85m Tonnes of Kieserite Discovered within Colluli Project Resource

Colluli Potash project defines Kieserite level
The discovery of more than 85 million tonnes of Kieserite further adds to the pipeline of Colluli’s multi agri product suite: the world class Sulphate of Potash (SOP), Sulphate of Potash Magnesia (SOPM) and now Kieserite. The Colluli project is positively unique and has no peer so far.

By Danakali Ltd.,

Danakali Limited (“Danakali”, ASX:DNK) is pleased to announce that the kieserite content in the Colluli Project Resource has been quantified. Kieserite (“Magnesium sulphate monohydrate”, MgSO4.H2O) is a commonly used chloride free, multi-nutrient fertiliser with limited current primary production centres globally.

Highlights

  • In excess of 85 million tonne Kieserite mineral resource contained within the Colluli Project JORC 2012 compliant Mineral Resource estimate
  • Kieserite is a chloride free, multi-nutrient fertiliser containing magnesium and sulphur typically used in cropping, horticulture, palm oil, market gardening and maize production
  • Kieserite reported to trade at approximately US$100 – US$120 per tonne
  • Kieserite further adds to the pipeline of Colluli’s multi agri product suite
  • Colluli Project definitive feasibility study (DFS) demonstrates a world class sulphate of potash (SOP) project, in close proximity to the coast, with a mine life of over 200 years
  • Kieserite expected to be mined as part of the plant feed material for SOP production
  • In addition to SOP and kieserite potential, sulphate of potash magnesia (SOPM) has been produced from the Colluli Project salts for marketing purposes
  • MOUs have been signed for 800,000 t per annum of SOP and 200,000 t per annum of SOPM

Managing Director, Paul Donaldson said

“This further adds to what we believe is a compelling investment case and further substantiates the Colluli Project as a positively unique, world class project with multi agri-commodity potential.

Kieserite is a sought after fertiliser for magnesium deficient soils which are common in jurisdictions proximate to Colluli. The monetisation potential adds to the industry leading capital intensity, superior project economics and bottom quartile operating costs determined in the definitive feasibility study for the production of sulphate of potash.

The geological history of the Danakil Depression has provided a unique resource composition relative to other potash basins throughout the world, enabling it to produce a broad suite of fertiliser products and providing unrivalled product diversification and project upside potential. The project has no peer.

The Colluli Project Mineral Resource Estimate completed by AMC Consultants (AMC) demonstrates that the majority of the kieserite within the Resource sits within the lower carnallitite layer, at a content of approximately 22%.

Additional kieserite is contained within the upper carnallitite and kainitite layers of the Resource . These salts may be extracted to produce Sulphate of Potash (SOP). Metallurgical test work indicates that the kieserite will report to the tailings stream of the processing plant with the design developed in the definitive feasibility study (DFS).

Test work was completed at the Saskatchewan Research Council (SRC) using salts from the Colluli Project Resource. Preliminary liberation testing indicates the kieserite can be separated from the salt in the tailings.

Next Steps

Work will commence in the near future on the recovery of kieserite from the tailings salt and the associated capital and operating costs required for its separation.

About Kieserite

Kieserite is a multi-nutrient fertiliser comprising sulphur and magnesium. It represents an ideal fertiliser for magnesium deficient soils, which are common in India, Africa and South America.

Kieserite is primarily obtained from deep underground mining of minerals in Germany. It occurs in marine evaporites in association with halite, carnallite, polyhalite and kainite. It is an effective magnesium and sulphur source for all crops and in all types of soil. Fine crystalline kieserite is sold for direct application to soil, or it is granulated to a larger particle size that is better suited for mechanical fertilizer spreading or for bulk blending with other fertilisers.

Many soils are low in magnesium (Mg) and require supplemental nutrients to support crop yield and quality. Sandy-textured soils and soils with a low pH (such as highly weathered tropical soils) are frequently characterized by a low Mg supply for plants. Under these conditions, it is a prerequisite to raise the Mg content in the soil by adequate fertilisation.

Fertiliser Mg application rates vary depending on factors such as the specific crop requirement, the quantity removed during harvest, and the ability of soil minerals to release adequate Mg in a timely manner to support crop yield and quality. Kieserite application rates are typically in the range of 200 to 300 kg/ha for many crops.

Current market prices for kieserite can be in the order of US$100 to US$120 per tonne FOB(2), based on supplier quotes (Runzichem (3 August 2016), Anderson Chemicals (3 August 2016), Aussie Fertichem (4 August 2016)). There is no certainty that kieserite will be successfully mined from the Colluli Project. In addition, if kieserite is successfully mined in economically viable quantities, there is no certainty that the Company will realise a sale price based on the current supplier quotes for kieserite.

Two key nutrients in one particle – Magnesium and Sulphur

Magnesium (Mg): The central chemical component of chlorophyll, the pigment molecule responsible for absorbing sunlight during photosynthesis. Providing Mg and K in the proper balance helps increase plant strength and builds resistance to winter kill, drying, insect attack and spray damage.

Sulphur (S): Helps build proteins in plants and is a key component of many unique traits. S puts the “green and leafy” into crops like spinach, gives garlic and asparagus their distinctive flavours and improves the baking quality of wheat. Deficiencies of S are of particular concern, as sulphur dioxide emission-reduction programs cause less S to be returned to the soil via the atmosphere. The sulphate form of the S aids initial root growth, and promotes seed production and vigorous plant growth.

Colluli Project is ideally located for Magnesium deficient regions

The Colluli Project is located in a highly favourable geographical location relative to key agricultural regions with magnesium deficient soils which are predominantly in India, Sub-Sahara Africa, South East Asia and South America.