Danakali Limited (ASX: DNK) today announced that its Colluli Potash Project is execution-ready. The company released the report on its quarterly activities update and financial position of the company for the three months ended 31 December 2018.
Mineral explorer Danakali told that its potash project located in Eritrea, East Africa, Colluli, is execution-ready with the construction and development fully backed by the underwritten debt finance facilities of US$200 million. The project is a 50:50 joint venture between Eritrean National Mining Corporation and Danakali Limited and is operated under the Colluli Mining Share Company (CMSC) which wholly owns the project.Â
Afreximbank and AFC who are acting as a Mandated Lead Arrangers of the project reportedly visited Eritrea during the quarter to meet with Colluli stakeholders and execute the mandate of debt finance. Implementing the debt finance mandate outlines a key project execution and financing milestone for Danakali and CMSC.
Danakali also hosted a senior EuroChem delegation in Eritrea including visits to Massawa port and Colluli. It also held the meetings with key Colluli stakeholders in Asmara, including Eritrean Government Ministries and ENAMCO, as per the report.
Meanwhile, the United Nation Security Council lifted the arms embargo, travel bans and associated sanctions on Eritrea that were placed since December 2009. It marks significant progress for the people of Eritrea who can now get benefitted by more international trade opportunities with a positive impact on foreign investment.
The report further reads that Danakali and CMSC are now focused on logistics and product optimization aspects with the with offtake partner EuroChem, following the signing of binding take-or-pay offtake agreement for 100% (minimum 87%) of Colluli Module I SOP in 2018. The company told that it is also looking into other technical collaboration aspects like operations readiness, operational contracts, funding, and corporate social responsibility initiatives.
Following the completion of the CMSC senior debt process, the company advances its move to secure further funds required for the projects through carrying out extensive awareness exercises to further raise the profile of Danakali and Colluli as well as mobilization of strategic, institutional and private client interest globally.
In November 2018, Danakali senior management completed a regional UK roadshow to supplement Danakaliâs July 2018 London Stock Exchange (LSE) listing. The road shown included the visit to Manchester, Liverpool, Glasgow, London, and Edinburgh.
The company informed that finalization of Colluli contracts with DRA is in line with Mandated Lead Arranger credit approval. DRA is announced as the preferred EPCM contract for Colluli project, and Inglett & Stubbs International is reportedly the preferred power provider for Colluli.
Further, a site visit to Colluli by the Mandated Lead Arrangers and their advisors is reportedly expected to take place in the March 2019 Quarter.
In todayâs trading session, DNK stock price slipped by 1.29% to settle at A$0.765 on 31 January 2019. The stock has witnessed a negative performance change of 0.64% over the past 12 months despite the surge of 1.31% seen in the last three months.
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