Proactiveinvestors Australia Danakali Ltd https://www.proactiveinvestors.com.au Proactiveinvestors Australia Danakali Ltd RSS feed en Mon, 27 May 2019 01:53:05 +1000 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - Danakali aims for transformative year with Colluli SOP project in Eritrea ]]> https://www.proactiveinvestors.com.au/companies/news/218956/danakali-aims-for-transformative-year-with-colluli-sop-project-in-eritrea-218956.html Danakali Ltd (ASX:DNK) (LON:DNK) is a greenfields potash project developer focused on Africa. The company is led by new chief executive officer Niels Wage, an experienced potash industry executive who became CEO in March 2019.

He had been Danakali’s chief commercial officer from June 2018, advancing the company’s relationship with its flagship project’s offtake partner EuroChem Group AG.

The executive previously held senior management positions at BHP, where he was vice-president of its potash, freight and diamonds divisions. At BHP, Wage was also responsible for Jansen Potash Project marketing and sales activity and its supply chain.

Before his time with BHP, Wage worked in trading and logistics for Cargill and Vopak, holding directorships in ventures such as JVs between Japanese firms K-line, Daiichi and JFE Steel and BHP, the International Plant Nutrition Institute and RightShip.

What does Danakali own?

The key asset is the 200-year Colluli Potash Project in Eritrea held in the 50%-owned Colluli Mining Share Company (CMSC) joint venture with the Eritrean National Mining Company (ENAMCO).

In December 2018 Danakali secured a US$200 million syndicated loan facility towards construction of the 50:50 JV’s sulphate of potash (SOP) mining project.

Colluli has a very large ore reserve estimate of 1.1 billion tonnes grading 10.5% potassium oxide for 203 million tonnes of contained SOP equivalent.

The company hopes to put the project in development this year as it meet a number of milestones set in its fully-underwritten loan facility.

Colluli’s loan facility is being led by African development financial institutions (DFIs) African Export-Import Bank and Africa Finance Corporation.

EuroChem has agreed to take, pay, market and distribute up to 100% (minimum 87% at CMSC’s option) of Colluli Module I SOP production for at least 10 years.

The agreement makes the developer a stand-out SOP greenfields developer with a take-or-pay offtake agreement.

Danakali had $9.7 million cash at the end of 2018 after making a $6.1 million total comprehensive loss for the year.

The well-backed company is expected to spend $2.6 million in the end of the March quarter of 2019 and is due to file its next quarterly reporting by the end of April 2019.

Inflection points

Construction and financing milestones

Regulatory approvals

Key investment decisions

Offtake agreement progressions

Significant agreements and transactions

CEO Niels Wage highlights significance of Colluli project

New Danakali CEO Niels Wage told the market this month: “2018 was very important for Danakali, with a mix of significant financial, operational and geopolitical developments that supported the progress of our plans.”

Speaking as the company released its fiscal year 2018 annual report, he said: “I believe that 2018 and 2019 will prove to be transformative for the company.

“We have established a clear strategy to further develop (Colluli) project and unlock shareholder value over the coming years.”

Chatting with Proactive Investors this month about the Eritrean project he noted the fertiliser project was a shallow deposit that “can be mined with an open pit.

“We’re working very closely with the Eritrean government to develop this project.

“The development of this deposit is quite unique for the industry ... it’s a low-cost project but also has a significant impact on Eritrea and the area.”

 

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Tue, 23 Apr 2019 22:30:00 +1000 https://www.proactiveinvestors.com.au/companies/news/218956/danakali-aims-for-transformative-year-with-colluli-sop-project-in-eritrea-218956.html
<![CDATA[News - Danakali aims to bring Colluli Sulphate of Potash project into development this year ]]> https://www.proactiveinvestors.com.au/companies/news/218802/danakali-aims-to-bring-colluli-sulphate-of-potash-project-into-development-this-year-218802.html Danakali Ltd (ASX:DNK) has established a clear strategy to bring the Colluli Sulphate of Potash (SOP) Project in the northeast African country of Eritrea into development later this year after delivering a transformative year in 2018.

In January 2019 an independent report, initiated and funded by the United Nations Development Program (UNDP), revealed that Colluli has the potential to significantly boost the country’s economy as well as assisting in developing the country and region.

READ: Danakali’s share price far below value estimates: Investors Chronicle

Danakali executive chairman Seamus Cornelius said in the company's 2018 Annual Report that 2018 saw substantial progress for the company as it demonstrated strong operational momentum, solid progress on funding and a London listing – all supported by positive developments in Eritrea.

SOP development peer comparison

“The Front End Engineering Design (FEED) study results released at the start of 2018 confirmed Colluli as an advanced greenfield SOP project able to deliver more SOP for longer and at a lower capital intensity than any other known greenfield deposit globally.

“In July 2018 an offtake deal was signed with EuroChem for up to 100% of Colluli’s Module 1 SOP production, which has paved the way for project financing and in August the Eritrean Ministry of Land, Water and Environment confirmed acceptance of the finalised Colluli Social & Environmental Management plans, which sees the project fully permitted for execution.

“2019 promises to be a transformational year for Danakali but despite the significant progress nobody should underestimate the challenges ahead.”

 

READ: Danakali appoints highly experienced potash industry executive as CEO

Danakali's new chief executive officer Niels Wage said a critical milestone was reached in December 2018 with the signing of a term sheet with leading African development finance institutions to provide debt finance facilities of US$200 million for construction and development funding of the project.

Overview of the Colluli EPCM phases

He said: “This brings us yet another step closer to production.

“Our immediate priority for 2019 will be the completion of the funding process, which will allow us to be in the position to proceed with moving into development later this year.”

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Thu, 18 Apr 2019 10:06:00 +1000 https://www.proactiveinvestors.com.au/companies/news/218802/danakali-aims-to-bring-colluli-sulphate-of-potash-project-into-development-this-year-218802.html
<![CDATA[Media files - Danakali's new CEO leads development of unique Colluli Potash Project in Eritrea ]]> https://www.proactiveinvestors.com.au/companies/stocktube/12866/danakali-s-new-ceo-leads-development-of-unique-colluli-potash-project-in-eritrea-12866.html Wed, 03 Apr 2019 21:35:00 +1100 https://www.proactiveinvestors.com.au/companies/stocktube/12866/danakali-s-new-ceo-leads-development-of-unique-colluli-potash-project-in-eritrea-12866.html <![CDATA[News - Danakali appoints highly experienced potash industry executive as CEO ]]> https://www.proactiveinvestors.com.au/companies/news/217062/danakali-appoints-highly-experienced-potash-industry-executive-as-ceo-217062.html Danakali Ltd (ASX:DNK) (LON:DNK) has appointed highly experienced potash industry executive Niels Wage as chief executive officer following a thorough global search.

The appointment is timely as Danakali finalises funding and begins project execution at its Colluli Potash Project in Eritrea with a 1.289 billion tonne resource at 11% K2O equivalent and 7% kieserite.

READ: Danakali’s world-class Colluli Potash Project has potential to boost Eritrea’s economy

Colluli is 100%-owned by the Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO).

The company said Wage, who has been chief commercial officer since June 2018, won the role due to his extensive and relevant industry experience, leadership capabilities and passion for the project and Eritrea.

Executive chairman Seamus Cornelius said: “The confirmation follows an extensive global search for the right leader for the company’s current stage, upcoming milestones and longer-term strategy, and we are very confident we have found that with Niels.

“In his time at the company, he has already added significant value, utilising his wealth of experience and

skills in leadership, mining, fertiliser, sales, marketing and supply-chain management.

“Niels starts as CEO at a very exciting and critical time for Danakali with project funding well progressed and project execution set to commence.

“I wish him the best of luck and know he will be supported ably by the rest of the company’s employees and the Danakali board.”

Added trading and logistics experience

As well as potash industry experience, Wage has trading and logistics experience.

Before joining Danakali he held senior management roles at BHP, including as vice president in the major’s potash, freight and diamonds divisions.

At BHP he was also responsible for marketing, sales and supply chain for the Jansen Potash Project.

Prior to this, he worked in trading and logistics for Cargill and Vopak and held a series of directorships.

These included joint ventures between Japanese firms K-line, Daiichi and JFE Steel and BHP, the International Plant Nutrition Institute and RightShip.

READ: Danakali’s share price far below value estimates: Investors Chronicle

As Danakali’s CCO, Wage has assisted the company to build and maintain industry relationships including interacting with CMSC’s offtake partner, EuroChem Group.

Wage said: “I am honoured to be asked by the board to serve as CEO at this particularly exciting stage, as the company advances towards construction and production at Colluli.

“Recent achievements including an industry-first binding take or pay offtake agreement with EuroChem, a US$200 million mandate and term sheet with leading African Development Finance Institutions AFC and Afreximbank and admittance to trading on the London Stock Exchange Main Market provide an excellent platform for the company’s further funding and project execution success.

“Move rapidly towards production”

“I look forward to building value for shareholders by working closely with the Danakali team, joint venture partners ENAMCO and other stakeholders to move rapidly towards production from Colluli.

“I am privileged to be able to contribute to a unique project that has the potential to positively change the lives of people in Eritrea and across the region while helping to deliver the substantial and environmentally sound increases in global food supply required in the coming decades.”

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Mon, 25 Mar 2019 09:37:00 +1100 https://www.proactiveinvestors.com.au/companies/news/217062/danakali-appoints-highly-experienced-potash-industry-executive-as-ceo-217062.html
<![CDATA[News - Danakali’s share price far below value estimates: Investors Chronicle ]]> https://www.proactiveinvestors.com.au/companies/news/215170/danakalis-share-price-far-below-value-estimates-investors-chronicle-215170.html Danakali Ltd (ASX:DNK) (LON:DNK) has a massive ore reserve of 1.1 billion tonnes grading 10.5% potassium oxide at the Colluli Potash Project in Eritrea.

UK-based Investors Chronicle, a weekly magazine published by the Financial Times Group, has recommended Danakali as a speculative buy in its Tip of the Week article published last Friday.

Following is an extract from the Investors Chronicle article:

As Sirius Minerals, Berkeley Energia and SolGold have shown in the past year, backing early-stage mining projects can be a frustrating, volatile yet sometimes exciting business. Investing in an unfinanced potash project in Eritrea, less than half a year after the country emerged from UN sanctions, certainly fits the volatile category.

But in Danakali (DNK), which joined London’s main market last summer, we think prospective backers have reason for genuine optimism, as well as potential drama. That’s because the group’s Colluli project has already ticked enough boxes to have a better-than-even chance of success. Ahead of debt project financing later this year, investors still have a chance to get in on the ground floor of a world-class (if high-risk) mining project.

That project centres on a deposit of sulphate of potash (SOP) – used as a low-chloride, premium fertiliser on high-value crops – in the Danakil Depression region of Eritrea, some 75km from the Red Sea coast. As last year’s defined feasibility study showed, Colluli is a simple and fully-permitted project, which has world-leading grades, extremely large reserves and logistical advantages over major producers in Russia, Belarus and Canada. Its overheads are lower than anywhere else, meaning it should occupy the bottom 15 per cent of the global cost curve for SOP, once complete.

Start-up costs should also be low. Danakali predicts that for an initial outlay of $302m (£236m), Colluli will be able to mine 472,000 tonnes of SOP a year. Against a long-term price forecast of $600 a tonne, broker Numis believes Danakali could generate a gross profit of $170m in 2022, when the mine reaches initial capacity. Based on a slightly lower price and cost assumptions, Danakali's bosses believe the miner's stake has a net present value of $242m, even after adjustments for debt funding, joint ownership of the project with the Eritrean state, and a 10 per cent discount rate on future cash flows.

These credentials haven’t gone unnoticed. A 10-year off-take agreement has already been struck with Swiss fertiliser giant EuroChem for between 87 and 100 per cent of output, while a non-indicative term sheet for $200m of debt funding has already been signed with Afreximbank and Africa Finance Corporation. The project also has a vote of approval from the United Nations' Development Programme, which funded an independent report that found Colluli could support Eritrea's sustainable development goals, economy, agricultural productivity, training and employment.

Until recently, a partnership with the desperately poor and historically isolated East African nation was an extremely high-risk proposition. But that all changed last year, when Eritrea signed a peace treaty with its long-time adversary, Ethiopia, and UN sanctions on the country were finally lifted. As such, the country has every incentive to make Colluli work.

Danakali's bosses also believe the project is the only known sulphate of potash greenfield development to have completed front-end engineering design. It's shovel-ready and unlikely to be leapfrogged. But things do go awry, and it’s sensible to assume setbacks will occur and, if so, the shares are likely to prove illiquid. Applying a generous 8 per cent discount rate and a cautious 'target multiple' of 0.6 times net asset value, Numis arrives at a target price of 70p.

That seems appropriate considering the risks, although this year is likely to present plenty of catalysts for short-term punters. Speculative buy.

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Mon, 25 Feb 2019 12:26:00 +1100 https://www.proactiveinvestors.com.au/companies/news/215170/danakalis-share-price-far-below-value-estimates-investors-chronicle-215170.html
<![CDATA[Media files - Danakali chairman updates on financing with construction to start before year-end ]]> https://www.proactiveinvestors.com.au/companies/stocktube/12119/danakali-chairman-updates-on-financing-with-construction-to-start--before-year-end-12119.html Wed, 06 Feb 2019 11:18:00 +1100 https://www.proactiveinvestors.com.au/companies/stocktube/12119/danakali-chairman-updates-on-financing-with-construction-to-start--before-year-end-12119.html <![CDATA[News - Danakali’s world-class Colluli Potash Project has potential to boost Eritrea’s economy ]]> https://www.proactiveinvestors.com.au/companies/news/213562/danakalis-world-class-colluli-potash-project-has-potential-to-boost-eritreas-economy-213562.html Danakali Ltd’s (ASX:DNK) (LSE:DNK) (FRA:SO3) (OTCMKTS:SBMSF) Colluli Potash Project in Eritrea has the potential to significantly boost the East African country’s economy.

An independent report initiated and funded by the United Nations Development Program (UNDP) also finds that Colluli can meaningfully advance Eritrea’s sustainable development agenda.

Report prepared on behalf of UNDP

Titled ‘Analysis of the Potential Contributions of Colluli Potash Project to Sustainable Development Goals in Eritrea’, the report was prepared during 2018 by senior economists on behalf of the UNDP.

It assesses a wide range of econometric data and includes findings from engagements with Eritrean government officials, relevant public institutions and other Colluli stakeholders.

READ: Danakali near-financing a positive sign for 'shovel-ready' Eritrean potash project

Danakali executive chairman Seamus Cornelius said the report reinforced the uniqueness of Colluli and the company was grateful for the effort and energy that went into the report.

“We appreciate the magnitude of the opportunity and the responsibility that comes with developing an asset of this significance with the potential to improve the lives of millions.

“Colluli is much more than a great mining asset.

“Not only does it have outstanding grade, size, location and simplicity; Colluli’s products will also help farmers and support food security in Eritrea, across Africa and beyond.”

Colluli is owned by the Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO).

The project is about 75 kilometres from the Red Sea coast, making it one of the most accessible potash deposits globally and mineralisation begins at 16 metres, making it the world’s shallowest deposit.

Amenable to open pit mining

This also means the resource is amenable to open pit mining, allowing for higher overall resource recovery; is generally safer than underground mining; and is highly advantageous for modular growth.

Colluli is about 75 kilometres from Eritrea’s eastern Red Sea coast.

The project has an ore reserve estimate of 1.1 billion tonnes grading 10.5% potassium oxide for 203 million tonnes of contained sulphate of potash (SOP) equivalent, providing a mine life of almost 200 years.

READ: Danakali executes US$200 million debt finance mandate for Colluli

Cornelius said: “The report effectively highlights the alignment between Danakali and, our partners, ENAMCO in ensuring the project is successfully executed.

“We look forward to working with ENAMCO to ensure Colluli reaches its full potential for the benefit of all stakeholders.”

Enhance delivery of UN goals

The UNDP, which is one of the largest UN development partners in Eritrea, has identified Colluli as a strategic opportunity to enhance the delivery of the UN Global Goals for Sustainable Development in Eritrea.

These goals are a collection of 17 global goals set by the UN and cover a broad range of social and economic development issues.

They include poverty, hunger, health, education, climate change, gender equality, water, sanitation, energy, urbanisation, environment and social justice.

UN Global Goals for Sustainable Development and Colluli.

“Direct impacts in Eritrea”

Cristian Parra, joint author of the report with Dr P Anand, said: “Colluli can be an important source of direct impacts in Eritrea.

“Because of these impacts and Danakali’s and CMSC’s corporate policies the project has the potential to generate significant positive effects on the Sustainable Development Agenda of Eritrea, in particular on 13 specific Sustainable Development Goals.

“The final effects on Sustainable Development Goals will be highly connected to fiscal impacts and effects that will be generated by Colluli’s final products.

“From a global perspective the project is a very interesting case and can be considered a significant step ahead in terms of the relationship between the resource industry and the development agenda of the host country, and how to understand mining contributions beyond the traditional direct economic effects.”

SOP price premium

CMSC has completed a Front End Engineering Design (FEED) for the production of SOP, a chloride free, specialty fertiliser which carries a substantial price premium relative to the more common potash type of potassium chloride (MOP).

Economic resources for production of SOP are geologically scarce.

The unique composition of the Colluli resource favours low energy input, high potassium yield conversion to SOP using commercially proven technology.

One of the key advantages of the SOP resource is that the salts are present in solid form, in contrast with production from brines, which reduces infrastructure costs and the time required to achieve full production capacity.

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Wed, 30 Jan 2019 11:56:00 +1100 https://www.proactiveinvestors.com.au/companies/news/213562/danakalis-world-class-colluli-potash-project-has-potential-to-boost-eritreas-economy-213562.html
<![CDATA[News - Danakali near-financing a positive sign for 'shovel ready' Eritrean potash project ]]> https://www.proactiveinvestors.com.au/companies/news/212745/danakali-near-financing-a-positive-sign-for--shovel-ready--eritrean-potash-project-212745.html Danakali Ltd (ASX:DNK) (LON:DNK) (OTCMKTS:SBMSF) has powered up its ambitions to construct and develop the Colluli Potash Project in Eritrea with a US$200 million syndicated loan facility.

The fully-underwritten loan facility led by African development financial institutions (DFIs) African Export-Import Bank and Africa Finance Corporation has a series of milestones Danakali must satisfy to qualify.

WATCH: Danakali ‘shovel-ready’ at Colluli after execution of US$200m debt finance mandate

Colluli has a massive ore reserve estimate of 1.1 billion tonnes grading 10.5% potassium oxide for 203 million tonnes of contained sulphate of potash equivalent.

Front end engineering design (FEED) has confirmed a post-tax net present value of US$902 million and post-tax internal rate of return (IRR) of 29.9% for the project.

Danakali secured its funding mandate for the project from the two African financiers in December 2018, with the company declaring the agreement a ‘significant milestone.’

Executive chairman Seamus Cornelius reported: “The execution of the mandate represents a significant milestone for the Colluli project funding.

“We are very pleased to be partnering with strong, experienced African financial institutions.”

 

Cornelius told Proactive Investors’ Stocktube video channel it was a major positive step to recruit the major African institutions for a wider project team to advance Colluli.

He said: “This is major African institutions joining us, joining our existing partners at ENAMCO (Eritrean National Mining Corporation), joining EuroChem, our offtake partners.

“A project like this, it needs a team. It needs a team inside Danakali, but it needs a team of partners to give it the best possible outcome, and that’s what we’ve got now.”

Colluli is 100% owned by the Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and ENAMCO.

CSMC has a binding offtake agreement with EuroChem for up to 100% (minimum 87%) of module I sulphate of potash (SOP) production from Colluli.

A number of debt milestones remain for the company that is focused on development of its asset in a country now at peace with its neighbour, Ethiopia.

Cornelius told Proactive Investors the company was at an exciting phase.

“Where we are in terms of the project, is we are shovel-ready.

“As soon as we secure the full funding we will start construction — the construction will take two years and then we’ll be in production [in] 2021.”

A changed environment

The UN lifted sanctions on Eritrea in November, changing the country’s investment environment.

Cornelius said: “Lifting of the sanctions is unquestionably a very positive thing.

“The sanctions were never specifically impacting us but as you can imagine, the general atmosphere was negatively affected by the fact of the sanctions.”

Colluli quality

The executive chairman outlined the features of the Eritrean asset Colluli in his Stocktube interview.

Cornelius said: “Colluli is a potassium asset, it’s in the Danakil Depression which is a giant, natural geological feature.

“Colluli is a very shallow potassium deposit very close to the coast.”

The deposit is amenable to simple, low-cost open-cut mining with a progressive working face to provide simultaneous access to each mineralised layer.

It has been declared the shallowest evaporite deposit in the world, with mineralisation starting at just 16 metres, allowing open-cut mining.

Cornelius also spoke about the proposed mine and ore gradings, saying “Once (the mine) opens up at the very beginning, we’ll be producing 472,000 tonnes of potassium sulphate, which is a particular kind of potash.

“It is the high-value, high-grade kind that is inshort supply, so we’re very happy with that.”

Milestone focus

Danakali’s remaining debt milestones include finalising contracts with a number of parties, including the company’s preferred engineering, procurement, construction and management (EPCM) provider DRA Global.

Danakali also needs to finalise contracts with EPC solutions provider Inglett & Stubbs International, and its preferred mining contractor.

Other commitments are to follow, including final credit approval from financiers, executive of facility agreement documents and closing of the financial deal after the conditions precedent are met.

Investor backing

Danakali has a market capitalisation of $187.7 million, having 264,422,398 ordinary shares on issue on December 21, 2018.

The company had $11.8 million cash on hand at the end of the September 2018 financial quarter after spending $1.3 million on operating expenses in the period and $1.3 million on investing activities.

Estimated outflows for the December 2018 quarter were $2.8 million, Danakali reported on October 30, 2018.

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Thu, 17 Jan 2019 16:30:00 +1100 https://www.proactiveinvestors.com.au/companies/news/212745/danakali-near-financing-a-positive-sign-for--shovel-ready--eritrean-potash-project-212745.html
<![CDATA[Media files - Danakali “shovel-ready” at Colluli following execution of US$200m debt finance mandate ]]> https://www.proactiveinvestors.com.au/companies/stocktube/11605/danakali-shovel-ready-at-colluli-following-execution-of-us200m-debt-finance-mandate-11605.html Thu, 13 Dec 2018 02:30:00 +1100 https://www.proactiveinvestors.com.au/companies/stocktube/11605/danakali-shovel-ready-at-colluli-following-execution-of-us200m-debt-finance-mandate-11605.html <![CDATA[News - Danakali executes US$200 million debt finance mandate for Colluli ]]> https://www.proactiveinvestors.com.au/companies/news/210618/danakali-executes-us200-million-debt-finance-mandate-for-colluli-210618.html Danakali Ltd (ASX:DNK) has executed a mandate to provide fully underwritten debt finance facilities of US$200 million to fund the construction and development of the Colluli Potash Project in Eritrea.

African development financial institutions (DFIs) African Export-Import Bank and Africa Finance Corporation will act as the mandated lead arrangers.

The mandate follows the signing of a US$200 million non-binding indicative term sheet.

READ: Danakali's Colluli asset is recognised as the world’s superlative potash deposit, Daniel Stewart says

Danakali’s CFO Stuart Tarrant said: “The execution of the mandate represents a significant milestone for the Colluli project funding.

“We are very pleased to be partnering with strong, experienced African financial institutions.

“Initial bank due diligence and subsequent negotiations have significantly advanced the project financing process and built on the finalisation of the binding off-take agreement with EuroChem placing CMSC in strong position to advance the Colluli Project .”

READ: Danakali confirms DRA Global as preferred EPCM contractor for Colluli

The execution of the Mandate is a critical project financing and execution milestone.

Once the remaining aspects of due diligence are finalised and preconditions satisfied the mandated lead arrangers will proceed to credit approval and execution of the syndicated loan facility.

The ability to drawdown funds will follow after satisfaction of the conditions precedent to be agreed in the facility.

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Thu, 06 Dec 2018 11:18:00 +1100 https://www.proactiveinvestors.com.au/companies/news/210618/danakali-executes-us200-million-debt-finance-mandate-for-colluli-210618.html
<![CDATA[News - Danakali welcomes lifting of UN sanctions and arms embargo on Eritrea ]]> https://www.proactiveinvestors.com.au/companies/news/209236/danakali-welcomes-lifting-of-un-sanctions-and-arms-embargo-on-eritrea-209236.html Danakali Ltd (ASX:DNK ) (LON:DNK) has welcomed the United Nations’ (UN) decision to lift the arms embargo and targeted sanctions imposed on the East African country of Eritrea since December 23, 2009.

The Security Council has unanimously adopted a resolution lifting the unjustified sanction against #Eritrea, marking an end a decade long injustice. A result of resilience of the people of Eritrea. Congratulations ????????

— Eritrea at the UN (@Eritrea_UN) November 14, 2018

Danakali is focused on the development of the world-class Colluli Sulphate of Potash (SOP) Project in Eritrea.

Colluli is 100% owned by the Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation.

READ: Danakali's Colluli asset is recognised as the world’s superlative potash deposit, Daniel Stewart says

Colluli is fully permitted following the signing of the Mining Agreement in February 2017; and the subsequent awarding of the requisite Mining Licenses.

The deposit comprises a massive ore reserve estimate of 1.1 billion tonnes grading 10.5% potassium oxide for 203 million tonnes of contained SOP equivalent.

Front end engineering design (FEED) has confirmed a post-tax net present value of US$902 million and post-tax internal rate of return (IRR) of 29.9% for the Colluli project.

READ: Danakali’s advanced Colluli Potash Project in Eritrea is a cut above the rest

Danakali executive chairman and CMSC director Seamus Cornelius said: “Danakali is delighted with the UN’s decision to lift the arms embargo and associated sanctions on Eritrea.

“This significant step should have a positive impact on foreign investment and enhance international trade opportunities, leading to improved economic outcomes for the people of Eritrea.

“I offer my congratulations to the Eritrean people on this achievement and for their exceptional resilience and determination over many years."

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Thu, 15 Nov 2018 12:25:00 +1100 https://www.proactiveinvestors.com.au/companies/news/209236/danakali-welcomes-lifting-of-un-sanctions-and-arms-embargo-on-eritrea-209236.html
<![CDATA[News - Danakali confirms DRA Global as preferred EPCM contractor for Colluli ]]> https://www.proactiveinvestors.com.au/companies/news/205810/danakali-confirms-dra-global-as-preferred-epcm-contractor-for-colluli-205810.html Danakali Ltd (ASX:DNK) has confirmed DRA Global as the preferred engineering, procurement, construction and management (EPCM) provider for its Colluli Potash Project in Eritrea.

The appointment was made on behalf of the Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean government.

 

Danakali executive chairman and CMSC director Seamus Cornelius said the company was pleased to confirm DRA, “a global engineering firm of strong repute with extensive experience operating in Africa”, as preferred contractor.  

Cornelius said: “We look forward to working with DRA in finalising the last few project sign-off gates and to commence project execution.”

READ: Danakali’s advanced Colluli Potash Project in Eritrea is a cut above the rest

A competitive EPCM tender process and evaluation was conducted for Colluli, based on the front-end engineering design study.

The tenders were assessed by Danakali and engineering consultants Turner & Townsend against strict evaluation criteria, with DRA the standout in a premium field of global engineering groups.

READ: Danakali achieves key milestones towards developing Colluli Potash Project

DRA Global chief executive officer Wray Carvelas said the award for the execution of Colluli to DRA was a testament to the contractor’s position as the preferred technical partner for projects in Africa.

He said: “We have put together a very strong team for the successful delivery of the project and both our project manager and proposed in-country manager have experience in delivering projects in Eritrea.”

DRA will be responsible for all aspects of design, project management, procurement, construction management and supervision, as well as commissioning of the process plant and related infrastructure.

The engineering company will also be responsible for awarding contracts for earthworks, structural, mechanical, piping, electrical and instrumentation works, a laboratory and a permanent camp.

READ: Danakali has social environmental management plans for potash project agreed and finalised

Colluli comprises a massive ore reserve estimate of 1.1 billion tonnes grading 10.5% potassium oxide for 203 million tonnes of contained sulphate of potash equivalent.

The deposit is amenable to simple, low cost, open-cut mining with a progressive working face that provides access to each of the mineralised layers simultaneously.

It is the shallowest evaporite deposit in the world, with mineralisation starting at just 16 metres allowing open-cut mining.

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Wed, 26 Sep 2018 22:52:00 +1000 https://www.proactiveinvestors.com.au/companies/news/205810/danakali-confirms-dra-global-as-preferred-epcm-contractor-for-colluli-205810.html
<![CDATA[News - Danakali’s advanced Colluli Potash Project in Eritrea is a cut above the rest ]]> https://www.proactiveinvestors.com.au/companies/news/205297/danakalis-advanced-colluli-potash-project-in-eritrea-is-a-cut-above-the-rest-205297.html Danakali Ltd (ASX:DNK) (LON:DNK) is focused on the development of the world-class Colluli Sulphate of Potash (SOP) Project in the East African country of Eritrea.

Colluli is 100% owned by the Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO).

Front end engineering design (FEED) has confirmed a post-tax net present value of US$902 million and post-tax internal rate of return (IRR) of 29.9% for the Colluli project.

SOP is a fertiliser used by farmers to grow high value, chloride-sensitive crops. SOP is currently under-supplied and demand is growing,

Interestingly, there is no other known SOP greenfield development project that has completed FEED.

Strong share price performance during the Colluli study phase

FEED provides off-takers and funders with a high level of detail, accuracy and confidence, and provides a robust platform for project execution.

Danakali’s modular development approach underpins a highly scalable, long life project.

Module I is expected to produce 472,000 tonnes per annum (tpa) of premium SOP product. Module II will increase total SOP production to 944,000 tpa.

Comparison to ASX SOP development peers

Colluli is the closest SOP deposit to a coastline, only 75 kilometres from the Red Sea coast.

It is 230 kilometres from the established port of Massawa, which is equipped with bulk and container loading facilities.

The port allows direct access to markets including India, Southeast Asia, the Middle East, Europe and Africa.

Fully permitted and top-tier resource

Colluli is fully permitted following the signing of the Mining Agreement in February 2017; and the subsequent awarding of the requisite Mining Licenses.

The deposit comprises a massive ore reserve estimate of 1.1 billion tonnes grading 10.5% potassium oxide for 203 million tonnes of contained SOP equivalent.

Colluli is amenable to simple, low cost, open-cut mining with a progressive working face that provides access to each of the mineralised layers simultaneously.

It is the shallowest evaporite deposit in the world, with mineralisation starting at just 16 metres allowing open-cut mining.

READ: Danakali signs offtake deal for full production from Colluli Potash Project

Danakali and its partner have already signed a binding offtake agreement for up to 100% of module I SOP production.

The take-or-pay offtake agreement has been signed with EuroChem Trading GmbH, a leading global producer of nitrogen, phosphate and potash fertilizers.

Danakali is the only known SOP developer with a take-or-pay offtake agreement; instrumental in providing cash flow certainty to unlock project funding.

READ: Danakali achieves key milestones towards developing Colluli Potash Project

Danakali executive chairman Seamus Cornelius recently said: “We have made significant progress in the first half of this year, achieving key milestones on the path to securing the necessary financing and commencing development of the Colluli Potash Project, including confirming a take-or-pay offtake agreement for up to 100% (minimum 87%) of Colluli Module I SOP production with EuroChem and listing on the LSE Main Market in July.

READ: Danakali lists on the London Stock Exchange

“We have also made good progress on the development of operational and in-country readiness systems and structures, which puts us in a good position to commence the next stages in the project development on completion of financing.


“We are pleased to see that SOP demand growth continues to outpace low-cost supply growth, resulting in a robust pricing environment, and welcome the significant positive developments in Eritrean-Ethiopian relations including the peace treaty signing, which provides a platform of stability for the region.”

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Thu, 20 Sep 2018 16:54:00 +1000 https://www.proactiveinvestors.com.au/companies/news/205297/danakalis-advanced-colluli-potash-project-in-eritrea-is-a-cut-above-the-rest-205297.html
<![CDATA[News - Danakali achieves key milestones towards developing Colluli Potash Project ]]> https://www.proactiveinvestors.com.au/companies/news/204787/danakali-achieves-key-milestones-towards-developing-colluli-potash-project-204787.html Danakali Ltd (ASX:DNK) is making significant progress towards securing the necessary financing and commencing development of the Colluli Potash Project in Eritrea, East Africa.

The project is a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO).

Danakali executive chairman Seamus Cornelius said: “We have made significant progress in the first half of this year, achieving key milestones on the path to securing the necessary financing and commencing development of the Colluli Potash Project, including confirming a take-or-pay offtake agreement for up to 100% (minimum 87%) of Colluli Module I SOP production with EuroChem and listing on the LSE Main Market in July.

READ: Danakali lists on the London Stock Exchange

“We have also made good progress on the development of operational and in-country readiness systems and structures, which puts us in a good position to commence the next stages in the project development on completion of financing.

“We are pleased to see that SOP demand growth continues to outpace low cost supply growth, resulting in a robust pricing environment, and welcome the significant positive developments in Eritrean-Ethiopian relations including the peace treaty signing, which provides a platform of stability for the region.”

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Thu, 13 Sep 2018 14:14:00 +1000 https://www.proactiveinvestors.com.au/companies/news/204787/danakali-achieves-key-milestones-towards-developing-colluli-potash-project-204787.html
<![CDATA[News - Danakali has Social & Environmental Management Plans for potash project agreed and finalised ]]> https://www.proactiveinvestors.com.au/companies/news/203345/danakali-has-social-environmental-management-plans-for-potash-project-agreed-and-finalised-203345.html Danakali Ltd (ASX:DNK) (LSE:DNK) has had its Social & Environmental Management Plans (SEMPs) for the Colluli Potash Project in Eritrea agreed and finalised after an extensive review process.

Eritrea’s Ministry of Land, Water & Environment’s Department of Environment (DOE) has confirmed acceptance of the finalised Colluli SEMPs.

READ: Danakali continues to progress Eritrean sulphate of potash project towards development

Finalisation and acceptance of the SEMPs represent another strong milestone for Colluli Mining Share Company (CMSC) as it prepares for project execution.

Danakali executive chairman Seamus Cornelius said: “We are committed to having a significantly positive impact in Eritrea.

“Colluli stands to provide significant social and economic benefits, creating hundreds of permanent jobs for Eritrean nationals and catering for community interests.

“Considerable community support”

“Danakali has experienced significant community support and is focused on sustainable development for the benefit of all stakeholders.

“We look forward to continuing our relationship with the government and local communities of Eritrea and achieving long-term economic, social and community benefits for the country and its people.”

READ: Danakali lists on the London Stock Exchange

The SEMPs are a cornerstone of the environmental, social and safety management system being developed by CMSC and provide the foundation for compliance.

Acceptance follows extensive DOE Impact Review Committee review of the SEMPs in the context of the previously approved Social & Environmental Impact Assessment (SEIA), numerous meetings and extensive comments.

Colluli is fully permitted for execution following the signing of a mining agreement between CMSC and the Eritrean Ministry of Energy and Mines and awarding of the requisite mining licences in early 2017.

READ: Danakali signs offtake deal for full production from Colluli Potash Project

The project is 100%-owned by CMSC, a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO).

It is in the Danakil Depression region of Eritrea, East Africa, and is about 75 kilometres from the Red Sea coast, making it one of the world’s most accessible potash deposits.

Shallow resource

Mineralisation begins at just 16 metres and is suitable for open-pit mining, which allows higher overall resource recovery, is generally safer than underground mining and is advantageous for modular growth.

Colluli has a JORC-2012 compliant measured, indicated and inferred mineral resource of 1.289 billion tonnes for 260 million tonnes of contained sulphate of potash equivalent.

A simple representation of the mining method of the Colluli resource.

Colluli’s impact in Eritrea

Eritrea stands to benefit from the long-term economic, social and community dividends that Colluli will generate:

- Positive impact through infrastructure, job creation, taxes, royalties, and associated economic development; - Creation of hundreds of permanent jobs for Eritrean nationals; - Long term training for trades and professionals; and - Potential for adjacent industry development – including infrastructure, mining services, transport and hospitality. ]]>
Wed, 22 Aug 2018 10:04:00 +1000 https://www.proactiveinvestors.com.au/companies/news/203345/danakali-has-social-environmental-management-plans-for-potash-project-agreed-and-finalised-203345.html
<![CDATA[News - Danakali continues to progress Eritrean sulphate of potash project towards development ]]> https://www.proactiveinvestors.com.au/companies/news/202077/danakali-continues-to-progress-eritrean-sulphate-of-potash-project-towards-development-202077.html Danakali Ltd (ASX:DNK) (LSE:DNK) has achieved significant progress towards the development of its Colluli Potash Project in Eritrea, East Africa during the quarter ended June 30, 2018.

The company also crossed a major milestone by starting to trade on the London Stock Exchange (LSE) from July 24, 2018.

READ: Danakali lists on the London Stock Exchange

 

The LSE listing is expected to help Danakali access capital from the London market.

The company, its advisers to the LSE listing and other UK stakeholders ‘ring the bell’

Danakali's new coverage research analyst at Bell Potter, David Coates, recently released his maiden research report on the company, with a speculative buy recommendation and a fair value of $1.19 per share.

READ: Bell Potter research report

Notably, Danakali's shares traded up to 94 cents on the ASX this week, representing the highest share price levels since early 2012.

During the last quarter, Danakali signed a binding offtake agreement for the sulphate of potash (SOP) production from its Colluli project.

READ: Danakali signs offtake deal for full production from Colluli Potash Project

The offtake deal has been signed with EuroChem Trading GmbH, a leading global producer of nitrogen, phosphate and potash fertilizers.

As per the offtake deal, EuroChem will take, pay, market and distribute up to 100% (minimum 87%) of Colluli module I SOP production.

READ: Danakali’s advanced potash project is a cut above the rest

EuroChem may use a portion of the Colluli SOP to produce complex nitrogen-phosphate-potassium (NPK) fertilisers at its facilities in Antwerp, Belgium and Nevinnomyssk, Russia.

Eritrean officials visit Ethiopia for first time in 20 years

Danakali has witnessed significant positive developments in Eritrean-Ethiopian relations throughout June and July 2018.

Eritrean President Isaia Afwerki and Ethiopian Prime Minister Abiy Ahmed recently announced the re-establishment of diplomatic and trade ties.

The progress with Ethiopia has been very well received in Eritrea, with ongoing celebrations taking place

Importantly, the progress in relations between Eritrea and Ethiopia enhances the opportunities for increased economic development for Eritrea and represents a de-risking event for foreign investments.

The company's cash position at June 30, 2018, was $14.4 million.

Key activities planned for the September 2018 quarter include:
- Confirmation of preferred EPCM contractor
- Confirmation of preferred mining contractor, finalisation of negotiations and advancement of contract terms
- Continue due diligence process for debt portion of project financing
- Extensive investor awareness exercises in the UK and other jurisdictions
- Detailed assessment of operations readiness processes and systems to position Danakali and CMSC for development and production

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Thu, 02 Aug 2018 16:34:00 +1000 https://www.proactiveinvestors.com.au/companies/news/202077/danakali-continues-to-progress-eritrean-sulphate-of-potash-project-towards-development-202077.html
<![CDATA[News - Danakali lists on the London Stock Exchange ]]> https://www.proactiveinvestors.com.au/companies/news/201455/danakali-lists-on-the-london-stock-exchange-201455.html Australian-based Danakali Limited (ASX:DNK) (LON:DNK) has added London to its listing on the Australian Securities Exchange.

"We are delighted to deliver on another of our strategic goals for 2018,” said Danakali’s executive chairman Seamus Cornelius.

WATCH: Danakali Limited to begin trading on London's Main Market later this month

“The LSE listing should increase our profile, liquidity and breadth of potential investors. It is a key milestone as we move towards construction and production at the Colluli potash project."

Colluli is a major potash project in Eritrea, situated just 75 kilometres from the coast. 

The shares were steady at 47p.

 

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Tue, 24 Jul 2018 13:48:00 +1000 https://www.proactiveinvestors.com.au/companies/news/201455/danakali-lists-on-the-london-stock-exchange-201455.html
<![CDATA[News - Danakali gets ready for London Stock Exchange listing ]]> https://www.proactiveinvestors.com.au/companies/news/200632/danakali-gets-ready-for-london-stock-exchange-listing-200632.html Danakali Ltd (ASX:DNK) is expected to mark an important milestone by starting to trade on the London Stock Exchange (LSE) main market from 24 July 2018.

The company is focused on the development of the Colluli Potash Project in Eritrea.

Danakali’s shares will continue to remain listed on the Australian Stock Exchange (ASX).

READ: Danakali signs offtake deal for full production from Colluli Potash Project

Danakali’s strategy is to become a leading Sulphate of Potash (SOP) producer through the development of the Colluli Potash Project.

The project represents one of the lowest cost, shallowest and most advanced greenfield SOP development projects globally.

LSE listing provides access to more investors

Danakali executive chairman Seamus Cornelius said: “We are delighted to announce our formal intention to list on the LSE.

“This has been a key strategic objective for us this year, along with the signing of the offtake agreement with EuroChem and the completion of the FEED study.

“The LSE listing provides us with additional access to sophisticated investors in London and internationally with a strong appetite for advanced stage development projects and a good understanding of the African mining and resource environment.

WATCH: Danakali Limited to begin trading on London's Main Market later this month

“Danakali presents an attractive investment opportunity through providing exposure to one of the most advanced and economically attractive SOP projects globally with a post-tax project valuation of US$902 million and IRR of 29.9% for Modules I & II, expected first quartile operating costs, industry leading capital intensity, and an almost 200-year mine life. The Colluli deposit is unrivalled in the SOP industry.

Long-term reliable supply of premium fertiliser

Cornelius added: "We, and our partner ENAMCO, are excited to be progressing the development of this world-class project, and delivering a long-term and stable supply of premium fertiliser for years to come.

“It also promises to be a major contributor to the Eritrean economy through exports, employment and skills. We look forward to bringing Colluli into production, and building value for our shareholders and stakeholders."

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Thu, 12 Jul 2018 12:03:00 +1000 https://www.proactiveinvestors.com.au/companies/news/200632/danakali-gets-ready-for-london-stock-exchange-listing-200632.html
<![CDATA[Media files - Danakali Limited to begin trading on London's Main Market later this month ]]> https://www.proactiveinvestors.com.au/companies/stocktube/9829/danakali-limited-to-begin-trading-on-london-s-main-market-later-this-month-9829.html Thu, 12 Jul 2018 08:06:00 +1000 https://www.proactiveinvestors.com.au/companies/stocktube/9829/danakali-limited-to-begin-trading-on-london-s-main-market-later-this-month-9829.html <![CDATA[Media files - Danakali announces new Executive Chairman and CCO as Colluli project advances ]]> https://www.proactiveinvestors.com.au/companies/stocktube/9573/danakali-announces-new-executive-chairman-and-cco-as-colluli-project-advances-9573.html Thu, 14 Jun 2018 10:15:00 +1000 https://www.proactiveinvestors.com.au/companies/stocktube/9573/danakali-announces-new-executive-chairman-and-cco-as-colluli-project-advances-9573.html <![CDATA[News - Danakali signs offtake deal for full production from Colluli Potash Project ]]> https://www.proactiveinvestors.com.au/companies/news/198659/danakali-signs-offtake-deal-for-full-production-from-colluli-potash-project-198659.html Danakali Ltd (ASX:DNK) and its partner have signed a binding offtake agreement for up to 100% of module I sulphate of potash (SOP) production from the Colluli Potash Project in Eritrea, East Africa.

Danakali’s shares are trading about 9% higher intra-day at 72 cents after signing the offtake deal with EuroChem Trading GmbH, a leading global producer of nitrogen, phosphate and potash fertilizers.

The Colluli project is owned by CMSC, a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO).

READ: Danakali well-funded to continue execution phase at Colluli Potash Project

As per the offtake deal, EuroChem will take, pay, market and distribute up to 100% (minimum 87%) of Colluli module I SOP production.

EuroChem may use a portion of the Colluli SOP to produce complex nitrogen-phosphate-potassium (NPK) fertilisers at its facilities in Antwerp, Belgium and Nevinnomyssk, Russia.

The term of the agreement is 10 years from the date of commissioning of the Colluli SOP processing plant, with an option to extend for a further 3 years if agreed by EuroChem and CMSC.

EuroChem may terminate the agreement if first commercial production has not occurred by 1 July 2022, well beyond CMSC’s production commencement expectations.

READ: Danakali’s advanced potash project is a cut above the rest

Importantly, the agreement is expected to be instrumental in unlocking project funding for the Colluli Potash Project.

Danakali chief executive officer Danny Goeman said: “We could not be happier with this result.

“EuroChem is an outstanding partner for the project. EuroChem has a wealth of experience and expertise in the fertiliser sector.

“We would like to thank EuroChem for their part in what was a smooth and productive negotiation process that has resulted in an excellent outcome for both parties.”

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Tue, 12 Jun 2018 15:09:00 +1000 https://www.proactiveinvestors.com.au/companies/news/198659/danakali-signs-offtake-deal-for-full-production-from-colluli-potash-project-198659.html
<![CDATA[News - Danakali prepares to update market on off-take negotiations ]]> https://www.proactiveinvestors.com.au/companies/news/198498/danakali-prepares-to-update-market-on-off-take-negotiations-198498.html Danakali Ltd (ASX:DNK) has entered a trading halt today pending the release of commercial information regarding the progress of its off-take negotiations.

Shares in the company will remain halted until the earlier of the release of the relevant information or the commencement of trading next Wednesday.

READ: Danakali well-funded to continue execution phase at Colluli Potash Project

Danakali continues the execution phase for its Colluli Potash Project in Eritrea.

After completing the study phase, Danakali is focused on offtake, funding, operational contracts, operational readiness and corporate social responsibility.

READ: Danakali’s advanced potash project is a cut above the rest

The project is owned by the Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO).

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Fri, 08 Jun 2018 11:26:00 +1000 https://www.proactiveinvestors.com.au/companies/news/198498/danakali-prepares-to-update-market-on-off-take-negotiations-198498.html
<![CDATA[News - Danakali well-funded to continue execution phase at Colluli Potash Project ]]> https://www.proactiveinvestors.com.au/companies/news/195917/danakali-well-funded-to-continue-execution-phase-at-colluli-potash-project-195917.html Danakali Ltd (ASX:DNK) is well-funded to continue the execution phase of the Colluli Potash Project in Eritrea with $16.4 million in cash as at March 31, 2018.

The healthy cash balance was boosted during the March quarter with $3.8 million raised through the exercise of 11.1 million options.

After completing the study phase, Danakali is focused on offtake, funding, operational contracts, operational readiness and corporate social responsibility.

READ: Danakali’s advanced potash project is a cut above the rest

The project is owned by the Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO).

During the current quarter, CMSC intends to announce a preferred engineering, procurement, construction and management (EPCM) contractor to manage the project.

A number of EPCM bids were received during the March quarter.

EPCM bids evaluated

These have been reviewed and evaluated for technical and commercial viability and cost competitiveness in consultation with project management consultant Turner & Townsend.

Negotiations with the preferred EPCM contractor have taken place and management expects to seek board approval this quarter.

Mining will be conducted by mining contractors using conventional methods and mechanised equipment, including surface miners, excavators, bulldozers and haul trucks.

Negotiations with the two shortlisted mining contractors have started, supported by Danakali’s mining consultant, AMC.

Power provision negotiations

Final contract conditions for power provision are nearing completion.

This will follow a Build Own Operate Transfer model, which diversifies project risk by utilising the experience of proven operators.

Danakali continues to liaise with the Ministry of Energy and Mines and the Ministry of Land, Water and Environment on the social and environmental management plans.

An impression of the proposed plant at Colluli.

The company is also progressing its offtake strategy and is working with several offtakers who continue to express strong interest in securing granular and standard sulphate of phosphate product.

READ: Danakali major shareholder increases interest through option exercise

Debt funding was initiated in the March quarter through the provision of a Debt Information Memorandum (IM) to potential financiers.

The IM provides detailed project related information and seeks non-binding expressions of interest from potential financiers.

Danakali expects receipt of non-binding expressions of interest in the current quarter.

Activities this quarter

Key activities planned for June quarter include:

▪ Advance bankable offtake agreements and associated approvals

▪ Selection of the preferred EPCM contractor

▪ Finalise negotiations and advance the contract terms with shortlisted mining contractors

▪ Finalise contract terms for preferred power provider ISI

▪ Continue due diligence process for debt project financing

▪ Materially complete the dual listing on the London Stock Exchange

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Fri, 27 Apr 2018 15:23:00 +1000 https://www.proactiveinvestors.com.au/companies/news/195917/danakali-well-funded-to-continue-execution-phase-at-colluli-potash-project-195917.html
<![CDATA[News - Danakali’s advanced potash project is a cut above the rest ]]> https://www.proactiveinvestors.com.au/companies/news/194696/danakalis-advanced-potash-project-is-a-cut-above-the-rest-194696.html Danakali Ltd (ASX:DNK) is focused on the development of the world-class Colluli Potash Project in the East African country of Eritrea.

Colluli is 100% owned by the Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO).

Front end engineering design (FEED) confirmed a post-tax project net present value of US$902 million and post-tax internal rate of return (IRR) of 29.9% for Colluli.

There is no other known sulphate of potash (SOP) greenfield development project that has completed FEED.

Most advanced SOP greenfield project globally

Danakali’s chief executive Danny Goeman said: “Colluli is the premier and most advanced SOP greenfield development project globally.

“It has industry-leading capital intensity, forecast first quartile operating costs, and highly attractive economic returns.

“We are focused on working with our joint venture partner to ensure the successful development of modules I and II, and unlocking the significant expansion and multi-commodity potential of the resource.”

FEED completion transitions Colluli from study phase into project execution phase

FEED provides offtakers and funders with a high level of detail, accuracy and confidence, and provides a robust platform for project execution.

The modular development approach underpins a highly scalable, long life project.

Module I is expected to produce 472,000 tonnes per annum (tpa) of premium SOP product. Module II will increase total SOP production to 944,000 tpa.

Colluli is the closest SOP deposit to a coastline, only 75 kilometres from the Red Sea coast.

It is 230 kilometres from the established port of Massawa, which is equipped with bulk and container loading facilities.

The port allows direct access to markets including India, Southeast Asia, the Middle East, Europe and Africa.

Colluli is also 87 kilometres from a potential port export terminal at Anfile Bay, which is an alternative export option subject to further review.

It has potential to unlock significant value for Colluli by enabling the low-cost export of additional volumes from the project.

Fully permitted and top-tier resource

Colluli is fully permitted following the signing of the Mining Agreement in February 2017; and the subsequent awarding of the requisite Mining Licenses.

The deposit comprises a massive Ore Reserve estimate of 1.1 billion tonnes grading 10.5% potassium oxide for 203 million tonnes of contained SOP equivalent.

Colluli is one of the few resources globally comprising Sylvite, Carnallite and Kainite in an ideal ratio for simple processing.

It is the shallowest evaporite deposit in the world, with mineralisation starting at just 16 metres allowing open-cut mining.

First quartile operating costs

Colluli is amenable to simple, low cost, open-cut mining with a progressive working face that provides access to each of the mineralised layers simultaneously.

The processing method to be utilised at Colluli is the most commonly used, low-cost process for the production of SOP.

The ore body consists of three main members being Sylvinite, Carnallitite and Kainitite which are fed as ore feed into the processing plant, and from which the minerals Sylvite, Carnallite and Kainite are extracted and mixed to produce SOP.

If operating in 2016, Danakali would have been the lowest cost SOP producer outside of China.

Moving towards the execution phase

The completion of FEED unlocks Danakali’s ability to focus on financial close and project execution.

FEED provides off-takers with additional confidence on project execution and its ability to receive funding.

It also provides project financiers with a level of certainty which further de-risks the investment proposition.

The project’s execution phase will incorporate engineering design, procurement, construction, management and commissioning of facilities.

Danakali has released a new Investor Pack which can be accessed here ]]>
Wed, 11 Apr 2018 13:52:00 +1000 https://www.proactiveinvestors.com.au/companies/news/194696/danakalis-advanced-potash-project-is-a-cut-above-the-rest-194696.html
<![CDATA[News - Danakali major shareholder increases interest through option exercise ]]> https://www.proactiveinvestors.com.au/companies/news/194681/danakali-major-shareholder-increases-interest-through-option-exercise-194681.html Danakali Ltd (ASX:DNK) has had major shareholder, Well Efficient Ltd, increase its holding to 13.33% in the company.

The increase came about through the issue of 5 million shares upon exercise of 5 million options with a strike price of 35 cents each.

This option exercise provides the company with $1.75 million in additional funding and takes its holding to 35 million shares in total.

READ: Danakali poised to develop the world's largest undeveloped sulphate of potash deposit

In February 2018, Danakali updated its sulphate of potash ore reserve at its flagship Colluli Potash Project in Eritrea.

The reserve is 1.1 billion tonnes at 10.5% potassium oxide for 203 million tonnes of contained sulphate of potash (SOP) equivalent.

This provides an expected mine life of circa 200 years at proposed production rates.

Colluli’s reserve was updated as part of the Front End Engineering Design (FEED) phase, which investigated options to improve production and cost outcomes.

READ: Danakali sulphate of potash reserve supports mine life of 200 years at Colluli

Danakali is focused on off-take, funding, and project execution in 2018.

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Wed, 11 Apr 2018 08:52:00 +1000 https://www.proactiveinvestors.com.au/companies/news/194681/danakali-major-shareholder-increases-interest-through-option-exercise-194681.html
<![CDATA[News - Danakali poised to develop the world's largest undeveloped sulphate of potash deposit ]]> https://www.proactiveinvestors.com.au/companies/news/193840/danakali-poised-to-develop-the-world-s-largest-undeveloped-sulphate-of-potash-deposit-193840.html Danakali Ltd’s (ASX:DNK) Colluli Potash Project in the Danakil Depression region of Eritrea, East Africa, is the world’s largest undeveloped sulphate of potash (SOP) deposit.

With a profile such as this and a mine life in excess of 200 years, one would expect the company would be trading at a premium valuation, but not so.

The supply-demand metrics for SOP as a fertiliser are expected to grow as they have tended to track population growth, as well as being supported by diminishing arable land.

Adding further traction to the story is that investors only have to wait until 2021 at the latest until the project comes into production.

Analysts at Baillieu Holst Research are more positive, forecasting a profit $15.8 million in 2020.

Bell Potter more conservative but fundamentals are strong

Bell Potter analyst Duncan Hughes is forecasting first production of 460,000 tonnes of SOP to occur in 2021, generating a net profit of $88 million.

Having crunched the numbers on the underlying metrics of the project, it is essential to gain an understanding of its superior position as an emerging global supplier.

It is also worth noting that the project is a 50:50 joint venture between Danakali and the Eritrean National Mining Company (ENAMCO).

Consequently, the government has a vested interest in the success of the project, particularly given its large scale and the boost it will provide to the economy.

Prospective territory with supporting infrastructure

Colluli is about 180 kilometres southeast of the capital Asmara and a similar distance from the port of Massawa, which is Eritrea’s key import/export facility.

The Danakil Depression is an emerging potash province, which commences in Eritrea and extends south across the border into Ethiopia.

It is one of the largest unexploited potash basins globally with over 6 billion tonnes of potassium bearing salts suitable for the production of potash fertilisers having been identified.

Colluli is also only 75 kilometres from the Red Sea coast providing unrivalled future logistics benefits, which could offer additional competitive advantages.

The project is on the Eritrean side of the border, giving Colluli a significant advantage relative to all other potash development projects in the Danakil Depression.

Other developers need to ship from the Tadjoura port in Djibouti, over 600 kilometres by road from the closest project on the Ethiopian side of the border.

Far superior product with economies of scale

Colluli boasts the shallowest mineralisation in the Danakil Depression with mineralisation commencing at 16 metres below-surface.

In addition, the potassium-bearing salts are present in solid form, not necessitating production from SOP brines.

Shallow access to salts in solid form provides Colluli with significant mining, logistics and economic advantages which equate to better margins and more competitive pricing.

Cost advantages drive down capital expenditure

These aspects of the deposit provide capital and operating cost advantages over other global potash developments.

The project also carries a significantly lower level of complexity as a consequence of predictable processing plant feed grade and production rates.

Shallow mineralisation also makes the resource amenable to open cut mining, a proven, high productivity mining method.

Open cut mining provides higher resource recoveries relative to underground and solution mining methods.

Three potassium bearing salts

The Colluli resource comprises three potassium bearing salts in solid form - Sylvinite, Carnallitite and Kainitite.

These salts are suitable for high yield, low energy production of SOP, a high-quality potash fertiliser carrying a price premium over the more common Muriate of Potash (MOP).

The SOP premium over MOP has been gradually increasing and more recently accelerating to a level of 130%.

SOP is chlorine-free and is commonly applied to high-value crops such as fruit, vegetables, nuts, and coffee.

Economic resources for primary production of SOP are geologically scarce and there are few current primary producers.

1.3 billion tonnes resource

The JORC 2012 compliant resource for Colluli is estimated at nearly 1.3 billion tonnes at 11% potassium oxide for 260 million tonnes of contained SOP equivalent.

The ore reserve was updated in February.

READ: Danakali sulphate of potash reserve supports mine life of 200 years at Colluli

The ore reserve estimate for Colluli is estimated at 1,100 million tonnes at 10.5% potassium oxide for 203 million tonnes of contained SOP equivalent

The Colluli mineral resource also comprises 85 million tonnes of Kieserite, a premium fertiliser suitable for magnesium deficient soils.

FEED confirms quality of Colluli project

In late January, the Front-End Engineering Design (FEED) for Colluli was completed, reaffirming the outstanding project economics and world-class nature of the resource.

FEED firmly established Colluli as the most progressed, economically attractive and fundable SOP greenfield development project globally.

The FEED provides off-takers and funders with a high level of study detail and accuracy and it is the final study stage before project execution.

The project net present value is US$902 million with an internal rate of return of 29.9%.

Duncan Hughes responded to the FEED findings in saying: “The size and quality of the Colluli reserve give it strategic value as the project has the lowest capital intensity of SOP developers globally.”

This is a big call given the multi-billion-dollar multinationals that have dominated this space for decades, but the numbers support his assessment.

Robust profit margin at US$525 per tonne

Hughes said: “The end product is a high-grade pure product likely to fetch a premium to peers, and the company is expected to produce the world’s lowest cost SOP on a free on board (FOB) basis."

He is forecasting an industry-leading FOB cost of US$258 per tonne for phase I of the project, reducing to US$242 per tonne when combined with phase II.

This leaves a healthy profit margin based on his SOP price assumption of US$525 per tonne in 2021, a level he believes is sustainable out to at least 2023.

Project financing

The project is fully permitted and ready to advance into engineering and construction after funding is secured.

Completion of the FEED was an important development in terms of clearing the way for financiers as it provided a high level of study detail and accuracy.

A key near-term development could be the securing of offtake agreements.

On this note, Hughes said: “The company is securing offtake and funding for phase I, and we view this as a potential game changer as it will significantly de-risk the world-class project.”

Hughes values the project at $1.08 per share, suggesting the stock is trading about 55% shy of his valuation.

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Tue, 27 Mar 2018 15:41:00 +1100 https://www.proactiveinvestors.com.au/companies/news/193840/danakali-poised-to-develop-the-world-s-largest-undeveloped-sulphate-of-potash-deposit-193840.html
<![CDATA[News - Danakali receives support from director, a show of confidence in Colluli Potash Project ]]> https://www.proactiveinvestors.com.au/companies/news/192215/danakali-receives-support-from-director-a-show-of-confidence-in-colluli-potash-project-192215.html Danakali Ltd (ASX:DNK) has received support from director Paul Donaldson as it moves towards development of the Colluli Potash Project in Eritrea.

Donaldson exercised 50,000 options in Danakali at a strike price of $0.35 bringing his total holding of fully paid shares to circa 2.7 million. 

This provides additional capital for the potash group as well as providing a show of confidence as it enters what Bell Potter describes as a company making year.

Following the completion of a study in January, Duncan Hughes from Bell Potter said Danakali’s Colluli project was the world’s largest undeveloped potash deposit.

READ: Danakali sulphate of potash reserve supports mine life of 200 years at Colluli Colluli viewed as a tier 1 project

Hughes has labelled Colluli as a tier 1 potash because of its likely low-cost development and the high-quality nature of the resource.

Bell Potter noted in January that the outlook for sulphate of potash was favourable with current pricing implying margins of circa US$300 per tonne in phase 1 production.

Hughes expects Danakali to secure offtake agreements which should then lead to a funding solution for the US$300 million project.

Suitable funding could derisk project

Negotiating a suitable funding package would not only go towards derisking the project, it could see Danakali trade closer to Bell Potter’s valuation of $1.08 per share.

This implies a premium of circa 50% to Monday’s closing price of $0.71.

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Tue, 27 Feb 2018 08:27:00 +1100 https://www.proactiveinvestors.com.au/companies/news/192215/danakali-receives-support-from-director-a-show-of-confidence-in-colluli-potash-project-192215.html
<![CDATA[News - Danakali sulphate of potash reserve supports mine life of 200 years at Colluli ]]> https://www.proactiveinvestors.com.au/companies/news/191863/danakali-sulphate-of-potash-reserve-supports-mine-life-of-200-years-at-colluli-191863.html Danakali Ltd’s (ASX:DNK) updated sulphate of potash ore reserve provides an expected mine life of circa 200 years at proposed production rates at the Colluli Potash Project in Eritrea.

The reserve is 1.1 billion tonnes at 10.5% potassium oxide for 203 million tonnes of contained sulphate of potash (SOP) equivalent.

Colluli’s reserve was updated as part of the Front End Engineering Design (FEED) phase, which investigated options to improve production and cost outcomes.

READ: Danakali study puts Colluli potash economics ahead of the pack

Danakali engaged recognised consultants for the development of FEED and associated cost estimates, including many who were involved with the Colluli definitive feasibility study (DFS).

This provided the engineering team with a high level of specific Colluli expertise and study continuity.

Based on two processing modules

The ore reserve estimate is based on a plant configuration comprising two processing modules and offsite water infrastructure to support the site water requirements.

Colluli’s reserve comprises 285 million tonnes at 11.3% potassium oxide of proven ore reserve and 815 million tonnes at 10.3% of probable reserve.

It is the third SOP reserve estimate for the project and replaces the reserve reported on 30 November 2015.

85% of resource included

More than 85% of measured and indicated SOP resources are now included in the reserve estimate.

The resource remains open to the southeast of Area A and to the west of Area B.

FEED investigations continued after mine planning for reserve estimation was complete, including an alternative water supply option for the second plant module from groundwater sources at the project site.

This alternative option has an immaterial impact on the reserve estimate, but yields improved project economics.

Colluli also has a JORC 2012-compliant measured, indicated and inferred rock salt resource estimate of 347 million tonnes at 96.9% sodium chloride.

READ: Danakali bags $180,000 from early exercise of unlisted options

The FEED study has improved the economics of Colluli, delivering industry-leading capital intensity and first quartile operating costs.

It has confirmed Colluli as the world’s most advanced and economically attractive SOP greenfield development project.

No other known project of this type has completed FEED, which provides offtakers and funders with a high level of detail and accuracy.

Key near-term milestones

Danakali is focused on offtake, funding, and project execution in 2018 and key milestones are:

- Progress negotiations to final binding offtake agreements;

- Final EPCM negotiations with shortlisted bidders;

- Final mining negotiations with shortlisted bidders;

- Final power negotiations with the preferred power provider Inglett and Stubbs International;

- Dual listing on the London Stock Exchange; and

- Finalise debt arrangements with commercial lenders.

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Tue, 20 Feb 2018 08:56:00 +1100 https://www.proactiveinvestors.com.au/companies/news/191863/danakali-sulphate-of-potash-reserve-supports-mine-life-of-200-years-at-colluli-191863.html
<![CDATA[News - Danakali bags $180,000 from early exercise of unlisted options ]]> https://www.proactiveinvestors.com.au/companies/news/191799/danakali-bags-180000-from-early-exercise-of-unlisted-options-191799.html Danakali Ltd (ASX:DNK) has issued 450,000 new shares with a total value of almost $180,000 after the early exercising of unlisted options.

There were 400,000 shares issued on exercise of unlisted options with an exercise price of $0.405 each for $162,000.

Another 50,000 shares were issued for a value of $17,500 on the exercise of options with an exercise price of $0.35 each.

Discount to trading price

Both lots of options were due to expire on 13 May 2018 and represent a significant discount to last Friday’s close of $0.72.

Danakali is 50% owner of the Colluli Potash Project in Eritrea, East Africa.

The company is developing Colluli in partnership with the Eritrean National Mining Corporation (ENAMCO).

Mineralisation within the resource begins at just 16 metres, making it the world’s shallowest potash deposit and amenable to open pit mining.

READ: Danakali study puts Colluli potash economics ahead of the pack

Danakali has completed a Front End Engineering Design (FEED) for the production of potassium sulphate, otherwise known as SOP.

This is a chloride-free, specialty fertiliser which carries a substantial price premium relative to the more common potash type, potassium chloride or MOP.

The study demonstrates a project level net present value (NPV) of US$902 million with internal rate of return (IRR) of 29.9% for modules I and II.

Colluli has a JORC-2012 compliant measured, indicated and inferred mineral resource estimate of 1,289 million tonnes at 11% K20.

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Mon, 19 Feb 2018 08:29:00 +1100 https://www.proactiveinvestors.com.au/companies/news/191799/danakali-bags-180000-from-early-exercise-of-unlisted-options-191799.html
<![CDATA[News - Danakali study puts Colluli potash economics ahead of the pack ]]> https://www.proactiveinvestors.com.au/companies/news/190709/danakali-study-puts-colluli-potash-economics-ahead-of-the-pack-190709.html Danakali Ltd (ASX:DNK) has further improved the economics of its tier-1 Colluli Potash Project in Eritrea with a new study delivering industry leading capital intensity and first quartile operating costs.

The front end engineering design (FEED) study has confirmed Colluli as the world’s most advanced and economically attractive sulphate of potash (SOP) greenfield development project.

No other known SOP greenfield development project has completed FEED, which provides offtakers and funders with a high level of detail and accuracy.

NPV of US$902 million

The study demonstrates a project level net present value (NPV) of US$902 million with internal rate of return (IRR) of 29.9% for modules I and II.

The project is 100%-owned by the Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO).

READ: Danakali appoints Danny Goeman as chief executive officer

Danny Goeman, chief executive officer, said: “We are extremely happy with the FEED outcomes for Colluli, which are the culmination of a long period of high quality work from our study team and consultants.

“Colluli is the premier and most progressed SOP greenfield development project globally.

“It has industry leading capital intensity, forecast first quartile operating costs, and highly attractive economic returns.

“As such, the FEED results confirm what we already knew, but, importantly, provide us with a much greater degree of accuracy and certainty, with key cost and valuation outcomes improving significantly.”

Reserve of 1.1 billion tonnes

Colluli is fully permitted and has a 1.1 billion tonne reserve suitable for low cost, shallow, open cut mining.

Fluor was lead FEED consultant supported by industry recognised consultants with intimate knowledge of the project.

Study improves DFS outcomes

The study further reduced the capital intensity achieved in the definitive feasibility study (DFS) due to lower development capital requirements for module I and increased annual production.

Module I is expected to produce 472,000 tonnes of premium SOP product annually.

Module II, which starts in year 6, will increase total annual production to 944,000 tonnes.

The expected mine life at FEED production rates is circa 200 years.

Danakali’s share of the NPV is US$439 million with an IRR of 31.3%.

Colluli’s diversification and multi-commodity potential provides additional upside.

READ: Danakali receives $1 per share valuation from Hannam & Partners

Goeman added: “The successful completion of FEED, as well as the completion of permitting in 2017, further enhances Danakali and CMSC’s ability to finalise binding offtake agreements, advance towards financial close, and execute the project.

“We are looking forward to working with our joint venture partners to ensure the successful development of project modules I and II, and unlocking the significant expansion and multi-commodity potential of the resource.”

Key near term milestones

Danakali is focused on offtake, funding, and project execution in 2018 and the key milestones are:

• Progress negotiations to final binding offtake agreements;
• Final EPCM negotiations with shortlisted bidders;
• Final mining negotiations with shortlisted bidders;
• Final power negotiations with the preferred power provider Inglett and Stubbs International;
• Dual listing on the London Stock Exchange; and
• Finalise debt arrangements with commercial lenders.

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Mon, 29 Jan 2018 10:20:00 +1100 https://www.proactiveinvestors.com.au/companies/news/190709/danakali-study-puts-colluli-potash-economics-ahead-of-the-pack-190709.html
<![CDATA[News - Danakali appoints Danny Goeman as chief executive officer ]]> https://www.proactiveinvestors.com.au/companies/news/189136/danakali-appoints-danny-goeman-as-chief-executive-officer-189136.html Danakali Ltd (ASX: DNK) has appointed the experienced Danny Goeman as chief executive officer effective immediately.

Goeman is an experienced mining industry professional who joined Danakali in 2016 as Head of Marketing and has since developed the offtake strategy and offtake contract frameworks, and led the offtake negotiations on behalf of the Colluli Mining Share Company.

Prior to Danakali Goeman worked within Rio Tinto in roles covering commodity price negotiations, market analysis, market segmentation and price forecasting.

Goeman will replace Paul Donaldson who joined Danakali in 2012.

Seamus Cornelius, chairman, commented:

"This is another positive step forward for Danakali as we move into the development phase at Colluli with our JV partners ENAMCO.

"We believe we have the world's best SOP asset with Colluli, an outstanding team of people and fully aligned stakeholders working together to maximise value through constant improvement in every area.

"Paul's contribution to Danakali has been without equal, and the smooth transition from Paul to Danny as CEO is a testament to the extremely high calibre of both men."

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Thu, 21 Dec 2017 15:40:00 +1100 https://www.proactiveinvestors.com.au/companies/news/189136/danakali-appoints-danny-goeman-as-chief-executive-officer-189136.html
<![CDATA[News - Danakali receives $1 per share valuation from Hannam & Partners ]]> https://www.proactiveinvestors.com.au/companies/news/188689/danakali-receives-1-per-share-valuation-from-hannam-partners-188689.html Danakali Ltd (ASX:DNK) continues to advance the Tier-1 Colluli Potash Project in Eritrea, and has recently attracted the attention of UK-based merchant bank, Hannam and Partners.

Hannam and Partners valuation for Danakali remains unchanged at $1 per share, or a 50% premium to the last traded price of $0.67. The following is an extract from a recent breakfast presentation and report.

Unique project, well advanced

DNK’s 50% owned Colluli project is currently the only fully permitted, post-BFS SOP project globally and has a number of unique advantages over its peers.

Colluli has an exceptional 1.1bn tonne reserve that is suitable for low cost, shallow, open cut mining.

The project also has the lowest capital intensity amongst global development SOP projects due to presence of existing infrastructure, and a relatively simple processing plant design.

During the Potash Breakfast, DNK suggested that the likely commissioning date at Colulli would occur in late 2020.

FEED study improves capital costs

DNK is currently completing front-end engineering design (FEED) which will lead to updated project economics in January 2018.

Preliminary capex estimates, including working capital, show a small decrease to $332m from $337m.

Operating cost estimates for FEED are currently being gathered and will be supported by contractor competitive bids in mining and power generation.

Danakali has so far improved the cost structure of Colluli through each project study phase, which supports our confidence in management’s ability to deliver a profitable SOP project in Colluli.

Small project footprint a key advantage

The key advantage Colulli has is the right combination of carnallite and kainite salts for simple, high-yield conversion to SOP at ambient temperatures.

As Colluli’s salts are already in solid form, there is no need to harvest from brines via evaporation, which significantly reduces the project’s evaporation footprint vs brine producers.

For example, N American SOP producer Compass Minerals has 40k acres of evaporation ponds, whilst Colluli’s DFS plans using only 300 acres to harvest salts on its site.

This combined with a lack of communities or other economic activity on site provides a unique advantage over SOP peers.

Offtake discussion key

Danakali is set to become a globally significant SOP producer, with just Colluli Phase 1 providing around 8% of global SOP supply (based on CRU’s 2016 total SOP supply estimate of 6.1Mt).

During the breakfast, Danakali outlined their offtake strategy which envisages having 85% of its supply under contract with 15% retained for price discovery.

The Company’s marketing strategy is partly to target end users and partly the leading fertiliser traders, and not to focus on a single party solution.

The importance of securing offtake for the 472 ktpa of production during Colluli Phase 1 and 850 ktpa during Phase 2 was emphasised by Monday’s announcement of a management change, where Danny Goeman will transition from Head of Marketing to the role of Chief Executive Officer where his focus will be on the completion of the binding offtake.

The current CEO, Paul Donaldson, will become a Non-Executive Director on the Danakali Board.

SOP a bright spot in an otherwise difficult potash market

SOP is a specialty potash product, vital in the cultivation of chloride-intolerant crops such as fruit and nuts, for which potassium chloride (aka “muriate of potash” or “MOP”) cannot be used.

The premium for SOP vs MOP has risen post the break-up of Uralkali and Belaruskali’s joint marketing deal in 2013, which caused MOP prices to fall, and as SOP demand has grown at a faster pace, especially in China.

While we believe potash in general may see more modest demand growth in the coming years, the outlook for MOP appears particularly challenged by the amount of new capacity expected to come on line.

However, we expect sticky demand from chloride-sensitive farmers and environmental limits on Chinese supply will allow SOP to sustain a healthy premium.

DNK valuation remains unchanged

Using a 0.5x NPV multiple and a $550/t SOP price forecast, we arrive at a valuation for Danakali of US$188m, or A$1.0 per share.

This implies c.42% upside to the current share price.

We will update our valuation in January following the release of updated FEED study project economics.

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Wed, 13 Dec 2017 10:40:00 +1100 https://www.proactiveinvestors.com.au/companies/news/188689/danakali-receives-1-per-share-valuation-from-hannam-partners-188689.html
<![CDATA[News - Danakali on track for strong finish to 2017 at Eritrean potash project ]]> https://www.proactiveinvestors.com.au/companies/news/188154/danakali-on-track-for-strong-finish-to-2017-at-eritrean-potash-project-188154.html Danakali Ltd (ASX:DNK) is increasing its focus on firming offtake agreements and advancing debt and financing at the Colluli Potash Project in Eritrea.

This work comes as the company, which is seeking a secondary listing in the UK, finalises studies, including the front-end engineering design (FEED) phase.

These factors, along with a solid cash position, align Danakali for a strong finish to 2017.

They will also allow it to progress to full engineering and construction of Colluli.

Negotiations for bankable offtake agreements

The company is working with a select group of potential offtake parties to secure bankable offtake agreements.

It has been well supported by Norton Rose Fulbright in developing the contract framework and completion of binding agreements is targeted for early 2018.

READ: Danakali seeks London listing for increased liquidity and access to funds

The company also expects to be boosted by secondary listing on the London Stock Exchange (LSE), which is expected to be completed during the next quarter.

FEED results have improved Colluli’s competitive position as a result of reduced development capital and higher sulphate of potash (SOP) output.

The company believes the project has a lower estimated capital cost per tonne of SOP than any other greenfields development.

READ: Danakali lowers its industry-leading capital costs further

Equipment and supplier lists developed in the FEED phase provide key inputs to the procurement-led debt funding process.

Capital cost estimates for the second module of the two-stage development process are being finalised and will form part of the final FEED economics.

Danakali plans to release these results next month.

Capital optimisation work is expected to be completed this month while optimisation work on the site water intake and treatment area is expected to further reduce development costs.

Project’s world class attributes

Throughout the study phases Danakali said the project has continued to demonstrate world class attributes.

Development capital and overall economics have progressively improved while capital intensity remains unrivalled in contrast with advanced stage peer developments.

The project offers unrivalled capital intensity and valuation metrics.

Colluli is the world’s leading and most progressed SOP development project and Danakali said it is without peer on capital intensity or valuation bases.

Module I has post-tax IRR of 25.2% and when combined with Module II, the project stands at 29.3%, well above other similar projects.

Colluli is in the bottom quartile of cash costs, which protects margins and provides an opportunity for the project to displace high cost secondary SOP supply.

Underpinned by versatile resource

Colluli is underpinned by a versatile resource.

As well as premium SOP, it can produce potassium chloride (MOP), potassium magnesium sulphate (SOP-M), magnesium sulphate and rock salt.

SOP has steadily growing demand with limited new supply coming online and a sustained 130% premium over MOP.

Another advantage of the project is that the resource is shallow, allowing for simple, low cost, open cut mining.

The unique combination of potassium bearing salts allows simple, energy efficient, commercially proven processing.

Colluli’s strategic positioning puts it close to key fertiliser markets and population centres, including India, Middle East, China, Southeast Asia and Europe.

Danakali and joint venture partner Eritrean National Mining Corporation (ENAMCO) each have a 50% ownership interest in the Colluli Mining Share Company (CMSC).

What comes next at Colluli

FEED optimisation will be completed in January with results released.

Final mining negotiations are due to be completed with shortlisted bidders in the first half of 2018.

Danakali will evaluate and finalise the preferred power provider’s proposal in the March quarter.

Offtake negotiations are advancing and the company expects these to be finalised during the first quarter.

Debt arrangements with commercial lenders will be finalised in the first half of 2018 along with the dual LSE listing.

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Mon, 04 Dec 2017 11:39:00 +1100 https://www.proactiveinvestors.com.au/companies/news/188154/danakali-on-track-for-strong-finish-to-2017-at-eritrean-potash-project-188154.html
<![CDATA[News - Danakali lowers its industry-leading capital costs further ]]> https://www.proactiveinvestors.com.au/companies/news/188000/danakali-lowers-its-industry-leading-capital-costs-further-188000.html Danakli Ltd (ASX:DNK) has revealed positive results from its near-complete front end engineering design (FEED) optimisation work for its top-tier Colluli Potash Project in Eritrea.

Significantly, preliminary FEED results show that the project’s module I development capital cost has decreased by 2% compared to the definitive feasibility study (DFS) estimate.

Furthermore, while the cost has been lowered, the FEED production capacity has increased by 11%.

Validates the quality of the work completed during the DFS

These preliminary results from the FEED work verify that Colluli carries industry-leading capital intensity for advanced stage sulphate-of-potash (SOP) projects globally.

The FEED work is being completed by globally recognised, multi-national engineering company, Fluor Corporation (NYSE:FLR).

Notably, the FEED process carries a higher level of accuracy than the DFS and provides an independent engineering data point which validates the work completed by Lycopodium in the DFS.

Final FEED optimisation results expected to be released in January 2018

Paul Donaldson, managing director, said: “We are happy to provide this update to shareholders as our FEED optimisation work nears completion.

“Danakali is closing in on a year of exciting and substantial progress and achievement, with 2018 is set to be a defining year for the company as we look to secure offtake and funding for this world-class project.”

The FEED economics are expected to be complete and released in January 2018 following a full review of the revised economics and ore reserve.

READ: Danakali: Broker Hartleys values the stock at double current valuation

Colluli continues to demonstrate that it is a standout, world-class SOP project.

It is the most advanced greenfield SOP development in the world and has the highest level of rigour and accuracy in its capital and operating costs.

Unlike other SOP projects, Colluli is close to the coast and key markets and has unrivalled growth and product diversification potential.

Furthermore, unlike SOP brine projects, extraction of salts in solid form means the production rate is not subject to weather conditions, providing unmatched reliability of supply.

Shares have nearly doubled over the past 12 months

Danakali has had a strong finish to 2017 with the delivery of another robust piece of study work at its flagship 50% owned Colluli Potash Project.

As the project advances towards financing, development and production, the company has both strengthened its board and more recently flagged a secondary listing in the UK.

READ: Danakali seeks London listing for increased liquidity and access to funds

Advanced negotiations are ongoing with a list of prospective parties, working towards final binding agreements.

Discussions regarding project finance are well progressed pending final equipment lists (FEED reliant), confirmation of key operating contracts (close), and offtake confirmation (well advanced).

In the interim, Danakali is well funded and has the capacity to raise a further $3.4 million from options expiring March 2018 with a $0.35 strike price.

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Thu, 30 Nov 2017 07:43:00 +1100 https://www.proactiveinvestors.com.au/companies/news/188000/danakali-lowers-its-industry-leading-capital-costs-further-188000.html
<![CDATA[News - Danakali reveals mining bid costs are well aligned to the DFS estimates ]]> https://www.proactiveinvestors.com.au/companies/news/187793/danakali-reveals-mining-bid-costs-are-well-aligned-to-the-dfs-estimates-187793.html Danakali Ltd (ASX:DNK) and 50:50 joint venture partner, the Eritrean National Mining Corporation (ENAMCO), continue to advance the Tier-1 Colluli Potash Project in Eritrea.

Following a comprehensive bidding process for the Colluli mining contract, the technical and commercial compliance process is complete.

Most important is that the mining bid costs are well aligned to the DFS cost estimates which validates the quality of the work completed during the study.

The bids are both technically and commercially compliant and have been fully evaluated by AMC Consultants.

The real contract bids will be included in the front end engineering design (FEED) economics, and the FEED process is now drawing to a conclusion.

Final reviews of direct and indirect development capital costs are underway and a revised Ore Reserve will be completed in December / January in accordance with the requirements of JORC-2012.

Paul Donaldson, managing director, commented:

"We are very happy to have progressed our bidding process and commercial and technical evaluation of the mining bids.

"We are also very happy to have real bids supporting the FEED economics and that they are very well aligned to our DFS estimates."

Next steps for Danakali are the completion of commercial negotiations to identify a preferred service provider.

READ: Danakali seeks London listing for increased liquidity and access to funds ]]>
Mon, 27 Nov 2017 12:55:00 +1100 https://www.proactiveinvestors.com.au/companies/news/187793/danakali-reveals-mining-bid-costs-are-well-aligned-to-the-dfs-estimates-187793.html
<![CDATA[News - Danakali seeks London listing for increased liquidity and access to funds ]]> https://www.proactiveinvestors.com.au/companies/news/187603/danakali-seeks-london-listing-for-increased-liquidity-and-access-to-funds-187603.html Danakali Ltd (ASX:DNK) intends to take its 50% owned Colluli Potash Project to the London Stock Exchange (LSE) by seeking a dual-listing. 

Benefits of dual-listing on the LSE include liquidity, access to funds, the relative size of other companies, profile benefits, costs, and the company’s growth potential.

The project is located in the Danakil Depression region of Eritrea, and is circa 75 kilometres from the Red Sea coast, making it one of the most accessible potash deposits globally.

The company is currently developing Colluli in partnership with the Eritrean National Mining Corporation (ENAMCO). Mineralisation within the Colluli resource commences at just 16 metres, making it the world’s shallowest potash deposit.

The resource is amenable to open pit mining, which allows higher overall resource recovery to be achieved, and this is generally safer than underground mining, making it highly advantageous for modular growth.

Danakali has completed a definitive feasibility study (DFS) for the production of potassium sulphate, otherwise known as salt of potash (SOP), a chloride free, specialty fertiliser which carries a substantial price premium relative to the more common potash type, potassium chloride (or MOP).

Management expects that the dual listing will be executed by the June half of 2018. The dual listing is in line with the Danakali's equity strategy which includes effectively mobilising significant UK, European, and Middle East institutional interest, increasing share trading liquidity, and further raising the profile of the Colluli Project.

Management views LSE as the world’s leading stock exchange for African miners

Paul Donaldson, chief executive, highlighted the fact that analysis and advice sought by the company from external parties indicated that the LSE is clearly the world’s leading stock exchange for African focused mining companies.

He noted that there are currently limited opportunities for exposure to mining companies of Danakali's size and quality on the LSE, and it is expected that this dynamic will serve to strengthen interest.

Danakali has been working with UK brokers and advisors, and expects to make appointments in the immediate term. The company is well funded and currently has no specific plans to raise capital in line with the LSE listing.

Furthermore, the company’s shares will continue to be listed and trade on the ASX. Donaldson acknowledged that the ASX remained an important listing jurisdiction for Danakali as it progressed the project.

This is supported by the fact that the company has strong broker support in Australia, has accumulated a substantial retail and high net worth following on the ASX, and has experienced material share price gains since the release of the Colluli DFS and completion of project permitting.

Offtake discussions in progress

Offtake discussions for Colluli are well advanced and running in parallel with funding workstreams and front-end engineering design (FEED) is nearing completion.

Summing up the benefits of the dual listing, Donaldson said, “The decision to list on the LSE is the result of careful consideration and reflects our learnings from extensive interactions with investment communities globally with respect to the company and the Colluli Project." 

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Wed, 22 Nov 2017 08:16:00 +1100 https://www.proactiveinvestors.com.au/companies/news/187603/danakali-seeks-london-listing-for-increased-liquidity-and-access-to-funds-187603.html
<![CDATA[News - Danakali directors exercise heavily in-the-money options ]]> https://www.proactiveinvestors.com.au/companies/news/187398/danakali-directors-exercise-heavily-in-the-money-options-187398.html Danakali Ltd (ASX:DNK) has been an ASX-star performer over the past couple of years, with shares last trading at $0.70, or around double their value a year ago.

Go back three years and the company is a four-bagger.

The rising share price has allowed some option series to move into-the-money, which includes holdings by directors of the company.

Liam Cornelius, a non-executive director, has exercised one million $0.278 options, paying $278,000, with their converted value now $700,000 based on the latest share price.

Cornelius is a founder member of Danakali, and has a direct holding of 14.4 million shares and several lines of options.

He also has an indirect stake of 2.3 million shares, with some additional options.

Paul Donaldson, managing director, exercised 200,000 of the same series of options, increasing his direct stake to 2.7 million shares.

Donaldson also has several lines of options and performance rights.

READ NOW: Danakali chairman exercises options and builds shareholding ]]>
Fri, 17 Nov 2017 09:38:00 +1100 https://www.proactiveinvestors.com.au/companies/news/187398/danakali-directors-exercise-heavily-in-the-money-options-187398.html
<![CDATA[News - Danakali chairman exercises options and builds shareholding ]]> https://www.proactiveinvestors.com.au/companies/news/187197/danakali-chairman-exercises-options-and-builds-shareholding-187197.html Danakali (ASX:DNK) chairman, Seamus Cornelius has once again built upon his major shareholding in the company by exercising 1.3 million options.

The option exercise increases his direct and indirect shareholding in the company to 9.8 million shares.

The 1.3 million options were exercisable at $0.278 and the total value paid of $361,400 will become additional available funding for Danakali.

Danakali is advancing the fully permitted Colluli Potash Project located in Eritrea, East Africa.

The company’s focus has recently shifted to funding, offtake and construction activities following the signing of a mining agreement, award of mining licenses and approval of the social, environmental impact assessment SEIA.

READ NOW: Danakali makes key appointment to advance Colluli Potash Project READ NOW: Danakali appoints Andre Liebenberg to the board ]]>
Wed, 15 Nov 2017 07:14:00 +1100 https://www.proactiveinvestors.com.au/companies/news/187197/danakali-chairman-exercises-options-and-builds-shareholding-187197.html
<![CDATA[News - Danakali makes key appointment to advance Colluli Potash Project ]]> https://www.proactiveinvestors.com.au/companies/news/185535/danakali-makes-key-appointment-to-advance-colluli-potash-project-185535.html Danakali Ltd (ASX:DNK) has appointed William Sandover as head of corporate development and external affairs.

Sandover joins Danakali from an executive director role at Vesparum Capital, and is a former employee of top tier investment banks including Macquarie and UBS.

Paul Donaldson, managing director, commented: "We are pleased to have Will join the Danakali executive management team.

"His skills and extensive experience in equity capital markets, corporate strategy and investor relations strongly align with our overall corporate objectives and further strengthen our team and capability."

Earlier in the month Danakali appointed Andre Liebenberg to the board as a non-executive director.

Liebenberg will be based in London, and brings extensive investor, market, finance, business development and leadership experience.

He has spent over 25 years in private equity, investment banking, and held senior roles within QKR Corporation and BHP Billiton (ASX:BHP).

Danakali holds a 50% interest in the Colluli Potash Project in Eritrea, which is the world’s shallowest potash deposit.

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Fri, 13 Oct 2017 08:56:00 +1100 https://www.proactiveinvestors.com.au/companies/news/185535/danakali-makes-key-appointment-to-advance-colluli-potash-project-185535.html
<![CDATA[News - Danakali appoints Andre Liebenberg to the board ]]> https://www.proactiveinvestors.com.au/companies/news/184876/danakali-appoints-andre-liebenberg-to-the-board-184876.html Danakali Ltd (ASX:DNK) has appointed Andre Liebenberg to the board as a non-executive director.

Danakali holds a 50% interest in the Colluli Potash Project in Eritrea, which is the world’s shallowest potash deposit.

Liebenberg will be based in London, and brings extensive investor, market, finance, business development and leadership experience.

He has spent over 25 years in private equity, investment banking, and held senior roles within QKR Corporation and BHP Billiton (ASX:BHP).

Seamus Cornelius, chairman, commented: "We are pleased to have Andre join the board of Danakali as an independent non-executive director.

"His experience across multiple disciplines and jurisdictions will be very beneficial as we progress through the funding and development phases of the project and into production.

"This is another strong quality endorsement and supports our ongoing commitment to maximise shareholder returns through constant improvement in every area."

READ NOW: Danakali: Broker Hartleys values the stock at double current valuation ]]>
Mon, 02 Oct 2017 11:07:00 +1100 https://www.proactiveinvestors.com.au/companies/news/184876/danakali-appoints-andre-liebenberg-to-the-board-184876.html
<![CDATA[News - Danakali: Broker Hartleys values the stock at double current valuation ]]> https://www.proactiveinvestors.com.au/companies/news/184560/danakali-broker-hartleys-values-the-stock-at-double-current-valuation-184560.html Danakali Ltd (ASX:DNK) holds a 50% interest in a truly Tier 1 asset, the Colluli Potash Project in Eritrea.

Colluli is the world’s shallowest potash deposit, and being amendable to open pit mining, this delivers a higher overall resource recovery and compelling economics.

The resource is favourably positioned to supply the world’s fastest growing markets.

This potential is not going unnoticed by the broker community, with Hartleys applying a Speculative Buy and 12-month price target of $1.16, which is close to double the later traded price of $0.65.

The following is an extract from the broker report.

Offtakes should be arriving soon

Danakali Ltd is continuing to advance its Colluli SOP potash project in Eritrea.

Recent FEED optimisation studies have shown that SOP output capacity can be increased by 47ktpa to 472ktpa, by debottlenecking the processing plant configuration.

Further optimisation of the plant site and pond materials are underway.

The Company has also said that offtake discussions are advancing towards binding agreements, expected to be announced later this year.

We would expect that financing would follow offtake agreements and could be a major catalyst.

The Colluli project is attractive for a number of reasons including its large reserve (1.1Bt @10.76% K2O) giving it an expected mine life >200years, producing 472-944kt pa at low cash costs (~US$290/t CIF) for phase I development capex of US$298m.

The project is unique in its scale, open-pit mining, favourable combination of potassium bearing salts suitable for production of SOP, SOP-M and MOP and ability for low cost expansions to lift production.

Upcoming catalysts for DNK

We view the negotiations for binding offtake agreements as significant, with the Company believing that binding agreements should be finalised later this year.

Other possible catalysts include further optimisation study results and advancements in financing.

Hartleys estimates Stage 1 EBITDA ~A$80m pa to DNK

We assume Stage 1 EBITDA of ~A$80m pa (DNK share), which should more than double after Stage 2 (year 5).

Our pre-tax NPV12 for DNK is ~A$570m (project NPV roughly double).

Consequently, despite the large capital requirement, the project is highly economic. Our DNK base valuation is $1.23/shr.

Using spot prices (US$540/t), our pre-tax NPV12 for DNK is ~A$360m (project NPV roughly double), with Stage 1 EBITDA ~A$60m pa ($120m pa to JV).  Our spot price valuation is $0.60/shr.

Retain Speculative Buy

We retain our Speculative Buy recommendation. The Colluli project is highly economic.

Financing is the final hurdle to development and hence we also expect offtake soon (expected by the end of the year).

We see a trade sale to a larger company as a distinct possibility. We have a twelve-month price target of $1.17, implying funded EV/EBITDA of 7.5x.

We assume construction begins mid next year (CY18), which appears realistic if binding offtakes and financing are completed in the next six months.

We note the last Company to receive a mining licence in Eritrea was Sunridge Gold in 2015, and it was taken over shortly afterwards.

Our fair value takeout price (discount to valuation, but with no more dilution) is >$1.70/shr.

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Tue, 26 Sep 2017 00:07:00 +1000 https://www.proactiveinvestors.com.au/companies/news/184560/danakali-broker-hartleys-values-the-stock-at-double-current-valuation-184560.html
<![CDATA[News - Danakali's world-class sulphate of potash project attracts broker Buy Recommendation ]]> https://www.proactiveinvestors.com.au/companies/news/182569/danakali-s-world-class-sulphate-of-potash-project-attracts-broker-buy-recommendation-182569.html Danakali Ltd (ASX:DNK) has received a Buy Recommendation and valuation of $1.10 from broker Bell Potter.

Danakali last traded a $0.685. The following is an extract from the report.

World class, premium product and low cost

Economically exploitable resources of sulphate of potash (SOP) are geologically
scarce.

DNK’s 50% owned Colluli project in Eritrea is the world’s largest undeveloped
SOP reserve with a mine life in excess of 200 years from first production expected in
2020.

The size and quality of the Colluli reserve give it significant strategic value.

Open pit mining of solid minerals rather than a brine allows for an easier and lower cost processing and mining path than peers.

The solid form salt removes the need for extensive evaporation ponds used in salt lake and solution mining projects thus reducing capital intensity, the environmental footprint of the project and yields.

The project has the lowest capital intensity of SOP developers globally.

The project is located close to an operating port with capacity and access to the world’s growing SOP markets.

DNK is expected to produce the world’s lowest cost SOP on an FOB basis (~US$200/t).

The end product is a high grade (53%), pure product (98%) likely to fetch a premium to peers.

We are confident that there will be significant demand for the high quality and flexible (SOP, SOP-M and MOP) product from Colluli.

SOP prices are on the rise and in excess of modelled price assumptions.

Funding and offtake represent an upcoming de-risking event

A mining license has been awarded and can be considered a key deliverable in offtake
discussions.

Now it is granted, we are hopeful that DNK can progress MOU discussions towards binding offtake and potentially part funding of Colluli this year.

Investment thesis – Buy, (Speculative), valuation $1.10/sh

Our SOTP valuation consists of a risked 0.75xNAV on an NPV10 valuation of the
company’s 50% ownership of the Colluli project. Our valuation also accounts for
unpaid capital and is diluted accordingly.

We value product and reserve upside as well as cash.

DNK have a world class asset, where costs could optimize still lower (already world leading), expected near term offtake and financing should be a game changer.

We initiate with a Buy (speculative) recommendation and valuation of $1.10/sh.

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Thu, 17 Aug 2017 11:46:00 +1000 https://www.proactiveinvestors.com.au/companies/news/182569/danakali-s-world-class-sulphate-of-potash-project-attracts-broker-buy-recommendation-182569.html
<![CDATA[News - Danakali and partner advance Tier-1 Colluli sulphate of potash project ]]> https://www.proactiveinvestors.com.au/companies/news/182019/danakali-and-partner-advance-tier-1-colluli-sulphate-of-potash-project-182019.html Danakali Ltd (ASX:DNK) and its 50:50 joint venture partner, the Eritrean National Mining Corporation (ENAMCO), continue to advance key operational contracts at the Colluli Sulphate of Potash Project.

Mining contract tendering documents have been issued to five potential tenderers who will visit the Colluli site.

This is one of the key operational contracts that will support the project and is a key input for ongoing funding discussions.

Paul Donaldson, managing director for Danakali, commented: "We are very pleased to be progressing our key operating and construction contract bidding processes as we continue to advance the Tier 1 Colluli Sulphate of Potash Project.

"In addition to firming up the project economics as the project advances towards construction, the operational contracts are key inputs to support our ongoing funding discussions."

Potential mining methods

Extensive test work completed throughout the pre-feasibility and definitive feasibility study phases confirmed both the suitability of the open cut mining method for the resource and the suitability of surface miners for the extraction of the suite of salts within the resource.

The open cut method provides superior resource to reserve conversion and allows selective extraction of the various salts within the resource.

Colluli is the only resource globally where primary production of sulphate of potash can be achieved with salts extracted in solid form.

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Mon, 07 Aug 2017 10:38:00 +1000 https://www.proactiveinvestors.com.au/companies/news/182019/danakali-and-partner-advance-tier-1-colluli-sulphate-of-potash-project-182019.html
<![CDATA[News - Danakali reveals positive optimisation outcome for Colluli Potash project ]]> https://www.proactiveinvestors.com.au/companies/news/181520/danakali-reveals-positive-optimisation-outcome-for-colluli-potash-project-181520.html Danakali Ltd (ASX:DNK) and its 50:50 joint venture partner, the Eritrean National Mining Corporation (ENAMCO), have revealed a positive outcome following a comprehensive optimisation program.

The overall site earthworks requirements for the Colluli Potash project in Eritrea have been reduced relative to the Definitive Feasibility Study (DFS).

Evaluation of the earthworks requirements follows a reduction in the overall size of the processing recovery ponds.

This reduction occurred despite an increase in the processing plant throughput relative to the DFS.

Colluli is the most advanced greenfield and lowest cost sulphate of potash (SOP) development project in the world.

Paul Donaldson, managing director for Danakali commented:

"We are very pleased with the outcomes of the optimisation work, and look forward to further results in the upcoming weeks."

Key Points

- FEED optimisation process has improved overall earthworks requirements across entire site relative to DFS;
- Outcomes follow an optimisation process which identified improvements for FEED;
- FEED seeks to build on the industry leading capital intensity demonstrated in the Colluli DFS;
- Processing Cut volumes reduced by almost 30%;
- Processing Plant Fill volumes reduced by 86%;
- Total site surface preparation area reduced by 13%;
- Total site Fill volumes reduced by 22%;
- Prior debottlenecking optimisation has increased production from 425kt to 472kt per annum; and
- FEED phase well advanced.

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Thu, 27 Jul 2017 09:36:00 +1000 https://www.proactiveinvestors.com.au/companies/news/181520/danakali-reveals-positive-optimisation-outcome-for-colluli-potash-project-181520.html
<![CDATA[News - Danakali reveals design enhancements from Colluli Potash ]]> https://www.proactiveinvestors.com.au/companies/news/181173/danakali-reveals-design-enhancements-from-colluli-potash-181173.html Danakali Ltd (ASX:DNK) continues to advance the Tier-1 Colluli Potash project in Eritrea which is a 50:50 joint venture with the Eritrean National Mining Corporation (ENAMCO).

Following an optimisation program, the recovery pond area for the project has been reduced.

The recovery ponds form a key sub-set of the processing plant configuration and allow higher potassium yields by capturing and evaporating waste brines exiting the processing plant.

Paul Donaldson, managing director for Danakali, commented:

"We are very pleased with the positive outcomes of the optimisation work on the recovery ponds and expect that there will be flow on benefits to the construction earthworks.

"The Colluli DFS demonstrated evaporation pond sizes significantly smaller than SOP brine projects as a direct consequence of the potassium salts being extracted from the resource in solid form.

"This benefit is unique to the Colluli resource. We are also very happy that the results from the FEED work are now flowing through, and we look forward to further results in the upcoming weeks."

Other recent improvements include the processing plant throughput increasing to 472,000 tonnes per annum from 425,000 tonnes following a debottlenecking exercise.

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Thu, 20 Jul 2017 11:00:00 +1000 https://www.proactiveinvestors.com.au/companies/news/181173/danakali-reveals-design-enhancements-from-colluli-potash-181173.html
<![CDATA[News - Danakali makes another appointment for Colluli ]]> https://www.proactiveinvestors.com.au/companies/news/178809/danakali-makes-another-appointment-for-colluli-178809.html Danakali (ASX:DNK) has appointed global construction and project management consultants, Turner & Townsend to advance the Colluli Potash Project located in the East African country of Eritrea.

The consultants will define the full scope of the engineering, procurement and construction bidding requirements as the front-end engineering design process progresses.

With over 4,000 employees spread across 90 offices in 38 countries, Turner & Townsend work predominantly for owner’s teams in major capital project developments around the world and have extensive experience globally and within Africa across the infrastructure and energy and mining sectors.

Turner & Townsend also carry potash specific experience from work undertaken in both the U.K. and Canada.

Core competencies include programme strategy and set up, program management, project management, and procurement, cost and commercial management.

Paul Donaldson, managing director, commented:

"We have engaged Turner & Townsend to provide support and advice that will: optimise project set up at the execution stage; facilitate the development of the procurement, construction, commissioning and contracting strategies; and review risk and mitigations through execution of stakeholder engagements."


Colluli Potash Project

Colluli is the most advanced greenfield and lowest cost sulphate of potash (SOP) development project in the world and is making good progress towards construction.

Permitting was completed in February 2017, clearing the way to apply for mining licenses within the Colluli tenements.

Danakali's 50:50 partner is the Eritrean National Mining Corporation (ENAMCO).

The project will be developed in two stages – stage one at 425,000 tonnes per annum and the stage two expansion to 850,000 tonnes per annum.

The ongoing FEED process has now identified an additional 47,000 tonnes per annum of additional capacity for stage one.

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Tue, 06 Jun 2017 12:00:00 +1000 https://www.proactiveinvestors.com.au/companies/news/178809/danakali-makes-another-appointment-for-colluli-178809.html
<![CDATA[News - Danakali takes another step forward at world-class Colluli project ]]> https://www.proactiveinvestors.com.au/companies/news/178515/danakali-takes-another-step-forward-at-world-class-colluli-project-178515.html Danakali (ASX:DNK) and its 50:50 joint venture partner, the Eritrean National Mining Corporation,  have appointed Inglett and Stubbs International as the preferred power provider for the Colluli Sulphate of Potash Project.

Colluli is a Tier-1 project, located in the East African country of Eritrea.

The project is the most advanced greenfield and lowest cost sulphate of potash (SOP) development project in the world.

The valuation of Danakali has almost tripled over the past 12-motnhs, with the company last trading at $0.76 per share.

Adding interest, a new North American substantial shareholder emerged recently, with The Capital Group Companies, Inc holding a 6.79% stake.


Power provider details

The appointment follows a competitive tendering process utilising a build-own-operate-transfer model.

Paul Donaldson, managing director, commented:

"We are very pleased to have identified ISI as the preferred power provider for the Colluli project and look forward to working with them on refining the proposal and integrating it with the outcomes of the front-end engineering design work.

"We are also very pleased with the close alignment between the DFS estimates and the proposals received."

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Wed, 31 May 2017 09:00:00 +1000 https://www.proactiveinvestors.com.au/companies/news/178515/danakali-takes-another-step-forward-at-world-class-colluli-project-178515.html
<![CDATA[News - Danakali gains new North American shareholders ]]> https://www.proactiveinvestors.com.au/companies/news/178298/danakali-gains-new-north-american-shareholders-178298.html Danakali (ASX:DNK) has a new substantial shareholder known as The Capital Group Companies, Inc., which is the parent company of Capital Research and Management Company (CRMC).

CRMC is a U.S.-based investment management company that manages the American Funds family of mutual funds, and now holds a 6.79% stake in Danakali.

Danakali remains focused on the Tier-1 Colluli Potash Project, which is located in the East African country of Eritrea.

Colluli is the most advanced greenfield and lowest cost sulphate of potash (SOP) development project in the world.

Danakali's 50:50 partner is the Eritrean National Mining Corporation (ENAMCO).

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Thu, 25 May 2017 12:30:00 +1000 https://www.proactiveinvestors.com.au/companies/news/178298/danakali-gains-new-north-american-shareholders-178298.html
<![CDATA[News - Danakali secures investor funds for Colluli Potash Project ]]> https://www.proactiveinvestors.com.au/companies/news/177882/danakali-secures-investor-funds-for-colluli-potash-project-177882.html Danakali (ASX:DNK) has secured $12.25 million after receiving commitments from institutional and sophisticated investors for the issue of 20 million shares in a placement priced at $0.62.

Proceeds will be used to continue advancing the Colluli Potash Project located in the East African country of Eritrea.

This includes:

- Completion of the development cost reduction and optimisation work identified in the front-end engineering design process;
- Completion of the tendering processes for key contracts including mining and engineering procurement and construction (EPC); and
- Completion of off-take and financing activities, on the ground work to reduce the project development timeline, working capital and transaction costs.

Paul Donaldson, managing director, commented: “This placement is testimony of how the international profile of the Colluli Project is growing and is a clear endorsement of the project, the jurisdiction and the company.

The project is by all accounts world class and is the most advanced stage greenfield sulphate of potash (SOP) development project globally.

“The resource is positively unique and has outstanding potential. We believe that the industry leading capital intensity, bottom quartile operating costs, unrivalled product diversification potential and proximity to coast and global markets, as demonstrated by the completed definitive feasibility study makes the Colluli Project the most compelling greenfield potash development project in the world.”

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Wed, 17 May 2017 10:00:00 +1000 https://www.proactiveinvestors.com.au/companies/news/177882/danakali-secures-investor-funds-for-colluli-potash-project-177882.html
<![CDATA[News - Danakali to lift funds for world-class Colluli ]]> https://www.proactiveinvestors.com.au/companies/news/177748/danakali-to-lift-funds-for-world-class-colluli-177748.html Danakali (ASX:DNK) has been granted a trading halt by the ASX, pending details of a capital raising.

Colluli is the most advanced greenfield and lowest cost sulphate of potash (SOP) development project in the world.

Danakali's 50:50 partner is the Eritrean National Mining Corporation (ENAMCO).

The halt will remain in place until the opening of trade on Wednesday 17th May 2017, or earlier if an announcement will be made to the market.

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Mon, 15 May 2017 09:00:00 +1000 https://www.proactiveinvestors.com.au/companies/news/177748/danakali-to-lift-funds-for-world-class-colluli-177748.html