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news.. Allana Potash (AAA.tsx)
Allana Formalizes Mandate Letters With Prospective Lenders & Proceeds With Formal Due Diligence for Project Financing
http://online.wsj.com/article/PR-CO-20130826-901313.html
TORONTO, ONTARIO--(Marketwired - Aug. 26, 2013) - Allana Potash Corp. (TSX:AAA)(OTCQX:ALLRF) ("Allana" or the "Company") announces progress in its project financing strategy with the signing of formal mandate letters with prospective lenders within a lender group representing loans in excess of the target amount of 60-65% debt contemplated to finance the initial construction of Allana's Danakhil potash project (the "Project"). Following receipt of renewed letters of interest from large Development Finance Institutions ("DFIs") and Export Credit Agencies ("ECAs"), formal mandate letters have been signed between Allana and members of the group of DFIs and ECAs. In parallel with the mandates, lenders have begun formal loan assessment preparations and a due diligence review of the Project. The group of lenders includes large multilateral and regional DFIs and ECAs from North America, Europe and Africa.
Management is pleased that the capital structure for the Project has been well-received and supported by the lenders' analysis of the Project Feasibility Study. Allana continues to work with its project finance advisor, BNP Paribas and representatives of the lenders, as well as with the specialized technical advisors engaged on behalf of the lenders, with a view to de-risking the Project as we move towards finalizing financing commitments. Allana expects the technical and commercial evaluation of the Project to be completed by late 2013, thereby allowing for the closing of the project debt financing and start of construction in early 2014.
Farhad Abasov, President and CEO, commented: "Allana is very encouraged by this major project financing milestone achieved. The company is very appreciative of positive and strong support from the group of large, prestigious multilateral DFIs and ECAs that we have engaged and are consulting. We will maintain our efforts to ensure that the solid projected credit metrics of the Project support our targeted amount of project debt financing, thereby increasing the potential returns to Allana shareholders. The formal mandating of the lenders is a significant development in our project financing activities which, along with our current cash on hand and continued support from our existing strategic investors in the face of challenging sector conditions, gives us confidence that the Project will continue to be financed and developed according to schedule."
About Allana Potash Corp.
Allana is a publicly traded corporation with a focus on the acquisition and development of potash assets internationally with its major focus on a previously explored potash property in Ethiopia. Allana has secured financial support from two significant strategic investors: IFC, a member of World Bank Group, and Liberty Metals and Mining, a member of Liberty Mutual Group. Allana has estimated measured and indicated Sylvinitemineral resources of 327.4 million tonnes of 28.3% KCl; and an estimated inferred Sylvinite mineral resource of 90.8 million tonnes grading 27.8% KCl, In addition, the Danakhil Project hosts estimated measured and indicated Kainitite mineral resources of 1,150.5 million tonnes at 19.4% KCl, an estimated inferred Kainitite mineral resource of 481.8 million tonnes of 19.8% KCl; estimated measured and indicated Upper Carnallitite mineral resources of 411.3 million tonnes grading 17.3% KCl, estimated inferred Upper Carnallitite mineral resources of 175.5 million tonnes of 16.5% KCl; estimated measured and indicated Lower Carnallitite mineral resources of 557.2 million tonnes of 9.2%KCl, and estimated inferred Lower Carnallitite mineral resources of 369.3 million tonnes grading 7.7% KCl. The foregoing mineral resource estimates are as at April 17, 2013. For more information with respect to the data verification procedures undertaken and the key assumptions, parameters and risks associated with the foregoing estimates, refer to Allana's Technical Report entitled "Resource Update for the Danakhil Potash Deposit, Danakhil Depression, Afar State, Ethiopia" dated effective April 17, 2013 filed under the Company's SEDAR profile at www.sedar.com on August 7, 2013. Allana has approximately 276.9 million shares outstanding. Allana trades on the Toronto Stock Exchange under the symbol "AAA".
Dr. Peter J. MacLean, Ph.D., P. Geo., Allana's Senior VP Exploration, is the Company's designated Qualified Person and has reviewed and approved the technical information presented in this release.
Nice Close
NICE CLOSE
now who would want to do that??
hmmmm
ouch.. selling at market??
the company's come a long way since SPARKs first post in SEPT'09.....
company was a completely different animal back then
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=41633637
thanks to spark for starting this board & thanks to everyone for posting (well.. almost everyone lol)
people paint high.. people paint low
i don't think it has much of an effect on peoples psyches over here
obviously, that particular paint job (if that was the persons intention) had no effect
absolutely
i'm sure both options are on the table, but the article wasn't specific
some nice action today..
lol.. interesting trades
nice find Max.. this sentence makes it very plausible:
thanks for posting the articles.. esp the cartel history
yeah, i agree
should turn out to be a good investment but tough to watch
news/update: (AAA.tsx/ALLRF.otcbb)
Allana Potash Provides Project Update and Files NI 43-101 Technical Report
http://www.juniorminingnetwork.com/junior-miner-news/news-releases/758-tsx/aaa/16522-allana-potash-provides-project-update-and-files-ni-43-101-technical-report.html
TORONTO, ONTARIO--(Marketwired - Aug. 7, 2013) - Allana Potash Corp. (TSX:AAA) (OTCQX:ALLRF) ("Allana" or the "Company") provides project update and announces that it has filed a technical report entitled "Resource Update for the Danakhil Potash Deposit, Danakhil Depression, Afar State, Ethiopia" (the "Technical Report") prepared in accordance with National Instrument 43-101 in support of the June 26, 2013 news release, which outlined the updated mineral resource estimates on its Danakhil Potash Project in Ethiopia.
Project Update
The Company is pleased to report significant progress on its key initiatives.
Mining Permit Process
The Company has submitted complete mining permit documentation to the Ministry of Mines of Ethiopia as requested and has held a number of meetings with Ministry officials. We are very pleased with the progress that the Ministry has made on Allana's mining permit application to date. Ministry officials have confirmed that all documentation and work requirements are complete and all outstanding questions and requests to Allana have now been satisfied. We are now entering the stage of final clarifications on certain aspects with the Ethiopian government and we expect the approval of the mining permit in the next few weeks.
Debt Financing Process
Allana's management is very pleased to announce that the first formal due diligence trip to the Company's site by representatives of a group of large Development Financing Institutions (DFIs) and Export Credit Agencies (ECAs) was successfully completed in late July. The Company and the group of lenders have also advanced various technical and legal aspects of the entire process. Our timeframe on finalization of the debt process remains intact and we expect significant developments in the near future.
Offtake and Strategic Partnership Talks
The Company has successfully advanced talks on both offtake and equity investment with a number of large fertilizer companies in the last several weeks. Under the current conditions in the sector, the interest in Allana's low-cost potash project has increased and some of these organizations are now pursuing a potential partnership agreement with Allana. Management is working with various parties and advisors with a view to maximizing value for shareholders.
The Company has also launched the EPCM selection process over the course of the last few weeks. A number of very strong engineering firms have been selected to participate in the process and management's goal is to choose a company that can deliver on engineering and construction objectives in the most efficient manner. Management also continues to strengthen Allana's technical expertise, recently adding a solution mining expert to the team.
Management believes Allana is uniquely positioned to thrive in the current environment that will favour low-cost production projects for the following reasons:
• Allana's project economics are very robust. Our estimated low CAPEX ($US 642 m for 1 million tpy ), production OPEX ($65/t), FOB cost ($US100/t) and strategic location position Allana well in the final planning stages of our debt and equity financing process (see news release dated February 4, 2013 and the results of Allana's feasibility study prepared by Ercosplan in February 2013 which are restated in summary in the Technical Report)
• All required infrastructure is in place or under construction (roads, rail, port, power) and is expected to be completed by the time Allana's operation is in production.
• Negotiations with our lender group, consisting mostly of Development Financing Institutions, Export Credit Agencies and strategic off-take partners, are progressing and are expected to be concluded over the course of the next several months. Our existing partners (LMM & IFC) are expected to provide financing as well.
• The application for our mining licence is being processed by the Ethiopian government and Allana is optimistic that the granting of the Mining License will occur in the next few weeks
• Allana is uniquely positioned to meet growing potash demand in Africa and Ethiopia proper. Ethiopia has recently announced the tender process in relation to four NPK plants that will require about 200,000 tonnes of potash annually.
• Allana is working diligently to reduce its cash burn rate, which has come down from its Feasibility Study peaks and as reported as at and for the nine months ended April 30, 2013, Allana had a cash balance of over $20 million. In the event of any unanticipated licensing or financing delays, Allana's management believes there are sufficient cash reserves to weather any headwinds.
Technical Report Filing
The Technical Report outlines an updated mineral resource estimate for all four potash units on the Company's Ethiopian potash project. The estimated mineral resources are outlined in the tables below:
Cautionary Notes:
1. MT=Million Tonnes, tonnage is for in-situ resource with no discount for recovery as mining method is to be determined. Potash deposits have been mined by underground, open pit and solution mining methods, a Feasibility Study has indicated solution mining and solar evaporation are the optimal mining methods.
2. The numbers for tonnage, average KCl per cent are rounded figures.
3. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimates of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
4. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.
5. Average densities used in resource calculations are 2.14, 1.81, 1.91, and 2.10 g/cm3 for the Sylvinite, UC, LC and Kainitite members respectively.
The Technical Report is available under Allana's profile on SEDAR at www.sedar.com.
About Allana Potash Corp.
Allana is a publicly traded corporation with a focus on the acquisition and development of potash assets internationally with its major focus on a previously explored potash property in Ethiopia. Allana has secured financial support from two significant strategic investors: IFC, a member of World Bank Group, and Liberty Metals and Mining, a member of Liberty Mutual Group. Allana has estimated measured and indicated Sylvinite mineral resources of 327.4 million tonnes of 28.3% KCl; and an estimated inferred Sylvinite mineral resource of 90.8 million tonnes grading 27.8% KCl, In addition, the Danakhil Project hosts estimated measured and indicated Kainitite mineral resources of 1,150.5 million tonnes at 19.4% KCl,an estimated inferred Kainitite mineral resource of 481.8 million tonnes of 19.8% KCl; estimated measured and indicated Upper Carnallitite mineral resources of 411.3 million tonnes grading 17.3% KCl, estimated inferred Upper Carnallitite mineral resources of 175.5 million tonnes of 16.5% KCl; estimated measured and indicated Lower Carnallitite mineral resources of 557.2 million tonnes of 9.2% KCl, and estimated inferred Lower Carnallitite mineral resources of 369.3 million tonnes grading 7.7% KCl. The foregoing mineral resource estimates are as at April 17, 2013. For more information with respect to the data verification procedures undertaken and the key assumptions, parameters and risks associated with the foregoing estimates refer to Allana's Technical Report entitled "Resource Update for the Danakhil Potash Deposit, Danakhil Depression, Afar State, Ethiopia" dated effective April 17, 2013 filed under the Company's SEDAR profile at www.sedar.com on August 7, 2013 . Allana has approximately 276.9 million shares outstanding. Allana trades on the Toronto Stock Exchange under the symbol "AAA".
The mineral resource and reserve estimates were completed by ERCOSPLAN under the supervision of Dr. Henry Rauche, Ph.D., EurGeol, Managing Director, CEO ERCOSPLAN, Dr. Sebastiaan van der Klauw, Ph.D., EurGeol., Consulting Geologist, ERCOSPLAN and Euro Ingenieur Ralf Linsenbarth of ERCOSPLAN Ingenieurbüro Anlagentechnik GmbH who are each independent Qualified Persons for the purposes of National Instrument 43-101. Dr. Peter J. MacLean, Ph.D., P. Geo., Allana's Senior VP Exploration, is the Company's designated Qualified Person for the purposes of the Technical Report and has reviewed and approved the technical information presented in this release.
Forward-Looking Statement
Except for statements of historical fact relating to the Company, certain information contained herein constitutes "forward-looking information" under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except in accordance with applicable securities laws.
Allana Potash Corp.
Richard Kelertas
Senior Vice President, Corporate Development
514 717 6256
rkelertas@allanapotash.com
news/update:
Allana Potash Provides Project Update and Files NI 43-101 Technical Report
http://www.juniorminingnetwork.com/junior-miner-news/news-releases/758-tsx/aaa/16522-allana-potash-provides-project-update-and-files-ni-43-101-technical-report.html
TORONTO, ONTARIO--(Marketwired - Aug. 7, 2013) - Allana Potash Corp. (TSX:AAA) (OTCQX:ALLRF) ("Allana" or the "Company") provides project update and announces that it has filed a technical report entitled "Resource Update for the Danakhil Potash Deposit, Danakhil Depression, Afar State, Ethiopia" (the "Technical Report") prepared in accordance with National Instrument 43-101 in support of the June 26, 2013 news release, which outlined the updated mineral resource estimates on its Danakhil Potash Project in Ethiopia.
Project Update
The Company is pleased to report significant progress on its key initiatives.
Mining Permit Process
The Company has submitted complete mining permit documentation to the Ministry of Mines of Ethiopia as requested and has held a number of meetings with Ministry officials. We are very pleased with the progress that the Ministry has made on Allana's mining permit application to date. Ministry officials have confirmed that all documentation and work requirements are complete and all outstanding questions and requests to Allana have now been satisfied. We are now entering the stage of final clarifications on certain aspects with the Ethiopian government and we expect the approval of the mining permit in the next few weeks.
Debt Financing Process
Allana's management is very pleased to announce that the first formal due diligence trip to the Company's site by representatives of a group of large Development Financing Institutions (DFIs) and Export Credit Agencies (ECAs) was successfully completed in late July. The Company and the group of lenders have also advanced various technical and legal aspects of the entire process. Our timeframe on finalization of the debt process remains intact and we expect significant developments in the near future.
Offtake and Strategic Partnership Talks
The Company has successfully advanced talks on both offtake and equity investment with a number of large fertilizer companies in the last several weeks. Under the current conditions in the sector, the interest in Allana's low-cost potash project has increased and some of these organizations are now pursuing a potential partnership agreement with Allana. Management is working with various parties and advisors with a view to maximizing value for shareholders.
The Company has also launched the EPCM selection process over the course of the last few weeks. A number of very strong engineering firms have been selected to participate in the process and management's goal is to choose a company that can deliver on engineering and construction objectives in the most efficient manner. Management also continues to strengthen Allana's technical expertise, recently adding a solution mining expert to the team.
Management believes Allana is uniquely positioned to thrive in the current environment that will favour low-cost production projects for the following reasons:
• Allana's project economics are very robust. Our estimated low CAPEX ($US 642 m for 1 million tpy ), production OPEX ($65/t), FOB cost ($US100/t) and strategic location position Allana well in the final planning stages of our debt and equity financing process (see news release dated February 4, 2013 and the results of Allana's feasibility study prepared by Ercosplan in February 2013 which are restated in summary in the Technical Report)
• All required infrastructure is in place or under construction (roads, rail, port, power) and is expected to be completed by the time Allana's operation is in production.
• Negotiations with our lender group, consisting mostly of Development Financing Institutions, Export Credit Agencies and strategic off-take partners, are progressing and are expected to be concluded over the course of the next several months. Our existing partners (LMM & IFC) are expected to provide financing as well.
• The application for our mining licence is being processed by the Ethiopian government and Allana is optimistic that the granting of the Mining License will occur in the next few weeks
• Allana is uniquely positioned to meet growing potash demand in Africa and Ethiopia proper. Ethiopia has recently announced the tender process in relation to four NPK plants that will require about 200,000 tonnes of potash annually.
• Allana is working diligently to reduce its cash burn rate, which has come down from its Feasibility Study peaks and as reported as at and for the nine months ended April 30, 2013, Allana had a cash balance of over $20 million. In the event of any unanticipated licensing or financing delays, Allana's management believes there are sufficient cash reserves to weather any headwinds.
Technical Report Filing
The Technical Report outlines an updated mineral resource estimate for all four potash units on the Company's Ethiopian potash project. The estimated mineral resources are outlined in the tables below:
Cautionary Notes:
1. MT=Million Tonnes, tonnage is for in-situ resource with no discount for recovery as mining method is to be determined. Potash deposits have been mined by underground, open pit and solution mining methods, a Feasibility Study has indicated solution mining and solar evaporation are the optimal mining methods.
2. The numbers for tonnage, average KCl per cent are rounded figures.
3. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimates of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
4. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.
5. Average densities used in resource calculations are 2.14, 1.81, 1.91, and 2.10 g/cm3 for the Sylvinite, UC, LC and Kainitite members respectively.
The Technical Report is available under Allana's profile on SEDAR at www.sedar.com.
About Allana Potash Corp.
Allana is a publicly traded corporation with a focus on the acquisition and development of potash assets internationally with its major focus on a previously explored potash property in Ethiopia. Allana has secured financial support from two significant strategic investors: IFC, a member of World Bank Group, and Liberty Metals and Mining, a member of Liberty Mutual Group. Allana has estimated measured and indicated Sylvinite mineral resources of 327.4 million tonnes of 28.3% KCl; and an estimated inferred Sylvinite mineral resource of 90.8 million tonnes grading 27.8% KCl, In addition, the Danakhil Project hosts estimated measured and indicated Kainitite mineral resources of 1,150.5 million tonnes at 19.4% KCl,an estimated inferred Kainitite mineral resource of 481.8 million tonnes of 19.8% KCl; estimated measured and indicated Upper Carnallitite mineral resources of 411.3 million tonnes grading 17.3% KCl, estimated inferred Upper Carnallitite mineral resources of 175.5 million tonnes of 16.5% KCl; estimated measured and indicated Lower Carnallitite mineral resources of 557.2 million tonnes of 9.2% KCl, and estimated inferred Lower Carnallitite mineral resources of 369.3 million tonnes grading 7.7% KCl. The foregoing mineral resource estimates are as at April 17, 2013. For more information with respect to the data verification procedures undertaken and the key assumptions, parameters and risks associated with the foregoing estimates refer to Allana's Technical Report entitled "Resource Update for the Danakhil Potash Deposit, Danakhil Depression, Afar State, Ethiopia" dated effective April 17, 2013 filed under the Company's SEDAR profile at www.sedar.com on August 7, 2013 . Allana has approximately 276.9 million shares outstanding. Allana trades on the Toronto Stock Exchange under the symbol "AAA".
The mineral resource and reserve estimates were completed by ERCOSPLAN under the supervision of Dr. Henry Rauche, Ph.D., EurGeol, Managing Director, CEO ERCOSPLAN, Dr. Sebastiaan van der Klauw, Ph.D., EurGeol., Consulting Geologist, ERCOSPLAN and Euro Ingenieur Ralf Linsenbarth of ERCOSPLAN Ingenieurbüro Anlagentechnik GmbH who are each independent Qualified Persons for the purposes of National Instrument 43-101. Dr. Peter J. MacLean, Ph.D., P. Geo., Allana's Senior VP Exploration, is the Company's designated Qualified Person for the purposes of the Technical Report and has reviewed and approved the technical information presented in this release.
Forward-Looking Statement
Except for statements of historical fact relating to the Company, certain information contained herein constitutes "forward-looking information" under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except in accordance with applicable securities laws.
Allana Potash Corp.
Richard Kelertas
Senior Vice President, Corporate Development
514 717 6256
rkelertas@allanapotash.com
he sounds VERY optimistic about some big milestones being completed soon.. think we're gonna have a legendary run when it comes
market seems to be picking up on his optimism
we could be close
SmallCapPower.com CEO Interview With Allana Potash Corp(TSX: AAA)
http://www.smallcappower.com/posts/smallcappower-com-ceo-interview-with-allana-potash
In this exclusive interview, Allana CEO Mr. Abasov discusses the significant progress made by the company to advance its Danakhil project towards production. He also discusses the recent developments in the potash industry resulting from the breakup of a key supply cartel and its likely impact on existing and upcoming producers like Allana.
SCP: Give us a quick update on the potash project that Allana Potash is developing in Ethiopia
FA: Allana has had a very busy year so far in 2013. We have completed our feasibility study in February, announced a significant increase in our potash resource with the total estimated measured and indicated mineral resources reaching 2.45 billion tonnes at 17.9% KCl, including 347 million tonnes grading 28.3% KCl of estimated measured and indicated sylvinite mineral resource (that is the basis for our feasibility study estimated mineral reserves and our initial production plans) . An additional estimated inferred mineral resource totalling 1.12 billion tonnes at 15.9% KCl indicate potential for expansion of the resource in the future. The Company has also successfully managed to complete the Environmental, Social and Health Impact Assessment Study which was subsequently approved by the Ethiopian Government.
We have submitted our application for the mining permit to the Ministry of Mines of Ethiopia a couple of months ago. The Ministry officials have been making tremendous progress on the review of the documentation. The cooperation between the Ministry officials and Allana executives has been exemplary as both sides fully understand how important this project is for both Ethiopia and Allana. We are optimistic that we will receive the mining permit soon.
Our debt financing process has been on track for the last several months since the completion of the feasibility study. As you might remember, we have engaged BNP Paribas, one of the largest French banks with a great track record of completing such project financing packages in Africa, to lead our debt financing process. We have successfully put together one of the best groups of lenders. The group includes major global Development Financing Institutions (DFIs) and Export Credit Agencies (ECAs). The support coming from this group of potential lenders has been very strong as they are keenly aware of the transformational nature of our project not only for the Afar region, but also for Ethiopia as a whole and this part of East Africa. We expect some significant developments on this front in a very short period of time.
Allana has also continued advancing partnership talks with large fertilizer and other industrial organizations. Negotiations with some of them are in the final stages and we expect important developments in this regard. The support we heard from some of these organizations, even in the midst of last week’s events, was very reassuring for us.
On the technical development side, the team has worked very hard after the feasibility study completion to define the selection process for an EPCM contactor. The key is to find the right EPCM contractor who can design, engineer and build our potash project in this part of the world at a reasonable cost and in the most efficient manner. This process is going very well and we have identified several very strong organizations from among which we will be selecting the right EPCM contractor. The plan is to finalize the process in the fall.
Allana also continued building its technical team in the last several months by adding key experts to its experienced team including professionals on the solution mining side. We have been interviewing a number of candidates for the position of Senior Vice President of Operations, and are in the process of finalizing that process.
I am very pleased with the progress made by our technical and financing teams so far.
SCP: Recently, Russian producer Uralkali announced that it was dissolving the cartel with Belarusian state-owned Belaruskali and will supply potash to countries like China and India on its own. There is a wide spread perception that the days of controlling the pricing through these cartels is probably over and potash prices are likely heading lower in coming years. All potash producers and companies that are developing potash projects witnessed a plunge in their share prices last week. Do you believe that significantly lower potash prices will result due to this development and how does this new development impact Allana Potash?
FA: Unquestionably, the news on Tuesday shook the potash world. Our take on this news is that although Uralkali has announced its departure from BPC and most importantly from the long-held policy of price-over-volume, we believe it will take time for Uralkali to boost its production capacity to reach their recently announced production target.
As far as Allana is concerned, one of the most important reasons we selected the Danakhil project in Ethiopia was its low-cost structure. This is one of the shallowest deposits in the world that is amenable to solution mining. Also the region is extremely hot and dry which means we will end up having one of the most efficient solar evaporation processes in the world. All those factors make our potash project one of the lowest cost projects not only among greenfield and brownfield projects but also even in comparison to some current potash producers.
With $642 million of capital requirements to reach 1 million tonnes of production per year it is very hard to find even a handful potash projects in the world that can compete with Allana’s Danakhil project in Ethiopia. Our estimated production cost is $65/t and our full cost including transportation to the Tadjourah Port in Djibouti is estimated at less than $100/t. So not only do we compare very advantageously to others and will we be able to withstand lower potash prices but also we will eventually thrive in that environment. IRRs are still healthy even at projected short-term, worst case market prices.
SCP: Some experts are arguing that the breakup of the cartels is actually a good thing in the long run for the potash industry. It will help to establish a fair price, which might very well be at a lower level from the current prices, but will spur demand and will lead to higher sales for potash miners. What are your views on this?
FA: As we already saw last week the impact of that breakup in the short term was already painful with the entire sector taking a big hit on valuations. Nevertheless, if the potash prices do eventually go down only economically most robust projects will survive. I also agree that lower prices will eventually spur more demand and that should work well for companies like Allana and other low-cost potash companie
SCP: A wide spread fear amongst investors, with regards to junior potash companies is the fact that at lower prices their projects become unviable and unfundable. How is Allana positioned now that lower potash prices in coming years are a real possibility? Do you think Allana can still easily attract interest from financiers and put together a project finance package to take the project to production?
FA: We have been saying for years that investors should focus on the fundamentals of potash projects and not other aspects that are very difficult to quantify. As you know very well, in the last several years the market has seen quite a few new potash projects both greenfield and brownfield expansion projects that have astronomical capex price tags with high operating costs. But investors magically believed that these projects had a chance to raise capital and build these projects despite weak economics. I believe now most investors will finally start delving into the project economics rather than investing based on how “sexy” the story sounds.
We have had a very clear and well-delineated financing strategy for Allana from day one. We realized that we have potentially a very low-cost project in a developing nation and have been mindful of the project’s bankability of the project since its early stage of exploration, focusing on two aspects: bringing large Development Financing Organizations to help us with financing of the project debt; and finding strong financing supporters from the private sector for project equity as early as possible.
That’s why we have become the first and still the only potash project in the world that has equity investment from International Finance Corporation (IFC), a member of the World Bank Group, who has already expressed strong indicative support for us at the construction stage as well. They are actively engaged with the company right now on all aspects, not only financing issues. For example, IFC was involved in the preparation of the Environmental Impact Study.
In addition to IFC, as I mentioned above now we have a group of other large global and regional DFIs expected to support us on the debt side. We expect that 60-65% of our entire capex requirements will come from debt financing by this group.
On the equity side, we continue to have strong relations with Liberty Metals and Mining, a part of Liberty Mutual Insurance Group, that own approximately14% of the company’s shares and who are committed to supporting us at the construction stage.
I also mentioned before that we are advancing talks with a number of large fertilizer and other industrial groups on potential strategic investment and offtake.
Our plan is to get 100% of our funding completed among these groups in the next several months.
SCP: Our understanding is that Allana’s project, when in production, could be one of the lowest cost producers. The capital expenditure required to get to 1 million tonnes a year type production is also on the lower side of the range. Can you please elaborate on this and tell us what you believe are key differentiating features of Allana’s project versus other upcoming projects?
FA: Our strong economic parameters with $642 million capex and $65/t of operating cost are our best advantages.
But also we have other significant advantages. Let me summarize them.
a) Financibility and clear visibility on where the funds will come from. As I already described 60-65%
of our entire capex is expected to come from debt financing from a group of large DFIs and ECAs.
The equity component is expected to come from existing strategic equity investors as well as a
potential new strategic partner.
b) Once in production, we will be the nearest producer to India and most of Asia, and East Africa
c) The demand for potash is growing in Africa, and we will be able to meet that demand. In Ethiopia
alone this demand may reach 200,000 tonnes per year in the next few years.
d) We are building one of the strongest junior potash operating teams in the world
e) We also enjoy full support from both the Ethiopian and Djibouti governments, who see this as a
key element of their economic growth strategies.
f) Allana is the only potash junior with access to its own potash terminal as we signed an MOU with the
government of Djibouti to that effect a few months back. We are finalizing that agreement as we speak.
I don’t know of many potash juniors who have clear visibility on where their funding will come from. I should also add that we have close to $20 million in the bank thus the company is financially solid. This is sufficient to implement our current and planned programs.
SCP: So are you suggesting that in a way the recent developments have a silver lining for Allana since your project will likely be one of a very few upcoming projects that will get built?
FA: Very well said. Yes, and most importantly it is not only Allana management and board that think that way. We received expressions of interest from some large fertilizer players last week when the potash sector was in a state of turbulence. Looks like the fundamentals are becoming an important factor for investors and strategic players again.
SCP: We believe that most new potash projects that are near completion and likely to be in production within 18 to 24 months are here in North America, far away from the most potent sources of demand for potash, which are in India and China. Allana’s on the other hand is in Ethiopia, with a port access and once complete will be the closest source of potash supply to India. Do you believe that this will help Allana in getting significant interest from Indian and Chinese investors/miners interested in a good source of potash supply?
FA: Allana became the first junior to sign up a potash terminal as I mentioned before. This is a unique advantage that we have as most juniors are far from potash consuming countries and have no access to ports currently. This is of course important for accessing the Asian markets, but recently we are also developing an “Africa First” strategy, pursuant to which, we believe a considerable part of our potash will stay in Ethiopia and be exported to the rest Africa as well. As far as India is concerned, we have been receiving strong expressions of interest from various organizations in that country.
SCP: What should investors be looking forward to from Allana in the next 6 to 12 months?
FA: I am very happy that you always ask this question and so far we have always delivered on all the milestones we have set before us. In the next 6-12 months, our singular focus will be on the following: getting the mining permit; securing strategic equity financing; securing debt financing; selecting a very strong EPCM contractor; securing an offtake agreement; and continue building our team. If we are successful with these objectives in the next few months we hope to break the ground for construction in early 2014.
nice day over here.. great news too!
If we didn't have Liberty M&M & IFC as strategic partners, I'd probably be real worried.
I'm thinkin now's a good time to add for me.
yeah.. not bad
when the run comes, it's gonna be a big momma
thanks bob
always liked this company.. picked up some .595s a couple of weeks ago.. looking for $1+ in the near future
gl!
deregulation strikes again! anyone wonder how many are going to jail for this one??
U.S. Weighs Inquiry Into Big Banks’ Storage of Commodities
http://www.nytimes.com/2013/07/23/business/inquiry-possible-into-storage-of-commodities-by-big-banks.html?_r=0
A tactic devised by Goldman Sachs and other financial players that has inflated the price of aluminum — and ultimately cost consumers billions of dollars — is coming under federal scrutiny. The Commodity Futures Trading Commission has taken the first step in an examination of warehouse operations that are controlled by Goldman Sachs, Glencore Xstrata, the Noble Group and others and used to store vast amounts of aluminum. The operations were the subject of an article by The New York Times that was published on Sunday.
The commission has told the firms to retain internal documents and e-mails related to the businesses, according to people who reviewed the requests and spoke on the condition of anonymity because the notices had not been made public.
The call comes as a Senate committee prepares to open hearings on Tuesday on how Wall Street has extended its reach beyond banking and into global markets for essential commodities. The panel is expected to focus on how banks have taken advantage of loosened federal regulation to buy warehouses, pipelines, oil tankers and other infrastructure used to store basic goods and deliver them to consumers.
The overarching question is whether banks should control the storage and shipment of commodities, and whether such activities could pose a risk to the nation’s financial system.
But other crucial issues are expected to arise as well. Among them is how Wall Street’s push into these markets has affected the prices paid by manufacturers and ultimately consumers. Another is whether Goldman and Morgan Stanley have operated their storage facilities at arms’ length from their banking business, as required by regulators.
Goldman has exploited industry pricing regulations set by the London Metal Exchange by shuffling tons of aluminum each day among the 27 warehouses it controls in the Detroit area, The Times reported on Sunday. The maneuver lengthens the storage time and generates millions a year in profit for Goldman, which charges rent to store the metal for customers, the investigation found. The C.F.T.C. issued the notices late last week, and it was unclear on Monday whether the agency or other authorities would open a full-fledged investigation into banks’ activities.
The agency’s request included a specific admonition against destroying internal documents or deleting e-mails, a warning that often precedes more formal inquiries. Among other things, the agency asked the companies to retain communications regarding monetary incentives that they provide to customers to store metal in the warehouses, as well as any complaints they may have received about their practices, according to the people who have reviewed the notices.
The delays at Goldman’s Detroit-area warehouses, which are owned by a subsidiary, Metro International Trade Services, make aluminum more expensive nearly everywhere in the country because of a formula used to determine the cost of the metal on the spot market. The delays are so long that Coca-Cola and many other manufacturers avoid buying aluminum stored there. Nonetheless, they still pay the higher price.
Michael DuVally, a Goldman spokesman, said that Goldman had arranged its ownership of Metro to be in complete compliance. A spokesman for the commission declined to comment.
Wall Street’s maneuverings in the commodities markets have added many billions to the coffers of investment banks like Goldman, JPMorgan Chase and Morgan Stanley, while forcing consumers to pay more for gasoline, electricity and a wide range of products, from cars to cellphones. In the last year, federal authorities have accused three banks, including JPMorgan, of rigging electricity prices, and on Monday JPMorgan was working to reach a settlement that could cost it $500 million.
Tuesday’s hearings, led by Senator Sherrod Brown, Democrat of Ohio, will focus on banks’ ownership of aluminum warehouses, oil tankers and other facilities. Among those scheduled to testify is Saule T. Omarova, a professor at the University of North Carolina at Chapel Hill, who has been critical of bank ownership of commodities operations, and Tim Weiner, an executive at MillerCoors, the big brewing company.
For much of the last century, banks were barred from owning nonfinancial businesses, and vice versa. These restrictions were weakened or lifted during the 1990s, when Congress allowed banks to expand into storing and transporting commodities.
Questions about Wall Street’s activities in the commodities markets have been growing for years. A spokeswoman for the Federal Reserve Board said last Friday that the Fed was “reviewing the 2003 determination that certain commodity activities are complementary to financial activities and thus permissible for bank holding companies.”
In 2008, during the depths of the financial crisis, Goldman Sachs and Morgan Stanley were granted bank holding company status; before that time they had been investment banks and not subject to the restrictions on commodities operations that covered commercial banks.
Still, it is unclear if big banks would be required to divest themselves of their commodities operations immediately. Goldman Sachs and Morgan Stanley purchased some of these operations as part of their merchant banking units, and regulations give them 10 years from the date of purchase to sell them. Goldman Sachs bought Metro International, the warehouse unit, three years ago, meaning it could hold on to the warehouse company until at least 2020.
One line of regulatory inquiry could relate to whether officials at Goldman, a bank holding company, are sufficiently separated from the activities of the merchant banking unit, which actually owns Metro International. Under the terms of the exemption under which Goldman bought the company, the two are supposed to be separated to prevent conflicts of interest.
nice close.. good to see it over 3¢
any lucky buggers out there able to snag some 24s (or lower)?
cause they weren't giving them to me
nice!!
no.. i do have a bid in though
think i better get a bid in down there
lookin real good!!
SPMI Bid: 0.033 Ask: 0.038 Last: 0.038 Chg +($): 0.008 (26.67%) Vol: 152,050
damn!
SPMI Bid: 0.033 Ask: 0.038 Last: 0.038 Chg +($): 0.008 (26.67%) Vol: 152,050
3½¢ hit.. nice! barrier broken!!
nice volume/movement this AM
150k stateside
35s up
SPMI Bid: 0.03 Ask: 0.035 Last: 0.03 Chg ($): 0.00 Vol: 79,450
nice day over here!
i'm liking the way this is trading!!
SPMI 0.030 +.007 (30.43%) vol:1,080,769