The tranche of almost 53 million shares at 60 cents per share was completed on December 10, 2019, and valued in excess of US$21.5 million (~A$31.8 million).
AFC’s investment is part of the overall funding package for development and construction of Danakali’s Colluli Sulphate of Potash (SOP) Project in Eritrea.
Tranche 2 upcoming
Tranche 2 will consist of about 70 million shares at the same issue price as the first tranche to raise another US$28.5 million (~A$42 million).
This is subject to Danakali shareholder approval at a general meeting expected to be held in February 2020, execution of senior debt documentation and other conditions precedent.
Total US$150 million participation
The placement takes AFC’s total participation to US$150 million which demonstrates their major and long-term commitment to the project, Danakali and Eritrea.
This comprises US$50 million in Danakali equity plus US$100 million of credit approved Colluli Mining Share Company (CMSC) senior debt.
“Momentum towards financial close”
Danakali’s chief executive officer Niels Wage said recently: “I am very pleased to have secured AFC as a strategic equity investment partner.
“It marks a significant milestone for Danakali and continues our momentum towards financial close.
“Danakali has made good progress over the past 12 months having secured a large proportion of the development capex for Module I and demonstrated a sustainable approach to the future development of Colluli.”