Aspiring potash miner Davenport Resources (ASX: DAV) has strengthened its cash reserves with a $750,000 share purchase plan, and is a step closer to advancing its development plans after appointing Deloitte Corporate Finance as its financial adviser to assist with locking-in strategic partners to bring its German potash projects online.
As part of its appointment, Deloitte will act as a financial advisor for six months. During this period, Deloitte will provide Davenport with support regarding assessment, planning, strategy, marketing, negotiation, due diligence and closing.
“Our appointment of Deloitte demonstrates another step in our progress to as we seek suitable development partners for our potash projects,” Davenport interim chairman Dr Reinout Koopmans said.
“Securing project partners will allow us to advance toward feasibility studies to validate the results of the positive technical studies we have already completed for three of the projects.”
“We expect to start working on drilling for the Ohmgebirge project this year,” Dr Koopmans added.
As part of the company’s strategy to shore up its chances of attracting project partners, Davenport has already appointed Cenkos Securities as its UK partner and rejigged its board.
The UK broker appointment is expected to broaden Davenport’s investor base in the UK and Europe.
Share purchase plan to boost cash reserves
To boost its cash reserves, Davenport has announced a $750,000 share purchase plan to existing shareholders.
Eligible shareholders can subscribe for up to $30,000-worth of Davenport shares at $0.04 each – representing an 18% discount to Davenport’s volume weighted average market price over the previous five trading days.
Dr Koopmans said he encouraged all eligible shareholders to “take advantage” of the offer and increase their holding in the company.
The funds are expected to provide Davenport with capital as it advances discussions with potential strategic partners.
German potash projects
Davenport has several exploration and mining licences encompassing 659 square kilometres in Germany’s South Harz potash basin.
The basin is known for its prospectivity and has been mined for potash since the 1890s, with about 181.7 million tonnes of the material produced from the region.
Davenport’s licences surround former mines and are in proximity to water, gas and rail.
All-up, Davenport’s projects have global inferred resources of 5.3 billion tonnes at 10.8% potassium oxide.
The largest resource is at the Mulhausen-Keula-Kullstedt project (2.7Bt), while the other advanced projects include Nohra-Elende (1.7Bt) and Ebeleben (577Mt).
Davenport’s strategy is to develop Ohmgebirge first, which has a resource of 325Mt. The deposit is shallow and Davenport expects this asset will take less capital and time to develop – enabling a fast-track to early cash flow to assist with developing the larger resources.
The company plans to produce sulphate of potash, muriate of potash and magnesium sulphate for the western European market.