Proactive Investors: Danakali begins bidding process for potash project’s power

From: Semere Asmelash <semereasmelash_at_ymail.com_at_dehai.org>
Date: Thu, 12 Jan 2017 19:42:50 +0000 (UTC)

http://www.proactiveinvestors.com.au/companies/news/171497

Danakali begins bidding process for potash project’s power

12 Jan 2017

Paul Donaldson commented: "We are rapidly advancing our world class project."

Danakali (ASX:DNK) has initiated the bidding process for power generation for the Colluli potash project in Eritrea and completed the initial expressions of interest (EOI) phase.

The process is a sign of the continuing momentum for Danakali, who recently appointed globally recognised engineering and construction firm, Fluor, to lead the front end engineering design.

EOI’s have been received from power providers based in the Middle East, Australia, Africa, the United States and the United Kingdom.

The shortlisted parties will formally bid in a competitive tendering process based on the technical specifications for power generation determined in the definitive feasibility study

Paul Donaldson, managing director, commented: “The very high level of interest for providing power generation to the Colluli project is pleasing and it is a clear endorsement of both the project and the jurisdiction.

“We are rapidly advancing our world class project and expect to commence tendering for the mining contract in the near future.”

Background

The definitive feasibility study on Colluli was completed in November 2015 and the project is currently awaiting mining license approvals.

Danakali has a 50% equity interest in Colluli through a joint venture with the Eritrean National Mining Company.

The study forecast the project to have industry leading capital intensity, bottom quartile operating costs and an ore reserve of 1.1 billion tonnes.

Recent milestones at Colluli include the bidding process for the power generation, the appointment of Fluor and approval of the social and environmental impact assessment (SEIA).

Fluor is a highly reputable, globally recognised engineering and construction firm with extensive experience in potash and Africa.

Approval of the SEIA for the project was given by the Ministry of Land, Water and Environment in December 2016 and the award of the Mining Agreement and Mining License for the project is well progressed.

Analysis

Activity regarding the development of Colluli continues to gain momentum, which signifies the project’s value.

Colluli is one of the most advanced greenfield sulphate of potash (SOP) developments in the world, and demonstrates outstanding economics.

This includes industry leading capital intensity, bottom quartile operating costs, close proximity to coast and key markets and unrivalled product diversification potential.

The share price is up 90% over the past 12 months, currently priced at $0.55.

-- 
ASX Announcements 
Power generation expressions of interest for Colluli project complete 
Thursday, 12 January 2017 
PDF 
http://www.asx.com.au/asxpdf/20170112/pdf/43f8fqgcshr4c3.pdf
Received on Thu Jan 12 2017 - 14:42:52 EST

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