Danakali’s Eritrea potash project attracts A$6.7m

JOHANNESBURG (miningweekly.com) – ASX-listed Danakali is looking to raise A$6.7-million through the issue of 20.2-million shares, at A$0.33 apiece, which will be used to advance the development of its Colluli potash project, in Eritrea.

MD Paul Donaldson said on Friday that the placement was testimony to how the international profile of the project, with an estimated mine life of over 200 years, had grown. “This is a clear endorsement of the project, the jurisdiction and the company. It also demonstrates the attractiveness of the Colluli project and Danakali as an emerging agri-commodity company,” he added.

Donaldson further highlighted that the capital intensity, bottom quartile operating costs, unrivalled product diversification potential and proximity to coast and global markets made the project the “most compelling greenfield potash development project in the world”.

The placement shares will be issued under a single tranche under the company’s 15% placement capacity.

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.