Got in at .47, a believer and a buyer for 5 years, never sold 1 share until yesterday. Truly disappointing.

Signing off for good...

AAA(apparently NOT)_FTW

IIRC Didn't the "other company" not find itself suddenly 50% owned by the government. I think that might be why they are having difficulty finding a "strategic partner".

Allana Potash Announces Strategic Alliance With ICL

http://finance.yahoo.com/news/allana-potash-announces-strategic-alliance-222200759.html

Updated presentation. New information on construction plans. Jan 2014 Presentation

Although neither Allana nor Ethiopia mentioned directly, I found this article interesting in that, if you go to the interactive map, you can see that Ethiopia was not considered a counry that is stressing its water resources.

Water Stessed Countries

Considering that Allana did get a mining license to do solution mining and will require a fair amount of water, it's good that Ethiopia seems to be in a good position.

It is actually considered in better shape than Canada (go figure).

Africa Rising.....

“What’s happening in business on the continent will reshape everything people know or thought they knew about Africa,” said Rosa Whitaker, longtime Africa business expert and CEO of the Whitaker Group consultancy. “It’s very real, and Americans will connect with Africa in fundamentally different ways than in the past.”

http://www.thedailybeast.com/articles/2013/01/06/africa-is-rising-inside-the-continent-s-great-economic-leap.html

Still here but not much to discuss. No drama Allana. Should get intersting in the not too distant future and then this place'll get busy in a hurry.

Ethiopia vs Sask

Posted on SH by jstinvest

In spite of recent market weakness in potash stock prices, they will rebound but the same may not be said for others such as gold stocks, silver, etc. With more planting needed to be done by farmers all over the world to meet higher demand for food, animal feed and even fuel, potash has a strong future. What does not have a strong future are the junior potash companies in Saskatchewan. It's amazing that people still invest in those companies when you have AAA and FED that are the only Canadian juniors with potential to have a mine that makes money with low potash prices.

Saskatchewan is going to have over supply when new Potash Corp, Agrium, Mosaic and K+S mines come online in coming years. As for Jansen, that's out of the question as there's no way BHP goes ahead with that. Potash prices must stay around $500 or lower per tonne, otherwise Asia is not going to buy. New Saskatchewan mines will not make back their CAPEX and daily operating costs to run new mines if the potash price is less than $500 per tonne. With these types of prospects facing Saskatchewan, no one is going to buy juniors there. Potash one was the last (and lucky) to get bought out. In Ethiopia, the metrics are completely different and the basin can still allow companies to make money with prices well below $500 per tonne -- most of you know this so I will not explain. This means there are only two Canadian junior potash company that have a future (either going into production or a take out) AAA and FED.

Why choose the Potash Sector?

World will need more food, animal feed, plant fuel, etc. Looking at other sectors all have many junior companies to invest in but for Canadian junior potash, there really is only AAA and FED. BHP appetite for potash already have them in the Ethiopian basin and with continued great drilling results from AAA and FED, this will only confirm to BHP that they need to make a take over in the basin and get some of the good quality land - BHP came late to the basin (after AAA and FED who both took better land position than BHP). BHP can't afford to just sit back and see FED and AAA releasing these high grade KCL without making a move, otherwise India or China will beat them to it and then they probably can't get into the sector in the future. Where else could BHP go if they don't buy out AAA and FED? Their own land in the Ethiopian basin is no where as good as FED or AAA, they can't build new mines in Saskatchewan as they will not make a return on their investment. So looking at the bigger picture, BHP is sort of in a situation where they have to take out AAA and FED or don't get into the potash business at all (where else in the world would they go and build new mines that can earn a return on investment with low potash prices?).

Allana mentioned on BNN:

For those who missed it, the comments start at around 2:30 into the clip.

If he's here, thanks to "Peter in Winnipeg" for calling in.

Allana on BNN

Here you go
http://watch.bnn.ca/commodities/june-2011/commodities-june-23-2011/#clip489640

Andrew Cook on BNN today on Market Call 1:30 ET

Last time he was one, Allana was one of his "Top Picks"

http://watch.bnn.ca/commodities/february-2011/commodities-february-10-2011/#clip400637

March 24th News Release ($1.60 PP)

Allana Potash Announces a Strategic Investment by International Finance Corporation

Allana Potash Corp. (TSX VENTURE:AAA) ("Allana" or the "Company"), is pleased to announce a non-brokered private placement with International Finance Corporation, a member of the World Bank Group ("IFC") for 6,250,000 units (the "Units") at a price of $1.60 per Unit for gross proceeds of CAD$10 million. Each Unit shall consist of one common share in the capital of the Company and one-half of one common share purchase warrant, with each whole warrant exercisable for $2.08 for a period of three years from the date of the issue.

About IFC

IFC's corporate powers are vested in a Board of Governors, to which each country appoints a governor, generally the minister of finance or an equivalent.

Apparently there are a number of ways to calculate NAVPS, one of which includes cash flow. The Dundee report makes no mention of which method they use. They do, however, imply they are using something other that just assets because they factior in a 10 year tax holiday which should only affect cash flow.

Mining company valuations not all created equal

I am an optimist so I prefer to believe that the Dundee report doesn't infer any specific resource size, only that if they can extract 2 mtpy.

"this would increase our NAV considerably to $7.22/share with all other variables constant."

Based on their previous report, I assumed it counted for something

Feb 03 Report

If Allana deems a two million tonne mining operation as realistic, this would increase our NAV considerably to $7.22/share with all other variables constant. If the resource can support it we definitely believe management would opt to increase the production capacity of the project.

Plus they are only assuming 1 mtpy capacity. Farhad has stated he expects "2 - 3 maybe more" mtpy capacity. That will change the valuation considerably as well.

I was in the same position last year. I went "all in" in the .45 to .58 range and then watched it drop to .34. But the reason I hung in was that I had done my DD, which included going over weeks and weeks of posts on this and another board, and believed in the potential of this company.

I have seen nothing over this past year that causes me to question my original assessments.

Still believing in the potential, I took the opportunity lately to purchase more.

I am long on AAA and fully expect to still see a significant return on even my most recent purchases.

Break Even Stripping Ratio (BESR) Estimate

It appears there is a calculation that helps determine the breakeven point beyond which the cost to remove overburden becomes prohibitive. This calculation is used to derive the Break Even Stripping Ratio (BESR)

http://www.oraee.net/shenase/Portals/0/ascertaining.pdf

The BESR is calculated for the point at which break-even occurs and the necessary stripping is paid for by the net value of the ore removed. Generally, the BESR can be determined as follows:

BESR = I - CT / CW

I = Revenue/tonne of ore
CT = production cost per tonne of ore (incl. all costs to the point of sale, excluding stripping)
CW = stripping cost per tonne of waste

For example, if we assume

$400 / tonne finished KCL
$100 / tonne processing, shipping, taxes, bribes, etc
$1 / tonne to remove material

and apply it to DK-10-11 Zone 1 (3.3M @ 33%)

I = $133 (.33 X $400)
CT = $33 (.33 X 100)
CW = $1

BESR = 133-33/1 = 100

IE: Using these numbers, we can remove 100M of overburden to get at 3.3 M of ore @ 33% grade and still "break even"

I think it only went up 446% over 12 months. 1000% took 22 months.

I REALLY like the way this is trending....

Great Post. I would add that it is not only potash that is new to investors but the fact that it can and does exist elsewhere than Sask and Russia.

I wonder if we'll see these being used to transport potash from the minesite to the railhead.

Another Comparison Surface VS Underground Mining

One of the major advantages AAA and the other potash plays in Ethiopia have over ALL OTHER Potash miners in the world is the potential to be the only open pit potash mines in the world.

Because we are going to be somewhat the pioneers at this, I've been researching this a bit more to see if there were any "issues" that may impact the likelihood that AAA will be able to succeed.

I found this technical article comparing SURFACE VS. UNDERGROUND METHODS

Some of the highlights include:

The development of a large underground mine can take from
five to ten years. The interest cost during the construction time
will thus be high and can account for up to 30 to 40% of the
capital requirement before mining can start.
------------------------
Many surface mines operate 24 hr/day and almost 365 days/
yr. The high capital requirements for purchase of open pit equipment
make it important to use as many hours per year as possible
so the number of machines can be reduced. In the case of a
machinery breakdown, it is often easy to move the vehicle and
replace it with a spare, so that ore production can resume.

Underground mines, on the other hand, often must limit their daily,
weekly, and yearly operating times because of the need for ventilation
and maintenance. In the case of underground coal mines,
tradition and union attitudes have so far prevented work crews
from being rotated into weekend time slots. This makes the
number of mines greater than what it could be with a higher
equipment time utilization and the capital requirement higher
per ton of capacity.
--------------------------------------
In a surface mine, a large part of the operating costs is
variable. If a surface mine operator must decrease production,
it is often possible to sell the mining equipment, because there is
a large market for such equipment that is also used by other
industries.

Underground mining requires more mine-specific equipment.
In addition, large amounts of money are often invested in
shafts and haulage systems. It is, therefore, more likely that an
underground mine will keep producing as long as the revenues
cover the variable operating costs, even though the operation is
not profitable on an overall cost basis.
------------------------------------
In a surface mine, it is normally possible to recover almost
all the mineral or coal one wants to mine. As a general rule, surface
mining allows extraction of a larger part of a deposit than if
underground methods are used.

The recovery underground is usually lower and depends upon the mining method
used.
-------------------------------------
Published data indicates that most surface operations require
5 to 10 kWh energy equivalents/ton of rock handled. Most of
this is diesel fuel, although the use of electric power has increased
in recent years because of trolley-assist trucks and in-pit crushing
and conveying.

Underground mining normally requires an average
of 15 to 30 kWh of energy equivalent/ton, with up to 50
kWh in smaller cut and fill operations. A large part of this is
electricity. During recent years, electric trucks and load-hauldump
(LHD) equipment have been developed.
--------------------------
Only in very cold or hot climates do miners find it better to work underground than in a surface
mine.

Advantages of Surface Mining...


Underground Mining Equipment



Surface Mining Equipment



Any Questions....

Keep in mind the AAA will have significantly lower costs so the value of their resources is higher and that is what you take to the bank.

Plus, some of the M+I resources for Sask companies will never see the light of day because the cost to recover it is prohibitive. Whereas a lot of Allana's is close enough to the surface that it can be recovered at a reasonable cost.

The last line should have read.

"A quick calculation gives me an average of 1.75 M of 100% KCL over the area you describe. The final number (133 MT of KCL) is less but is, I think, mathmatically more accurate."

Either way, they can recover 3 MT/year for the next 40 years with only what they've found so far.

BTW: Great research. Just keeps confirming that we are all sitting on an awesome resource.

I don't think you can average the averages. For instance
10M @ 100% + 5 M @ 50% gives you 7.5 M @ 75% average.

If you then take 10M @ 50% + 5M @ 100%, you get the same average but the amount of potash would be significantly different

I think a better calculation would be calculate the equivilant width of pure potash for each sample and then average that number out.

A quick calculation gives me an average of 1.75 M of 100% KCL over the area you describe. The final number (13.26 MT of KCL) is less but is, I think, mathmatically more accurate.

That is what he said on BNN.

"2 to 3 million tons a year.... maybe more. And all at shallow depth"

I am going to take Farhad at his word when he says 2 - 3 Mt or more. I am only trying to show naysayers that it is completely feasible to be able to move the amount of material required to hit those levels.

However, when you consider that the incremental costs to scale up to even bigger numbers would probably be low compared to other mining techniques, I could see this getting even bigger.

I took your 2.5 X 5 KM resource size and, with a total depth 357 M, I came up with 4.5 billion M3 of material. A single 5000 M3/hr BWE would take 100 years to excavate the entire site.

If we imagine 2 or 3 of these working a site, it is not inconceivable to see how they will be able to extract your calculated 250 million tons of KCL within 25 - 30 years.

The beauty of open pit mining is that it is basically low tech, low cost. Nothing fancy, just BFI (brute force and ignorance).

Thanks.... I don't like boats but I figure it'll look good on the back end of this

If you need to dig a big hole, get big shovels...Bucket Wheel Excavators