Jun 24 2014
Allana Potash Corp. ("Allana" or the "Company") provides an update to investors regarding the development of its flagship Danakhil potash project in northeastern Ethiopia. Significant progress has been made so far this year in all areas of critical pre-construction project work such as technical optimization studies, bank debt financing and infrastructure development.
TECHNICAL & SOCIAL PROGRAM WORK
- The Ministry of Water, Irrigation and Energy has granted Allana an exlcusive right to extract approximately 30,000,000 cubic metres of water per year which greatly exceeds the requirements for planned MOP production of 1 million tonnes per year which is estimated at 18,500,000 cubic metres per year.
- Optimization studies, including in-fill drilling, water field supply pre-construction development and additional solution mining work, are ongoing with ICL/AAA technical committee guidance.
- Final review of potential EPCM contractors for project pre-construction studies is in progress.
- After 18 months of dialogue and cooperation, the hamlets of Mororo and Alai Lai in the Afar region have been relocated and re-established under Allana's Relocation Assistance Plan approved by the Ethiopian Government and the IFC.
- APA (Allana Potash Afar), in partnership with the Afar regional government, opened a dormant clinic in the village of Hamad Ela in May 2014 to provide primary health care to the local Afar people. To date, 219 patients have been treated at this new facility.
INFRASTRUCTURE BUILD
- Construction at Tadjoura Port in Djibouti is proceeding and target completion is projected by the Djibouti Ports and Free Zones Authority (DPFZA) for Q1 2016. Allana expects to be granted construction access for the Tadjoura Potash Terminal facility starting from mid-2015.
- Allana is completing the final elements of the commercial arrangement with the DPFZA, having clarified the physical and operations service interfaces between the DPFZA Tadjoura Port and Allana Tadjoura Potash Terminal facilities.
- Construction of 120 km of upgraded highway in Djibouti is also proceeding with completion projected by the Djibouti Ministry of Transport and Infrastructure to be by early 2015.
- Construction of 110 km of highway in Ethiopia near Allana's project site is expected to start with contracting by the Ethiopian Roads Authority in late 2014.
- Tender is now out for the construction of the 216 km Asayita to Tadjoura railway project with contractor bids due to the Ethiopian Railway Authority in early August 2014.
DEBT FINANCING
- Allana has worked with ICL to integrate project preparation activities with those of the lender group, and financing program activity is proceeding
- Core lender group and major supply-country export credit agency lender are following their processes in cooperation with Allana and its advisors
- Timeline for completion of all debt financing expected to be late fall, early winter of this year
Farhad Abasov, Allana's President & CEO stated: "All aspects of our project have been progressing extremely well since we signed our transformative strategic alliance agreement with ICL Ltd. (Israel Chemicals Ltd.) in February, 2014. Not only have we benefited from ICL's technical, operational, and engineering expertise, but ICL has been instrumental in assisting Allana Potash with our infrastructure and transportation logistics planning and implementation procedures. In addition, the take-or-pay contract signed with ICL for 80% of our eventual potash production has not only solidified the financial robustness of our project, it has also attracted interest from international commercial banks and large investment institutions, as well as some private equity entities. This has allowed us to consider more flexible forms of additional debt & equity and an overall less dilutive project finance structure."
NEXT STEPS
Allana will continue to advance all the critical aspects of the project that need attention for its successful completion. In addition to the technical, financing and infrastructure development programs in progress, comprehensive taxation, customs, and foreign currency exchange agreements with the Ethiopian government thorough various ministries are currently in advanced negotiation stages and are expected be complete before the end of the year. Securing full project financing as soon as possible remains Allana's top priority and senior management continues to working diligently towards this goal.
About ICL
ICL is a global manufacturer of products based on unique minerals that fulfill humanity's essential needs, primarily in three markets: agriculture, food and engineered materials. The agricultural products that ICL produce help to feed the world's growing population. The potash and phosphates that it mines and manufactures are used as ingredients in fertilizers and serve as an essential component in the pharmaceutical and food additives industries. The food additives that we produce enable people to have greater access to more varied and higher quality food; ICL's water treatment products supply clean water to millions of people as well as industry around the world; and other substances, based on bromine and phosphates help to create energy that is more efficient and environmentally friendly, prevent the spread of forest fires and allow the safe and widespread use of a variety of products and materials. ICL benefits from a broad presence throughout the world and proximity to large markets, including in developing regions. ICL operates within a strategic framework of sustainability that includes a commitment to the environment, support of communities in which ICL's manufacturing operations are located and where its employees live, and a commitment to all its employees, customers, suppliers and other stakeholders.
ICL is a public company whose shares are traded on the Tel Aviv Stock Exchange (TASE: ICL). The company employs around 12,000 people worldwide, and its sales in 2013 totaled $6.3 billion. For more information, visit the company's website at www.icl-group.com.
About Allana Potash Corp.
Allana is a publicly traded corporation with a focus on the acquisition and development of potash assets internationally with its major focus on a previously explored potash property in Ethiopia. Allana has secured financial support from three significant strategic investors: ICL, one of the world's largest potash producers, IFC, a member of World Bank Group, and LMM, a member of Liberty Mutual Group. Allana has estimated measured Sylvinite mineral resources of 115.3 million tonnes of 27.8% KCl; indicated Sylvinite mineral resources of 212.1 million tonnes of 28.6% KCl, and an estimated inferred Sylvinite mineral resource of 90.8 million tonnes grading 27.8% KCl, In addition, the Project hosts measured Kainitite mineral resources of 552.3 million tonnes at 19.4% KCl, indicated Kainitite mineral resources of 598.2 million tonnes of 19.5% KCl and an estimated inferred Kainitite mineral resource of 481.8 million tonnes of 19.8% KCl; estimated measured Upper Carnallitite mineral resources of 121.5 million tonnes grading 17.5% KCl, estimated indicated Upper Carnallitite mineral resources of 289.8 million tonnes of 17.2% KCl and estimated inferred Upper Carnallitite mineral resources of 175.5 million tonnes of 16.5% KCl; estimated measured Lower Carnallitite mineral resources of 235.0 million tonnes of 9.7%KCl, estimated indicated Lower Carnallitite mineral resources of 322.2 million tonnes of 8.9% KCl and estimated inferred Lower Carnallitite mineral resources of 369.3 million tonnes grading 7.7% KCl. The foregoing mineral resource estimates are as at April 17, 2013. For more information with respect to the data verification procedures undertaken and the key assumptions, parameters and risks associated with the foregoing estimates, refer to Allana's Technical Report entitled "Resource Update for the Danakhil Potash Deposit, Danakhil Depression, Afar State, Ethiopia" dated effective April 17, 2013 filed under the Company's SEDAR profile at www.sedar.com on August 7, 2013.Allana has approximately 325.2 million common shares outstanding. Allana trades on the Toronto Stock Exchange under the symbol "AAA". For more information, please visit the Company's website at https://www.icl-group.com/.
Dr. Peter J. MacLean, Ph.D., P. Geo., Allana's Senior VP Exploration, is the Company's designated Qualified Person and has reviewed and approved the technical information presented in this release.
Source: https://www.icl-group.com/