Can you describe your company and say what it does?
Allana Potash (TSX: T.AAA, Stock Forum) is a potash exploration and development company focused on its Danakhil Potash Project in Ethiopia. Allana has explored for potash the past two years and outlined significant resources, which are the basis for a Feasibility Study due for completion in Q4, 2012. The company plans to produce one million tonnes of potash per year.
What distinguishes your company from others in your space?
The Allana Potash project is unique in the world. Potash is present mainly as sylvinite and kainitite and at shallow levels, which results in lower extraction costs. The Danakhil Project area is the one of hottest places on Earth, which permits the use of solar evaporation after solution mining and again results in significant cost savings. Allana has strong strategic financing partners including International Finance Corporation, a member of World Bank. The company is the best funded junior potash company in the world. Finally, Ethiopia is ideally located to benefit from the increased use of potash in rapidly emerging markets of India and China.
Can you explain why you have chosen to work in Ethiopia?
The main reason Allana chose to work in Ethiopia was the quality of the asset. The Danakhil is developing into a world-class potash basin and Allana recognized this potential and acquired its land position early and over what we feel is the best ground. Secondly, Ethiopia is an emerging mining country with a favourable mining law and the government is very supportive of foreign investment.
What are your flagship projects?
Our flagship project is our Danakhil Potash Project in Ethiopia. Allana also has a potash project in the Neuquen Basin in Argentina near Vale’s Rio Colorado project.
What are the main challenges that you face in operating your business?
The main challenges the Company faces are the lack of infrastructure at our project. Fortunately the government has been very supportive of the exploration work and has rehabilitated roads and is building new roads to access the area. This will greatly facilitate transporting product to the deep water port in Djibouti.
Are you close to being in production? If not, is there a timeline?
The project is at the Feasibility Stage and we are still doing some exploration drilling. The start of production is estimated at the end of 2014-early 2015.
Who are the major shareholders of Allana Potash?
Liberty Metals and Mining (16%)
International Finance Corp. (3%)
How much cash do you have on hand and what is your monthly cash burn rate?
Cash on hand is approximately $65 million as of early February 2012. Our burn rate averages $2 million per month.
Who are the key players on your management team?
Farhad Abasov: Extensive experience in potash and the junior mining sector
Rick Lacroix: Former Senior VP of Potash Corp of Saskatchewan, the largest potash producer in the world
Nejib Abba Biya: Strong working experience in Ethiopia and with government
Jack Scott: Infrastructure and financing background
Peter MacLean: Mineral exploration and development throughout the world
Jason Wilkinson: Extensive exploration and mining experience including many years in Africa
Mark Stauffer: Former president of Potash and Phosphate Institute of Canada
Disclosure: Allana Potash is a Stockhouse client
