Allana Potash fka AAA

[Bobwins]

I attended the MoneyShow presentation on 5/13/10. I was very impressed by Abasov. He quickly went thru the corporate presentation. He emphasized the cost advantage that Allana will have over Canadian potash juniors due to the shallow depth of the deposit, the ability to use solar evaporation to do most of the work and the dramatically lower labor costs in Ethiopia.

He spent a lot of time covering the financial aspects. Said he didn't want to get to feasibility and not have financing lined up like Mag. He said they are having difficulty lining up financing and are being offered loan shark terms. He wants to focus on financing very early so that by the time the feasibility study is done, the financing will be secured.

He hopes to prove up enough resource for a 20 year mine life at 1 million tons/yr by moving 20 million tons into M&I by the end of October. He is hoping to launch the feasbility study by end of 2011 and be mining by late 2013/early 2014.

He is looking for a strategic partner and hopes to have one announced by this year. He emphasized the unique nature of the offtake agreement with the Chinese. The agreement provides for the Chinese to get 20% of their production at a discounted price that still provides a 50% margin to Allana. The agreement lasts until the Chinese have recovered their investment. One key is that if Potash soars in price, the Chinese will recover their investment faster. At the end of the agreement, the Chinese will revert to market pricing with a small discount. But the key is that Allana retained 100% of the project to allow them max flexibility in finding a JV partner.

I asked after the show about the sylvite/kainite mix. He said he is not worried about finding enough sylvite to provide sufficient resource to build a mine. The kainite is deeper and has not been fully explored. If drilling confirms that the kainite is plentiful, beyond historic levels, they can always mine it underground but they will attempt to use solution mining first. Need to measure the size of the resource first. Made it sound like they are pretty confident they will expand on historic resources due to the small area that had been explored previously.

Also reported that China has agreed to loan Ethiopia money for several infrastructure projects, including a rail line that will allow economical access to a coastal port. He emphasized the geographic advantage of Ethiopia in terms of closeness to India and China.

Overall, a very good speaker. Confident that the drill results, the possibility of a big JV partner and feasibility study starting will be stock price catalysts in 2010. He estimated that AAA.v is well ahead of any Canadian junior because they can be in production in 3-4 years while Canadians will have to look at a 5-7 year timeline and 2+X the capex plus higher operating costs.

After the presentation, I started thinking about buying more stock. He did a good job. Too bad there weren't more in the audience. Bobwins