Danakali raises funds for Colluli

PERTH (miningweekly.com) – Potash developer Danakali would raise about A$5.5-million to advance its Colluli potash project, in Eritrea.

The ASX-listed company said on Monday that it had received commitments from professional and sophisticated investors for the issue of up to 25-million shares, at a price of 22c each.

The placement would include one free attaching unlisted option, exerciseable at 35c each, with an expiry date of two years from issue, for every two placement shares.

The share placement would be done in two tranches, with the first 23.3-million shares and 11.7-million options falling within the company’s 15% placement capacity. The second tranche of the remaining shares would require shareholder approval at the company’s yearly general meeting in May.

“We are very pleased with this successful placement,” said Danakali MD Paul Donaldson.

“Danakali is now well funded and can focus on progressing Colluli throughout 2016, including the securing of project funding and offtake. The international profile of Colluli is rapidly growing. This world-class project at the centre of booming Asian and African population centres is destined to support a globally significant agri-commodity business for decades to come.”

A 2015 feasibility study into the Colluli project estimated that the Stage 1 development would require a capital investment of $442-million. The study examined a two-module development with an expected production of 425 000 t/y sulphate potash for the first five years of operation, increasing to 850 000 t/y for the remainder of the proposed 30-year mine life.

The Phase 1 development would include a project-owned and -built road, as well as a 900 000 t/y product export terminal.