Mining Contract Expressions of Interest Complete for World Class Colluli Project

Colluli is the largest and shallowest known evaporite deposit in the world with a solid form ore reserve estimate of over 1.1bn tonnes.

Danakali prepares to award mining contract
Danakali prepares to award mining contract. It has completed the expressions of interest process for mining contractors for the Colluli Project.

BY DANAKALI LTD

Danakali Limited (ASX:DNK) is pleased to advise that is has completed the expressions of interest (“EOI”) process for mining contractors for the Colluli Potash Project. The EOI phase is a precursor to the mining contract tendering process which will commence shortly.

Expressions of interest have been received from mining contracting firms based in Australia, South Africa, and the broader African continent. All parties have extensive experience in the African mining industry and specialise in open cut mining methods.

The shortlisted parties will formally bid in a competitive tendering process using further refined and detailed pit designs and material movement schedules derived in the definitive feasibility study.



An appointment of a suitable industry service provider to further optimise and refine the mining schedule, in line with the front end engineering design (FEED) work which is currently underway, will be made in the very near future.

The mining method, which includes the use of conventional haul trucks, excavators and surface miners was established during the Colluli feasibility studies after a series of economic trade-off evaluations.

Surface miners are highly suitable for salt mining and provide a high degree of selectivity. This is highly advantageous for managing the suite of sodium, magnesium and potassium salts within the Colluli resource.

The use of surface miners negates the need for primary crushing within the processing plant and completely eliminates the need for explosives in the mining operations.

The open cut mining method also provides superior resource to reserve conversion in contrast with the alternate potash mining methods of underground and solution mining. The mining operation will generate a low waste to ore ratio of approximately two to one.

Colluli is the most advanced stage greenfield primary sulphate of potash (SOP) project in the world.

Pre-construction activities including the front end engineering design process and advancement of major operational contracts are progressing well whilst funding and off-take discussions continue. Power generation bids have been received and are currently under evaluation.

Managing Director, Paul Donaldson said

“This is another significant step in our pre-construction activities and we now look forward to the final refinement and optimisation of the mining schedules to support the mining contract bidding process. This is a critical operational contract for the project, and we are very pleased to have a high-quality group of candidates to progress to the competitive bidding phase.”

Danakali Limited, in conjunction with the Eritrean National Mining Corporation (“ENAMCO”), is developing the world class Colluli Potash Project located in the Danakil region of Eritrea, East Africa.

Colluli is the largest and shallowest known evaporite deposit in the world with a solid form ore reserve estimate of over 1.1bn tonnes.

Permitting for the project was completed in February 2017, providing the Colluli Mining Share Company (“CMSC”) exclusive rights to apply for mining licenses within the Colluli tenements. Mining licenses have also been granted.

Colluli is the most fundable and economically attractive advanced stage SOP greenfield development in the world. The project demonstrates outstanding economics including industry leading capital intensity, bottom quartile operating costs, close proximity to coast and key markets and unrivalled product diversification potential.

Globally recognised, and highly reputable engineering and construction firm, Fluor was appointed as the lead for the FEED process for the project. The FEED team is also supported by Global Potash Solutions, Knight Piésold and Elemental Engineering.