ASX-listed Danakali has received commitments from investors in the United Kingdom and Australia to subscribe for shares valued at A$12.25 million.Proceeds from the Danakali placement will be used to complete the development cost reduction and optimisation work identified in the front-end engineering design process, completion of the tendering processes for key contracts.
These contracts include mining and EPC, completion of offtake and financing activities, on the ground work to reduce the project development timeline, working capital and transaction costs.
[quote]The Colluli project definitive feasibility study (DFS) was completed in November 2015 and outlined the production of sulphate of potash using a two-module development approach.
The DFS demonstrates industry leading capital intensity and expected bottom quartile operating cost curve position. The expected mine life at the DFS production rates exceeds 200 years.
Optimisation work completed to date has successfully liberated over 10% of expected production capacity, increasing the planned production rate from 425 Ktpa per module to 472 Ktpa per module.
“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 Danakali itself,” says Danakali MD, Paul Donaldson.
“The project is by all accounts world class and is the most advanced stage greenfield sulphate of potash development project globally,” he continues.
“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 DFS makes the Colluli project the most compelling greenfield potash development project in the world.
“We are very pleased with the placement and specifically with the addition of more UK-based institutional investors to our share register.”
Hannam and Partners and Arlington Group Asset Management acted as joint-lead managers to the placement with support from Australian-based financial advisory firm, Baillieu Holst and placed approximately 20 million new ordinary shares in Danakali at a price of $0.62 per share.
Feature image credit: Danakali