DanaKali Limited
Feed the World
danakali.com.au
DanaKali (DNK) own 50% of the giant Colluli Potash Project in Eritrea. The project sits in the world’s only Sulphate of Potash ‘SOP’ Super Basin
danakali.com.au/company presentation
Colluli is a Giant:
$200bn in ground value
+200 year mine life (JORC reserves, not resources)
It is so large it has the potential to:
● Feed billions of people
● Save millions of lives
● Assure Food security for generations
● Eliminate the need for charity for the African continent
● Achieve goals set out by Bob Geldof & Bono
● Assist in Bill Gates fertilizer solution for Africa:
gatesnotes.com/Development/Why-I-love-fertilizer
Company Details:
Shares on Issue: Share price: Market Cap:
320 million $0.40
$120 million
Dual Listed on London’s (LSE) Main Board Market Cap: £70m
Dual Listed on Frankfurt Stock Exchange
8% of DNK shares on issue are held by German investors
DNK American Depository Receipts (ADR’s) are traded on the OTC otcmarkets.com DNKLY
Fertilizer Prices are Rising:
bloomberg.com/huge-rally-in-food-prices-stoking-record-fertilizer-demand
Soybean, wheat and corn prices are booming
Potash Companies: Since March 2020 lows, Canadian potash giant Nutrien is up 90%, Mosaic is up 330% and Israel’s ICL is up 110%
Disallowed Call
In August 2011 BHP made a hostile US$40 billion bid for Canada’s giant Potash Corp
It was rejected by the Canadian government for national interest reasons
But it set off a flurry of investment in global potash stocks
Danakali’s share price went from 10c to $6.25 (a 6,000% return) in a matter of months Our analysis shows that DNK is worth more than its current $120 million market cap or 40c share price
We believe the share price can easily reach $4.00 and as such is our latest Disallowed call We actually believe that over time it can become a $10bn company (similar to ICL, Eurochem, Mosaic & Nutrien) and go to $30.00 per share
Which would achieve similar high returns (6,000%) as we achieved in 2011/12
UK LSE Main Board Listing:
DNK recently appointed Canaccord Genuity as their broker
They commenced coverage with a BUY recommendation on the stock Neil Gregson (ex-head of JPMorgan Resources) runs DNK in the U.K
Hannam Partners UK have an 80p ($1.40) share price target on the company We predict that as the company grows it will enter the FTSE small cap index
st th
The index consists of the 351 to 619 largest-listed companies on the London Stock
Exchange main board
We predict massive buying by global funds plus London based ESG funds will be active due to the green movement gathering momentum across the globe
Whoever controls the Danakil Depression, will control the future of premium food production on Planet earth for the next 100 - 200 years:
Colluli sits at the very head of the Danakil Depression and has the only access to the port
Whoever controls Colluli will control the world’s only SOP Super Basin It’s like owning all of the Gold in the Kalgoorlie district, Western Australia Or all of the Iron Ore in the Pilbara, Western Australia
Or all of the Potash in Saskatchewan basin, Canada
Zero Carbon Potash
The majority of the world’s current SOP production comes via the Mannheim process Colluli will put an end to this environmentally disastrous process forever
ESG and sustainability:
In January 2019, a report was released by the United Nations UNDP that showed Colluli meets an unprecedented 13 of the 17 UN’s Sustainable Development Goals (S.D.G’s)
danakali.com.au/the-colluli-project/undp-report
Germany:
DNK has a large shareholder base in Germany
This is result of coverage in The Gold Report dergoldreport.de
In 2016, German based resources analyst Carsten Ringler placed a $13.74 valuation on DNK African Debt/Equity Providers:
Africa Finance Corporation (AFC): A US$6 billion bank based in Lagos have committed $100 million debt & $30 million of equity
They are now DNK’s major shareholder with 16.5% of issued capital
As far as we are aware at Disallowed, banks don’t buy equity in mining projects
This is a true third-party validation to the quality of the project as banks always do their due diligence!
africafc.org
AfrExIm Bank: A US$12 billion bank based in Cairo have committed $100 million debt afreximbank.com
We predict the following developments for Colluli in the coming years:
Using the existing port at Massawa - 210km’s from Colluli
Stage 1:– Production of 472,000 tonnes per annum (tpa) of Sulphate of Potash (SOP)
Profits of US$100 million pa to DNK
Stage 2: – Doubling of production to 950,000 tpa of SOP Profits of US$200 m pa to DNK
NPV US$440m or A$600m. IRR 31%
Using a new port to be constructed at Anfile Bay - 70km’s from Colluli Stage 3: – New port construction for higher capacity
SOP production increases to 2 million tpa of SOP
Profits expand to US$400m to DNK
They immediately add rock salt (already mined and sitting on the surface as vast waste dumps) to the product portfolio possibly resulting an additional US$100m to DNK each year Industrial salt trades between $30t - $50t (huge applications in PVC with the replumbing of the whole of China on the cards in the next decade as well as use as a de-icing agent)
Stage 4: – 2 million tpa of SOP production continues as Colluli quickly transitions into a Multi Agri business
Rock salt continues
1+ million tpa of Sulphate of Potash- Magnesia (SOPM) approximately $400t is added to the product portfolio
1+ million tpa Kieserite – Magnesium Sulphate $80t - $100t is added to the product portfolio Profits increase to US$600 million per year
Stage 5: – Massive expansion
5 million tpa of SOP production & distribution
Global elimination of environmentally disastrous Mannheim SOP production Rock salt stays steady
SOPM production increases
Kieserite production increases
Gypsum is added to the product portfolio
Colluli cements is status as an unrivalled, Tier 1 asset, dictating global food prices Profits to DNK explode to US$700 million per year
Stage 6:
Colluli Project reaches maximum capacity
Production continues for the next 200 years
As the lowest cost fertilizer company in the world
A Tier 1 asset
Profits per annum to DNK are at US$700 million per year for the next 200 years? Massive Dividends are paid out per year
Stock price heads to $30 per share
Corporate activity:
In 2010 German’s K+S (Kali & Salz) took over Canada’s Potash One for CDN$434 million
In October 2020 K+S sold their Salt-Business in the US for US$3.2 billion
Colluli has a billion tonnes of Rock-Salt, not even talked about so would be attractive for this alone
ICL Group took over Allana Potash in 2015 for CDN$162 million
It sits on the Ethiopian side of the Danakil Depression www.prnewswire.com/news-releases/icl-completes-its-acquisition-of-allana-potash
Eurochem:
(Swiss-based Russian) wants Colluli to advance as they have a 10 year take or pay off-take agreement with DNK
This will enable them to grow and expand/diversify into the highly strategic African continent and Indian subcontinent
Middle East groups:
Across the Red Sea and we have large Saudi and Dubai based chemical conglomerates that could easily supply funds for development or just take out DNK with little more than lunch money
The Saudi’s are committed to diversify their own economy away from oil by 2030
African Debt:
AFC have supplied US$100m in debt to the project, earning a nice annual percentage % return
They are also DNK’s largest shareholder so they want Colluli to proceed as they are a bank and need a return on their investment
The current CEO of AFC also sits on the DanaKali board
Success with Colluli will cement the bank with not only enormous local but also international prestige
China:
Would be circling like vultures to get this asset
We presume they are looking for project finance failure so they can swoop on an asset that will give them food security for the next 100 - 200 years
This asset in the hands of the Chinese means exactly what you think it means ... get ready for a Masterclass in global potash price monopolisation
Canadian giants:
The big Canadian potash miners (Nutrien and Mosaic) will be watching
They would probably only come in once Colluli is in production and running smoothly but would happily write out a monster multi $Billion cheque
This is why we are predicting:
A 40c to $1 price target (imminent)
A 40c to $4 price target (1- 2 years)
A 40c to $30 price target (over the longer term of 3-5 years)
DanaKali will become a cash printing machine and dividend paying giant for the next 200 years
Disclaimer: ***High Risk***
The above analysis and in-production valuations are not intended as financial advice Analysis is based on various assumptions and opinions
You are encouraged to do your own research (DYOR) on the company and their strategy/
DNK Price at posting:
55.0¢ Sentiment: Buy Disclosure: Held
(20min delay)