Danakali Ltd (ASX:DNK) (LON:DNK) (OTCMKTS:SBMSF) (FRA:SO3) has completed a heavily oversubscribed placement to domestic and international institutional and sophisticated investors raising A$20.3 million.
The company will issue 47,296,231 ordinary shares in the placement at A$0.43 per share.
Proceeds will be used for early work at the Colluli Sulphate of Potash (SOP) Project in Eritrea, including site road development, geotechnical optimisation, reverse osmosis plant completion and installation, exploration camp relocation and RA International mine camp installation.
Some of the proceeds will also be allocated towards detailed engineering for the project.
“Delighted by interest”
Danakali executive chairman Seamus Cornelius said: “We are delighted by the strong interest from new institutional and sophisticated investors as well as the support from existing shareholders and would like to thank them for their participation in this heavily oversubscribed fundraise.
“With the completion of this placement and subject to agreement on timing and priorities with our partners in Eritrea, the company can now fund key activities which allows us to move forward immediately with the early works at Colluli that will ensure efficient mine construction.”
The allotment of placement share is not subject to shareholder approval and falls within the company’s 15% placement capacity under ASX listing rule 7.1. and additional 10% placement capacity under ASX LR 7.1A.
Placement shares will be ranked equally with the existing ordinary shares in the company and have been conditionally placed subject to admission to trading on the ASX.
Euroz Hartleys Limited is the lead manager and bookrunner to the placement while Canaccord Genuity (Australia) Limited acted as co-manager to the placement.
Board and management support
Danakali’s directors have indicated their intention to collectively subscribe for 1.08 million shares to raise $464,400 on the same terms as the placement.
Resolutions to approve participation by directors will be put to shareholders at a general meeting planned to be held on or around June 2021.
In addition to the directors, certain persons discharging managerial responsibilities (PDMR) and persons closely associated with a PDMR have indicated their intention to subscribe for 269,768 shares to raise $116,000 on the same terms.
This participation is to be confirmed once the company has released its quarterly results for the period ended March 31, 2021, and is therefore out of the ‘closed period’ for trading.