Welcome To The Allana Potash HUB On AGORACOM
Focusing on the Dallol Potash Project in Ethiopia
Message: Will a buyout occur before financing or after...
I posted this on SH, and thought I would share. My thoughts here...yours is ??
Will a buyout occur before financing or after...
And will ICL have Allana over a barrel?? That is the question that many traders trying to push Allana down here are asking.
Last year Allana made a deal with ICL just as the market was under pressure from tax loss selling. ICL also took advantage of the fact Allana needed to make a deal as cash was tight. So the deal was done at what investors figured as unfavorable terms and price due to the circumstances.
Allana did however secure a deal with the 6th largest potash producer in the world, and a partner who has extensive potash mining experience.
This has been extremely helpful in securing many key areas for financing.
1) Partner with potash mining experience
2) 100% Offtake with an 80% take or pay commitment
3) Assurance for the financial institutions with the participation of a major partner, thus paving the way for debt financing.
The result of the deal has resulted in the cooperative effort in the project optimization studies that are currently underway.
The project financing was pushed back as the Financial institutions requested further information and data on the solution mining process. In particular the water recharge rates for the mine. The water testing will start mid November and will last 30-60 days.
In August, Allana has engaged AMEC Americas Limited ("AMEC") to complete Front End Engineering and Design (FEED) on its one million tonne per year MOP Danakhil Potash Project in Ethiopia as preparatory work in anticipation of the completion of project financing and expected start of construction.
Shortly after Allana announced that they will conduct a PEA study with Ecosplan on Kainitite resources that may be amenable to SOP production on its Danakhil Project in Ethiopia. This is a major announcement for Allana as the Kainitite layer represents the majority of Allana's resource from what I have seen.
The PEA will examine the use of solution mining to mine the Kainitite Horizon and produce 1,000,000 tonnes per year of SOP product from the brine as a separate operation from the current development program which will produce 1,000,000 tonnes per year of MOP.
If Allana were to mine 1,000,000 tonnes per year of SOP, Allana would be one of the largest SOP producers in the world. So yes this is a major announcements IMO...
Then the year end finances, MD&A came out and Allana is shown to have approximately $23 million in the bank, with around $14 million in liabilities due at various stages. This leaves approximately $10 million in working capital, which I believe should be more that enough to meet the current financing timelines IMO.
That leads us up to today's update. The SOP solution testing was a surprise for me as I never expected this to be done at this point, although if you are going to conduct a PEA and tests on your water recharge rate the two make sence to be done at the same time. MAy as well make use of the water right?
The comments from Farhad in the press release that stood out were:
Last year Allana made a deal with ICL just as the market was under pressure from tax loss selling. ICL also took advantage of the fact Allana needed to make a deal as cash was tight. So the deal was done at what investors figured as unfavorable terms and price due to the circumstances.
Allana did however secure a deal with the 6th largest potash producer in the world, and a partner who has extensive potash mining experience.
This has been extremely helpful in securing many key areas for financing.
1) Partner with potash mining experience
2) 100% Offtake with an 80% take or pay commitment
3) Assurance for the financial institutions with the participation of a major partner, thus paving the way for debt financing.
The result of the deal has resulted in the cooperative effort in the project optimization studies that are currently underway.
The project financing was pushed back as the Financial institutions requested further information and data on the solution mining process. In particular the water recharge rates for the mine. The water testing will start mid November and will last 30-60 days.
In August, Allana has engaged AMEC Americas Limited ("AMEC") to complete Front End Engineering and Design (FEED) on its one million tonne per year MOP Danakhil Potash Project in Ethiopia as preparatory work in anticipation of the completion of project financing and expected start of construction.
Shortly after Allana announced that they will conduct a PEA study with Ecosplan on Kainitite resources that may be amenable to SOP production on its Danakhil Project in Ethiopia. This is a major announcement for Allana as the Kainitite layer represents the majority of Allana's resource from what I have seen.
The PEA will examine the use of solution mining to mine the Kainitite Horizon and produce 1,000,000 tonnes per year of SOP product from the brine as a separate operation from the current development program which will produce 1,000,000 tonnes per year of MOP.
If Allana were to mine 1,000,000 tonnes per year of SOP, Allana would be one of the largest SOP producers in the world. So yes this is a major announcements IMO...
Then the year end finances, MD&A came out and Allana is shown to have approximately $23 million in the bank, with around $14 million in liabilities due at various stages. This leaves approximately $10 million in working capital, which I believe should be more that enough to meet the current financing timelines IMO.
That leads us up to today's update. The SOP solution testing was a surprise for me as I never expected this to be done at this point, although if you are going to conduct a PEA and tests on your water recharge rate the two make sence to be done at the same time. MAy as well make use of the water right?
The comments from Farhad in the press release that stood out were:
"Well SW3 is currently undercut leaching the Kainitite horizon and brine will be pumped to the ponds for crystal crop generation to assist in the ongoing SOP studies. Initial indications from the observation wells and the pumping wells point to high flow rates of greater than 100 cubic metres per hour as well as very low dissolved solids."
Read more at http://www.stockhouse.com/news/press-releases/2014/11/04/allana-potash-provides-update-on-optimization-studies-and-project-progress#dL4hWQfgOkHAu0Iq.99
So... The question... "Will Allana go through tax loss selling and be forced to sell out at a low ball offer to ICL"?
If you consider the current situation Cash in the bank..... ICL partnership (to ensure bank funding requirements).... FEED study..... etc.... Why would Allana be FORCED to sell out under unfavorable terms? It makes no sense in my mind that they would do such a move when they don't need to do so to stay afloat. Remember they still have Liberty Mining & Metals as well as the World Bank as partners in the project, who are into Allana at a considerably higher price than today's bargain IMO.
I believe the situation is a partnership between Allana and ICL. Although others here paint a different picture. In fact the latest ICL video has pictures of the Allana Ethiopia project when they reference their Africa strategy. They have a man on the Allana board... and they have staff on the ground... Remember the guy who moved from the UK to oversee the Ethiopia potash project...
So I believe the MOP will continue to be tested in the optimization work and the recent SOP announcement is Allana's way of extracting more shareholder value as IF... big IF.....the SOP solution testing and extraction works as planned and ERCOSPLAN shows a favorable PEA, then the investors of Allana will have a considerable increase in value IMO as the mine is now a MOP and SOP capable mine.
Will a buy out occur? I personally believe that it will occur, but not until ICL is comfortable with the project, Ethiopia and the infrastructure. The buy out will also occur when Allana feels they have reached a mutually beneficial deal for all parties involved including shareholders.
These comments are my observations and my DD on Allana and I recommend everyone else do their own Due dillegence on Allana and come to your own conclusion. I would welcome any constructive feedback and discussions.
So... The question... "Will Allana go through tax loss selling and be forced to sell out at a low ball offer to ICL"?
If you consider the current situation Cash in the bank..... ICL partnership (to ensure bank funding requirements).... FEED study..... etc.... Why would Allana be FORCED to sell out under unfavorable terms? It makes no sense in my mind that they would do such a move when they don't need to do so to stay afloat. Remember they still have Liberty Mining & Metals as well as the World Bank as partners in the project, who are into Allana at a considerably higher price than today's bargain IMO.
I believe the situation is a partnership between Allana and ICL. Although others here paint a different picture. In fact the latest ICL video has pictures of the Allana Ethiopia project when they reference their Africa strategy. They have a man on the Allana board... and they have staff on the ground... Remember the guy who moved from the UK to oversee the Ethiopia potash project...
So I believe the MOP will continue to be tested in the optimization work and the recent SOP announcement is Allana's way of extracting more shareholder value as IF... big IF.....the SOP solution testing and extraction works as planned and ERCOSPLAN shows a favorable PEA, then the investors of Allana will have a considerable increase in value IMO as the mine is now a MOP and SOP capable mine.
Will a buy out occur? I personally believe that it will occur, but not until ICL is comfortable with the project, Ethiopia and the infrastructure. The buy out will also occur when Allana feels they have reached a mutually beneficial deal for all parties involved including shareholders.
These comments are my observations and my DD on Allana and I recommend everyone else do their own Due dillegence on Allana and come to your own conclusion. I would welcome any constructive feedback and discussions.
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