DESCRIPTION: Allana Potash is a Canadian company exploring and developing the previously explored Dallol Potash Property in the Danakil Depression, Ethiopia. This depression had small-scale potash production in the 1920s and was extensively explored in the 1960s. The company has 43-101 compliant resources of more than 100 Mts.; a strong, experienced management team; and strategic investment from an offtake agreement with a Chinese mining group. Allana also has potash claims in Argentina adjacent to Vale's Rio Colorado project.
The information provided below is based on the most recent information we have received from analysts, newsletters and other contributors to Streetwise Reports' The Gold Report or The Energy Report. We encourage you to visit the company's web site and call the company for more specifics on this company before you decide to invest.
"Potash juniors having their day in the sun. Allana is a junior exploring for potash in Ethiopia and Argentina. The company has three potash concessions (Dallol Potash Project) located in Ethiopia's NE Danakil Depression totaling about 150 sq. km. The Dallol project area is ~100 km. from the Red Sea coast. The project, which has a NI 43-101-compliant Inferred Mineral Resource of 105.2 Mts. with a composite grade of 20.8% KCl, was the site of intense exploration in the 1960s when American company Ralph M. Parsons completed over 300 drill holes exploring for potash. A test mining operation was abandoned in the late 1960s due to water problems, but Parsons had outlined a resource of nearly 171.3 Mts. grading 32.5% KCl (non-NI 43-101 compliant). The company recently announced some promising exploration results, including the first successful potash drilling in the Danakhil Depression in some 40 years. Allana envisions a solution mining operation at Dallol and processing using solar evaporation. The company has ~118.5M shares outstanding."
Marc Davis, Stockhouse (08/31/10)
"Potash is, obviously, at or near the top of China Mining United Fund's (CMUF) shopping list—especially as it already has small, but strategic investments in place with privately owned Brazil Potash Corp. and Toronto-based Allana Potash Corp.
Investment industry analysts believe that CMUF will likely favor Allana's Ethiopian potash project in the near term. That's partly because the Chinese government committed earlier this year to investing billions of dollars in Ethiopia's underdeveloped economy, which, obviously, also buys plenty of political influence.
Allana's deposit, which sits at the heart of Ethiopia's historic Danakhil potash basin, has an inferred resource of 105 Mts. potash, averaging a favorable grade of 20.8%. Drills continue to turn in the anticipation of building upon this initial resource estimate, as well as validating the company's view that one of the world's lowest-cost potash mines is in the offing. . .China's $300B sovereign wealth fund—China Investment Corp.—may yet decide to underwrite CMUF's plan to develop Allana's potash project, says the China Mining Association's website."
The Energy Report Interview with Stan Bharti (08/12/10)
"Allana Potash Corp. in Ethiopia [is] a great company. It's in the Danakil Depression, where the geology is also similar to Saskatchewan's. It's surrounded by BHP Billiton Ltd. and an Indian company, Sainik Coal Mining, and has 43-101-compliant resources of more than 100 million tons [to be put] into production shortly. . .Allana also will be a great takeover candidate in the next 12 to 24 months."
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Marc Robinson, Cormark Securities Inc.
(08/06/10)
"Allana's Dallol project is uniquely situated to serve the key export markets of India and China. Given its potential for low-cost production and its geographic positioning, it is a highly strategic asset. As an indication of this, a Chinese investment fund has made a strategic investment in Allana and has signed an MOU to provide 35% of the capital requirements in exchange for favorable pricing on 20% of the projects output and an option to negotiate for further supply. This agreement significantly reduces financing risk—we estimate that Allana would only need to raise $140 MM of equity, significantly lower than the vast majority of greenfield projects.
Given Allana's financing structure, geographic position, strategic benefits and low-cost potential, we believe the Dallol project is one of a very small handful of greenfield MOP projects that will ultimately be developed. Allana is currently involved in a drilling program to define and extend the resource; preliminary results have been positive."
The Gold Report Interview with Vikas Ranjan (07/26/10)
"Allana just started Phase I drilling at the Dallol potash property and has been receiving very good results. There is strong evidence of near-surface mineralization. . .the resource base could be expanded. . .[Allana] has the potential to be one of the lowest-cost potash producers in the world. . .Allana could use a potash-processing method called solar evaporation, which will bring down the operational costs as it uses less energy. And because the potash seems to be near the surface, it is amenable to lower-cost open-pit mining.
Allana has done a good job of putting together other pieces of the puzzle by entering into a strategic partnership agreement with China Mineral United Management Ltd., a Chinese mining investment group closely associated with one of the largest fertilizer companies in China, which are two of the largest consumers of potash—and potash is a heavy fertilizer to ship. . .The big advantage for a potash project in Ethiopia is it's closer to India and China."
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