"Let´s have a closer look at the size of the deposits. The LEGACY project has reserves of 160 million tons KCl and resources of 982 million tons KCl. The DANAKALI COLLULI project has reserves of 216 million tons SOP (a product which is twice as expensive and DANAKALI has 35% more reserves) and resources of stunning 1.28 billion tons SOP (+31%)! We have here a project which is a showpiece, which surpasses K+S with its reserves and resources in about 30% and furthermore, the project shelters SOP-deposits, which obtain the double market price. I think these few numbers show us the dimensions of what we are talking about. Hereafter the product value, so you can get a better idea of the products. If I calculate with 300 USD per ton of KCl from K+S and take into consideration only the reserves, then I will expect a value of 48 billion USD situated in the LEGACY mine. If I calculate cautiously with 600 USD per ton SOP from DANAKALI project and take into consideration only the reserves, then I have to expect a value of 129 billion USD!"
The ideal case: a takeover battle If we take a look at the project and its great development opportunities which are possible with a successful start, then you will probably raise the question why nobody has carried out a takeover. I can give you an answer to this question, but it´s not a guarantee. I can only assume. DANAKALI has submitted all the necessary documents for the mining license recently (NEWS). This license is the final one DANAKALI needs. After getting the license the company will be “ready to go”. The company management expects a granting of the license in 4 to 6 months. This means, which is only my assumption that a company that is looking to take over DANAKALI wants to wait until the final license has been granted. All studies are available; the only thing missing is the “ok” from the government. I have already explained to you, what kind of potential the project has and the project can surely drive out some producers from the market. Especially the SOP-producers, who use the Mannheim-Process (minimum costs 500 – 550 USD per tonne) should think about buying the COLLULI project, as it allows production a tonne of SOP for a price of 255 USD. As soon as this project gets into right or even wrong hands, 3 million tons from the Mannheim-process will vanish. The ideal case is a takeover battle. We are talking about a mine life of more than 100 years, which means that the project is strategically important for big companies of the sector (POTASH CORP., K+S, SQM, MOSAIC, ICL). As soon as company X makes an offer, some other companies will probably panic. I can also imagine that a strong company could buy the whole project area in order to prevent other companies from getting the project and mixing up the current SOP-Market.
Also with Seamus buying on market recently remember that company appointed officers only have a certain window in which to buy and then face black out periods. Makes me wonder if he was just topping up before a black out period kicks in where mining approval is imminent???
Once again, the deposit is THAT GOOD!
That report was from June this year so extrapolate the dates for mining approval and see where we end up. Sometime between now and the end of the year...................................
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