http://www.4-traders.com/DANAKALI-LTD-22348369/news/Danakali-Quarterly-Report-Period-Ending-December-2016-23777197/
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http://www.asx.com.au/asxpdf/20170130/pdf/43fl6xbgt6y56g.pdf
Danakali Ltd. Relases Quarterly Update on Colluli Potash Project
ASX Release 30th January 2017 DECEMBER 2016 QUARTERLY REPORT
Danakali Ltd (ASX: DNK) ("Danakali" or "the Company") is pleased to provide this quarterly update on its
Colluli Potash Project ("Colluli" or "the Project"), located in Eritrea, East Africa.
HIGHLIGHTS CONTINUED SUCCESSFUL ADVANCEMENT OF THE WORLD CLASS COLLULI POTASH PROJECT
*Approval of Social and Environmental Impact Assessment (SEIA) by the Eritrean Ministry of Land, Water and Environment
*Appointment of Fluor to lead Front End Engineering Design (FEED) and optimisation process
*Appointment of Global Potash Solutions, Knight Piésold and Elemental Engineering to FEED team
*Commencement of optimisation phase of FEED
*Mining agreement and license approvals positively progressing towards completion
*Advanced marketing MOUs to Drafted Heads of Agreements with high level commercial terms for Off- take Agreements
*Successful Colluli site visit for Mining Analysts and Mining Media completed
PLANNED FOR MARCH QUARTER
*Continued engagement with relevant ministries on the advancement and award of the mining agreement and mining licenses
*Commencement of value engineering and optimisation as part of FEED process
*Commencement of bidding processes for power generation for the Colluli project
*Appointment of mining consultant to develop detailed mining schedules
*Commencement of bidding process for mining contract
*Continuation of off-take discussions to move to non-binding Heads of Agreement
*Continuation of financing discussions
*Commencement of pre-construction geotechnical investigations for pond and plant foundation design
CORPORATE
*Strong cash position of A$10.9m at quarter end
*2,959,546 options exercised
PROJECT UPDATE - MAINTAINING A SUCCESSFUL TRACK RECORD OF PROJECT ADVANCEMENT
During the quarter Danakali Limited ("Danakali" or "the Company"), and its joint venture partner, the Eritrean National Mining Corporation (ENAMCO), has continued its focus on developing the World Class Colluli Potash Project ("Colluli"), located in the Danakil basin in Eritrea, East Africa.
Significant work has positively progressed in all aspects of the project. Key activities completed for the quarter include:
*Approval of the Social and Environmental Impact Assessment (SEIA) by the Ministry of Land, Water and Environment paving the way for the mining approvals.
*Fluor selected to lead the front end engineering design (FEED) and optimisation process, following a competitive bidding process, bringing a highly reputable, internationally recognised engineering and construction company with an outstanding project delivery track record in the minerals industry to the Project.
*Global Potash Solutions (GPS), Knight Piésold and Elemental Engineering appointed to the FEED team, to work with Fluor on process optimisation, equipment selection and commissioning procedures.
*Completed Expressions of Interest (EoI) process for power generation at Colluli.
*Site visit completed by analysts and mining media.
Social and Environmental Impact Assessment approved by the Ministry of Land Water and Environment
The Eritrea Ministry of Land, Water and Environment formally approved the Social and Environmental Impact Assessment (SEIA) for the Colluli Potash Project in December 2016. The approval is a critical pre-requisite for completion of the mining agreement and mining license application and validates the quality of the data collection, baseline condition analysis, associated risk assessments and overall thoroughness of the assessment. The approval follows a comprehensive review by an Impact Review Committee nominated and assembled by the Ministry of Land, Water and Environment, and a mining approvals team nominated
Photo: Hydrological baseline studies in the local area
and assembled by the Ministry of Energy and Mines. As part of the approvals process, representatives of the ministries visited the Colluli project site and local and regional communities. A series of workshop engagements between ministry representatives, review team members, Danakali representatives and CMSC representatives were held in Asmara to ensure an effective review process with alignment of all parties to the successful outcome.
The SEIA process was led by MBS Environmental (MBS) consultants. MBS has a specialist team of environmental scientists, geochemists, engineers and geologists, with expertise in African mining projects throughout the entire project lifecycle. Specific community, social and occupational health and safety components of the SEIA were executed by Sustainability who have global experience in development projects in the resources sector, with specific specialities in Africa.
The SEIA was developed consistent with the criteria specified in the Terms of Reference agreed between CMSC and the Ministry of Land, Water and Environment, as well as IFC Performance Standards and the Equator Principles. It follows
Photo: Detailed mapping of local flora
extensive data gathering programmes from the Colluli site and the wider region. Stakeholder engagements including focus group discussions and town hall meetings were conducted throughout the project study phases, and the final SEIA report document has been made available to local community groups. The project development has strong support from local communities, and the feedback from stakeholders has been exceptionally positive, with clear recognition of the benefits to the region. Stake holder consultations are continuing as the project progresses.
Photo: CMSC and Danakali employees with local residents
Highly regarded engineering firm Fluor selected for FEED following EPC engineers tendering
Three internationally renowned engineering firms were shortlisted for tendering for the front-end engineering design (FEED) and optimisation phase of the Colluli Project, following a comprehensive expression of interest process. The shortlisted group was selected based on African and Eritrean experience, and potash credentials.
A site visit was held with the shortlisted engineering firms in October 2016. Representatives of the firms visited the future Colluli mine site, inspected the nominated processing plant location, traversed the water pipeline and transport corridors, and inspected the Port facility at Massawa from where the product will be exported. The representatives also toured the country capital, Asmara, and met with the heads of the key construction, earthworks and logistics companies in Eritrea.
Internationally recognised, highly reputable construction and engineering company Fluor, was awarded the contract to conduct the FEED and optimisation work for the project. Fluor has exceptional credentials in African projects, has potash experience, and demonstrates proven EPC success across multiple projects. Through their strong relationships with export credit agencies, Fluor provides project financing support to clients. Fluor has a globally distributed footprint and is a leader in the mining industry for developing projects based on a fixed-price EPC contracting strategy. The company strives to deliver quality, fit-for-purpose, solutions at unmatched value and is a recognised leader in optimising projects to reduce capital costs for mining clients.
Photos: Representatives of the shortlisted EPC engineering teams and power
station providers visit the mine site.
Received on Tue Jan 31 2017 - 14:47:45 EST