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Danakali HY 2020 Financial Report

Posted by: Semere Asmelash

Date: Thursday, 27 August 2020

Thursday 27 August, 2020

Danakali Limited

Half-year Report

RNS Number : 3109X
Danakali Limited
27 August 2020

Announcement

Thursday, 27 August 2020

 

Danakali HY 2020 Financial Report

Danakali Limited (ASX: DNK, LSE: DNK, Danakali or the Company), focused on the development of the Colluli Sulphate of Potash Project (Colluli, or the Project), is pleased to release its Financial Report for the six month period ended 30 June 2020 (Half Year Financial Report).

Operational Highlights:   

· EPCM Phases 1 and 2 (FEED Review and Update) completed on budget with all vendor and contractor packages received from DRA Global, allowing the completion of the tender evaluation process

· Business continuity and emergency plans put in place to ensure safety of employees in response to COVID-19

· All resources mobilised in support of desk-based activities to allow continued progress on the development of the Project and EPCM workstreams, including test work and optimisation studies in support of EPCM Phase 3 (Detailed Design)

· Optimisation design opportunities identified for improved Environmental and Capital outcomes

· Notice of Commencement of Mine Development accepted by Eritrean Ministry of Energy & Mines and permits granted for infrastructure development and quarries

· Publication of the inaugural 2019 Sustainability Report, reaffirming our commitment to sustainable mining principles and alignment to the UN SDGs and other international frameworks

Corporate & Financial Highlights:   

· Mutual agreement reached between DNK and AFC to extend the deadline for Tranche 2 equity funding in response to, amongst other things, constraints arising from COVID-19

· Appointment of two AFC nominees as non-executive directors to Danakali's Board of Directors

Expectations for the remainder of 2020:  

· Finalisation of project funding requirements

· Finalise the remaining conditions precedent and receipt of AFC Tranche 2 (US$28.5M)

· Continue design and EPCM optimisation work and Commencement of EPCM Phase 3 (Detailed Design)

Niels Wage, Chief Executive Officer of Danakali, said: "We started 2020 with the kick off of the Project Development for Colluli, and despite the unprecedented and challenging COVID-19 pandemic, we have been able to make good progress with our EPCM activities. I am pleased to report that the business has responded well to the challenges and I thank all of my colleagues for their hard and dedicated work during the period.

Following the significant milestones achieved towards the end of last year, we entered 2020 with a robust plan to significantly progress EPCM activities, bringing Colluli closer to construction. This enabled us to progress on those works that could be delivered remotely whilst restrictions continued.

As COVID-19 restrictions are being relaxed in Eritrea, access to Colluli is possible and we can prepare for construction. The business is well positioned financially with its existing cash resources. With a number of prudent reduction measures that had been taken to manage spend in Q2 2020, we are seeing a lower burn rate, and continue to follow a disciplined and balanced capital allocation policy.

We will continue our focus for the second half of 2020 on closing out the required financing and progressing with the project development. I look forward to reporting on further progress in the months ahead."

Announcement authorised for release by the CEO of Danakali.

For more information, please contact:

Danakali

 

Niels Wage

Chief Executive Officer

+61 8 6189 8635

Mark Riseley

Senior Corporate Development Manager

+61 8 6189 8635

Corporate Broker - Canaccord Genuity

UK IR/PR - Instinctif Partners

James Asensio / Angelos Vlatakis

+44 (0)20 7523 4680

Mark Garraway / Dinara Shikhametova / Sarah Hourahane

danakali@instinctif.com

+44 (0)207 457 2020


Visit the Company's website: www.danakali.com

Follow Danakali on LinkedIn: www.linkedin.com/company/danakali-limited

Subscribe to Danakali on YouTube: www.youtube.com/channel/UChGKN4-M4lOvPKxs9b-IJvw



Danakali eyes finish line for Eritrea potash project

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