Potash is a highly valuable commodity as it is an integral ingredient of inorganic fertilizers that are used as crop nutrients and strengthening plant stalks, which in turn feed the rising global population. Although potash is in high demand, the majority of the global supply is concentrated in only a few countries, namely Canada, Russia and Belarus.
Toronto-based potash company Allana Potash Corp. is developing a unique potash project in an emerging world-class potash basin in north-eastern Ethiopia. In addition to its extensive technical work, Allana is committed to being a leader in environmental and social studies within the commodities industry.
Allana is a publically traded company on the TSX Venture (AAA.V), focused on the international development and acquisition of potash assets. The company’s focal point of development is its 160-square kilometres Dallol Potash Project in the Danakil Depression in north-eastern Ethiopia.
Ethiopia’s economy is stable and growing with strong governmental support in mining initiatives. Foreign investors are supported by the Ethiopian Investment Code and are given constitutional protection from expropriation.
“Allana Potash started with the project in Ethiopia about 2 years ago and we have made sound progress with approximately 25 holes drilled, seismic surveys completed and environmental studies intiated to date and we also released our updated 43-101 in June” says Allana’s President and CEO, Farhad Abasov, who is experienced in building successful resource companies in potash, uranium, and energy sectors, as well as has served on the executive management teams of Potash One and Uranium One.
In late August 2011, Allana announced that the Environmental Resources Management (ERM) will be conducting an Environmental and Social Impact Assessment Study (‘ESIA’) with the involvement of an Ethiopian environmental consulting firm, Beles Engineering. The ESIA, which is expected to be completed in Q3 2012, is an integral part of the Feasibility Study and will ensure that any work done on site is in compliance with IFC and World Bank standards.
The successful completion of the ESIA and the Feasibility Study will enable Allana to advance its project to production. “This project is very unique. Geologically it is a young formation and it has shallow potash” says Mr. Abasov. A typical potash source will be between 1,200 to 1,800 metres underground, whereas the Dallol project has potash is located as shallow as 100 metres and displays strong grades over good widths. In certain locations the grade is very high, locally up to 52 per cent KCl.
This shallow geological structure may allow Allana to use both solution mining and open pit mining. This would potentially result in lower cost of production through solar evaporation and geothermal power. This bodes well for Allana as potash mining is typically time and capital intensive in the case of greater depths.
“Nowhere else in the world can one think about using both those methods because most of the deposits are quite deep” Mr. Abasov says.
In addition to potentially being the world’s lowest cost potash producer, Allana’s Dallol Project is in an ideal geographical location to the world’s largest potash consumers. While 65 per cent of potash is supplied by Canada and Russia, Allana is in a “really sweet spot because it is one of the nearest suppliers to the largest markets, such as India and China.” says Mr. Abasov.
Always thinking steps ahead, Allana works with Stockhouse, North America’s largest active resource investor community. Allana has been utilizing Stockhouse’s Awareness Campaign for the past year and a half. The campaign has assisted the company in gaining additional investor exposure through the development of a compelling message as well as a strong and consistent delivery of the story. Stockhouse’s largest social media small-cap investment community enabled Allana to garner the traction from retail investors via marketing and a viral strategy.
Over the past 12 months, this successful strategy advanced Allana from the 278th ranked company on Stockhouse, to consistently being in the top 5 trending and followed companies.
In addition to focusing on its current goals, Allana continues the exploration program in the eastern portion of its land position of the Dallol Project. The Company already confirmed mineralization in this portion of the property and hopes to potentially increase its potash resource further.
Allana is the only potash company in the world with financial support from the International Finance Corporation (IFC), a division of World Bank, and Liberty Metals and Mining LLC, a subsidiary of the Liberty Mutual Group. Even so, as a result of ongoing efforts, the Company is working to secure project financing.
Allana is also in discussion with strategic partners regarding investment and off-take agreements and will continue to showcase best practices.