Replies to post #1237 on Value Microcaps Food, Agriculture and Soft Commodi

[Max Power]

From the Dundee Analyst Report:

Amongst the Lowest Capital and Operating Expenses in the Industry. Once
operational,Allana’s solutionmine is estimated to have one of the lowest costs from
mine to customer in the potash industry. There are three main reasons for this:
– Solar Evaporation: Typical solution mines use large amounts of natural gas
to evaporatewater (energyaccounts for ~40%of opex).Allana’s potash deposit
is located in one of the driest places on earth and can use solar evaporation
which is significantly less expensive.
– Ethiopian Location: Ethiopia provides Allana with a cheap labor force and
proximity to major markets such as India and China. Furthermore, the
government is extremely supportive and imposes a smaller tax burden and
less environmental regulations thanmost other jurisdictions.
– Infrastructure: Allana is located 600km away by road from a major deep sea
port, compared to Canadian producers who have to travel 1,500 km.
Furthermore, the port has ample capacitywhereas Canpotex has been forced to expand the secondary port of Prince Rupert to accommodate increased shipments

Strategic Partner Provides 35% of Mine Capex. Allana has partnered with a
Chinese firm (ChinaMineralUnitedManagement) which has signed an agreement
to finance 35% of the mine capital expenditures in exchange for a 20% off-take
agreement. The off-take agreement will stay in place until ChinaMineral recoups
its investment through favourable (though still profitable for Allana) prices. We
estimate (based on forecasted production and prices) the off-take agreement will
last roughly eight years, at which point Allana will have full control of its mine’s
Allana Resources Inc.
Risk* ....................................................................... High
Fiscal Year-end ................................................... April 30
52-Week Range ......................................... $0.08 – $0.37
Shares Outstanding (MM) ....................................... 88.52
Fully Diluted Shares Outstanding (MM) .................. 122.55
Market Capitalization $MM) .................................. $45.34
Enterprise Value .................................................... $44.21
3-MonthAverage Trading Volume ....................1.04million
Valuation
DCF Valuation ........................................................ $1.50
Target ..................................................................... $1.00