Allana Potash fka AAA

[CdnGuy]

Dundee expecting report on open pit vs. solution in ~ 4 weeks

http://research.dundeesecurities.com/Research/AAA110711.pdf

I thought this report was interesting since it showed Dundee’s different
models (open pit vs. solution) and compared the two.

The tone of the report suggests to me that Dundee is more than half
expecting that it will be a solution mine. Interesting, since the last
time I saw any information from Dundee on the solution mining model was
back in March – everything since then was all about open pit potential.

Even if it’s a solution mine they are still really positive:

“There is a strong possibility that Allana will need to pursue the solution
mining option, and while the NPV of the project would fall ~24%, the
economics remain attractive and with an expected return of 110% from the
current price, would still be a buying opportunity in our opinion.”

Anyone have any thoughts on why Dundee is still showing a blended
$485/tonne price in 2014, when forecasts see to be headed to $600 next
year? Maybe they’re thinking that by 2014 there will be more supply, so
prices will be lower. Can’t see it myself, since I think demand then is going to be out-pacing supply even more than it is now.