Danakali to raise A$6.7M via Private Placement
Danakali has received commitments from a UK-based institutional investor to raise gross proceeds of A$6.7 million through the issue of 20.2 million shares at A$0.33 per share. The placement shares are to be issued at a 17.1% discount to the 15-day volume weighted average price of the Company traded on the ASX up to 11 August. MD Paul Donaldson said the placement was an endorsement of the Colluli potash project, Eritrea as a jurisdiction and Danakali as an emerging agri-commodity Company.
- Commitment to issue 20.2M shares at $0.33 per share to a UK based institutional investor to raise A$6.7 million
- Funds raised will be applied to continue the positive progress on the development of the Colluli Project, working capital and corporate purposes
Danakali Limited (ASX: DNK) (“Danakali” or the “Company”) is pleased to announce that it has received commitments from a UK based institutional investor to raise gross proceeds of A$6.7 million through the issue of 20.2 million shares (Placement Shares) at A$0.33 per Share (Placement). The Placement Shares are to be issued at a 17.1% discount to the 15-day volume weighted average price of the Company’sshares traded on the ASX up to 11 August 2016.
Funds raised from the Placement will be used to advance the development of the World Class Colluli Potash Project (Colluli Project), working capital and corporate purposes. The Colluli Project definitive feasibility study (DFS)1 was completed in November 2015 and outlined the production of sulphate of potash (SOP) using a two module development approach, and demonstrates expected industry leading capital intensity and expected bottom quartile operating cost curve position. The expected mine life at the DFS production rates exceeds 200 years(1) .
Danakali Managing Director, Paul Donaldson said: “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. It further demonstrates the attractiveness of the Colluli Project and Danakali as an emerging agri-commodity Company. 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 DFS makes the Colluli Project the most compelling greenfield potash development project in the world. We are very pleased with the Placement and welcome the addition of a UK based institutional investor to our share register.”
The Placement Shares are to be issued under a single tranche under the Company’s 15% placement capacity pursuant to ASX Listing Rule 7.1 (expected to settle on Wednesday, 17 August 2016).
Somers and Partners Pty Ltd acted as Lead Manager to the Placement.
(1): For more information on the Definitive Feasibility Study, refer ASX Announcement dated 30 November 2015. Danakali is not aware of any new information or data that materially affects the information in the announcement and confirms that the material assumptions used in the DFS continue to apply and have not materially changed.