Agnico Eagle's EPS beat expectations; guidance maintained. Based on what evidence? The Colluli potash project also involves evaporation ponds, a run-of-mine (ROM) pad, a sewage treatment plant, fuel storage tanks, accommodation camp, workshops, warehouses, and a main administrative building. The company expects to start full commercial production in mid-December 2022. The project, 50/50 owned by Australian mining company Danakali and the Eritrean Government, is rapidly progressing towards construction. Colluli is positioned very close to vital potash markets. I focus on identifying high-quality deep values in the natural resources sector and undervalued wide-moat businesses, an investment approach that has proven to be extremely rewarding over the years. Thank you for your comment. 2). The agreement encourages the maximisation of netback pricing of SOP produced in the Colluli, which will become the first Africa-based fertiliser provider in the supply chain of EuroChem. ,and the value is around 67,000.00 . The deposit is the only one in the world world where SOP can be made from an open-cut mine due to its extreme shallowness. Eritreas north-eastern and eastern parts have an extensive coastline along the Red Sea, strategically located along the Maritime Silk Road. By downloading this Whitepaper, you acknowledge that we may share your information with our white paper partners/sponsors who may contact you directly with information on their products and services. The appointment of RA International is testament to sound execution of our growth strategy, highlighting continued new business momentum with another significant award in the mining sector., Your email address will not be published. The Colluli potash mine could be an economic game changer for Eritrea but the country is unlikely to undergo an economic transformation as long as Afwerki is in power. The country only has one preferential trade agreement in force (with Italy) and is not a member of the World Trade Organisation. 1. Colluli has been largely de-risked in terms of. The company expects to start full commercial production in mid-December 2022. GDP dropped by -0.6% in 2020 in the wake of the Covid-19 pandemic and a locust invasion. These alternative producers require substantial lead times to generate their harvest salts for processing. Colluli is obviously a tier-1 asset, boasting the lowest-costs in the world and >200 years of mine life. DANAKALI focuses on developing the Colluli potash project in Eritrea, which is wholly owned by Colluli Mining Share Company . region, chief executive Niels Wagetold MINING.COM last year. What Are the Best Fertilizer Stocks? In comparison, Tessenderlo (OTCPK:TSDOF) and Compass Minerals (CMP) have a P/FCF multiple of 10.0X and 20.9X, respectively. %PDF-1.7 The Colluli potash project is expected to commence production in 2022. It is a member of the African Union, the UN and the Intergovernmental Authority on Development which deals with issues around drought and desertification in the Horn of Africa but it is the only African country (out of 55) not to sign up to the African Continental Free Trade Area, the huge free trade area that went live on 1 January 2021. Fig. Jason Mitchell is a senior editor at Investment Monitor, with a specialisation in emerging markets. Danakali reports that the Colluli Mining Share Company (CMSC) has appointed RA International Group as its preferred contractor for the supply of accommodation, support services and other infrastructure buildings in support of the Colluli sulphate of potash project development, in Eritrea. Colluli is located in the Danakil Depression . A United Nations report published in 2019suggested that Colluli could significantly boost the economy of Eritrea. Colluli, furthermore, boasts the shallowest evaporite mineralisation globally and consequently has significant mining, logistics and, in turn, capital and operating cost benefits over other potash development projects in the Danakil Depression and elsewhere. According to the article below the mine will require 1,115 workers during the construction phase and 600 thereafter. Fig. The three key objectives set for the second phase of development included updating the capital estimate, project schedule and identifying key test work required to move into Phase 3. The operating environment weighed heavily on Danakalis decision, as Eritrea is ruled by one of the worldsmost oppressive regimes and was until 2018 on the UNs sanctions list. second phase of development, as the project has a possible 200-year plus Have the local Afar people been displaced and supplies to their communities cut to allow access to the site? Colluli, a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO), has been called a game-changer for Eritreas economy, as it is expected to become one of the worlds most significant and lowest-cost sources of sulphate of potash (SOP), a premium grade fertiliser. The project also involves the construction of a heavy fuel oil-based power plant on-site to meet the electricity requirement. A binding offtake agreement for up to 100% of Module I SOP production, and a US$200M debt financing term sheet have been executed, and all material permits are in place. After the Second World War, it was annexed to Ethiopia. It also has access to solar, wind and geothermal energy systems the East African rift. It has industry-leading capital intensity, forecast first quartile operating costs, and highly attractive economic returns. The Perth-basedminer noted that despite covid-19 restrictions, engineering, procurement and construction management (EPCM) activities have continued as scheduled. I recommend a book by Martin Plaut, a senior researcher at Londons Institute of Commonwealth Studies and former Africa Editor of the BBCs World Service called Understanding Eritrea: Inside Africas Most Repressive State (https://www.hurstpublishers.com/book/understanding-eritrea-2/). There are many sources of potassium, including. It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt. In 2023, Botswana expects diamond output to decline by 1%. There was a famous incident where some of the disabled tried to walk into town to complain to him, and they were met by the police and the army who opened fire on them. In some cases, depending on the ambient conditions, this process can take over two years. #google_translate_element2 {display:none!important;} The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.. Many Eritreans hoped that the peace deal with Ethiopia would create economic opportunities for the country, but there is little sign of that happening yet. "They were only used to getting effectively pocket money and food, lodging and, of course, ammunition and weapons, and they began to turn round and say: 'Well, hang on, we now have to look after our families. According to Reporters Without Borders, only North Korea has less press freedom. As part of the agreement with CMSC, owned 50:50 by Danakali and the Eritrean National Mining Corporation, RA will supply, deliver and install a mine accommodation camp as well as a plant administration and service facilities for the Colluli mine site. Colluli has a JORC-2012 compliant Measured, Indicated and Inferred Mineral Resource estimate of 1,289Mt @11% K20. I bought many shares @ 67 Cents per share, total of 240.000.00 Now the share is under 20 Cents. Abu Dhabi has established a growing reputation as a source of innovation due to forward-thinking projects across sectors including energy, infrastructure, sport, culture and tourism. Net to Danakali's 50% interest, Module I is projected to generate NPV-10 of 242 million, on average delivering an undiscounted FCF of US$43 million per year, with a post-finance IRR of 29.7%; module I&II is projected to generate NPV-10 of 439 million, on average delivering an undiscounted FCF of US$85 million per year, with a post-finance IRR of 31.3% (Table 1). The SOP quality spectrum, from the same source as Fig. It has a geographic area of 117,600km2, making it slightly larger than Bulgaria. What are the best countries for cryptocurrency adoption? A port development at Anfile Bay could assist in unlocking this potential. stream Below, let's look at Danakali Ltd. (DNK.ASX) (OTCPK:SBMSF) (OTCPK:DNKLY), which operates in Eritrea. However, in July 2018, a peace agreement was finally reached between Afwerki and Ethiopias Prime Minister, Abiy Ahmed. Internal industry and services contribute the majority of the remaining GDP, while agriculture accounts for only 13% (despite employing 80% of the population). The Colluli project lies in an area that saw detailed geological and geochemical work by USAID and US Geological Survey with the Eritrean Ministry of Mines and Energy. "The analysis of direct impacts of Colluli potash project and its potential contributions to the sustainable development agenda in Eritrea is focused on five main areas," the report states. body {top:0 !important;} Potash products including SOP, MOP, and SOP-M all have the potential to be produced at Colluli. A United Nations report says that Eritrea's Danakali Colluli potash project has the potential to boost the economy of the country that was removed from the UN's sanctions list only two months ago. Fig. Australia's Danakali (ASX: DNK) is selling its 50% stake in the Colluli potash project in Eritrea, Africa, almost 13 years after partnering with the Eritrean National Mining Corporation. Colluli Potash Project, Eritrea. ( source):Danakalihttps://www.danakali.com.au/You can play an important role in investing in a truly once in a lifetime business opportunity. Mineral & Phosphate Mining in the US industry outlook (2022-2027) poll Average industry growth 2022-2027: x.x lock Purchase this report or a membership to unlock the average company profit margin for this industry. Danakali (DNK) - Technical Analysis. What are my chances of getting my money back? (5) a community of investors to bounce off ideas and share information with. The Colluli project requires low upfront development costs and is highly scalable for long-life production. Discover how your business could benefit from a base in Masdar Citys economic free zone, download this free whitepaper. Earth Moving Worldwide (EMW) was selected to provide mining services for the Colluli potash project in December 2019. At Colluli, the JORC-2012 compliant mineral resource is estimated at 1,289 Mt at 11% K2O for 260 Mt of contained SOP equivalent. All primary production of potassium sulphate from kainitite worldwide commence with low potassium content brines, which require substantial solar evaporation to generate a harvest salt for subsequent processing. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. The Colluli project is located in the Danakil Depression region of Eritrea, East Africa, about 75 km from the Red Sea coast. In 1993, after a brutal war of independence from Ethiopia lasting almost three decades and led by Isaias Afwerki Eritrea became a sovereign country. Colluli, which Danakali shares with the Eritrean National Mining Corporation, is scoped to produce 472,000 tons a year of potash in sulphate (SOP) in its first phase before scaling up to second phase production of 944,000 tons annually. The Project has unrivalled potash product versatility. Eritrea one of the least accessible countries for humanitarian organisations, Searches, Arrests, and Tension in Eritrea, Eritreas jailed journalist exhibition opens in UK Parliament, Dispute over Patriach splits Norwegian Orthodox church in two, Twenty one years after being jailed, Eritreas independent journalists are remembered in the British Parliament. Phase one involving an estimated capital investment of $298m is expected to produce 472,000 tonnes (t) a year of high-quality SOP, while in phase two, the mine is expected to produce up to 944,000t of SOP from year six of the project with an additional capital investment of $202m. With planned production of 1m tonnes/year of SOP, it will put Eritrea among the topten potash producers in the world. 9. The Danakil salt basin, in Eritrea, is a positively unique example as it is one of only very few known potash deposits where kainite, a sulphate bearing mineral key for potassium sulphate production, is found in solid form. The JORC-2012 compliant mineral resource estimate, from this source. In June 2018, Danakali reached a binding take-or-pay offtake agreement with EuroChem Trading GmbH (EuroChem). They have significant experience in executing projects of the scale and quality required for the Colluli project. It is generally used in combination with the other two macro-nutrients, nitrogen and phosphorus, to produce a range of fertilisers, the type used being dependent on the soil to which it will be applied. As inflation falls, what can be expected from the Bank of England in the months to come? Disclosure: I am/we are long SBMSF, CMP. The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. I am not receiving compensation for it (other than from Seeking Alpha). Open-cut solid salt mining beats underground solid salt mining, lacustrine brine, and playa brine in operating costs. The project will be developed in multi-modules, with Module I serving as a platform for future growth. The deposit is located in the Danakil depression region of Eritrea, about 75km away from the Red Sea coast and 177km south-east of Asmara, the capital city (with a population of 960,000 people). In turn the well-defined geological features support our ability to maximise the potential from this the multi salt deposit. The Colluli project is a 5050 joint venture between South Boulder Mines and the government-owned Eritrean National Mining Corporation. The above advantageous features combine to make Colluli the lowest-cost SOP producer outside of China (Fig. A United Nations reportpublished last yearsuggested that Colluli could significantly boost Eritreas economy. The 600 person camp capacity is exclusive of camp services personnel, which will have an additional camp, provided by RA, located within the overall camp boundary. In the sprawling mining sector, potash mining is unique in that potash mines typically last decades to even centuries, thus forcing the miners to deploy capital for the long-term return, and that transportation of bulk-tonnage potash tends to lead to regional monopolies. The Colluli potash deposit is considered to be one of the worlds shallowest evaporite mineralisation with potash resources found just 16m below the surface. .goog-te-menu-value:hover {text-decoration:none !important;} <>/Metadata 306 0 R/ViewerPreferences 307 0 R>> With the first production scheduled for 2022, Danakali is well positioned to emerge as a pure-play SOP producer in the coming years, especially considering its low-cost structure (Fig. At mine-gate production costs of US$149-165/t or total cash costs of US$242-258/t, Colluli can be profitable even at the current low SOP price of US$500-650/t. Sylvinite and carnallitite both produce potassium chloride, which is then combined with decomposed kainitite to form high purity potassium sulphate. It has a Human Development Index of 0.42, which puts it among the ten least-developed countries on the planet. and mag chloride to be commercialized with minimal further processing required. Development is already underway with expected production in 2022. 3). Proudly Researched by: Melanie Miles. Additionally, it will provide comprehensive camp services incorporating catering, cleaning, laundry, pest and vector control, grounds keeping and waste management. The best energy and mining stock ideas with multibagger potential. Danakali has a 50% interest in a JV with the Eritrean National Mining Corporation (or ENAMCO), which operates the Colluli project. AustraliasDanakali(ASX: DNK) is selling its 50% stake in the Colluli potash project in Eritrea, Africa, almost 13 years after partnering with the Eritrean National Mining Corporation (ENAMCO) to build the mine.Subject to conditions, the deal with Chinese company Sichuan Road and Bridge Group is expected to be finalized between March and May next year, leaving Danakali with $121 million cash, of which 90% will be distributed back to shareholders.The miner said it would use the remaining cash about $12 million to identify new projects and potential new alternative growth opportunities.The Colluli potash project is considered one of the worlds most significant and lowest-cost sources of sulphate of potash (SOP), a premium grade fertilizer.The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. It also has access to solar, wind and geothermal energy systems the East African rift. It also provides off-takers with additional confidence on Project certainty and fundability, supporting the finalisation of binding bankable offtake agreements. They are in deep need. Has access to the Ethiopian side of the deposit been guaranteed? with the move towards diplomatic relations between the once feuding countries Danakali Lmited is selling share to China. The proximity to the coast and the established port infrastructure in the Port of Massawa gives Colluli unrivalled access to global export markets, and it also decreases logistics costs from the mine gate onto the ship. In the initial phase of operation, Wage said, Colluli would Colluli contains three potassium-bearing salts in solid form, namely. It also contains other fertilizer products, such as muriate of potash (MOP) and gypsum, along with rock salt. Eritrea has managed to fall out with and then mend fences with every one of its neighbouring countries. The project has the worlds largest JORC compliant reserve at 1.1 billion tonnes. taxation and exports, and from jobs and skills and economic development of the Danakali, currently undervalued and standing for a massive re-rating upon the first production, should be considered by risk-tolerant investors with a long time horizon. Sadly, Eritrea looks set to remain a failed state as long as he is in office. The country also has 486,200 refugees, including 123,413 living in Sudan, 172,750 in Ethiopia and 18,976 in Egypt. The government monitors telephone and internet traffic and runs an extensive domestic surveillance system. For the area a high-temperature geothermal reservoir was identified in Alid with estimates of a potential heat of 250 to 300 degrees Celsius. The Colluli Potash Project (Project, Colluli) is 100% owned by Colluli Mining Share Company (CMSC,) a 50:50 Joint Venture between Danakali Limited (DNK) and Eritrean National Mining rporation (ENAMCO) Codes: ASX: DNK, SO3-FRA, SO3-BER. Masdar City Free Zone, in the United Arab Emirates capital, offers a hassle-free environment in which companies can operate. Phase one, involving an estimated capital investment of 220m ($298m), is expected to produce 472,000 tonnes per annum (tpa) of high-quality SOP, while in phase two, the mine is expected to produce up to 944,000tpa of SOP from year six of the project with an additional capital investment of 148m ($202m). Due to this change if you are seeing this message for the first time please make sure you reset your password using the Forgot your password Link. seriously, this Man is a lobbyist of TPLF A group designated as a Terrorist Organisation in Ethiopia. The JORC-2012 compliant ore reserve estimate at Colluli is estimated at 1,100 Mt at 10.5% K2O for 203 Mt of contained SOP equivalent (Fig. It is estimated to have about 80,000 archaeological sites. The total measured, indicated and inferred SOP mineral resources at the deposit are estimated to be 1.29 billion tonnes grading 11% K2O. 2. The decline is mainly due to a drop in production expected at Barrick Gold's Somilo/Gounkoto mine and B2Gold's Fekola mine. A big economic change will come to eritrea, proud to be an nseritrea. If you have an ad-blocker enabled you may be blocked from proceeding. Colluli, owned 50:50 by Danakali and the Eritrean National Mining Corporation, has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite. The project has a 200-year lifecycle and is expected to start operating in 2022. Installation of an export terminal at Anfile Bay would decrease the length of the land transport route from 230 to only 87 km, thus further lowering the logistics costs required to satisfy the multi-commodity trade in and out of Eritrea. Colluli is located in the Danakil Depression region of Eritrea and is approximately 230km by road southeast of the port of Massawa, which is Eritreas key import/export facility. Potash demand is largely driven by the need to increase crop production and by improved potash application rates, particularly in developing countries such as Asia, Africa, and Latin America, where potash has been historically under-applied relative to scientifically-recommended levels (Fig. Eritrea has a command economy under the control of the sole political party, the People's Front for Democracy and Justice, led by Afwerki. The shortfall of projected and actual global potash capacity, from this source. US Level 1 ADR . 4. <> A pre-feasibility study was completed in February 2015, followed by the completion of a definitive feasibility study in November 2015, while the mining licence was granted in February 2017. Wall Street Bulls Look Optimistic About Nutrien (NTR): Should You Buy? Fig. inequalities, climate action, peace, justice and strong institutions and Colluli will be a simple open-cut mining operation utilising truck and shovel methods complemented by continuous surface miners. (as referred to in ASX announcements of 3 October 2022, 1 December 2022, and 12 January 2023), it . The development of the Colluli potash projects coincides "A lot of the troops that he had under his command all of whom were volunteers, all of whom were guerrilla fighters had been fighting, some of them, for 10, 15 years without pay. During the long struggle, the people of Eritrea managed to forge a common national consciousness but, with peace established, they faced the task of overcoming their ethnic and religious differences in order to raise the country from poverty made worse by years of drought, neglect and war. By clicking the Download Free Whitepaper button, you accept the terms and conditions and acknowledge that your data will be used as described in the Masdar City Free Zone privacy policy However, China has set its sights on the country and perhaps it will receive large amounts of Chinese FDI in the future. It assesses a wide range of econometric data and includes findings . 9). Front End Engineering Design (FEED) strongly confirms Colluli as one of the worlds most economically attractive, and fundable SOP greenfield development project. The saleable SOP product will be trucked via road for sipping to the Massawa port which is located approximately 230km north-west of the project site. ColluliMining Share company (CMSC,) a 50:50 Joint Venture between Danakali Limited (DNK) and Eritrean National Mining Corporation (ENAMCO) Codes: ASX: DNK, SO3-FRA, SO3-BER. The front-end engineering design (FEED), expected to be The Colluli potash project is considered one of the worlds most significant and lowest-cost sources of sulphate of potash (SOP), a premium grade fertilizer. Table 1. <> It also said that all vendor and contractor packages have now been received. Profit was boosted by higher metal grades and prices. Image courtesy of Danakali. Colluli has a JORC-2012 compliant measured, indicated and inferred resource of 1,289 Mt at 11% K20 equivalent and 7% kieserite. Although the total productive life is estimated to be approximately 200 years, the current plan calls for the development of the mine in two stages to support an initial operational life of 60 years. Over 6Bt of potassium bearing salts suitable for the production of potash fertilisers have been identified in the region to date. In 2023, Botswana expects diamond output to decline by 1%. Therefore, the Eritrean government has a strong incentive to see the project be built, in production, and run successfully. 4. The report also identified how the mine could help Eritrea To the southeast of the teeming herds of wildlife in the Okavango Delta inBotswana, an offshoot of the Lundinminingdynasty is extending its search for the worlds biggestdiamonds. Standard, granular and soluble products can be produced for distribution to the market. In November 2021, Eritrea also signed a memorandum of understanding with China to join its Belt and Road Initiative. After all considerations and government taxes, Danakali said it expects to receive approximately $121m. As the commodity supercycle unfolds, you are invited to join The Natural Resources Hub today to take advantage of a slew of generational opportunities alongside Laurentian Research. Gensource Potash : Strategic Business Relationship and Project Update, Analysts Are Bullish on Top Materials Stocks: Albemarle (ALB), Nutrien (NTR), DraftKings To Rally Around 38%? In addition to these benefits our grade control drilling provides us to approach the open cut mine plan with a high degree of selectivity and certainty. I think you should research about th e author. Ok as claimed above I dure hope the dictatorship in place will be nice enough this time around to be honest and work for the sake of the people and show the truth about the budgetary issues to the public unlike what the dictatorship did on the gold mining sector.we Eritreans cannot wait to see the benefits of the potash industry on projects that will enhance peoples living standards and create a sustainable economic growth as stipulated on the government sustainable development goals and agendatime only will tell if the dictatorship will have a changing to work for the betterment of the country but not gew clicks. produce more than 472,000 tonnes a year of Sulphate of Potash. Status: Design. The Danakil Depression is an emerging potash province in Eritrea and Ethiopia. The UN sanction was lifted by the UN in November 2018 under Resolution 2444, by the EU in the following month, and by the U.S. in May 2019. According to the UNDP report entitled "Analysis of the potential contribution of Colluli potash project to sustainable development goals in Eritrea," Colluli is estimated to attract US$614 million of direct capital investment, generate 3% of Eritrean GDP once module I is up running, and account for 50% of Eritrean Exports by when module II is on stream. 11. The above mineral reserves support 215 years of SOP production at 944 Ktpa as envisaged in modules I and II development plan. US Level 1 ADR's OTC-DNKLY, CUSIP.23585T101 The world's largest JORC compliant solid salt, Sulphate of . Some people have been in national conscription for more than 20 years. Climate Change and its Impact on Insurance Market - Thematic Ukraine PESTLE Insights - A Macroeconomic Outlook Report, Germany PESTLE Insights - A Macroeconomic Outlook Report. Potash is the common term for fertiliser forms of the element potassium (K). Colluli is located about 75 kilometres from the Red Sea coast, making it among the most accessible premium potash deposits globally. Colluli Mining Share Company secured 165m ($200m) of senior debt finance from the Africa Finance Corporation (AFC) and the African Export-Import Bank (Afreximbank) in August 2019. The Colluli potash project is located in the Danakil Depression region of Eritrea, in East Africa, approximately 75km away from the Red Sea coast and approximately 177km southeast of capital Asmara. World potash demand has grown at an average rate of 2.5-3.0% per year since 2000 (Fig. Eritrea has one of the most erratic economies in the world, partly due to chronic drought and highly variable agricultural output: its GDP surged by 31% in 2014 before plummeting by -20.6% in 2015. Unlike North Korea, China or Iran, social media is mostly unregulated, but the biggest problem is access to the internet, which is unreliable and expensive.
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