Danakali confirms preferred mining contractor for Colluli Sulphate of Potash

Proactive Investors Thursday, 19 December 2019
Danakali Limited (ASX:DNK) has confirmed Earth Moving Worldwide (EMW) as preferred mining contractor for the Colluli Sulphate of Potash Project in Eritrea, Africa. EMW, which was selected after a competitive tendering process, has broad global experience in mining services and will provide the project with strong commercial and technical support. The company has demonstrated a thorough understanding of Colluli through risk analysis and safety preparedness. Mining services scope The mining services scope covers the pre-production period (development) plus the first five years of production and includes the provision, operation and maintenance of excavation, haulage and dewatering equipment. Execution of the mining services contract is expected early in 2020 and production is expected to begin at the world-class project in 2022. “Another major step” Danakali's chief executive officer Niels Wage said: “The confirmation of EMW is another major step for Danakali and Colluli. “We are pleased to be working with a company as experienced as EMW who share our commitment to the well-being of people and the environment surrounding Colluli. “We look forward to providing further updates as we progress through development and into production.” “Excited to build on shared vision” EMW Board of Directors member Yves Aertssen said: “EMW is delighted to be selected by Danakali to be part of Colluli. “Our shared culture and values were clearly evidenced during the tender process. “We are excited to build on this shared vision and work closely with Danakali and all stakeholders in the project to justify the confidence shown in EMW.” Project background The Colluli project is a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO). The project is on track for first production in 2022 after Africa Finance Corporation (AFC) agreed to a US$50 million strategic equity investment earlier this month. Danakali received the proceeds of the first tranche (A$31.8 million) on December 10 which consists of 53 million new Danakali shares at a price of 60 cents per share.   Tranche 2 will consist of about 70 million shares at the same issue price as Tranche 1 to raise the remaining US$28.5 million (A$42.0 million). This is subject to Danakali shareholder approval at a general meeting expected to be held in February 2020, execution of senior debt documentation and other conditions precedent.

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