Photo by: Bloomberg
PERTH (miningweekly.com) – Potash developer Danakali will raise some A$12.25-million through a share placement to sophisticated and institutional investors in the UK and Australia.
The company told shareholders that some 20-million new shares will be issued at a price of 62c each, representing a 7.4% discount to the company’s last closing price on the ASX, and a 7.9% discount to the 30-day volume-weighted average price of Danakali shares.
Proceeds from the placement will be used to complete the development and optimisation work indentified during the front-end engineering design process of the Colluli potash project, in Eritrea, as well as completing the tendering processes for key contracts, including mining and engineering procurement and construction, and completing offtake and financing activities.
“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 the company,” said MD Paul Donaldson.
A 2015 feasibility study estimated that the Stage 1 development of Colluli would require a capital investment of $442-million, with Danakali recently adding a further 47 000 t/y of sulphate of potash output capacity after a systematic debottlenecking of the processing plant configuration.
The additional capacity will increase Stage 1 sulphate of potash output to 472 000 t/y, up from the planned 425 000 t/y identified in the project’s definitive feasibility study.