Argentina #1 After reading this post and the following post, I hope you come to the same conclusions as I have…and begin to understand the potential underlying valuable of Allana’s 3 blocks of land in Argentina.
It is not a question of “if” there is potash there….but how much and how deep!!!
It is not easy to profile this relatively new potash basin and one must put the pieces together. I have attempted to review historical data and currently available information to form, what I think is a very compelling case for our future in Argentina and a base for a valuation. You might ask why? Well, I am more concerned about a hostile take over bid for Allana sometime in 2012 and if indeed this occurs, I am troubled that shareholders will not get one “nickel” of value applied for our assets in Argentina. Remember, there is no current plan to “spin out” the Argentina assets and I fear we could lose a huge amount of future value by default. Farhads recent comment in an email to alfalfa makes me think …what is a “reasonable premium” that a buyer would have to make to buy out our Allana shares? My opinion is that a reasonable premium is based on top of the real underlying value of our assets…including Argentina…
To put things into perspective…WPX would be a comparative other for this property, with similar depth of deposit and likely similar capital costs…and what is WPX trading at…yes, over a $1.00 per share…It is also important to note that Vale is building a $5 billion dollar mine and ramp up to over 4 m tons of potash per year…and right next door to our largest block of land…and in my opinion our most likely target based on size, location (and likely 20%+ KCL) as a potential future mine…the K1 properties were claimed based on publicly available historic oil well drill hole data…my point is that after doing this review I have concluded that the K1 land could be as valuable as Vales Rio Colorado Mine…we are not likely to be a take out target by Vale as they just bought out Bunge and assumed all of their lands in the basin… and now own half the basin
(bunge lands shown in light blue on the link map in the next post)
Just a thought, wouldn’t it be ironic if Rio Tinto decides that it wants back into the basin after selling the Rio Colorodo mine to Vale to pay down its debts a few years ago?... They would be a likely candidate and or partner…One must remember that Brazil has millions of hectares of arable land that are not in current crop production…and they currently import 90% of their fertilizer…even with the Verde Potash Mine in full production…one has to think where is the additional potash going to come from for the millions of hectares that will come into production over the next 10 years?...can you say Argentina and Rio Colorado….hmmm…and no overseas shipping required and infrastructures by land and lots of rivers and fresh water….hmmm and no Somali Pirates…lol
Also important to note that a preliminary NI Resource Estimate can be completed without spending millions on a full drilling campaign… Marifil completed an NI Resource Estimate on their K2 property in the south of the basin…and 2 miles south of our lower section of land and it was done from historic oil well drill holes and gamma rays… how much would it cost to have “geologists” assess the historic oil drill holes on our lands and decide if the same two potash layers are there?
It appears that these two potash layers are present from the Rio Colorado Mine all the way down south to Marifils K2 land (south of our lower block of land)…I think it would be well worth the time, money and energy…
The CEO of Marifil clearly states: 200 m tons recoverable tons x $450 per ton + $90 BILLION in value….and that 200 m tons is from old oil drill holes and not from 2D Seismic targets for the richer potash areas of their land.. the next post will outline the details of the basin and why I believe we are sitting on a gold mine….we just have to prove it…Marifil also believes that there is large deposits of oil on their K3 and K4 lands…hmmmm
I am not an analyst but rather a retail investor like you. Once I began to bite my teeth into this due diligence I began to uncover just how valuable this property could be to Allana shareholders. There has been some serious consolidation, investment and development around our property over the last couple of years. I know it appears long and detailed but there are no reports or research available. I have tried to put this puzzle together from several sources and I suggest if you want a future reference on our land in Argentina that you print this off as well as a map to use in future as a point of reference.
Karma