Danakai Announcement on Colluli SOP mining

· Debt finance mandate executed following signing of US$200M term sheet

· African development financial institutions Afreximbank and AFC will act as Mandated Lead Arrangers

Danakali Limited (ASX: DNK, LSE: DNK) (Danakali or the Company) is pleased to announce that the Colluli Mining Share Company (CMSC) has executed a mandate to provide fully underwritten debt finance facilities of US$200M to fund the construction and development of the Colluli Potash Project (Colluli or the Project) in Eritrea, East Africa (Mandate). African development financial institutions (DFIs) African Export-Import Bank (Afreximbank) and Africa Finance Corporation (AFC) will act as the Mandated Lead Arrangers. The Mandate follows the signing of a US$200M non-binding indicative term sheet (Term Sheet).

The execution of the Mandate is a critical project financing and execution milestone. Afreximbank and AFC are highly reputable African DFIs with extensive experience in providing project financing to African projects across the continent and were chosen as Mandated Lead Arrangers due to their extensive African project finance experience and the strength of their investor reach. In 2017 Afreximbank was lead / co-lead arranger on 11 syndicated debt transactions totalling over US$3Bn. In the same period AFC was mandated on over US$1Bn of transactions.

Once the remaining aspects of due diligence are finalised and preconditions satisfied the Mandated Lead Arrangers will proceed to credit approval and execution of the syndicated loan facility with CMSC (Facility). Drawdown will follow after satisfaction of the conditions precedent to be agreed in the Facility. See Appendix A for a Colluli debt funding process overview.

Chief Financial Officer of Danakali, Stuart Tarrant said: “The execution of the Mandate represents a significant milestone for the Colluli project funding. We are very pleased to be partnering with strong, experienced African financial institutions. Initial bank due diligence and subsequent negotiations have significantly advanced the project financing process and built on the finalisation of the binding offtake agreement with EuroChem placing CMSC in strong position to advance the Colluli Project .”

Endeavour Financial is acting as debt financial adviser to Danakali and CMSC.

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