Allana Potash appoints BNP Paribas as advisor for Ethiopian potash project debt financing

Allana Potash Corp. (TSE:AAA)(OTCQX: ALLRF) said Monday it has hired investment bank BNP Paribas as financial advisor for the structuring of a debt financing, which will be used for the construction of the company's Ethiopian potash project.
BNP Paribas has corporate and investment banking offices in over 50 countries worldwide, including 12 countries throughout Africa.
The bank will advise Allana in determining an appropriate financing plan, and approach potential lenders with a view to raising project finance debt. The firm will also work alongside Allana's feasibility study contractor, Ercosplan, and will coordinate with the ongoing environmental and social impact assessment now underway with Environmental Resources Management.
The completion of the feasibility study, which will investigate the potential to extract potash through open pit mining, solution mining and solar evaporation, and the environmental assessment are due out in late 2012.
"Allana is looking forward to working with BNP Paribas and the financial community in developing a team of lenders committed to supporting our Dallol potash project," said Allana's President and CEO, Farhad Abaso.
"The management team and our advisors believe that most of the debt financing can be sourced from large multi-lateral financing organizations as well as ECA's.
"We are encouraged by past successful financings of similarly structured resource projects in Africa and we are confident that BNP Paribas' experience and global network will help us to secure the project's financing."
In consideration for providing the financial advisory services, Allana will pay BNP a monthly cash work fee, and subject to the receipt of any applicable regulatory approvals, issue 1.4 million Allana common share purchase warrants to the bank.
Each warrant will be exercisable to acquire one common share of Allana at C$0.94 for a period of five years from the date of issue.
An updated NI 43-101 compliant resource report in late June estimated total measured and indicated resources of 673 million tonnes, with an average grade of 18.65% potash, or KCI, (the composite grade of all four potash-bearing beds including sylvinite, upper and lower carnallite and kainitite). Inferred mineral resources now stand at 596 million tonnes with an average grade of 19.96% KCI.