Danakali Ltd (ASX:DNK) (LON:DNK) (OTCMKTS:SBMSF) (FRA:SO3) has completed a A$20.3 million placement to support the early works program at its Colluli Potash Project in Eritrea, East Africa.

Funds have been received from domestic and international, institutional and sophisticated investors and Danakali will also receive another A$464,400 from directors - subject to shareholder approval at Danakali’s Annual General Meeting planned to be held in June 2021.

Strong support for the placement validates the world-class potash project that hosts large near-surface resources, is close to infrastructure and is favourably positioned to supply the world’s fastest-growing markets.

The company appreciates the strong support of existing and new shareholders and is now well placed to commence the early works program emphasising critical plant and infrastructure in Eritrea to support the full-scale development.

Danakali executive chairman Seamus Cornelius said: “We are grateful for the ongoing support of our shareholders, ENAMCO and other stakeholders. 

“Our team is well prepared to execute on the early works program and will keep the market up to date as we move forward.”

The Colluli Project is 100%-owned by Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO). 

Proceeds from the placement will be used for early work including site road development, geotechnical optimisation, reverse osmosis plant completion and installation, exploration camp relocation and RA International mine camp installation.

Some of the proceeds will also be allocated towards detailed engineering for the project.