Eritrea Awards Mining Licenses for World Class Colluli Project

Development News

Danakali has achieved a significant milestone by having been awarded all seven of the mining licences it applied for at its world class Colluli Potash Project in Eritrea.

Mining licenses awarded to Danakali Ltd
The award of mining licenses follows the signing of a mining agreement with the Eritrean government providing exclusive access over the 1.3 billon tonne potash deposit.

By Danakali Ltd,

Danakali Limited (ASX:DNK) is pleased to advise that the Colluli Mining Share Company (“CMSC”) has been awarded Mining Licenses for the exploitation of mineral resources within the Colluli tenements. This follows the signing of a Mining Agreement between CMSC and the Eritrean Ministry of Energy and Mines.

The Mining Agreement provides exclusive access to CMSC over the 1.3 billon tonne Colluli JORC-2012 compliant potassium resource and associated minerals. CMSC applied for, and were awarded seven mining licenses which span over 60km2 of the 100km2 Agreement area, and represent over 60 years of the 200-year mine life determined in the definitive feasibility study (“DFS”). Additional licenses can be applied for within the Agreement area as required to sustain and/or grow operations.

The licenses allow exploitation of potassium, calcium, sodium, and magnesium salts from the Colluli resource, as well as bromine. The focus of the highly favourable DFS is a two-stage modular development for the production of Sulphate of Potash (“SOP”) which is a high quality, chloride free multi-nutrient potash type with limited primary production centres globally. There is significant growth potential through the monetisation of other salts within the resource and diversification of potash product types.

The award of the Mining Licenses follows the completion of a series of pre-requisites which include the completion and submission of a DFS, submission of a comprehensive social and environmental impact assessment and associated management plans, a series of pre-and post DFS stakeholder engagements with local and regional communities and stakeholders, and the signing of a Mining Agreement.

Managing Director, Paul Donaldson said:

“This is another very significant milestone for both Danakali and the Colluli Mining Share Company. There is a clear and compelling investment case that supports the Colluli development and we have consistently stated that our joint venture partnership is a project enabler. The fact that Colluli is the most advanced SOP project in the world is a testament to that. The award of the agreement and mining licenses are also a clear demonstration that business can be done in Eritrea. We have worked very closely with a number of ministries throughout the approvals process and we are appreciative of both the engagement and support that has been given to the project as it has advanced. Our continued thanks go to our joint venture partners, ENAMCO for their support throughout the various phases of the project to date.”