Danakali Releases Colluli Potash Project Definitive Feasibility Study

Danakali Ltd. (ASX:DNK) announced definitive feasibility study results from their Colluli Potash Project, located in Africa.
As quoted in the press release:

Key outcomes of the DFS include a reduction in Phase I development capital by over 30% to US$298m resulting in a market leading capital intensity of US$702/t sulphate of potash (SOP) and an accelerated Phase I payback period of 3.5 years.
Highlights:

• Colluli Definitive Feasibility Study (DFS) results exceed expectations and PFS results
• DFS confirms low capex, high margin, long life project
• Phase I development capital reduced by over 30% to US$298m
• Capital payback period of 3.5 years
• Project post tax NPV of US$860m and IRR of 29%
• Colluli in the bottom quartile of the mine gate cost curve
• 1.1 billion tonnes ore reserve, with expected 200+ year mine life
• Preliminary funding discussions underway with offtakers, strategic partners and financiers
• Mining license application process to be initiated in Q1 2016
• Commissioning targeted for Q4 2018
• DFS demonstrates Colluli is one of the most attractive potash projects in the world

Danakali Managing Director, Paul Donaldson, stated:

We are very happy with the DFS outcomes for Colluli. It confirms a robust, low capital intensity, low operating cost project with attractive economic returns and a high level of expandability. The DFS also confirms that Colluli is one of the most attractive potash projects in the world. The 1.1 billion tonne ore reserve that underpins the project, in combination with the suite of potassium salts and proximity to coast and future markets, makes Colluli positively unique. We believe that over the decades to come, Colluli has the potential to grow to an ultimate capacity of 4 to 5 million tonnes per annum of potash products. Rock salt, magnesium chloride and magnesium sulphate within the resource also represent significant project upside. We are looking forward to working with our Joint Venture partners over the upcoming months to advance the approvals process and secure the funding for the project development.

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