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Davenport Resources set to become world-class producer and major potash supplier in Europe

Snapshot

It has four separate potential projects that can be developed independently within its asset base, with several licence areas having a significant content of valuable sulphate and magnesium minerals.

Davenport Resources set to become world-class producer and major supplier of potash in Europe

Quick facts: Davenport Resources Ltd

Price: 0.064 AUD

ASX:DAV
Market: ASX
Market Cap: $13.73 m
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Davenport Resources Ltd (ASX:DVA) (FRA:NV9M) is set to become a world-class producer and major supplier of potash in Europe as development planning progressing for its large potash resource in the South Harz region of Germany.

The company has four separate potential projects that can be developed independently within its asset base, with several of the licence areas having a significant content of valuable sulphate and magnesium minerals.

Ohmgebirge deposit will spearhead its drilling plans while work proceeds in parallel at its Nohra-Elende resource.

The next step is for the company to fund its drilling program and complete a definitive feasibility study (DFS) within 20 months of financing.

“Significant headway”

Davenport managing director Dr Chris Gilchrist said: “It is extremely pleasing that we are making significant headway in the developmental planning for our massive potash resources in Germany.

“We have carefully examined the merits of our various perpetual mining licence areas and concluded that Ohmgebirge should be selected as the spearhead project.

“We also recognise, however, the merits of the huge Nohra-Elende resource and its capacity to provide a diverse basket of specialty fertiliser products.

“Work will continue on this in parallel with developing Ohmgebirge where drilling is expected to take place early next year.

“This will contribute to Davenport developing into a world-class producer and become a major supplier in Europe.”

Four potash projects

The company has an attractive portfolio with a total of JORC inferred resources of over 5.3 billion tonnes containing 567 million tonnes of K2O across four projects in the South Harz region in Thuringia, Germany, which has a long history of potash mining.

Four standalone projects have been identified - Nohra Elende, Ohmgebirge, Mühlhausen-Keula and Ebeleben.

There are also two other exploration targets - Küllstedt and Gräfentonna.

The total licence area covers 659 square kilometres and all the projects are under perpetual mining licences, with no holding costs or royalties.

Several of the licence areas have a significant content of valuable sulphate and magnesium minerals.

The licence areas are also a short distance to the deep-sea port of Hamburg.

It is well-positioned to market potash competitively into France and Germany as logistic distances are much shorter and the 6.5% EU tariff is not applicable.

Ohmgebirge drilling first

The Ohmgebirge scoping study supports the potential for low-cost, low mining and processing risk, long-life project

It has a shallow depth of resource, access to bulk samples and proximity of infrastructure promises low capital expenditure requirements.

In addition, the historic drilling records reduce exploration risks and facilitate a faster timetable.

Potential for premium specialty products

The Nohra-Elende and Mühlhausen-Keula projects offer the potential for premium specialty fertiliser products.

Potash is found in conjunction with Kieserite (MgSO4 ), facilitating the production of a range of premium fertilizer products, including sulphate of potash – a low chloride, premium potash fertiliser.

Global demand

Current production of potash is heavily concentrated in Canada, Belarus and Russia, with western Europe a significant net important.

Davenport believes it is in a strong competitive position relative to both Belarusian and Russian potash operators.

Changes to board

Ian Farmer.

Following a global search for a permanent chairman in September 2020, Ian Farmer was appointed the new chair.

Farmer, a UK-based, highly experienced mining executive, served as chief executive officer of Lonmin Plc (LON:LMI), the third-largest global platinum miner, between 2008 and 2012, where he oversaw a period of significant transformation, both operationally and financially.

Non-executive director and former interim chairman Dr Reinout Koopmans said: “His track record and his strategic and financial expertise in the mining sector will make a critical difference in the development of Davenport going forward.”

“Having completed the scoping studies for what is Western Europe’s largest potash inventory, we are excited to move towards the next phase under Ian’s lead.”

Robert Van der Laan and Koopmans, who stood in as interim chair following the resignation of Patrick McManus, continue as non-executive directors.

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Davenport Resources Ltd's (ASX:DVA) (FRA:NV9M) Ian Farmer talks to Proactive London about his reasons for joining the company - which he says has 'size, quality and location all in one package'. He explains the development planning progress for its large potash resource in the South Harz...

on 20/10/20

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