Danakali Rating Update

John Robertson

PortfolioDirect

Danakali Limited, developing the Colluli potash project in Eritrea, has been classified as a late stage Phase I company and rated ‘3+’ on the five point PortfolioDirect rating scale where a ‘5’ is the highest rating on the risk adjusted quality scale. The company has released a definitive feasibility study for a potash mine and export facility at Colluli in Eritrea (ASX 30 November 2015). The feasibility study results were consistent with earlier guidance of a construction start in late 2016 and first production in late 2018. Operating costs are slightly higher than a March 2015 estimate primarily due to refinement of product logistics estimates but the feasibility study places the Colluli project in the lowest position on the sulphate of potash industry cost curve. The company had already received a rating which indicated a better than usual chance of proceeding to development. The feasibility study confirmed the validity of the prior assessment although the financing environment for late stage Phase I companies has deteriorated since the earlier PortfolioDirect reviews and the feasibility study were completed.


3 topics

John Robertson
John Robertson
PortfolioDirect

John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.