Perspective " 2012 AAA "courtesy of Karmanow
Looks like a very impressive 8 months ahead for Allana and for us shareholders. After reading this post…take the time to apply a valuation on Allana after she achieves the milestones listed below and due to be achieved over the next 8 months. It has all been laid out by Farhad if you take the time to step back from the day to day ups and downs and look at the bigger picture...and one other thing not mentioned is that Allana is reviewing data on our lands in Argentina...and will inform the market in due course...I believe from what I have previously posted that its not “if” there is potash on our land…but how “much” potash is there and AAA can do an initial NI Resource Estimate WITHOUT drilling....but it appears Allana plans on doing some drilling in areas that are likely strong targets from the information that Geomnia possesses on our lands in Argentina. From Peter McLean (courtesy of seeking) : “Geomnia is currently completing data compilation on the project areas. Geomnia includes many core members of Rio Tinto’s potash team that was disbanded when Rio Colorado was sold to Vale and they have an extensive database of seismic and drilling information for the area. Presently we are finalizing drill hole locations to be tested later this year.”
(Excerpts from Richard Kelertas interview Nov 11/2011)
Jansen Project in Saskatchewan needs average long-term potash prices of about $500-550/t really to make a go of it, and from my work the long-term international price is about $410-425/t.
But the limiting factor right now is “financing”, and that's because you're dealing with $800 million (M)-1 billion (B) for a 1-1.5 billion tons per year (tpa) equivalent of potash, even for a solution mine. The second limiting factor is “cash balances”. If we are going to have a long, drawn-out economic downturn here, which is quite possible, then very few of these projects will come to fruition and get into production. They will “run out of cash” before they can either get taken out or get the financing. So, there are only a couple of strong plays that have plenty of cash and, where cash-burn rates are low, can survive this downturn and lack of liquidity in the marketplace. Allana’s $20 million bought deal puts us in an even better position long term…and makes us the best cashed up junior…period. You might be surprised if you actually knew how much cash some of the other juniors actually have on hand to pay for their “burn rate”…they will have to go to the market sooner than many might think…
2012 First Quarter: expect measured and indicated to increase from 675 m tons to over 1 billion tons. An update to the NI 43-101 compliant technical report is expected by the end of the first quarter of 2012, with Abasov expecting substantial additions to resources on the eastern side, and an upgrade to the measured and indicated category on the western side.
2012 First Quarter + Currently Underway: capital raised from non-commercial development agencies have an advantage during a market down turn or pending Euro Financial tightening. Non Commercial Agencies have more latitude during any financial credit crunch similar to 2008. Their funding mandates are ongoing and their commitment to a project is long term...IFC World Bank. The remainder of the financing for the capex of the project will come from around $480 million in debt, to be raised from non-commercial, development agencies. Allana has retained BNP Paribas as an advisor on this front, and said the process in now in "full swing".
“By the end of the first quarter, CEO Abasov expects to have a "good understanding" of those interested in providing debt financing for the project, which could prove to be a significant catalyst to the company's share price.”
Another interesting observation from their report is the word “strategic” and if taken in conjunction with Farhad’s 3 oversea visits to Asia in the last 12 months with no released news… “a sovereign wealth fund or state-owned fertilizer company from either one of these countries would be on a list of plausible “strategic” partners…. an agreement “could conceivably happen at any time” although the conversations have likely become more in depth following the recent release of a preliminary economic assessment.
2012 Second Quarter: We hear the word "strategics" again and again.... Farhad expects developments from these ongoing discussions with "strategics" by the end of June 2012. The strong project attributes and economics have allowed Allana to advance talks with new potential strategic partners for off-take agreements and other partnership structures. Abasov told Proactiveinvestors that it is currently in discussions with large, global potash buyers and agricultural companies, from which it expects developments sometime in the first half of next year.
2012 Third Quarter: and the final catalyst is due by the end of September 2012. This study will deliver the road map for Allana's future. All aspects of the "mining" process will be addressed and detailed. Remember, we are spending $25 - $30 million on this study...its a big deal and a huge catalyst to show the validity of our Ethiopian Property. The company also said that there is potential to ramp up operations to two million tonnes of MOP product per year after the third year of full production, with Allana currently considering additional MOP and sulphate of potash (SOP) output as well during the ongoing bankable feasibility study,due out in the third quarter of 2012.