Danakali (NSX:DNK) remains positive for Eritrea’s development after the US Government’s Treasury Office of Foreign Assets Control confirmed that the national emergency has expired.
The national emergency declared in Executive Order 14046 expired on 18 September, removing persons from the specially designated nationals list.
Entities removed under the order include People’s Front for Democracy and Justice, the Eritrean Defense Forces, Red Sea Trading Corporation, and Hidri Trust, together with certain individuals.
Danakali, which is awaiting the Ela Gedel exploration licence, believes this change will be positive for foreign investment in Eritrea and may assist in the licence application.
The removal of US measures will not result in the granting of this licence, and there is no certainty it will be granted.
Danakali submitted its application for an exploration licence within the Ela Gedel Gold and Base Metal Project in the Gash Barka region in November 2023, with the licence area spanning 1,500km2.
The company’s board is hopeful this news may reduce sanctions-related compliance complexity and perceived reputational risk for potential financiers, contractors, service providers, insurers, and joint venture partners considering involvement in Eritrean exploration projects.
Danakali also believes the removal of US measures may ease practical difficulties foreign companies can face when dealing with parties that apply conservative US sanctions screening, while also supporting a ‘more productive’ environment for engagement between Eritrea and international investors.
Executive Chairman Seamus Cornelius says the removal of US measures is a “positive and long overdue development for Eritrea” and the company’s Eritrean colleagues.
“It removes a serious, unjustifiable impediment to their natural rights to social and economic development on their own terms,” Cornelius says.
“We look forward to continuing our long-term involvement in the mineral exploration and development industry in Eritrea.”
Next steps
If Danakali is granted the Ela Gedel licence, the company intends to open a branch in Asmara and create a local exploration team.
The establishment of an Asmara-based branch is expected to take between three to six months after the licence is granted, before the company can commence the exploration program listed in the application.
The exploration licence application remains subject to consideration by Eritrean authorities under Eritrean law. The outcome and timing of the application remain uncertain.
