Expert Analysis
Expert Analysis
Mike Plaster, Salman Partners (9/4/12) "Allana Potash Corp. has entered an agreement to acquire the private Nova-Ethio Potash Corp., which wholly owns potash licenses adjacent to Allana's property in the Danakhil Depression. . .the transaction is expected to close by Oct. 17, 2012, and is conditional on Nova maintaining $1.3M in cash and the confirmation that the license underlying the property has been renewed with the Ethiopian Ministry of Mines. . . we view this acquisition as beneficial for the development of the Danakhil potash project: we especially like that the majority of payment is contingent on realization of the preferred sylvinite resource. . .we also view the potential for access to additional water resource attained from this acquisition as especially significant in the Ethiopian desert."
Andrea Rubakovic, Salman Partners (9/4/12) "Allana Potash Corp. announced it has entered an agreement to acquire the private Nova-Ethio Potash Corporation, which wholly owns potash licenses adjacent to Allana's property in the Danakhil Depression in Ethiopia. . .we view this acquisition as beneficial for the development of the Danakhil potash project; we especially like that the all-share deal was conducted such that the majority of payment is contingent on realization of the preferred sylvinite resource, which provides potential for Allana to produce KCl from sylvinite only. . .we reiterate our Buy Rating and $1.20 target price."
Robert Winslow, National Bank Financial (9/4/12) "Allana Potash Corp. signed a definitive agreement to acquire Nova-Ethio Potash Corp. . .we view the proposed Nova acquisition as strategic and favorable, as it would further consolidate Ethiopia's potash basin and help secure additional water resource. . .we reiterate our $1.25 target and Outperform rating."
Steve Hansen, Raymond James (9/4/12) "Allana Potash Corp.'s Nova-Ethio Potash Corp. acquisition provides attractive scale and water access opportunities. . .we view the acquisition of Nova as a positive over time, providing Allana with: 1.) A sizeable increase in land, 2.) potential for resource expansion and production greater than the 1 Mmtpa outlined in the PEA (and our model) and 3.) Critical access to additional potential water resources.