Allana Potash announces progress in its project financing strategy last week with the signing of formal mandate letters between Allana and members of the group of large development finance institutions and export credit agencies.
Prospective lenders within a lender group represent loans in excess of the target amount of 60pc to 65pc debt contemplated to finance the initial construction of Allana's Danakhil potash project, according to the press statement posted on the company's official website.
In parallel with the mandates, lenders have begun formal loan assessment preparations and a due diligence review of the Project. The group of lenders includes large multilateral and regional institutions and agencies from North America, Europe and Africa.
"The formal mandating of the lenders is a significant development in our project financing activities which, along with our current cash on hand and continued support from our existing strategic investors in the face of challenging sector conditions, gives us confidence that the Project will continue to be financed and developed according to schedule," said Farhad Abasov, president and CEO of the Company.
Allana Potash controls 160SqKm of the Danakhil Depression at Dallol, in Afar Regional State. In 2012, the company discovered 1.3 billion tonnes of potash resources at its Danakil potash project. The resource holds an average grade of 19.32pc potassium chloride, representing about 250-million tonnes, more than a 90pc increase over the June 2011 resource estimate.