AMN - ERITREA: Danakali makes progress at potash project

Danakali Ltd is making significant progress towards the development of its Colluli Potash Project in Eritrea. This includes signing a binding offtake agreement for the sulphate of potash (SOP) production from the project.

The offtake deal has been signed with EuroChem Trading GmbH, a leading global producer of nitrogen, phosphate and potash fertilisers. The agreement will see EuroChem take, pay, market and distribute up to 100% of Colluli module 1 SOP production.

EuroChem may use a portion of the Colluli SOP to produce complex nitrogen-phosphate-potassium (NPK) fertilisers at its facilities in Antwerp, Belgium and Nevinnomyssk, Russia.

The company also passed a major milestone on July 24 when it started to trade on the London Stock Exchange (LSE). This is expected to help Danakali access capital from the London market.

Key activities planned by Danakali for the September 2018 quarter include:

- Confirmation of preferred EPCM contractor;

- Confirmation of preferred mining contractor, finalisation of negotiations and advancement of contract terms;

- Continue the due diligence process for debt portion of project financing;

- Extensive investor awareness exercises in the UK and other jurisdictions; and

- Detailed assessment of operations readiness processes and systems to position Danakali and CMSC for development and production.

The company, which is also ASX-listed, is encouraged by significant positive developments in Eritrean-Ethiopian relations throughout June and July.

Eritrean President Isaia Afwerki and Ethiopian Prime Minister Abiy Ahmed recently announced the re-establishment of diplomatic and trade ties.

Importantly, the progress in relations between Eritrea and Ethiopia enhances the opportunities for increased economic development for Eritrea and represents a de-risking event for foreign investments.

www.danakali.com.au