and the elimination of brine
and local communities, to understand their needs and
expectations. Wherever possible, the Company has engaged
local consultants, contractors, and employees. Morocco has a
motivated, well-educated workforce, and an established mining
sector, and it is the Company’s policy that, where external
expertise is required for specific task, skills will be transferred
to local teams as part of the work.
disposal.
Corporate Governance
In addition, two of the new products resulting from the new
Emmerson is committed to good governance in all areas, as
process, struvite and vivianite, are slow-release phosphate
a means of ensuring the Company is managed appropriately,
fertilisers containing the additional micro-nutrients magnesium
to ensure the right skill sets and structures are in place to
and iron respectively. Not only will these contribute, alongside
safeguard the Company’s assets and to benefit all stakeholders,
potash, to the challenges of food security in Africa and across
and to ensure our working practices are ethical and in line with
the globe but, by having low water solubility, they also minimise
the negative environmental impact of phosphate run-off
compared with other phosphate fertilisers (such as DAP or
MAP), which can lead to eutrophication of streams and rivers.
best practice.
Further details on governance are set out in more detail in the
Governance section of the Directors’ Report.
Emmerson PLC | 08
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors present their report and the
audited financial statements for the year
ended 31 December 2023.
General information
Principal risks and uncertainties
Emmerson PLC (“the Company”), was incorporated in the Isle
The Group operates in an uncertain environment and is subject
of Man with registered number 013301V on 1 March 2016.
to a number of risk factors. The Directors have carried out a
The Company’s Ordinary Shares were admitted to the London
robust assessment of the principal risks facing the Group,
Stock Exchange’s Main Market and commenced trading on 15
February 2017. On 27 April 2021, the Ordinary Shares of the
including those that threaten its business model, future
performance, solvency or liquidity. They consider that the
Company were admitted to trading on AIM and the listing of the
following are the principal risk factors that could materially and
Company’s Ordinary Shares on the Official List and their trading
adversely affect the Group’s future operating results or financial
on the Main Market were cancelled.
position:
Emmerson PLC’s primary focus is on developing the Khemisset
Potash Project located in Morocco.
Results for the year and dividends
The total comprehensive income attributable to the equity
holders of the Group for the year was a loss of US$2,875k
(2022: loss of US$3,243k).
The Company paid no dividend during the year (2022: US$ nil).
Business performance for the year
As detailed in the Chairman’s and CEO’s Statements,
development of the Khemisset Potash Project continued during
the period, with progress made on a number of technical and
financial workstreams.
During the financial year, the Group made a loss per share of
0.29 cents (2022: a loss per share of 0.34 cents). Given the
current stage of the Group’s exploration project, the Directors
do not consider there to be any other financial key performance
indicators. As at 30 April 2024, the Group’s cash balance was
US$3.1 million.
09 | Emmerson PLC
Permitting risk
The Company’s primary asset is the Khemisset project in
Morocco, which requires an environmental approval in order
to be able to proceed. There is a risk that approval may not be
granted, and if not, it may be difficult to realise value from the
project. In order to mitigate this risk, the Company has made
a number of significant optimisations to the project design in
order to address environmental concerns, including the KMP
processing enhancement.
Deterioration in global economic conditions or in
the potash market in particular
There is a risk that changes in the relevant laws and legislation
could have an adverse effect on the Group’s future performance,
expected return and or feasibility of the project.
The Group is also exposed to general economic risk, including
changes in the economic outlook in its principal markets and
government changes in industrial, fiscal, monetary or regulatory
policies.
The Board continues monitoring developments in the market
in order to adapt. The management team has wide-ranging
expertise in mineral exploration which, together with a flexible
cost structure, enable the Group to adapt its organisation to
changes in circumstances.
Funding risk
Although the Group has sufficient working capital for at least 12
months from the date of this report (see Going Concern Note
2.13 c) to the Financial Statements), the Group may not be able
to obtain additional financing as and when needed, which could
result in a delay or indefinite postponement of exploration and
development activities.
In common with many exploration and development entities,
the Group will need to raise further funds in order to progress
the Group from the development phase into construction,
and to build the mine at Khemisset in order to become cash-
generative. Although the Company has supportive shareholders
and has negotiated non-binding debt financing agreements with
a syndicate of banks, the completing of fundraising cannot be
guaranteed and therefore represents a risk.
Dependence on key personnel
The Company has a small management team, and the loss of a
key individual could have an adverse effect on the future of the
Group’s business. The Group’s future success will also depend
in a large part upon its ability to attract and retain highly skilled
personnel. There can be no assurance that the Group will be
successful in attracting and retaining such personnel.
The Group seeks to create a workplace that attracts, retains and
engages its workforce. Efforts are also made to attract new
talent and skilled people.
Environmental risk
There may also be unforeseen environmental liabilities resulting
from future or historic exploration or mining activities, which
may be costly to remedy. In addition, potential environmental
liabilities as a result of unfulfilled environmental obligations
by the previous owners may impact the Group. If the Group is
unable to fully remedy an environmental problem, it may be
required to stop or suspend operations or enter into interim
compliance measures pending completion of the required
remedy.
Environmental management systems are in place to mitigate
environmental hazard risks. The Group uses advisers with
specialist knowledge in mining and related environmental
management to reduce the impacts of environmental risk.
Estimates of mineral reserves and resources
Mineral resources are estimates and no assurance can be given
that any particular grade or tonnage will be realised or that
they will be converted into ore reserves or will ever qualify as a
commercially mineable (or viable) deposit which can be legally
and economically exploited. As a result of these uncertainties,
there can be no assurance that any potential mineral resources
defined by the Group’s exploration programmes will result in
profitable commercial mining operations.
The Directors are confident that the management team will
continue to be able to deal with the above issues as they arise.
Corporate Responsibility
We have defined the scope of our Group’s responsible business
practices as falling within the following key focus areas:
•
•
•
•
•
Health and Safety – ensuring the safety and well-being of
our staff
Environment – managing our environmental impact areas
of waste, energy and water
Employees – supporting our people to develop and flourish
within the business
Community – positive interaction with the communities in
which we operate
Ethical Standards – operating to the highest ethical
standards
We remain committed to ensuring these activities become
embedded in how we operate and contribute towards the
success of our business. This includes not only identifying and
managing business risk but exploring opportunities to add value
to the business.
Emmerson PLC | 10
In April 2024, the
Company raised
gross proceeds
of US$2.5 million
through a share
placing, including
with its largest
shareholder
Global Sustainable
Minerals Pte Ltd.
11 | Emmerson PLC
11 | Emmerson PLC
Corporate Governance
The statement on corporate governance can be found in the
corporate governance report below. The corporate governance
report forms part of this Directors report and is incorporated
into it by reference.
Financial risk management
The Group has exposure to the following risks from its use of
financial instruments:
• Liquidity risk
• Market price risk
•
• Foreign exchange risk
•
Credit risk
Interest rate risk: cash flow interest rate risk
Further details on the financial risks and suitable risk
management system put in place by the management are in
note 10.
Events after the reporting period
In April 2024, the Company raised gross proceeds of US$2.5
million through a share placing, including with its largest
shareholder Global Sustainable Minerals Pte Ltd. For further
details, see note 17 of the accounts.
Going concern
The financial statements have been prepared on a going
concern basis. The Group has not yet earned revenues and is
in the pre-construction phase of its business. The operations
of the Group are currently financed from funds raised from
shareholders and strategic investors. In common with many
pre-production entities, the Group will need to raise further
funds in order to progress the Group from the feasibility phase
into construction and eventually into production of revenues.
The Group had cash and cash equivalents of US$3.1 million at
30 April 2024 and the Directors are of the view this is sufficient
to fund the Group’s committed expenditure and maintain good
title to the exploration licences over the next 12 months from
the date of approval of these financial statements, without
raising funds in this period.
The Directors therefore have a reasonable expectation that
the Group has adequate resources to continue in operational
existence for the foreseeable future and believe the going
concern basis is appropriate for the preparation of the financial
statements.
Director appointments and resignations during the year
The Directors who held office during the year and to the date of this report were:
Hayden Locke
Robert Wrixon
Graham Clarke
James Kelly
Rupert Joy
There were no appointments or resignations during the year.
Directors’ interests
The Directors’ interest in the shares of the Company at the date of this report were:
James Kelly (Non-executive Chairman)
Graham Clarke
Hayden Locke1
Robert Wrixon2
Rupert Joy
Total
Number of
Ordinary Shares
% Issued
Ordinary Shares
1,416,406
1,399,861
9,274,660
46,233,411
544,371
58,868,709
0.12%
0.12%
0.81%
4.06%
0.05%
5.16%
Notes
1 Hayden Locke’s shares are held by Benson Capital Limited
2 Robert Wrixon’s interest is held through Good Spirit International Limited
Details of the Directors’ fees are given in note 4 to the financial statements.
Directors’ share options disclosures are in note 12.
Disclosure of Information to Auditors
Reappointment of auditor
So far as the Directors are aware, there is no relevant audit
The auditors, PKF Littlejohn LLP, have indicated their willingness
information of which the Company’s auditors are unaware,
to continue in office and a resolution seeking to reappoint them
and each Director has taken all the steps that he ought to
will be proposed at the Annual General Meeting.
have taken as a Director in order to make himself aware of any
relevant audit information and to establish that the Company’s
auditors are aware of that information.
This report was approved by the Board on 23 May 2024 and
signed on its behalf.
Graham Clarke
CHIEF EXECUTIVE OFFICER
Emmerson PLC | 12
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance
with applicable law and regulations and have elected to prepare the financial statements in accordance
with International Financial Reporting Standards (“IFRSs”), as adopted by the United Kingdom (UK).
The Financial Statements are required to give a true and fair
Each of the Directors confirm that, to the best of their
view of the state of affairs of the Group and of the profit or loss
knowledge:
of the Group for that year.
•
•
the financial statements, prepared in accordance with
International Financial Reporting Standards as adopted by
the UK, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Group;
the Directors’ report includes a fair review of the
development and performance of the business and the
position of the Group, together with a description of the
principal risks and uncertainties that they face.
By Order of the Board 23 May 2024
Graham Clarke
CHIEF EXECUTIVE OFFICER
In preparing these Financial Statements, the Directors are
required to:
•
•
•
•
select suitable accounting policies and then apply them
consistently;
make judgements and accounting estimates that are
reasonable and prudent;
state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group will
continue in business.
The Directors are responsible for keeping proper accounting
records that are sufficient to show and explain the Group’s
transactions and disclose with reasonable accuracy at any time
its financial position. They have general responsibility for taking
such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website; the work carried out by the auditors does
not involve the consideration of these matters and, accordingly,
the auditors accept no responsibility for any changes that
may have occurred in the accounts since they were initially
presented on the website. Legislation governing the preparation
and dissemination of financial statements may differ from one
jurisdiction to another.
13 | Emmerson PLC
13 | Emmerson PLC
CORPORATE GOVERNANCE REPORT
Introduction from the Chairman
The Board is committed to good corporate governance and, so
far as appropriate, given the Group’s size and the constitution
•
Seek to understand and meet shareholder needs and
expectations
of the Board, intends to comply with the QCA Guidelines on
Corporate Governance (“QCA Guidelines”). The Board believes
this to be the most appropriate recognised governance code for
the Group.
This is a practical, outcome-oriented approach to corporate
governance that is tailored for small and mid-size quoted
companies in the UK and which provides the Group with the
framework to help ensure that a strong level of governance is
maintained.
As Chairman, I am responsible for leading an effective board,
fostering a good corporate governance culture, maintaining
open communications with the shareholders and ensuring
appropriate strategic focus and direction for the Group.
Notwithstanding the Board’s commitment to applying the QCA
Code, we will not seek to comply with the QCA Code where
strict compliance in the future would be contrary to the primary
objective of delivering long-term value for the Company’s
shareholders and stakeholders.
However, we do consider that following the QCA Code,
and a framework of sound corporate governance and an
ethical culture, is conducive to long-term value creation for
shareholders. All members of the Board believe strongly in
the importance of good corporate governance to assist in
achieving objectives and in accountability to stakeholders. In
the statements that follow, the Board explains its approach to
governance in more detail.
•
Establish a strategy and business model which promote
long-term value for shareholders
Emmerson’s sole current activity is development of
the Khemisset potash project in Morocco. The project
has a large JORC Resource Estimate (2012) of 537Mt
@ 9.24% K20 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. The Feasibility Study completed in
2020 indicated that the project has a 19-year mine life and
a net present value in excess of US$1.4 billion. In early
2024, an updated set of financial estimates, incorporating
a new processing route known as KMP, showed a revised
net present value of US$2.2 billion. Building and operating
the Khemisset project is therefore expected to deliver
considerable value over the long term.
The Company is committed to engaging and
communicating openly with its shareholders to ensure that
its strategy, business model and performance are clearly
understood. All Board members have responsibility for
shareholder liaison, but queries are primarily delegated
to the Company’s advisors in the first instance or the
Company’s CEO. Contact details for the Company’s
advisors are available on the Company’s website.
Copies of the annual reports are sent to all shareholders
and can be downloaded from the Company website
https://www.emmersonplc.com. Alternatively, they are
available on request by writing to the Company Secretary at
55 Athol St, Douglas, Isle of Man, IM1 1LA. Other Company
information for shareholders is also available on the
website.
The Company also engages with shareholders at its AGM
each year, which gives investors the opportunity to enter
into dialogue with the Board and for the Board to receive
feedback and take action if and when necessary. The
results of the AGM are subsequently announced via RNS
and published on the Company’s website.
•
Take into account wider stakeholder and social
responsibilities and their implications for long-term
success
The Board is aware that engaging with its stakeholders
is key and ultimately promotes the long -term success
of Emmerson PLC. The Group’s stakeholders include
shareholders, members of staff of investee companies and
of advisors and other service providers, suppliers, auditors,
lenders, regulators, industry bodies, and the surrounding
communities where its investments are located.
The Board as a whole is responsible for reviewing and
monitoring the parties contracted to the Company, including
their service terms and conditions. The audit committee
supports Board decisions by considering and monitoring
the risks to the Company.
The Board is regularly updated on wider stakeholder
views and issues concerning the existing projects both
formally at Board meetings and informally through ad hoc
updates. The Board recognises the importance of its social
responsibilities concerning its investment decisions. The
Company is committed to continuing engagement with all
stakeholders.
Emmerson PLC | 14
•
Embed effective risk management, considering both
opportunities and threats, throughout the organisation
Directors receive accurate, timely and clear information.
In doing so, this fosters a positive corporate governance
The Directors are responsible for maintaining the
Company’s systems of controls and risk management in
order to safeguard its assets.
Risk is monitored and assessed by the Board, who meet at
least quarterly, and the audit committee, who meet at least
twice annually and are responsible for ensuring that the
financial performance of the Group is properly monitored
and reported. This process includes reviews of annual and
interim accounts, results announcements, internal control
systems, procedures and accounting policies.
The senior management team (“Executive Committee”)
meet on a regular basis to consider new risks
and opportunities presented to the Group, making
recommendations to the Board as appropriate.
The Board receives guidance from FIM Capital Limited,
the administrator and Company Secretary to the Group,
covering updates to relevant legislation and rules to ensure
they remain fully informed and able to make informed
decisions.
culture throughout the Group.
The Chief Executive Officer is responsible for managing the
Group’s business and operations within the parameters set
by the Board.
The Non-Executive Directors are responsible for
bringing independent judgement to the discussions
held by the Board, using their breadth of experience and
understanding of the business. Their key responsibilities
are to constructively challenge and contribute to strategic
proposals, and to monitor performance, resources, and
standards of conduct, compliance and control, whilst
providing support to executive management in developing
the Group.
The Board is satisfied that it has a suitable balance between
independence and knowledge of the business to allow it to
discharge its duties and responsibilities effectively.
The Board holds at least four meetings each year with
further ad hoc meetings held as required. The Directors
devote sufficient time to ensure the Group’s affairs are
managed as efficiently as possible.
•
Maintain the Board as a well-functioning, balanced team
led by the Chair
Board Attendance During the Year
The Board consists of one executive Director and four non-
executive Directors. Details of each Director are given in a
later section of this report.
The Chairman is responsible for leading the Board, ensuring
its effectiveness in all aspects of its role, promoting a
culture of openness of debate and communicating with
the Group’s members on behalf of the Board by facilitating
the effective contribution of Non-Executive Directors and
ensuring constructive relations between Executive and
Non-Executive Directors. The Chairman also ensures that
The number of formal scheduled Board meetings held and
attended by Directors during the year were as follows:
James Kelly
Hayden Locke
Robert Wrixon
Graham Clarke
Rupert Joy
7/7
5/7
7/7
7/7
7/7
15 | Emmerson PLC
15 | Emmerson PLC
•
Ensure that between them the Directors have the
necessary up-to-date experience, skills and capabilities
•
Maintain governance structures and processes that are
fit for purpose and support good decision-making by the
The Directors have extensive experience in the mining
board.
industry and a strong track record of value creation. It is
A description of each Board member and their experience are
a proven Board and management team, and it believes it
displayed on the website at https://www.emmersonplc.com.
has the correct balance of skills, reflecting a broad range
of commercial and professional skills across geographies
and industries that is necessary to ensure the Group is
equipped to deliver its investment objective. Additionally,
each Director has experience in public markets. Information
about each Director’s experience is given on page 18.
•
Evaluate Board performance based on clear and relevant
objectives, seeking continuous improvement
All Board appointments have been made after consultation
and detailed due diligence is carried out on all new potential
board candidates. The Board will consider using external
advisers to review and evaluate the effectiveness of the
Board and Directors in the future to supplement its own
internal evaluation processes.
The Group’s Rules require that all Directors are submitted
for election at the AGM following their first appointment to
the Board and at least one third of the Directors are subject
to retirement by rotation on an annual basis to refresh the
Board, irrespective of performance.
•
Promote a corporate culture that is based on ethical values
and behaviours
The Board is mindful that the tone and culture set by the
Board will impact many aspects of the Group and the way
that stakeholders behave and form views.
The Board has adopted a Bribery and Corruption Policy
consistent with the requirements of the UK Bribery Act 2010
and the Isle of Man Bribery Act 2013. Compliance with the
policy will be regularly reviewed at Board meetings.
The Board of Directors is responsible for the determination
of the investment decisions of the Company and for its
overall supervision via the investment policy and objectives
that it has set out. The Board is also responsible for the
Company’s day-to-day operations. In order to fulfil all their
obligations, the Board has delegated some responsibilities
through arrangements with the Investment Adviser and
Administrator.
There is no nomination committee separate to the full
Board. The role of the nomination committee is undertaken
by the full Board.
The Board intends to meet formally at least four times each
year. At each Board meeting the financial performance of
the Company and all other significant matters are reviewed
so as to ensure the Directors maintain overall control and
supervision of the Company’s affairs. The Board receives
investment reports from the Asset Manager and Valuation
and Portfolio Services Adviser and Committees.
The Board maintains regular contact with all its service
providers and are kept fully informed of investment and
financial controls and any other matters that should be
brought to the attention of the Directors. The Directors also
have access where necessary to independent professional
advice at the expense of the Company.
The Chairman is responsible for leading an effective board,
fostering a good corporate governance culture, maintaining
open communications with the major shareholders and
ensuring appropriate strategic focus and direction.
The Chief Executive Officer has overall responsibility for
managing the day-to-day operations of the Company and
the Board as a whole is responsible for implementing the
Company’s strategy.
Emmerson PLC | 16
Emmerson PLC | 16
Committees
Nomination Committee
Audit Committee
The Audit Committee is a sub-committee of the Board, currently
consisting of James Kelly, Robert Wrixon and Rupert Joy. The
Audit Committee meets at least twice a year to review the
following, where relevant, with the executive Directors and
external auditors of the Group:
•
•
•
•
•
The audit plans and results of the external auditors’
examination and evaluation of the Group’s systems of
internal accounting controls;
The Group’s financial and operating results and accounting
policies;
The financial statements of the Group before their
submission to the Directors and external auditors’ report on
those financial statements;
The quarterly, half-yearly and annual announcements
as well as the related press releases on the results and
financial position of the Group;
The co-operation and assistance given by the management
to the Group’s external auditors; and
The Company has not established a nomination committee as it
is satisfied nominations can be considered by the Board.
•
Communicate how the Group is governed and is
performing by maintaining a dialogue with shareholders
and other relevant stakeholders
The Board welcomes the views of all stakeholders who
can contact the Directors or Company Secretary with any
queries they may have. The Executive Director and advisers
regularly engage with shareholders.
The Board recognises the importance of maintaining strong
relationships with shareholders, so we understand their
views and are aware of their issues and concerns.
The management team continues to have close dialogue
with local landowners and ensure any concerns are
addressed. The management team has also met with a
number of senior officials of the Moroccan government,
with whom the Khemisset project has been discussed in
detail.
The Company communicates with shareholders and other
stakeholders through the Annual Report and Accounts, full-
year and half-year announcements, news announcements,
the Annual General Meeting, and website.
•
The re-appointment of the external auditors of the Group.
Historical information is available on the website. The
Following a review of the qualification, expertise and resources,
effectiveness and independence of the external auditors, the
Audit Committee recommended to the Board that they be
Group’s financial reports and Notices of General Meetings
can also be found here https://www.emmersonplc.com/
investors/corporate-documents/.
reappointed.
On behalf of the Board
Remuneration Committee
The Remuneration Committee, currently consisting of Rupert
Joy, James Kelly and Hayden Locke, is a sub-committee of
the Board and aims to meet at least twice each year. The
salaries, remuneration and other financial benefits of the key
management and members of the Board of Directors are
determined by the Remuneration Committee having regard to
the performance of individuals and market trends. During 2023,
the Remuneration Committee met once in order to consider
a range of issues, including remuneration policy and annual
incentives for the year 2023.
James Kelly
NON-EXECUTIVE CHAIRMAN
23 May 2024
17 | Emmerson PLC
BOARD OF DIRECTORS
James Kelly
(Independent
Non-executive Chairman)
Rupert Joy
(Independent
Non-Executive Director)
James Kelly has over 20 years’ experience in the mining
In a diplomatic career of more than 25 years, Rupert Joy served
and natural resource industry, with extensive experience in
at UK diplomatic missions in Yemen, Saudi Arabia, Morocco
corporate finance, strategy and capital allocation. James is the
and Iraq, and as British Ambassador to Uzbekistan. He has
founder of Trident Royalties plc, a growth focused, diversified
over seven years’ experience as a diplomat in Morocco, as
mining royalty and streaming company. Prior to founding
Deputy British Ambassador from 2000-03 and EU Ambassador
Trident, James was a senior member of the Xstrata Plc group
from 2013-17. As EU Ambassador, he worked to build on
business development team and following the merger with
Europe’s multi-faceted strategic partnership with Morocco at
Glencore Plc, was part of the team which founded Greenstone
a senior level in a wide range of areas, with a strong focus on
Resources LP, a mining private equity fund focused on post-
sustainable development. Rupert has worked as an independent
exploration development assets. James served as an Executive
consultant in recent years, focusing on North Africa. He studied
Director of ASX listed Cradle Resources Limited from May 2016
at New College, Oxford and speaks French and Arabic.
to July 2017 having been appointed a Non-Executive Director in
February 2016. James is a Fellow of the Institute of Chartered
Accountants of England and Wales and holds a BA (Hons) from
University College London.
Robert Wrixon
(Non-executive Director)
Graham Clarke
(CEO and Director)
An original founder of Moroccan Salts Limited, Rob has over 25
Graham is a highly experienced potash mining executive
years’ commercial experience, primarily in the mining sector,
with extensive experience managing large multi-disciplinary
including five years with Xstrata in both marketing and strategy
teams for underground fertiliser mines. During his 26 years
roles, and as MD and CEO of two ASX listed mineral exploration
at Cleveland Potash, which owned the Boulby Potash Mine
companies. He is a director and founding partner of Starboard
in Yorkshire, Graham held multiple positions from Graduate
Global Limited, a natural resource PE group and holds a PhD in
Trainee through to Director of Mining and, finally, as Managing
mineral engineering from the University of California, Berkeley.
Director of ICL UK (the owner of Cleveland Potash) with full
operational responsibility. From 2011 until early 2020, Graham
was a key member of the senior executive team at Sirius
Minerals, overseeing all technical aspects of the development
of the Woodsmith Mine, moving it successfully from concept,
through various phases of study and design, into construction.
Hayden Locke
(Non-executive Director)
A mining executive with 20 years’ experience in mining, private
equity and investment banking. He is currently the CEO of
Marimaca Copper Corp a TSX-listed copper company. Prior
to this, he was Head of Corporate and Technical Services
(Geology, Mining and Processing) at ASX-listed potash
developer Highfield Resources, and before that Head of
Corporate for ASX-listed Papillon Resources which was sold
to B2Gold in 2014 for approximately US$600 million. Hayden
studied engineering, commerce and geology.
Emmerson PLC | 18
Emmerson PLC | 18
•
•
•
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF EMMERSON PLC FOR THE YEAR ENDED 31 DECEMBER 2023
Opinion
We have audited the group financial statements of Emmerson
PLC (the ‘Group’) for the year ended 31 December 2023 which
comprise the Consolidated Statement of Comprehensive
•
•
Checking the mathematical accuracy of the calculations
used to model future financial performance;
Evaluating the assumptions regarding the use of funds to
develop the Khemisset project and the ability to restrict
Income, the Consolidated Statement of Financial Position, the
capital expenditure, if required, in order to protect the cash
Consolidated Statement of Changes in Equity, the Consolidated
position of the Group; and
Statement of Cash Flows and notes to the financial statements,
including significant accounting policies. The financial
reporting framework that has been applied in their preparation
is applicable law and UK-adopted international accounting
standards.
In our opinion, the Group financial statements:
give a true and fair view of the state of the Group’s affairs
as at 31 December 2023 and of the Group’s loss for the year
then ended;
•
Assessing whether management has adequately disclosed
the conditions which may cast significant doubt on the
ability of the Group to continue as a going concern.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group’s ability to continue as a going concern for a period of
at least twelve months from when the financial statements are
authorised for issue.
have been properly prepared in accordance with UK-adopted
international accounting standards; and
Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections
have been prepared in accordance with the requirements of
the Isle of Man Companies Act 2006.
of this report.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of
the group in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Conclusions relating to going concern
Our application of materiality
The scope of our audit was influenced by our application of
materiality. The quantitative and qualitative thresholds for
materiality determine the scope of our audit and the nature,
timing and extent of our audit procedures. The materiality
applied to the group financial statements was US$400,000
(2022: US$400,000), based on 2% of gross assets (capped at
US$400,000 in order to obtain sufficient coverage of exploration
expenditure), as we believe assets to be the main driver of the
business whilst the group is in the exploration stage and no
revenues are currently being generated. We also determine a
level of performance materiality which we use to assess the
extent of testing needed to reduce to an appropriate level the
probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality or the financial statements
as a whole. The performance materiality was $240,000 (2022:
US$240,000) to reflect the risk associated with the judgemental
and key areas of management estimation in the financial
statements. For each component in the scope of our group
In auditing the financial statements, we have concluded that
audit, we allocated a materiality that was less than our overall
the Director’s use of the going concern basis of accounting in
group materiality.
We agreed with the audit committee that we would report to the
committee all differences identified during the course of our
audit in excess of $20,000 (2022: US$20,000).
the preparation of the financial statements is appropriate. Our
evaluation of the Directors’ assessment of the Group’s ability
to continue to adopt the going concern basis of accounting
included:
•
Confirming the Group’s cash position at the date of approval
of the financial statements and amounts not yet drawn
under financing facilities;
19 | Emmerson PLC
Our approach to the audit
In designing our audit, we determined materiality and assessed
This, in conjunction with additional procedures performed,
the risk of material misstatement in the financial statements. In
gave us appropriate evidence for our opinion on the financial
particular, we looked at areas involving significant accounting
statements.
estimates such as the carrying value of intangible assets, share-
based payments and judgements made by the directors and
considered future events that are inherently uncertain. We also
addressed the risk of management override of internal controls,
including among other matters consideration of whether
there was evidence of bias that represented a risk of material
misstatement due to fraud.
There were two significant components identified; the parent
company and the MSL group which holds the Khemisset
project. The parent company was subject to a full scope audit
conducted directly by the group audit team. The MSL sub-group
is located in Morocco and was audited by a component auditor
under our instruction. The Engagement Partner and group
audit team interacted with the component audit team during
all stages of the audit and were responsible for the scope and
direction of the audit process.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in
the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Emmerson PLC | 20
Key Audit Matter
How the scope of our audit responded to the key
audit matter
Carrying value and recoverability of intangible assets
(refer to note 7)
The Group has reported intangible assets of $20,457k in its
We reviewed and evaluated the impairment assessment
Statement of Financial Position as at 31 December 2023
prepared by management in relation to the Khemisset project.
(2022: $18,607k) which comprise exploration and evaluation
assets related to the Khemisset Project.
The estimation of recoverable amount of the intangible
Our procedures included an assessment of the exploration and
evaluation project with reference to the criteria listed within
International Financial Reporting Standard (IFRS) 6, to include
assets is subjective due to the inherent uncertainty involved
whether:
in estimating future cash flows, considering the current stage
of the project as it progresses towards commencement of
construction. There is therefore a risk that the carrying value
of the intangible asset is overstated and an impairment charge
is required. Given the level of management judgement and
estimation required, we have considered this to be a key audit
matter.
•
•
•
•
the Group holds good title to the key project licences;
progress on the project towards construction has been
achieved during the year and subsequent to the year-end;
exploration and evaluation work to date indicates that the
carrying amount is unlikely to be recovered from further
development or sale; and
substantive expenditure on further exploration and
evaluation is not budgeted or planned.
We obtained and reviewed the independently prepared reports
commissioned in connection with the progression of the
project towards bankable feasibility stage including but not
limited to the feasibility study and competent persons report.
We also assessed the qualifications and independence of the
firms and individuals who prepared those reports. In addition,
we assessed and challenged management’s impairment
assessment memorandum.
We tested directly, and reviewed the working papers prepared by
the component auditor, in respect of the capitalised additions
in the year for eligibility in accordance with IFRS 6. We also
reviewed the work performed by the component auditor in
respect of assessing compliance with the terms and conditions
contained in the exploration licenses.
We reviewed the disclosures surrounding intangible assets and
related judgements to ensure compliance with the requirements
of IFRS.
The Directors’ judgements in their assessment of recoverability
were concluded as reasonable and we are satisfied that
there are no indicators of impairment to the carrying value of
intangible assets as at 31 December 2023.
Other information
The other information comprises the information included
statements or our knowledge obtained in the course of the
in the annual report, other than the financial statements and
audit, or otherwise appears to be materially misstated. If we
our auditor’s report thereon. The directors are responsible
identify such material inconsistencies or apparent material
for the other information contained within the annual report.
Our opinion on the group financial statements does not cover
the other information and, except to the extent otherwise
misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we
explicitly stated in our report, we do not express any form of
conclude that there is a material misstatement of this other
assurance conclusion thereon. Our responsibility is to read
information, we are required to report that fact.
the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial
We have nothing to report in this regard.
21 | Emmerson PLC
Responsibilities of Directors
As explained more fully in the Statement of Directors’
Responsibilities, the directors are responsible for the
preparation of the group financial statements and for being
satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group financial statements, the directors are
responsible for assessing the group’s ability to continue as a
going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial
statements
•
We also identified the risks of material misstatement of
the financial statements due to fraud. We considered,
in addition to the non-rebuttable presumption of a risk
of fraud arising from management override of controls,
whether key accounting estimates and judgements made
by management when auditing significant accounting
estimates. We address these risks by challenging the
assumptions and judgements made by management when
auditing significant accounting estimates, comprising the
impairment assessment of intangible assets.
•
We addressed the risk of fraud arising from management
override of controls by performing audit procedures which
included, but were not limited to: the testing of journals
and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course
of business, as well as discussions with management and
component auditor.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
Our objectives are to obtain reasonable assurance about
to a material misstatement in the financial statements or non-
whether the financial statements as a whole are free from
compliance with regulation. This risk increases the more that
material misstatement, whether due to fraud or error, and to
compliance with a law or regulation is removed from the events
issue an auditor’s report that includes our opinion. Reasonable
and transactions reflected in the financial statements, as we will
assurance is a high level of assurance but is not a guarantee
be less likely to become aware of instances of non-compliance.
that an audit conducted in accordance with ISAs (UK) will
The risk is also greater regarding irregularities occurring
always detect a material misstatement when it exists.
due to fraud rather than error, as fraud involves intentional
Misstatements can arise from fraud or error and are considered
concealment, forgery, collusion, omission or misrepresentation.
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities.
Irregularities, including fraud, are instances of non-compliance
This description forms part of our auditor’s report.
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
•
We obtained an understanding of the group and the sector
in which they operate to identify laws and regulations that
could reasonably be expected to have a direct effect on
the financial statements. We obtained our understanding
in this regard through industry research, application of our
cumulative audit knowledge and experience of the sector.
•
We determined the principal laws and regulations relevant
to the group in this regard to be those arising from the
UK-adopted international accounting standards, AIM Rules
for Companies and the terms set out in the mining and
exploration licenses.
•
We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-
compliance by the group with those laws and regulations.
These procedures included, but were not limited to specific
enquiries of management, reviewing board minutes and any
legal or regulatory compliance correspondence.
Use of our report
This report is made solely to the company’s members, as a
body, in accordance with our engagement letter. Our audit work
has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company’s members
as a body, for our audit work, for this report, or for the opinions
we have formed.
Imogen Massey (Engagement Partner)
For and on behalf of PKF Littlejohn LLP
Registered Auditor
15 Westferry Circus
Canary Wharf
London E14 4HD
23 May 2024
Emmerson PLC | 22
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Continuing operations
Administrative expenses
Share-based payment expense
Net foreign exchange gain/(loss)
Operating loss
Finance cost
Loss before tax
Income tax
Loss for the year attributable to equity owners
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Exchange gain/(loss) on translating foreign operations
Total comprehensive loss attributable to equity owners
Note
3
12
5
2023
US$’000
2022
US$’000
(2,664)
(335)
18
(2,981)
(11)
(2,992)
-
(2,992)
(2,581)
(256)
(356)
(3,193)
-
(3,193)
(5)
(3,198)
117
(2,875)
(45)
(3,243)
Earnings per share (cents)
Basic and diluted
6
(0.29)
(0.34)
23 | Emmerson PLC
The notes on pages 27 to 39 are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
Non-current assets
Intangible assets
Property, plant and equipment
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Trade and other payables
Total current liabilities
Net assets
Shareholders equity attributable to equity owners
Share capital
Share-based payment reserve
Reverse acquisition reserve
Retained earnings
Translation reserve
Total equity
Note
2023
US$’000
2022
US$’000
7
8
9
11
12
20,457
31
20,488
1,080
1,937
3,017
18,607
43
18,650
1,181
6,670
7,851
23,505
26,501
(346)
(346)
(1,032)
(1,032)
23,159
25,469
34,958
1,633
2,234
(15,451)
(215)
23,159
34,733
2,470
2,234
(13,636)
(332)
25,469
These financial statements were approved by the Board on 23 May 2024 and signed on their behalf by
Graham Clarke
DIRECTOR
The notes on pages 27 to 39 are an integral part of these consolidated financial statements.
Emmerson PLC | 24
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
US$’000
Share
Share-based
Reverse
Retained Translation
Capital
payment
Acquisition
earnings
reserve
Total
equity
reserve
reserve
Balance at 1 January 2022
28,993
2,113
2,234
(10,489)
(287)
Loss for the year
Other comprehensive income:
FX loss translating foreign operations
Total comprehensive loss
Fair value of share options
Shares issued to settle obligations
Shares issued for cash
Cost of issuing shares - cash
Cost of issuing shares – warrants
Options/warrants exercised for cash
Options exercised cashless
Transfer for options expired in 2021
-
-
-
-
25
6,106
(267)
(283)
28
131
-
Balance at 31 December 2022
34,733
Loss for the year
Other comprehensive income:
FX gain translating foreign operations
Total comprehensive loss
Fair value of share options
-
-
-
-
Options/warrants exercised for cash
225
Options exercised cashless
Warrants expired
Net adjustment for options cancelled
-
-
-
Balance at 31 December 2023
34,958
-
-
-
256
-
-
-
283
-
(131)
(51)
2,470
-
-
-
335
(62)
(187)
(930)
7
1,633
-
-
-
-
-
-
-
-
-
-
-
(3,198)
-
-
(3,198)
(45)
(45)
-
-
-
-
-
-
-
51
-
-
-
-
-
-
-
-
2,234
(13,636)
(332)
(2,992)
-
22,564
(3,198)
(45)
(3,243)
256
25
6,106
(267)
-
28
-
-
25,469
(2,992)
-
-
-
-
-
-
-
-
-
(2,992)
117
117
117
(2,875)
-
60
187
930
-
-
-
-
-
-
335
223
-
-
7
2,234
(15,451)
(215)
23,159
The nature of the share-based payment and reverse acquisition reserves are described in note 12.
25 | Emmerson PLC
The notes on pages 27 to 39 are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flows from operating activities
Loss before tax
Adjustments
Foreign exchange
Taxation
Share-based payment – fair value of options
Directors’ remuneration settled in shares
Depreciation
Changes in working capital
Decrease/(increase) in trade and other receivables
Decrease in trade and other payables
Net cash flows used in operating activities
Cash flows from investing activities
Exploration expenditure
Purchase of property, plant and equipment
Note
2023
US$’000
2022
US$’000
(2,992)
(3,193)
5
12
12
3
7
18
-
335
-
19
101
(719)
(3,238)
(1,726)
(7)
(205)
(5)
256
25
(2)
(410)
(803)
(4,337)
(5,052)
-
Net cash flow used in investing activities
(1,733)
(5,052)
Cash flows from financing activities
Proceeds from issuing shares
Cost of issuing shares
Proceeds from exercise of share options and warrants
11
Net cash flow generated from financing activities
Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Foreign exchange on cash and cash equivalents
Cash and cash equivalents at end of year
-
-
225
225
(4,746)
6,670
13
1,937
6,106
(267)
28
5,867
(3,522)
10,032
160
6,670
Significant non-cash transactions in respect of share issues are disclosed within note 12.
The notes on pages 27 to 39 are an integral part of these consolidated financial statements.
Emmerson PLC | 26
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1. General information
2.3. Basis of consolidation
Emmerson PLC (the “Company”) is a company incorporated
The Consolidated Financial Statements comprise the financial
and domiciled in the Isle of Man, whose shares were admitted
statements of the Company and its subsidiaries.
to the Standard Listing segment of the Main market of the
London Stock Exchange on 15 February 2017. On 27 April
2021, the Ordinary Shares of the Company were admitted to
trading on AIM and the listing of the Company’s ordinary shares
on the Official List and their trading on the Main Market were
cancelled.
The principal activity of the Group is the exploration,
development and exploitation of the Khemisset potash project
in Morocco.
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 (“IFRS”). The financial statements have
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
been prepared under the historical cost convention except
The Group re-assesses whether or not it controls an investee if
for the revaluation of certain financial instruments that are
facts and circumstances indicate that there are changes to one
measured at fair value.
2.2. Functional and presentational currency
The financial information of the Group is presented in US
dollars. The functional currency of the Company changed
on 1 January 2022 from GBP to US$, reflecting the stage in
development of activities whereby the cost base of the Group
changed from GBP to US$. The effect of a change in functional
currency was accounted for prospectively. All items were
translated into the new functional currency using the exchange
rate at the date of the change.
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
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.
(functional currency), these being US dollar and Moroccan
2.4. Going concern
Dirhams.
The financial statements have been prepared on a going
concern basis. The Group has not yet earned revenues and is
in the pre-construction phase of its business. The operations
of the Group are currently financed from funds raised from
shareholders and strategic investors. In common with many
pre-production entities, the Group will need to raise further
funds in order to progress the Group from the feasibility phase
into construction and eventually into production of revenues.
27 | Emmerson PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The Group had cash and cash equivalents of US$3.1 million at
those of segments operating in other economic environments.
30 April 2024 and the Directors are of the view this is sufficient
to fund the Group’s non-discretionary expenditure and maintain
good title to the exploration licences over the next 12 months
from the date of approval of these financial statements. The
Company will continue to work on advancing the Khemisset
project and to commence construction as soon as practicable,
however the timing of these activities will be dependent on
The Directors are of the opinion that the Group is engaged
in a single segment of business being the exploration and
development of potash in one geographical area, being
Morocco.
availability of funds.
2.7. Financial instruments
The Directors have a reasonable expectation that the Group
has adequate resources to continue in operational existence
A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
for the foreseeable future. Thus, they continue to adopt the
instrument of another.
going concern basis of accounting in preparing the financial
statements.
(a) Financial assets
Initial recognition and measurement
2.5. Changes in accounting policies
Standards, interpretations and amendments to published
standards effective from 1 January 2023
There were no new standards or interpretations effective and
adopted for the first time for the year beginning on or after 1
January 2023 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 1: Classification of current or non-
current liabilities (effective 1 January 2024);
Amendments to IAS 1: Presentation of Financial
Statements – Non-current liabilities with covenants
(effective 1 January 2024).
The effect of these new and amended standards and
interpretations, which are in issue but not yet mandatorily
effective, is 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
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
Emmerson PLC | 28
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Financial assets at amortised cost (debt instruments)
Impairment of financial assets
This category is the most relevant to the Group. The Group
The Group recognises an allowance for expected credit
measures financial assets at amortised cost if both of the
losses (“ECLs”) for all debt instruments not held at fair value
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
through the 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.
principal and interest on the principal amount outstanding.
The Group considers a financial asset in default when
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
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
include trade receivables (not subject to provisional pricing) and
expectation of recovering the contractual cash flows 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.
29 | Emmerson PLC
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, loans and
borrowings, payables, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate. All financial
liabilities are recognised initially at fair value and, in the case of
loans and borrowings and payables, 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 fair value through profit or loss
Financial liabilities at fair value through profit or loss include
financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through
profit or loss. Financial liabilities are classified as held for
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
trading if they are incurred for the purpose of repurchasing in
2.8. Taxation
the near term. This category also includes derivative financial
instruments entered into by the Group that are not designated
as hedging instruments in hedge relationships as defined by
IFRS 9. Separated embedded derivatives are also classified as
held for trading unless they are designated as effective hedging
instruments. Gains or losses on liabilities held for trading
are recognised in the statement of profit or loss and other
comprehensive income.
•
Financial liabilities at amortised cost
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
After initial recognition, interest-bearing loans and borrowings
are recognised only to the extent that it is probable that future
and trade and other payables are subsequently measured
taxable profit will be available against which the temporary
at amortised cost using the EIR method. Gains and losses
differences can be utilised.
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
2.9. Intangible assets – exploration and evaluation
expenditure
Exploration expenditure comprises all costs which are directly
attributable to the exploration of a project area.
comprehensive income. This category generally applies to trade
When it has been established that a mineral deposit has
and other payables.
Derecognition
A financial liability is derecognised when the associated
obligation is discharged or cancelled or expires.
development potential, 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,
When an existing financial liability is replaced by another from
and are depreciated over the expected life of the mineral
the same lender on substantially different terms, or the terms of
reserves on a unit of production basis. Other pre-trading
an existing liability are substantially modified, such an exchange
expenses are written off as incurred.
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.
(c) Financial liabilities
Liabilities within the scope of IFRS 9 are classified as financial
liabilities at fair value through profit and loss or other liabilities,
as appropriate.
A financial liability is derecognised when the obligation under
the liability is discharged or cancelled or expires.
Financial liabilities included in trade and other payables are
recognised initially at fair value and subsequently at amortised
cost.
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 not 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.
Emmerson PLC | 30
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.10.
Cash and cash equivalents
When options are exercised, the Company issues new
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.
2.11.
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
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.
2.13.
Critical accounting estimates and judgements
translated into US dollars at the rate of exchange ruling at the
The preparation of financial statements in conformity with IFRS
date of the transaction. Exchange differences are taken into
requires the use of certain critical accounting estimates. It also
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.
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
2.12.
Share-based payment arrangements
impaired.
The Group operates equity-settled, share-based compensation
IFRS 6 requires entities recognising exploration and evaluation
plans, under which the entity receives services from employees
assets to perform an impairment test on those assets when
as consideration for equity instruments (options) of the Group.
specific facts and circumstances indicate an impairment test is
The fair value of employee services received in exchange for
required. The assessment involves judgement as to the status
the grant of share options are recognised as an expense. The
of licenses and the likelihood of renewal of exploration licenses
total expense to be apportioned over the vesting period is
which expire in the near future. Where impairment indicators are
determined by reference to the fair value of the options granted:
present, the Group is required to evaluate the future cash flows
•
•
•
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.
31 | Emmerson PLC
expected to arise from the cash-generating unit and the suitable
discount rate in order to calculate the present value.
The carrying value of Group’s exploration and evaluation
intangible assets at 31 December 2023 was US$20.5 million
(2022: US$18.6 million), which relates to the Khemisset project.
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
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
•
Sufficient data exists to indicate that the book value
will not be fully recovered from future development and
There was a charge to the Statement of Comprehensive Income
during the year in relation to share based payments of US$335k
production.
(2022: US$256k).
The Board has reviewed the project for indicators of impairment
and is satisfied that the prospects of deriving economic value
are likely to be considerably in excess of the carrying value of
the asset in the accounts.
In arriving at this conclusion, the Directors considered the
ongoing commitment to the project, the economic metrics of
the project as set out in the 2020 Feasibility Study, as well as
the valuation enhancements indicated by the scoping study
announced in February 2024 in relation to the new processing
route.
Following their assessment, the Directors concluded that
no impairment charge was necessary for the year ended 31
December 2023.
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 12.
c) Going concern
In their assessment of going concern, the Directors have
prepared cash flow forecast showing the Group’s non-
discretionary expenditure obligations, as well as discretionary
activities.
The Group has sufficient cash reserves to cover non-
discretionary expenditure beyond the Going Concern horizon of
at least 12 months from the date of this report, and accordingly
the Board believe the Going Concern basis to be appropriate for
the preparation of the 2023 Financial Statements.
d) VAT recoverable in Morocco
Included in Trade and Other Receivables is a balance of 9.1
million MAD (US$0.9 million) relating to VAT on exploration
and other development expenditure. Although there is no time
limit on eligibility for reclaiming VAT, this amount will not be
recoverable until the Khemisset project is revenue-generating.
The Board is of the view that the Khemisset project will be
constructed and will generate more than sufficient revenues to
allow this balance to be recovered in full.
3.
Expenses by nature
Directors’ fees (note 4)
Depreciation
Travel and accommodation
Auditor’s remuneration
Employment costs
Professional and consultancy fees
Other costs
Administrative expenses
2023
US$’000
2022
US$’000
581
19
30
51
837
776
370
601
-
99
48
627
715
491
2,664
2,581
Emmerson PLC | 32
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
4. Directors’ remuneration
Details of Directors’ remuneration during the year are as follows:
Graham Clarke
James Kelly
Rupert Joy
Hayden Locke
Robert Wrixon
Total
2023
US$’000
2022
US$’000
332
99
50
50
50
581
348
117
55
35
46
601
Robert Wrixon (and, in 2022, Hayden Locke) also received fees for consultancy services which are disclosed within note 15.
During 2022, certain Directors received share options and shares as part of their remuneration (see note 12).
5.
Income tax
Current tax:
Tax
Total taxation charge
Reconciliation of income tax
Loss before tax
2023
US$’000
2022
US$’000
-
-
(5)
(5)
2023
US$’000
2022
US$’000
(2,992)
(3,193)
Loss before tax multiplied by domestic tax rates applicable to losses in the respective countries
(573)
(531)
Effects of:
IFRS consolidation adjustments
Disallowed expenditures
Tax losses used up
Foreign tax attributes
Minimum tax charges
Losses on which no deferred tax is recognised
Total taxation charge
33 | Emmerson PLC
11
3
(14)
-
-
573
-
(195)
21
(28)
-
(5)
733
(5)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The weighted average applicable tax rate was 19.2% (2022: 16.6%). 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$2,361k (2022: US$1,806k). The unrecognised deferred tax
asset relating to Moroccan tax losses amounted to approximately US$97k (2022: US$109k).
6.
Earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
Loss from continuing operations for the year attributable
to the equity holders of the Company (US$’000)
Number of shares
Weighted average number of ordinary shares for the
purpose of basic and diluted earnings per share
Basic and diluted loss per share
2023
2022
(2,992)
(3,198)
1,021,272,676
939,716,598
0.29 cents
0.34 cents
The potential number of shares which could be issued following the exercise of options and warrants currently outstanding amounts to
73,163,000 (see note 12). 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).
Cost:
At the beginning of the year
Additions
FX
Total
2023
US$’000
2022
US$’000
18,607
1,726
124
20,457
13,555
5,052
-
18,607
Intangible assets are reviewed at each reporting date to determine whether there is objective evidence of impairment.
See note 2.13 detailing the Company’s judgement in this area.
Emmerson PLC | 34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
8. Trade and other receivables
Other receivables
Prepayments
Total
Other receivables include recoverable VAT and other taxes.
9. Trade and other payables
Other payables
Accruals
Total
2023
US$’000
1,010
70
1,080
2023
US$’000
217
129
346
2022
US$’000
1,097
84
1,181
2022
US$’000
635
397
1,032
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. Trade payables are recognised initially at fair value, and
subsequently measured at amortised cost using the effective interest method. Other payables consist of supplier invoices for
administration expenses.
In addition to trade creditors, the Company also had contractual commitments totalling US$0.3 million with Barr Engineering, and
US$0.4 million (4 million MAD) with Reminex. Both of these amounts relate to basic engineering contracts signed in 2021, and which
are yet to be completed.
10. Financial instruments
Categories of financial instruments
Financial assets measured at amortised cost
Other receivables
Cash and cash equivalents
Financial liabilities measured at amortised cost
Other payables
2023
US$’000
2022
US$’000
1,080
1,937
3,017
1,097
6,670
7,767
217
635
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:
35 | Emmerson PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Capital management
Credit risk
The Group’s objectives when managing capital are to safeguard
The Company’s credit risk arises from cash and cash
the Group’s ability to continue as a going concern in order
equivalents with banks and financial institutions. For banks
to provide returns for shareholders and benefits for other
and financial institutions, only independently rated parties with
stakeholders and to maintain an optimal capital structure to
minimum rating “A” are accepted.
reduce the cost of capital.
Liquidity risk
The capital structure of the Group consists of issued capital,
Liquidity risk arises from the Directors’ management of working
reserves and retained earnings. The Directors review the capital
capital. It is the risk that the Company will encounter difficulty in
structure on a semi-annual basis. As a part of this review, the
meeting its financial obligations as they fall due.
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.
The management’s strategy remained unchanged from 2022.
Market price risk
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 2025. At the end of the period
under review, these projections indicated that the Group
The development and success of any project of the Group will
is expected to have sufficient liquid resources to continue
be primarily dependent on the future price of potash. Potash
in operational existence and meet its obligations under all
prices are subject to significant fluctuation and are affected
reasonably expected circumstances.
by a number of factors which are beyond the control of the
Company. Future production from the Khemisset Project is
dependent on potash prices that are adequate to make the
project economic. After increasing significantly following
supply disruption in the wake of the Russian invasion of
Ukraine, potash prices fell during 2023. Long-term demand for
potash, as a fertiliser, is expected to continue to grow, driven
by population growth, changing dietary habits, and increasing
pressure on land usage, however short-term volatility remains
possible.
Foreign exchange risk
The Group operates internationally and is exposed to foreign
exchange risk arising from various currency exposures. Foreign
exchange risk arises from future commercial transactions,
recognised monetary assets and liabilities and net investments
in foreign operations. The consolidated accounts use US$ as a
presentational currency, and from 1 January 2022, Emmerson
PLC (the parent company) determined that US$ was the
appropriate functional currency. The Group’s Moroccan entities
use MAD as their functional currency.
Net current assets denominated in MAD at the year-end
amounted to US$1.0 million and net liability of US$0.18 million
respectively.
Net current assets
Trade and other receivables
Prepayments
Cash and cash equivalents
Net current liabilities
Trade and other payables
Accrual
2023
US$’000
2022
US$’000
960
4
53
1,017
119
65
184
1,051
8
52
1,111
169
273
442
At 31 December 2023, had the exchange rate between the US$ and MAD increased or decreased by 5% with all other variables held
constant, the increase or decrease respectively in net assets would amount to approximately US$42k.
The Group does not hedge against foreign exchange movements.
Emmerson PLC | 36
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
11. Share capital
The Ordinary Shares issued by the Company have no par value and are fully paid. Each Ordinary Share carries one vote on a poll vote.
The Company does not have a limited amount of authorised capital.
As at 31 December 2022
Share options exercised in year for cash
Share options exercised in year cashless
As at 31 December 2023
Number of shares
US$’000
1,014,493,224
34,733
6,000,000
6,250,000
225
-
1,026,743,224
34,958
12. Share-based payments
The following is a summary of the share options as at 31 December 2023:
Date of
grant
26-Mar-19
26-Mar-19
07-Aug-19
01-Aug-20
01-Aug-20
01-Aug-20
01-Aug-20
01-Aug-20
01-Aug-20
01-Aug-20
01-Aug-20
01-Aug-20
01-Aug-20
01-Aug-20
01-Aug-20
21-Jul-22
21-Jul-22
21-Jul-22
21-Jul-22
21-Jul-22
21-Jul-22
21-Jul-22
21-Jul-22
21-Jul-22
Expiry
date
Vesting
date
Exercise
Price
No of
Options
Share price
at grant
24-Mar-24
24-Mar-24
05-Aug-24
31-Jul-25
31-Jul-25
31-Jul-25
31-Jul-25
31-Jul-25
31-Jul-25
31-Jul-25
31-Jul-25
31-Jul-25
31-Jul-25
31-Jul-25
31-Jul-25
20-Jul-32
20-Jul-32
20-Jul-32
20-Jul-32
20-Jul-32
20-Jul-32
20-Jul-32
21-Jul-27
20-Jul-32
26-Mar-20
26-Mar-20
07-Aug-19
01-Aug-20
01-Aug-20
01-Aug-21
01-Aug-21
01-Aug-21
01-Aug-21
01-Aug-21
01-Aug-22
01-Aug-22
01-Aug-22
01-Aug-22
01-Aug-23
15-Mar-23
15-Mar-23
15-Mar-23
15-Mar-24
15-Mar-24
15-Mar-24
15-Mar-25
20-Jul-24
20-Jul-24
£0.035
£0.050
£0.050
£0.060
£0.100
£0.001
£0.050
£0.060
£0.070
£0.100
£0.001
£0.050
£0.070
£0.100
£0.100
£0.070
£0.100
£0.150
£0.070
£0.100
£0.150
£0.150
£0.070
£0.070
3,900,000
3,000,000
1,500,000
9,500,000
9,250,000
500,000
1,000,000
7,000,000
2,000,000
10,083,333
1,000,000
1,000,000
2,000,000
3,333,333
3,333,334
1,000,000
1,500,000
1,333,333
1,000,000
1,500,000
1,333,333
1,333,334
1,500,000
4,263,000
£0.0400
£0.0400
£0.0375
£0.0435
£0.0435
£0.0435
£0.0435
£0.0435
£0.0435
£0.0435
£0.0435
£0.0435
£0.0435
£0.0435
£0.0435
£0.0700
£0.0700
£0.0700
£0.0700
£0.0700
£0.0700
£0.0700
£0.0700
£0.0700
Risk Free Volatility
rate
2.10%
2.10%
2.10%
1.10%
1.10%
1.10%
1.10%
1.10%
1.10%
1.10%
1.10%
1.10%
1.10%
1.10%
1.10%
2.05%
2.05%
2.05%
2.05%
2.05%
2.05%
2.05%
2.05%
2.05%
68%
68%
58%
71%
71%
71%
71%
71%
71%
71%
71%
71%
71%
71%
71%
55%
55%
55%
55%
55%
55%
55%
55%
55%
Option
Value
£0.0242
£0.0192
£0.0192
£0.0219
£0.0169
£0.0177
£0.0134
£0.0091
£0.0085
£0.0070
£0.0089
£0.0049
£0.0042
£0.0035
£0.0023
£0.0457
£0.0410
£0.0352
£0.0457
£0.0410
£0.0352
£0.0352
£0.0342
£0.0457
Total outstanding at 31 December 2023
73,163,000
37 | Emmerson PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
At 1 January 2022
Issued in year
Exercised in year
At 31 December 2022
Exercised in year
Expired/cancelled in year
At 31 December 2023
Share options
Warrants
Total
96,900,000
15,013,000
82,725,047
179,625,047
50,000,000
65,013,000
(13,500,000)
(333,333)
(13,833,333)
98,413,000
132,391,714
230,804,714
(25,000,000)
-
(25,000,000)
(250,000)
(132,391,714)
(132,641,714)
73,163,000
-
73,163,000
The weighted average remaining contractual life of the options
During 2022, James Kelly and Rupert Joy received 218,406 and
at year-end was 2.74 years
66,371 shares respectively at a VWAP of 7.1 pence (total value
US$25k) as part of their contractual remuneration. No shares
The options and warrants issued were valued using the
Black-Scholes valuation method and the assumptions used
were issued during 2023.
are detailed above. The expected future volatility has been
The total share-based payment recognised in the Statement
determined by reference to the historical volatility.
of Changes in Equity during the year was a US$335k (2022:
US$256k), in respect of the fair value of employee share
The Group operates equity-settled, share-based compensation
plans, under which the entity receives services from Directors
options.
and employees as consideration for equity instruments
There were 47,263,000 (2022: 53,763,000) options at the
(options) of the Group.
year-end held by current Directors and employees at year end.
Vesting of the options is subject to the option holder providing
continuous service during the vesting period and there are no
other performance conditions attached to the options.
Share options
2023
2022
Number issued
Expiry
Number issued
Expiry
Graham Clarke (Director)
Hayden Locke (Director)
Robert Wrixon (Director)
Jim Wynn (PDMR)
Other employees
Total
19,321,000
10,000,000
5,000,000
9,000,000
1 to 8 years
1 year
1 year
8 years
19,321,000
10,000,000
11,000,000
9,000,000
2 to 9 years
2 years
1 to 2 years
9 years
3,942,000
1 to 8 years
4,442,000
2 to 9 years
47,263,000
53,763,000
Emmerson PLC | 38
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
13. Reserves
The following table describes the nature and purpose of various reserves within owner’s equity:
Share-based payment reserve
Credits related to share-based payment
Reverse acquisition reserve
Values related to the reverse acquisition of Emmerson PLC by Moroccan Salts Ltd in 2018
14. Future rental payments
The commitments arising from operating leases are largely rental payments for buildings. The future minimum lease payments
(payables) under non-cancellable operating leases are:
Within one year
More than one year
As at end of year
2023
US$’000
2022
US$’000
24
-
24
23
-
23
15. Related party transactions
16. Ultimate controlling party
Directors’ consultancy fees
The Directors consider that there is no controlling or ultimate
controlling party of the Company.
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$30k (2022: US$71k). The amount
outstanding as at the year-end was US$ nil (2022: US$ nil).
Hayden Locke is a Director of the Company and is a Director
of Benson Capital Limited, which provided consulting services
to the Company during 2022. During 2023, Benson Capital
Limited received no fees (2022: US$95k). There was no amount
outstanding as at the year-end (2022: US$9k).
17. Events after the reporting date
On 8 April 2024, the Company raised gross proceeds of US$2.5
million through the placing of 121.3 million ordinary shares at
a price of 1.75 pence per share. US$2.2 million of this amount
was placed through Global Sustainable Minerals Pte Ltd
(“GSM”) and Gold Quay Capital Pte Ltd (“GQC”) (together the
“Strategic Investors”), who subscribed for US$2.0 million and
Details of Directors’ remuneration during the year are given in
US$175k retrospectively. The Strategic Investors also received
note 4.
There were no other related party transactions.
1:1 share warrants at an exercise price of 3 pence per share,
expiring on 31 December 2024. The balance of the funding
(US$0.3 million) was raised with other shareholders through the
REX retail platform.
39 | Emmerson PLC
COMPANY INFORMATION
DIRECTORS
REGISTERED OFFICE
James Kelly (Independent Non-executive Chairman)
Graham Clarke (Chief Executive Officer)
Hayden Locke (Non-executive Director)
Robert Wrixon (Non-executive Director)
Rupert Joy (Independent Non-executive Director)
ADMINISTRATOR AND REGISTERED AGENT
FIM Capital Limited
55 Athol St
Douglas
Isle of Man IM1 1LA
JOINT BROKER AND NOMINATED ADVISER
Liberum Capital Limited
Ropemaker Place, Level 12
25 Ropemaker Street
London EC2Y 9LY
JOINT BROKER
Shard Capital Partners LLP
70 St Mary Axe
London EC3A 8BE
55 Athol St
Douglas
Isle of Man
IM1 1LA
REGISTRARS
Share Registrars Limited
The Courtyard, 17 West Street
Farnham
Surrey GU9 7DR
AUDITOR
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
London E14 4HD
Emmerson PLC is registered in the Isle of Man under Company No. 013301V
Emmerson PLC | 40
Emmerson PLC | 40
Registered Office
55 Athol Street,
Douglas Isle of Man
IM1 1LA
London Office
25 Bedford Square
London
WC1B 3HH
emmersonplc.com
41 | Emmerson PLC