SEAMUS CORNELIUS Danakali executive chairperson Seamus Cornelius says that, while the company will continue to explore the best way to accelerate relisting, it will also actively explore other liquidity options
The board of directors of ASX-listed Danakali is exploring a range of new liquidity options for shareholders following the $154.7-million distribution from the sale of the Colluli potash project, in Eritrea.
These include an off-market share buyback and further distribution of the company’s cash reserves in the form of a capital return. Any such initiatives would be open to all shareholders and backed by expert opinion on tax implications.
Following the distribution to shareholders of proceeds from the sale of the Colluli project, Danakali has cash reserves of about $38-million, or about $0.11 a share.
The decision to explore new liquidity options follows recent notification from the ASX that Danakali’s latest proposal to seek a faster path to relisting the company’s shares has been rejected.
Danakali executive chairperson Seamus Cornelius says that, while the company will continue to explore the best way to accelerate relisting, it will also actively explore other liquidity options.
Cornelius says the board will consider all potential opportunities for shareholders.
“We believe the extended suspension of our shares puts our shareholders in a difficult position and we will now explore other options to achieve additional liquidity, while continuing to engage with the ASX.
“In doing so, we will be mindful of Danakali’s long-term strategy of adding value through diligent management of prospective development assets, shareholder value generation as the cornerstone of any corporate transaction, and the tax effectiveness of any liquidity initiative,” he comments.
Danakali will report back to shareholders on the outcome of the board’s work and deliberations.
NEW PROJECT
Further, Danakali has taken the first steps to pursuing a new resources project in Eritrea.
The company has applied for an exploration licence covering 1 537 km², where preliminary work has shown the area may be prospective for copper and gold.
Danakali has strong relationships in Eritrea and further opportunities have arisen following Colluli’s transition to new owners.