TSXV:AAA.P - Post by User
Post by
Karmanowon Apr 05, 2012 5:24pm
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Post# 19765329
Food For Thought
Food For Thought There is nothing wrong with the fundamentals of Allana. The management is working on several fronts at the same time. Allana continues to discuss indicative interest from prospective lenders for project financing through its project financing advisor BNP Paribas. This is the $600 million on "the table"...and more than Farhad needs to achieve his (60% ratio from debt and 40% from equity) The 40% for capex will likely come from Offtake Agreements and Institutional Investment. Logic would tell us that the offtake agreements will give a percentage of production in lieu of cash in to build the mine. Logic also tells us that the Institutional Investors may be more interested in a dividend or preferred share status if the structure can be put in place....time will tell. The fundamentals are sound....the market has painted many with the same brush...unfair as that may be...logic also tells us that being in a position to double our resource within 1 month and likely to hear more about the "prospective lenders" we are one of the fortunate juniors...even if the share price is not reflective. Either this is a bargain of the decade at these prices or someone knows something materially wrong with this company or someone is holding the share price down for alterior motives...you can apply any financial matrix to Allana and NONE come up with a shareprice of .56 - .32cents cash on hand = .24 cents? thats less than FED...and they have no cash and certainly do not have 673m tons Measured and Indicated with a 1 billion tons with the revised resource estimate...patience...and I would not be surprised that management take steps next week to tell the market they are going to buy back shares on the open market as the price is too low for any rational thinker...and the $25m from the bought deal will buy alot of shares back and for us longs...that will be a very good thing when you multiply less shares x 10 earnings per share when in production...food for thought!
From Invesotor Cubed today: Allana Potash is in a very strong financial position to manage its ongoing exploration and development operations at the Company's Ethiopian potash project. While other potash companies operating in Ethiopia's Danakil region may be experiencing financial difficulties ,as reported in the media recently, Allana has the necessary financial resources available to advance its potash project towards the path to production, as outlined by the following:
- Allana has over $60 million in cash on the Company's balance sheet
- Strong institutional investors are backing the company: Liberty Metals & Mining Holdings, a division of Liberty Mutual Insurance, and International Finance Corporation, are Allana's largest shareholders and recently exercised their participation rights in relation to Allana's bought deal financing as announced January 10, 2012 and March 9, 2012
- Allana continues to discuss indicative interest from prospective lenders for project financing through its project financing advisor BNP Paribas
- Support from the financial community - 7 investment dealers provide analyst coverage on Allana
- Allana has an ongoing drill program underway, which is confirming the continuity and strength of potash mineralization at its Danakil potash project.
- Allana believes this may allow it to upgrade mineral resources from Inferred to Measured and Indicated categories as well as add the Indicated and Inferred mineral resource categories
- In addition, management is planning to release an updated 43-101 compliant mineral resource estimate in April