Name and Location
Danakil potash project, Ethiopia.

Client
Circum Minerals.

Project Description
The results of a definitive feasibility study (DFS) on Circum’s Danakil potash project has shown that the project has the potential to be one of the lowest cost, lowest capital intensity, large-scale potash projects in the world with excellent economics and expansion potential.

The project has measured, indicated and inferred resources of 4.9-billion tonnes at 18.1% potassium chloride (KCI) and proven and probable reserves of 107.8-million tonnes of KCl equivalent.

The DFS envisages production of two-million tonnes a year of muriate of potash and 750 000 t of sulphate of potash for Phase I. This will give the project a life of 26 years based on current proven and probable reserves only, with a three-year ramp-up period. The project is easily scalable and Circum will complete a scoping study in 2016 on the expansion of production to five-million tonnes a year.

Net Present Value/Internal Rate of Return
The DFS estimates an after-tax net present value, at a 10% discount rate, of $2.1-billion and an after-tax internal rate of return of 22.4%.

Value
Development capital for Phase I is estimated at $2.58-billion, including contingency.

Duration
Production is being targeted from mid-2018 onwards.

Latest Developments
The next steps for the Danakil project will be to complete a mine development agreement with the Ethiopian government, start the value-added engineering process to further refine the DFS and reduce capital costs, and a scoping study to expand production at the project to five-million tonnes a year and conduct detailed rail and logistic studies to further reduce the long-term operating costs of the project.

Circum will also start the search for a strategic development partner as it continues to refine its overall financing plan for the project.

Key Contracts and Suppliers
Senet (DFS), K-UTEC AG Salt Technologies (resource definition and well field and plant design), Umvoto Africa (water-resource modelling, environmental-resource management and conducting the environmental- and social-impact assessment study).
On Budget and on Time?
Not stated.

Contact Details for Project Information
Circum Minerals, tel +1 441 295 1820, fax +1 441 295 5491 or email info@circumminerals.com.
Senet, tel +27 11 409 1300 or fax +27 11 409 1301.
K-UTEC AG Salt Technologies, tel +49 3632 610 0, fax +49 3632 610 105 or email info@k-utec.de
Umvoto Africa, tel +27 21 709 6700, fax +27 86 685 5725 or email amanzi@umvoto.com.