Danakali Ltd (ASX:DNK, LSE:DNK, OTC:SBMSF) directors have demonstrated their faith in the company’s sulphate of potash strategy through placement participation, as approved by shareholders at the annual general meeting held on July 30.

On May 12 the company received A$20.3 million, before costs from institutional and sophisticated investors as well as senior Danakali executives to support the early works program at the Colluli Potash Project in Eritrea.

Change of director interests

Executive chairman Seamus Cornelius acquired 1 million shares for A$430,000, increasing his interest in a direct holding to 9.5 million shares. He also holds a further 600,000 and 4,308,037 shares in two indirect interests.

Non-executive director Neil Gregson acquired 80,000 shares in a direct interest for A$34,400, marking his first share purchase.

Test-work confirms production rates

Recent test-work at Colluli has confirmed production rates and outlines a path to lower operating and capital costs.

Colluli Mining Share Company (CMSC), a joint venture vehicle with ownership split between Danakali and the Eritrean National Mining Corporation (ENAMCO), conducted the extensive test program over a six-month timeframe.

Promisingly, analysis has revealed the project’s sulphate of potash (SOP) production rates align with a previous front-end engineering and design study.

The test-work program proves Danakali can produce SOP using only filtered seawater, lowering the opex and capex costs tied to the compound’s production.

Colluli hosts the world’s largest JORC-compliant solid salt and sulphate of potash reserve, weighing in at 1.1 billion tonnes.