Danakali Limited · OTC:SBMSF
Danakali — Investor Presentation (April 2021)
28 slides from Danakali's investor presentation, Apr 29, 2021
Slide 1: Company Presentation
Announcement Thursday, 29 April 2021 Company Presentation Danakali Limited (ASX: DNK / LSE: DNK) (Danakali, or the Company) is pleased to provide an updated Company Presentation. No new information is disclosed in this presentation. Danakali’s presentation will be available on the Company’s website
Slide 2: Danakali: Colluli, A Global Game Changer
DANAKALI C®@LLULI A Global Game Changer
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS COLLULI IS MASSIVE = One of the worlds largest solid salt, near surface high grade Sulphate of Potash (SOP) reserve of 1.1Bt. 200 year of LOM = Fully Permitted POTENTIAL FOR ZERO CARBON SOP? = Colluli can become the worlds first zero carbon producer of SOP? = Access to solar, w
Slide 4: Top shareholders and financial information
Top shareholders Financial information Share price (26-April-2021) A$0.505 AFC Equity Investments Ltd 16.6% Number of shares 319.69 Well Efficient 10.9% Market capitalisation AU$161.4m Cash (31-Dec-20) A$9.7m Element 25 & Other related parties 7.9% Debt (31-Dec-20) Nil Danakali Board and management
Slide 5: Colluli is where the value begins
0 DANAKALI create, nurture, grow COLLULI IS WHERE THE VALUE BEGINS Evil core Som Colluli Ore Reserve GRADE GEOGRAPHY GEOMETRY GROWTH Homogenous, Closest to coast, port 1% Gradient Strong long term predictable high and key growth production growth grade solid salts markets options GEOLOGY: STRATIFICA
Slide 6: High Grade Comparisons
HIGH GRADE COMPARISONS Solid Salt SOP Mining has enormous advantages 100 Colluli Potassium Banana potassium Rich Brine? salts Colluli is the only resource in the world that is ideal for K2SO. (SOP) production that can be extracted in solid form This is directly related to the shallow kainite mineral
Slide 7: Colluli the only open cut and potentially zero carbon SOP mine
b COLLULI THE ONLY OPEN CUT AND POTENTIALLY ZERO CARBON?*"*:*"' SOP MINE GLOBALLY Open cut costs are lower and volumes are higher than underground Premium Price SOP SOP Price 2-3x MOP* OPEN CUT MINING Low Opex- Open pit Capex: US$320m (incl. working capital) Production Target: 1 mtpa (approx.) Low C
Slide 8: First quartile cost of production
uss/t FIRST QUARTILE COST OF PRODUCTION PAMAKALI Danakali will be one of the lowest cost SOP producers . . Mannheim Process production . . a High energy, high cost and environmental issues? Mine gate production costs for global SOP producers: >50% of production Protects margins for primary producers
Slide 9: Market potential and proximity
MARKET POTENTIAL AND PROXIMITY PANARALI SOP is currently underapplied in the areas expecting the highest rate of population growth, the majority of which are proximate to Colluli Europe 43kg/ha Middle East 2ekg/ha 4] southeast Asia kg/ha v ah] Gee 7 Uo. Forecast population 3 ° Rae m population growt
Slide 10: Market overview & demand
MARKET OVERVIEW & DEMAND PANAKAL! SOP is an environmentally-friendly, chloride-free, nonsubstitutable source of Potassium and Sulphur “Global SOP prices to in- crease to 2023 as the market balance tightens with limited new capacity i. to enter production”: High value, chloride sensitive or SOP price
Slide 11: SOP pricing dynamics
SOP PRICING DYNAMICS PANAKAL! SOP demand and supply dynamics support a robust pricing environment SOP price provides attractive margins for low cost primary producers Since 2014 the average SOP price premium to MOP is US$221/t* Premium is sustainable due to: Mannheim Process conversion cost Mannheim
Slide 12: SOP vital for climate-smart agriculture
SOP VITAL FOR CLIMATE-SMART AGRICULTURE DANAKALI SOP is integral to climate smart agriculture production as it improves soil and plant resilience? Mineral fertiliser like SOP can play an important role increasing soil carbon sequestration by supplying nutrients to crops increasing yields and limitin
Slide 13: High potential zero carbon
HIGH POTENTIAL ZERO CARBON a es as “ie installed ; ; A F , by Gof and and = Danakil Basin has Well endowed with Predictable wind supported by predictable geothermal energy resource, Colluli has UNDP and the EU i sunlight potential. approx 5 years of x a F wind data RED SEA ERITREA 600kW Wind park in
Slide 14: Industry trends & opportunities
DANAKALI INDUSTRY TRENDS & OPPORTUNITIES CONSUMER SENTIMENT DRIVING PRODUCT DEVELOPMENT Bill Gates: “Green Premium is the difference in cost between a product that involves emitting carbon and an alternative that doesn’t” - Feb. 2021" INDUSTRY ™Nestlé invest $3.6B to boost sustainability in supply c
Slide 15: Positioning Colluli with zero carbon
POSITIONING COLLULI WITH ZERO CARBON* mamAran ——— 7 BUILDING THE Potentially Worlds First Zero Carbon Farmers seek to reduce emissions** Climate-smart SOP" GREEN PROPOSITION* SOP* SOP can increase CO2 sequestration 70% less water and zero Abundant renewables at Site salinity Energy Solution** Carbon
Slide 16: Colluli can disrupt incumbents
COLLULI CAN DISRUPT INCUMBENTS DANAKALI Colluli can be the first Project to produce Zero Carbon SOP? With capacity to displace all carbon intensive Mannheim SOP production globally? ga * y 310 billion pounds of coal burned 58,253 Wind turbines running for a year? Removing approx. 61 million cars for
Slide 17: Proximity to a coastline
PROXIMITY TO A COASTLINE Massawa Operational port 113 km L E18 SEA 4 RED SEA Asmara Capital of Eritrea INDICATIVE ANFILE BAY SITE ACCESS (wita) ERITREA L Romp INDICATIVE COREA PIPELINE J TO ASSAB CORRIDOR RoaGI Colluli _— Mining and processing site. fe7km ., COLLULI MINE SITE Anfile Bay Proposed fut
Slide 18: The potential of Colluli
THE POTENTIAL OF COLLULI Strategic growth phases can create strong degree of economic expandability and multi-commodity potential, which can create significant additional economic value OF MASSAWA (Prior of Anfile Bay Development)5 SOP SOP-M MOP Gypsium POTENTIAL PRODUCTS (GYPSUM, SOPM) VIA NEW ANFI
Slide 19: Danakali ESG Framework
DANAKALI ESG FRAMEWORK The United Nations Development Programme reported Colluli’s potential contributions to Eritrea’s Sustainable Development Goals “Colluli has the potential to boost the national economy [of Eritrea] and potentially transform agriculture in the region” SUSTAINABLE DEVELOPMENT GOA
Slide 20: Eritrea as a proven mining jurisdiction
ERITREA AS A PROVEN MINING JURISDICTION man Stable, supportive Simple, predictable Pragmatic and No evidence of Freedom of Government tax conditions business-friendly corruption transactions mining policies ASX/TSX listed » 7 4 a] 7 is — Sega \ ] —— { ays > ay Q b ‘ 4 Improving Significant Safe and
Slide 21: Our Partners
6 OUR PARTNERS DANAKALI Equity faked senior Senior debt , el Power solution EPCM Accommodation and support services Off-take agreement FEED Study Mining Services Note: Aggteko, RA International and EMW are preferred providers.
Slide 22: COVID impact
DANAKALI COVID 19 IMPACT = G TRYR N Eritrea’s approach successful 3,605 cases in total since outbreak? 17 new infections reported on average each day? 193 active cases* 10 deaths: Access to site is secured DNK has access to site Able to get people in the country (with the one-week quarantine period
Slide 23: High quality board and executive team
HIGH QUALITY BOARD AND EXECUTIVE TEAM PANAKAL! Strong, energetic and accomplished Executive team supported by experienced, multi-disciplinary Board EXECUTIVE TEAM BOARD Seamus Cornelius Stuart Tarrant ETA aE PenGaieais Samalla.D-zubalra ij ; , " ; Non-Executive Director Non-Executive Director | Non-
Slide 24: Danakali: Colluli, A Global Game Changer
DANAKALI C@LLULI A Global Game Changer
Slide 25: DNK can expand quickly from base
DNK CAN EXPAND QUICKLY FROM BASE a2 KEY PROJECT METRICS Front End Engineering Design (FEED) economic estimates and outcomes’? PHASE I? PHASES | & II*5 Annualised SOP production 472 ktpa 944 ktpa Module | development capitalé US$302m Incremental Module II development capital>* US$202m Capital intensi
Slide 26: Population growth drives the SOP demand
POPULATION GROWTH DRIVES THE SOP DEMAND PANARALI SOP increases yields in high value crops and is integral to navigating the global food security challenge » cm a 130) GLOBAL POPULATION GROWTH Arable land per person (m2) 5,200 m? 5000 9.8Bn 10 REDUCTION IN ARABLE LAND PER CAPITA 4000 8 3000 5.7Bn 6 C
Slide 27: Forward looking statements disclaimer
FORWARD LOOKING STATEMENTS DISCLAIMER PANAKAL! Competent Persons Statement (Sulphate of Potash and Kieserite Mineral Resource) Colluli has a JORC-2012 compliant Measured, Indicated and Inferred Mineral Resource estimate of 289Mt @TI% K20 Equiv. and 7% Kieserite. The Mineral Resource contains 303Mt @
Slide 28: Forward looking statements disclaimer
FORWARD LOOKING STATEMENTS DISCLAIMER PANARAL! The information in this presentation is published to inform you about Danakali Limited (the “Company” or “DNk") and its activities. DNK has endeavoured to ensure that the information enclosed is accurate at the time of release, and that it accurately re