03/12/2019 - 10:57

Danakali to raise $74m

03/12/2019 - 10:57

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Perth-based Danakali will receive a $US50 million investment from Africa Finance Corporation to fund the development and construction of its Colluli potash project in West Africa.

Danakali to raise $74m
The Colluli potash project is located in the Danakil Depression region of Eritrea, in West Africa.

Perth-based Danakali will receive a $US50 million investment from Africa Finance Corporation to fund the development and construction of its Colluli potash project in West Africa.

The funds will be raised through a share placement, undertaken in two tranches, with the first issuing approximately 53 million shares to AFC at 60 cents per share to raise around $A31.8 million.

The second tranche will comprise the issue of approximately 70 million shares to AFC, also at 60 cents per share, to raise the remaining $A42 million.

Upon completion of the placement, AFC will hold a 32 per cent interest in Danakali and will have the right to nominate up to two directors to the board.

Danakali chief executive Niels Wage said the investment marked a significant milestone for the company.

Danakali has made good progress over the past 12 months having secured a large proportion of the development capex for (Colluli’s) Module I and demonstrated a sustainable approach to the future development of Colluli,” Mr Wage said.

“An investor with the reputation of AFC is a great endorsement of the project and will provide a strong platform to attract further investment.”

Also commenting on the investment was AFC chief executive Samaila D. Zubairu.

“We assess hundreds of potential investment opportunities across Africa every year,” he said.

“Colluli stands apart from other opportunities due to its long life, low cost, low technical risk and proximity to infrastructure.”

Colluli is located in the Danakil Depression region of Eritrea, approximately 230 kilometres south-east of the port of Massawa.

The placement to AFC brings its total participation in Colluli to $US150 million, which Danakali said demonstrated a major and long-term commitment to the project.

Shares in Danakali were down 3.2 per cent to trade at 62 cents per share, as at 12:25pm AEDT.

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