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DNK - Danakali Limited

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DNK had a bit of a rebound over the last month with hop that something has happened with finance. This is my pick for the monthly stock tipping so see how it goes. Will take off if a finance approval comes through.
 
Latest on financing from Quarterlies Activities Report
The Company continued its institutional and strategic equity engagement. In doing so the Company completed its virtual roadshow and face-to-face meetings with targeted investors in the United Kingdom, South East Asia, Australia and North America with Danakali’s Non-Executive Chairman, Seamus Cornelius, Executive team, ESG Team and Corporate Development presenting and attending. The Company also engaged with investors on Mining Journals’ Investor Outreach Program, completing virtual investor meetings with targeted investor groups in November 2020. In terms of funding options, Danakali is pursuing several promising alternative solutions, including AFC, and potential strategic partners. These options are all focused on obtaining full funding for Colluli’s development.

Iggy
 
Well done @Iggy_Pop

You have been a long time advocator of DNK.

I am a great believer in finding value before it develops so hopefully you are now on the way with this one.

You certainly deserve it!!

Potash ... who would have thought

I do not hold DNK but I am hoping (down the track), that my similar vision for KP2 may eventually be rewarded

Hopefully onwards and upwards over the next couple of years for you with Danakali.

 
I picked DNK for the stock tipping comp for May 21 prior to hearing about the capital raising. Still waiting on details, but a capital raising is not normally a good thing for share price as this raising seems to be about keeping the company going while sorting out finance. Time will tell but will stick with it for this month and most after this month as it will bounce high at some point when all the positives align.

Iggy
 
A report stating further reductions in Opex and Capex as well as optimimising production rates


Also reported on a German mining site

Danakali Ltd.: Projektupdate

In den vergangenen sechs Monaten hat die Firma zusammen mit mehreren Projekt-Partnern und Research-Instituten ein umfassendes Test-Programm durchgeführt, um die Ergebnisse aus der FEED-Studie zu bestätigen und die Aufbereitungsmethode weiter zu... - Veroeffentlicht am 17.06.2021
www.minenportal.de

Iggy
 
The quarterly report shows progress still a bit slow, and still looking at a few options for raising money for the project

Iggy
 

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DNK cancelled the listing of the company on the London Stock exchange. This was seen as a negative by holders and share price dropped. I am hoping for a rebound over the next month, and still hope for a funding approval which will be take off for the share price. Investing in potash is seen as a future path as indicated by BHP planning to drop oil and coal and take on potash together with other minerals.


Iggy
 

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Sorting funding for the project, is the delay of the share price taking off. but with delisting from the LSE on 23 September, a prospectus will not be needed to raise the remaining equity. It is possible this will be the trigger for announcing any new equity raise (>15%) which was authorised at the last AGM. Time will tell

Iggy
 
this would have to be positive for all SoP projects

Danakali receives updated Sulphate of Potash Price Forecast Analysis from CRU
Highlights
• Muriate of Potash (MOP) prices surged higher across multiple global markets from January 2021
• Medium term Sulphate of Potash (SOP) price is forecast to increase and long-term outlook predicts SOP prices increasing further
• Colluli’s FEED sensitivity analysis indicates that for every 10% increase in SOP price Colluli Project NPV increases by US$250M
• Colluli is fully permitted, all studies complete, process flow design finalised and de-risked

The global potash market has come alive in 2021 as rising demand, poor international crop yields, surging crop prices and margins and supply-side risks in Belarus have combined to drive regional potash prices up 200%-300% to above US$700/t (CFR Brazil Spot) and USD$520/t (CFR SE Asia Spot)

. Prompt availability remains very limited with China and India running down stockpiles and global crop prices are largely persisting at historically high levels. According to Green Markets, Bloomberg, North America’s nutrient gauge (fertiliser prices) surged past the 2008 peak to hit a new record of US$996.32. Historically, the ten year average premium of SOP to MOP is US$221 with current MOP prices FOB Vancouver at over US$550/t .
 
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The SOP price is looking positive for the future which has to help getting the financing of the project over the line. With recent hints from the chairman of an equity partner coming onboard together with debt, we are getting closer to project approval.

Iggy
 
DNK has been a bit volitile over November as positive signs for the project become apparent. Funding is still the challenge. Duing the month, a release said - Colluli will produce significant tonnes of high purity Magnesium Chloride (MgCl2) as a by-product of its Sulphate of Potash production process, which will improve the business case.

Iggy
 
My pick for the monthly stock tipping. Danakali is stuck waiting to get finance resolved and has been in this situation for a while. Some shareholders are frustrated at the pace of finance being sorted out. In the meantime DNK has released announcements about Magnesium Chloride as a byproduct (re-released) and also an announcement about Rock Salt as another potential source of income. Seems they are just trying to create interest while the finance is sorted. Hopefully this is soon, and the shtocks will sky rocket when/if this announcement is made.

Iggy
 
My pick for the stock tipping competion, but will need a miracle for the share price of DNK to move. The announcements on funding seem to have gone from "funding is imminent " to "funding is in discussion". Seems a step backwards and share price has dropped accordingly. But you never know, something may come u as the Govenment of Eitrea want the project to go ahead for the country, and have a stake in the company.

Iggy
 
Still my pick for the stock tipping competition for March but not looking great. Clearly finance is an issue and from what I am reading, there were some US sanctions imposed against some of the players in Eitrea, limiting European investors and leaving now defacto only Russian and Chinese investors as eligible. Throw in the Ukraine invasion sanctions and things are looking really dismal. Maybe I should move on?? But maybe it will bounce??

Iggy
 
Looks like the Eitrean government voted to support Russia in the vote against the invasion on Ukraine. As 50% owners of the Dankali Project, I suspect any chance of finding someone to finance the project from the West will have disappeared now. Russian companies will be getting squeezed by sanctions and unlikely to be financers. Leaves China as the only real option, but I suspect they will not be in a hurry. Bit of a pity, great assets, just in a high risk country.

Iggy
 
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