Replies to post #1554 on Allana Potash fka AAA

[u2bob]

Maybe this will lower the cost more ...

...This is from the Wellington West report !

Open Pit ...price per ton anyone!!!




Danakil Drill Results Intriguing, Confirm

Potash Mineralization at Shallow Depth




Drilling update: one of two holes confirm attractive potash grade.

DK-10-02 returned ~16% K2O over 5.5m (~150m deep), while DK-10-01

showed <3% K2O; other high-potential horizons in hole 01 to be analyzed.


DK-10-02 shows shallow mineralization – potential positive for opex.

We model a solution mine, but if mine is open-pittable our $100/tonne

opex estimate could be ~25% too high, NAVPS (fd, ff) similarly too low.


Reiterate 80¢ target, which implies ~11% discount to API take-out.

Our DCF drives 78¢ NAVPS (fd, ff) (@13.75%) and equates to 0.23x

EV/NAV; 0.25x EV/NAV of API deal implies ~90¢ AAA take-out price

[seekingalfalfa]

I guess I need to apologize to the board regarding my calculations in the post prior. Can't figure what I was thinking, but going over a 200 by 500 by 5 meter = 500,000 cubic meter deposit and given that potash weighs approximately 80 lbs. per cubic foot, or roughly 2400 lbs. per cubic meter, the $300/ton (opex in) profit, multiplies out to $180,000,000. Not a bad " whiff " I'd say.