TIDMDNK
RNS Number : 2154C
Danakali Limited
17 June 2021
Announcement Thursday, 17 June 2021
============= =======================
Colluli Project Update
Detailed Test Work Confirms Production Rates and Optimisation
has Delivered
Lower Opex and Capex
Highlights
-- SOP Production rates in line with FEED and confirmed at above spec grade
-- Production of high purity Sulphate of Potash (SOP) using only
filtered Red Sea seawater drives capital and operating cost
savings
-- Colluli ore proven to produce world class SOP product with very low (< 0.5%) Chloride
-- Column flotation preferred in SOP production, reducing maintenance and capital costs
Danakali Limited (ASX: DNK, LSE: DNK) (Danakali, the Company) is
pleased to announce that CMSC has completed its Test Work and
optimised the process plant design and mass balance using filtered
seawater, significantly reducing capex, opex and maintenance costs.
The results prove that Colluli ore will produce predictable high
grade (51.0%, K2O) SOP at low chloride levels (< 0.5%) at the
stated 472,000 tonnes per annum from Module 1 & 2.
These Test results are the outcome of six (6) months detailed
analysis conducted in collaboration with world leading industry
experts Saskatchewan Research Council (SRC), Global Potash
Solutions (GPS), DRA Global, and CasCan. We worked closely with our
offtake partners, EuroChem, to ensure high quality SOP was produced
in line with international standards.
This Test Work builds on the previous FEED study and optimises
CMSC process design using industry standard equipment and process
combining:
* the use of filtered seawater; * Colluli ore (unique);
* column flotation & equipment testing; * decomposition results;
* co-processing of carnalitite and sylvinitite ore; * desliming & leaching;
* mass balance determination; * particle size & collector dosage
all that reduce project, environmental, operational, finance and
market risk. This reinforces the benefits at Colluli with its
unique natural resources and in situ supplemental potassium that
result in significant economic advantages.
Dr Rod McEachern discusses the results with Executive Chairman,
Seamus Cornelius see Video link:
https://www.danakali.com.au/medias/project-videos
Executive Chairman, Seamus Cornelius commented : "Colluli has
been extensively studied by CMSC and the latest Test Work builds on
and confirms earlier work. While I am aware of the view that we
have done "too much study" the latest results more than justify the
work. Colluli is unique in the proper sense of the word and its
exceptional size, grade and overall quality merit and reward the
extra work. Every study has increased our certainty that Colluli is
the asset that will dominate the SOP industry and change
agriculture for the better in Eritrea, across Africa and beyond.
Actually, knowing we can produce high quality SOP from Colluli ore
using filtered sea water and a fully tested process because we have
done it is another significant advantage for Colluli".
This announcement authorised for release by the Executive
Chairman of Danakali.
For more information, please contact:
Danakali
Seamus Cornelius Mark Riseley
Executive Chairman Head of Corporate Development and IR
+61 8 6266 8368 +61 8 6266 8368
Visit the Company's website: www.danakali.com
Follow Danakali on LinkedIn:
www.linkedin.com/company/danakali-limited
Subscribe to Danakali on YouTube:
www.youtube.com/channel/UChGKN4-M4lOvPKxs9b-IJvw
About Danakali
Danakali Limited (ASX: DNK, LSE: DNK) (Danakali, or the Company)
is an ASX- and LSE-listed potash company focused on the development
of the Colluli Sulphate of Potash Project (Colluli or the Project).
The Project is 100% owned by the Colluli Mining Share Company
(CMSC), a 50:50 joint venture between Danakali and the Eritrean
National Mining Corporation (ENAMCO).
The Project is located in the Danakil Depression region of
Eritrea, East Africa, and is 75km from the Red Sea coast, making it
one of the most accessible potash deposits globally. Mineralisation
within the Colluli resource commences at just 16m, making it the
world's shallowest known potash deposit. The resource is amenable
to open cut mining, which allows higher overall resource recovery
to be achieved, is generally safer than underground mining, and is
highly advantageous for modular growth.
The Company has completed a Front-End Engineering Design (FEED)
for the production of potassium sulphate, otherwise known as
Sulphate of Potash or SOP. SOP is a chloride free, specialty
fertiliser which carries a substantial price premium relative to
the more common potash type; potassium chloride (or MOP). Economic
resources for production of SOP are geologically scarce. The unique
composition of the Colluli resource favours low energy input, high
potassium yield conversion to SOP using commercially proven
technology. One of the key advantages of the resource is that the
salts are present in solid form (in contrast with production of SOP
from brines) which reduces infrastructure costs and substantially
reduces the time required to achieve full production capacity.
The resource is favourably positioned to supply the world's
fastest growing markets. A binding take-or-pay offtake agreement
has been confirmed with EuroChem Trading GmbH (EuroChem) for up to
100% (minimum 87%) of Colluli Module I SOP production.
Development Finance Institutions, Africa Finance Corporation
(AFC) and African Export Import Bank (Afreximbank), have obtained
formal credit approval to provide CMSC with US$200M in senior debt
finance. The credit documentation was executed in December 2019,
allowing drawdown of CMSC senior debt on satisfaction of customary
conditions precedent. This represents the majority of funding
required for the development and construction of the Colluli.
Project execution has commenced and the Company's vision is to
bring Colluli into production using the principles of risk
management, resource utilisation and modularity, using the starting
module (Module I) as a growth platform to develop the resource to
its full potential.
Forward looking statements and disclaimer
The information in this document is published to inform you
about Danakali and its activities. Danakali has endeavoured to
ensure that the information enclosed is accurate at the time of
release, and that it accurately reflects the Company ' s
intentions. All statements in this document, other than statements
of historical facts, that address future production, project
development, reserve or resource potential, exploration drilling,
exploitation activities, corporate transactions and events or
developments that the Company expects to occur, are forward looking
statements. Although the Company believes the expectations
expressed in such statements are based on reasonable assumptions,
such statements are not guarantees of future performance and actual
results or developments may differ materially from those in
forward-looking statements.
Factors that could cause actual results to differ materially
from those in forward-looking statements include market prices of
potash and, exploitation and exploration successes, capital and
operating costs, changes in project parameters as plans continue to
be evaluated, continued availability of capital and financing and
general economic, market or business conditions, as well as those
factors disclosed in the Company ' s filed documents.
There can be no assurance that the development of Colluli will
proceed as planned. Accordingly, readers should not place undue
reliance on forward looking information. Mineral Resources and Ore
Reserves have been reported according to the JORC Code, 2012
Edition. To the extent permitted by law, the Company accepts no
responsibility or liability for any losses or damages of any kind
arising out of the use of any information contained in this
document. Recipients should make their own enquiries in relation to
any investment decisions.
Mineral Resource, Ore Reserve, production target, forecast
financial information and financial assumptions made in this
announcement are consistent with assumptions detailed in the
Company ' s ASX announcements dated 25 February 2015, 23 September
2015, 15 August 2016, 1 February 2017, 29 January 2018, and 19
February 2018 which continue to apply and have not materially
changed. The Company is not aware of any new information or data
that materially affects assumptions made.
No representation or warranty, express or implied, is or will be
made by or on behalf of the Company, and no responsibility or
liability is or will be accepted by the Company or its affiliates,
as to the accuracy, completeness or verification of the information
set out in this announcement, and nothing contained in this
announcement is, or shall be relied upon as, a promise or
representation in this respect, whether as to the past or the
future. The Company and each of its affiliates accordingly
disclaims, to the fullest extent permitted by law, all and any
liability whether arising in tort, contract or otherwise which it
might otherwise have in respect of this announcement or any such
statement.
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June 17, 2021 02:00 ET (06:00 GMT)
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