A definitive feasibility study on potash explorer Danakali’s Colluli project in Eritrea has found a 30 per cent reduction in development costs to $US 298 million.
Danakali, which owns the Colluli project in a 50:50 joint venture with the Eritrean National Mining Corporation, said phase one development costs had been reduced by 30 per cent, with the project expected to produce about 425,000 tonnes per annum of sulphate of potash (SOP) when commissioned at the end of 2018.
Phase two of the project is expected to begin after six years of production and boost the project’s output to 850,000t/year of SOP at an additional cost of $US 175 million.
Danakali Limited (Danakali, ASX: DNK) is pleased to announce the results of the Definitive Feasibility Study (DFS) for the Colluli Potash Project (Colluli, or the Project), located in Eritrea, East Africa. The Project is 100% owned by the Colluli Mining Share Company (CMSC), a 50:50 joint venture between Danakali and the Eritrean National Mining Corporation (ENAMCO).
Key outcomes of the DFS include a reduction in Phase I development capital by over 30% to US$298m resulting in a market leading capital intensity of US $702/t sulphate of potash (SOP) and an accelerated Phase-I payback period of 3.5 years.