Ercosplan speaks volumes!A very good day for Allana Potash in my long term view...a not so good day for the share price today. For those that sold good luck in your investing...for those that held and continue to see where Allana is going...and with a more sober set of eyes...one can see what Ercosplan and Farhad had to say....and remember, the Allana story has always been about the Kainitite Layer of potash...which contains the SOP KCL at $150 per tonne premium..
I said it before...there is only 6 million tonnes of SOP mined per year....we have just dramatically increased our mineable SOP
Ercosplan states the Kainitite Layer is relatively consistent throughout the Allana property...anyone still wonder if we are going to hit Kainitite in the East Drilling Phase in holes #20,#21,#22,#23? and what if it is shallow at less than 100 meters from surface?...like South Boulders drill results...can you say Open Pit for the SOP potash?
Farhad stated
confirmed negotiations with multiple partners are ongoing. One news release at a time...
and he wants to increase the production goal...ie 2 million tonnes per year?
And talk about fast track....
feasibility study slated for later this year. and likely after much more drilling in the east and infill drilling in the southwest to increase the 4km x 5km block
Allana has drilled 23 holes, all of which provided geological information for the report,
but several holes (14, 18, 4) did not meet these criteria and consequently were not included in the resource
Ercosplan states: The difference in ROI between the two groups is directly related to the geology of the evaporite mineralization.
The Sylvinite and UC members are interpreted to be secondary deposits formed from carnallite and therefore not as uniform as a primary evaporite deposit.
The Kainitite and LC members are formed by primary evaporite deposition and are relatively consistent throughout the Allana property.....
Hearing this is a very big deal for long AAA shareholders...Ercosplan is stating that the primary resource will be from the Kainitite Layer and is REALATIVELY CONSISTENT THROUGHOUT the Allana property....can you say Eastern Shoreline of the basin?
Due to this consistency there is a
greater degree of confidence in the lateral extent of the mineralization of the Kainitite and LC members and the ROI can be increased. ERCOSPLAN indicates that the current resource is based on only 40% of the licensed land area and believes
there is excellent potential to expand the resource and to upgrade Indicated and Inferred resources into Measured and Indicated categories. ERCOSPLAN has recommended a program of
infill drilling in certain parts of the southwestern portion of the property as well as additional 2D seismic surveys to increase confidence levels in the resources.
"
We were planning a 1-million-tonne-a-year production (project)," Abasov said in an email to Mineweb.
"With this large resource we can increase our production goal." noted the resources will form the basis of a
feasibility study slated for later this year.
Abasov
confirmed negotiations with multiple partners are ongoing.
"We are speaking with
various organizations and have not finalized the CMU deal yet," Abasov said
Jaret Anderson, who covers Allana for Salman Partners,
"the key bottleneck remains transportation. The transportation of more than on million tonnes of potash per year via truck along 600 kilometres of roads of varying quality to the port at Djibouti would seem to us to be very challenging.
Positive developments with regard to a rail network in Ethiopia could be very positive for Allana and other players in the Danakhil."
Someone needs to forward news articles and government releases that keep him in the loop.
Allana, however, recently pointed out on its website
that the Chinese government had agreed to lend the Ethiopian government billions in Ethiopian birr to complete 5,000 kilometres of railway lines into, among other areas, the Afar region where Allana operates.
One more thought for those that keep pumping FED on the AAA Board:
There simply is not enough room for all these producers to make it to production (read: there is not enough capital floating around for all these projects to get developed!). Having a head-start is a great advantage, but AAA also has two strategic investors in Liberty Metals & Mining (Liberty Mutual subsidiary) and International Finance Corporation (World Bank Member), which is an enormous advantage at this stage.EPC is further from a deep water port than AAA. Ethiopian producers will not be able to use Eritrea’s ports given the volatile relationship betwee n the two countries and will therefore likely have to ship/rail the product all the way down to the port of Djibouti, just south of Eritrea. Given that transportation has a significant impact on a producers’ opex, any competitive advantage in freight/transportation goes a long way. Allana is closer to the port, as well as closer to the proposed rail line that the Government of Ethiopia (in collaboration with the Indians and Chinese) is in the midst of developing. This will give AAA a significant cost advantage over EPC.