Danakali starts with detailed design of Colluli potash project
ASX- and LSE-listed Danakali has confirmed that Phase 1 and 2 of its engineering, procurement, construction and management (EPCM) has been completed on budget, with all vendor and contractor packages received from DRA Global.
This now allows for the completion of the tender evaluation process for the Colluli sulphate of potash project, in Eritrea.
Danakali continues to progress test work and optimisation studies in support of the EPCM Phase 3, which involves detailed design. The first two phases involved a front-end engineering design review and update.
The company has identified optimisation design opportunities for improved environmental and capital outcomes.
Danakali CEO Niels Wage says the company started this year with the kick-off of the project development for Colluli and, despite the unprecedented and challenging Covid-19 pandemic, the company has been able to make good progress with its EPCM activities.
“Following the significant milestones achieved towards the end of last year, we entered 2020 with a robust plan to significantly progress EPCM activities, bringing Colluli closer to construction. This enabled us to progress on those works that could be delivered remotely amid restrictions globally.
“As Covid-19 restrictions are relaxing in Eritrea, access to Colluli is possible and we can prepare for construction. The business is well positioned financially with its existing cash resources.
“With a number of prudent reduction measures that had been taken to manage spend in the second quarter, we are seeing a lower burn rate, and continue to follow a disciplined and balanced capital allocation policy,” he explains.
Danakali will continue its focus for the second half of the year on closing out the required financing for the project and progressing development.
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