Why not just mine SOP?  Or should Allana mine Both MOP & SOP??

Allana's deposit is very unique in the potassium world.  They have both MOP and SOP mining capabilities.  Why not unlock both and become a potassium powerhouse?

The MOP has a 100% offtake agreement with 80% take or pay for the production with ICL.  Developing the SOP is the logical next step...  Find a partner for the SOP and now you have unlocked a significantky higher value of the property and deposit.

Also remember year's ago when the exploration began MOP values were quite high.  They have come down in value due to the cartel's breakup.  Prices have began to firm again but values should return to the $400's according to some industry analysts.  In addition MOP has a different market target than SOP does, so a different target customer all together.  None the less Allana has secured a major partner with ICL locking in 25% of the resource production, that should help to secure financing (MOP portion) according to managment's reporting and their Shareholder update PDF.

If 25% of the deposit is MOP and 75% of the deposit is SOP.... You have the MOP spoken for in a 100% offtake agreement, the next logical step is to unlock the 75% SOP in your deposit.  Further to this the MOP partner now see's this potential in the 75% SOP and wants it, but the owners are shopping it around.... let's say a number of parties are interested in it and make some good offers.... what would the first partner say??  What will they do??  Also keep in mind once Allana is producing the cash flow will help them develop the SOP portion if they reach some type of a JV or offtake agreement.

Interesting development isn't it....

So far the testing says we have plenty of water for both MOP and SOP mining and extraction.... but yes we need to do the testing (which should give us an update soon).  FYI the SOP PEA is for 1 mmt of SOP!!!

P.S. Farhad already provided a big clue when it comes to the water testing....  

Quote "Initial indications from the observation wells and the pumping wells point to high flow rates of greater than 100 cubic metres per hour as well as very low dissolved solids, indicating the water is likely suitable for solution mining and processing."

So Why will Allana's SOP be more competative than 70% of the SOP currenlty being produced?

Currently most SOP is made from taking MOP (Potassium Chloride) and reacting it with Elemental sulphur.  Before you can do that you need to oxidize the elemental sulphur to produce sulphuric acid.  The sulphuric acid and Murate of Potash make Sulphate of potash (SOP).  

As you can see this is a major process that results in a higher production cost for about 70% of the current SOP market.  The Kainitite in the Allana deposit needs to be disolved by the water just like MOP and then evaportated out.  If I remember correctly the process may take one additional evaporation pont to settle out the unwanted solids.  The result if proved possitive will be a very low cost SOP that I believe may come in close to the MOP production costs.  Of course this is just my thoughts here but lets say it is 50% higher cost than the MOP on Allana's property.  This will mean we may see a $150 / OPEX (or less) which is roughly half of the Sulphuric acid reacted MOP process.  Again just my thoughts here nothing is confirmed, but if it's just a mater of disolving the Kainitite layer and processing in evap ponds, the process should be considerably less expensive.

Now do you think Allana may have difficulty finding a partner providing the water testing and PEA study goes well????.... 

Stay tuned as we have some updates coming that will help us to understand the full value that Farhad is workign towards.