Danakali (ASX:DNK) has secured $12.25 million after receiving commitments from institutional and sophisticated investors in the United Kingdom and Australia for the issue of 20 million new ordinary shares in a placement priced at $0.62.
Proceeds from the Placement will be used to advancing the Colluli Potash Project located in the East African country of Eritrea.
- Completion of the development cost reduction and optimisation work identified in the front-end engineering design process;
- Completion of the tendering processes for key contracts including mining and engineering procurement and construction (EPC); and
- Completion of off-take and financing activities, on the ground work to reduce the project development timeline, working capital and transaction costs.
Paul Donaldson, managing director, commented: “This placement is testimony of how the international profile of the Colluli Project is growing and is a clear endorsement of the project, the jurisdiction and the company.
The project is by all accounts world class and is the most advanced stage greenfield sulphate of potash (SOP) development project globally.
“The resource is positively unique and has outstanding potential. We believe that the industry leading capital intensity, bottom quartile operating costs, unrivalled product diversification potential and proximity to coast and global markets, as demonstrated by the completed definitive feasibility study makes the Colluli Project the most compelling greenfield potash development project in the world.”
Hannam and Partners and Arlington Group Asset Management acted as joint-lead Managers to the Placement with support from Australian based financial advisory firm, baillieu Holst and placed approximately 20 million new ordinary shares in the Company at a price of A$0.62 per share.
The issue price of A$0.62 represents a 7.4% discount to the closing price of $0.67 on ASX and a 7.9% discount to the 30-day ASX VWAP.