Mining Contract Expressions of Interest Complete for World Class Colluli Project

- April 5th, 2017

Danakali Ltd. (ASX:DNK; OTC:DNKLY) is pleased to advise that is has completed the expressions of interest (“EOI”) process for mining contractors for the Colluli Potash Project. The EOI phase is a precursor to the mining contract tendering process which will commence shortly.

Danakali Ltd. (ASX:DNK; OTC:DNKLY) is pleased to advise that is has completed the expressions of interest (“EOI”) process for mining contractors for the Colluli Potash Project. The EOI phase is a precursor to the mining contract tendering process which will commence shortly.
Expressions of interest have been received from mining contracting firms based in Australia, South Africa, and the broader African continent. All parties have extensive experience in the African mining industry and specialise in open cut mining methods.
The shortlisted parties will formally bid in a competitive tendering process using further refined and detailed pit designs and material movement schedules derived in the definitive feasibility study.
An appointment of a suitable industry service provider to further optimise and refine the mining schedule, in line with the front end engineering design (FEED) work which is currently underway, will be made in the very near future.
The mining method, which includes the use of conventional haul trucks, excavators and surface miners was established during the Colluli feasibility studies after a series of economic trade-off evaluations.
Surface miners are highly suitable for salt mining and provide a high degree of selectivity. This is highly advantageous for managing the suite of sodium, magnesium and potassium salts within the Colluli resource.
The use of surface miners negates the need for primary crushing within the processing plant and completely eliminates the need for explosives in the mining operations.
The open cut mining method also provides superior resource to reserve conversion in contrast with the alternate potash mining methods of underground and solution mining. The mining operation will generate a low waste to ore ratio of approximately two to one.
Colluli is the most advanced stage greenfield primary sulphate of potash (SOP) project in the world.
Pre-construction activities including the front end engineering design process and advancement of major operational contracts are progressing well whilst funding and off-take discussions continue. Power generation bids have been received and are currently under evaluation.
Managing Director, Paul Donaldson said

“This is another significant step in our pre-construction activities and we now look forward to the final refinement and optimisation of the mining schedules to support the mining contract bidding process. This is a critical operational contract for the project, and we are very pleased to have a high-quality group of candidates to progress to the competitive bidding phase.”

Danakali Limited, in conjunction with the Eritrean National Mining Corporation (“ENAMCO”), is developing the world class Colluli Potash Project located in the Danakil region of Eritrea, East Africa.
Colluli is the largest and shallowest known evaporite deposit in the world with a solid form ore reserve estimate of over 1.1bn tonnes.
Permitting for the project was completed in February 2017, providing the Colluli Mining Share Company (“CMSC”) exclusive rights to apply for mining licenses within the Colluli tenements. Mining licenses have also been granted.
Colluli is the most fundable and economically attractive advanced stage SOP greenfield development in the world. The project demonstrates outstanding economics including industry leading capital intensity, bottom quartile operating costs, close proximity to coast and key markets and unrivalled product diversification potential.
Globally recognised, and highly reputable engineering and construction firm, Fluor was appointed as the lead for the FEED process for the project. The FEED team is also supported by Global Potash Solutions, Knight Piésold and Elemental Engineering.
Forward Looking Statements and Disclaimer
The information in this document is published to inform you about Danakali Limited (the “Company” or “DNK”) and its activities. DNK has endeavoured to ensure that the information enclosed is accurate at the time of release, and that it accurately reflects the Company’s intentions. All statements in this document, other than statements of historical facts, that address future production, project development, reserve or resource potential, exploration drilling, exploitation activities, corporate transactions and events or developments that the Company expects to occur, are forward-looking statements. Although the Company believes the expectations expressed in such statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements.
Factors that could cause actual results to differ materially from those in forward-looking statements include market prices of potash and, exploitation and exploration successes, capital and operating costs, changes in project parameters as plans continue to be evaluated, continued availability of capital and financing and general economic, market or business conditions, as well as those factors disclosed in the Company’s filed documents.
There can be no assurance that the development of the Colluli Project will proceed as planned. Accordingly, readers should not place undue reliance on forward looking information. Mineral Resources and Ore Reserves have been reported according to the JORC Code, 2012 Edition. To the extent permitted by law, the Company accepts no responsibility or liability for any losses or damages of any kind arising out of the use of any information contained in this document. Recipients should make their own enquiries in relation to any investment decisions.
Mineral Resource, Ore Reserve and financial assumptions made in this presentation are consistent with assumptions detailed in the Company’s ASX announcements dated 25 February 2015, 4 March 2015, 19 May 2015, 23 September 2015, 30 November 2015, 15 August 2016 and 1 February 2017 which continue to apply and have not materially changed. The Company is not aware of any new information or data that materially affects assumptions made.
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