Emmerson chief executive Hayden Locke is an experienced mining executive and former mining private equity investor, straddling both the technical and commercial aspects of project development.
He was head of corporate at Papillon Resources (sold to B2Gold for US$600 million) and Highfield Resources. He studied engineering and commerce before completing a degree in geology.
The higher operating costs associated with average grades at the Khemisset potash project are more than offset by the Morocco-based asset's proximity to its end market, according to Emmerson chief executive Hayden Locke.
Answering a direct question on project risks, he said the Khemisset ore body hosted multiple potassium-rich minerals that would require a hot leaching crystalisation processing technique, which is more energy intensive and therefore expensive compared to the standard flotation technique applied to the largely uniform sylvanite ores typical of Canada.
Locke said hot leaching crystalisation was, however, a lower-risk processing technique and metallurgical work currently underway indicated the Khemisset ore would respond well.
More to the point, he said the key component for the overall operating cost to deliver a refined product to customers was actually the distance the product had to travel to that consumer.
"In the cost structure of the potash industry, more than 50% of the cost to customer is not in mining or processing, it's mostly related to transport logistics and royalties," Locke said.
"In terms of transport logistics and royalties to a multitude of customers, Morocco is almost the best jurisdiction in which you could be. We save a huge amount of money relative to our peers. Our estimates are between US$80-100 per tonne, which puts us in a very strong position."
The Khemisset operating cost to customer is US$162.60/t.
He said Emmerson had been working to explain this concept to investors, who had for years heard little about transport logistics from Canadian producers keen to keep new market entrants at bay.
Emmerson delivered a scoping study for Khemisset in November last year, which outlined an 800,000 tonne per annum muriate of potash operation, with an NPV (10% discount; post-tax) of $795 million and an IRR of 30%. Work has started on the full feasibility study, which was expected in the first half of next year.
