Danakali : Sydney Resources Round-up Conference Presentation

ASX:DNK

Paul Donaldson, Managing Director

RUI Sydney Resources Round Up Conference

10 - 11 May 2017

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 reflects the Company's intentions. All statements in this presentation, other than statements of historical facts, that address future production, project development, reserve or resource potential, exploration drilling, exploitation activities, corporate transactions and events or developments that the Company expects to occur, are forward-looking statements. Although the Company believes the expectations expressed in such statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements.

Factors that could cause actual results to differ materially from those in forward-looking statements include market prices of potash and, exploitation and exploration successes, capital and operating costs, changes in project parameters as plans continue to be evaluated, continued availability of capital and financing and general economic, market or business conditions, as well as those factors disclosed in the Company's filed documents.

There can be no assurance that the development of the Colluli Project will proceed as planned. Accordingly, readers should not place undue reliance on forward looking information. Mineral Resources and Ore Reserves have been reported according to the JORC Code, 2012 Edition. To the extent permitted by law, the Company accepts no responsibility or liability for any losses or damages of any kind arising out of the use of any information contained in this presentation. Recipients should make their own enquiries in relation to any investment decisions.

Mineral Resource, Ore Reserve and financial assumptions made in this presentation are consistent with assumptions detailed in the Company's ASX announcements dated 25 February 2015, 4 March 2015, 19 May 2015, 23 September 2015, 30 November 2015, 15 August 2016 and 1 February 2017 which continue to apply and have not materially changed. The Company is not aware of any new information or data that materially affects assumptions made.

• Large, long life, high quality resource close to coast and global markets

• One of the highest grade sulphate of potash resources in the world

• Shallowest known evaporite deposit globally

• Sulphatic salts extracted in solid form

• 60km from the coast and 200km from established shipping infrastructure

• 1.3 billion tonne potassium resource containing a 1.1 billion tonne reserve1,2

• Estimated mine life in excess of 200 years based on DFS production rates4

  Sulphate of Potash (SOP) is a premium potash type

• Premium, chloride free potash type providing both potassium and sulphur3

• Economically exploitable primary resources are geologically scarce

• Limited advanced stage primary projects in the development pipeline

• Supply gap has been bridged by high cost, manufactured secondary product which provides price support for primary producers3

  Positive DFS demonstrates outstanding economics

• Colluli demonstrates the most favourable economics relative to all advanced stage SOP projects globally4

• Low development capital4

• Industry leading capital intensity4

• Bottom quartile operating costs4

• Low incremental growth capital4 1. ASX Announcement, 25th February 2015

• ASX Announcement, 19th May 2015

• CRU Consultants, Integer Research

• ASX Announcement, November 2015

  HIGHLIGHTS Front end engineering design optimisation highly favourable1

• SOP output increase of over 10% following processing plant debottlenecking1

• Development capital reduction opportunities identified (water reduction, elimination of offsite infrastructure, pit development approach and processing plant footprint size reduction) and being progressed1

  Simple, commercially proven production process

• Production of SOP from kainite and sylvite is a proven, low cost, high yield process utilising simple, proven mineral processing units

  Unrivalled diversification and upside potential

• The Colluli resource has the capability of producing a multi agri-commodity suite including sulphate of potash (SOP), sulphate of potash magnesia (SOP-M), Muriate of Potash (MOP), polyhalite, magnesium sulphate (kieserite fertiliser) and gypsum

• In addition, the resource comprises over 300 million tonnes of high quality rock salt and appreciable amounts of magnesium chloride

  Fully permitted

• Mining agreement signed2

• Mining licenses awarded2

• Social, Environmental Impact Assessment Approved4

  Offtake discussions well progressed

• MOU's signed for entire product volume. Heads of agreements progressing with completion targeted for the end

of Q2

3 1. ASX Announcement, 3rd May 2017

1. ASX Announcement, 1st February 2017

2. ASX Announcement, 20th July 2016

3. ASX Announcement, 6th December 2016