Allana Potash reports results of AGM, expedites additional studies for Ethiopian project

Allana Potash Corp. (TSE:AAA)(OTCQX:ALLRF) said Tuesday that at the annual general meeting of shareholders held last week, the company's officers and directors were re-appointed.
The potash company, with its core project in Ethiopia, also provided an operational update Tuesday, and said it is expediting additional studies on its Ethopian project for the feasibility study, following the successful completion of its preliminary economic assessment (PEA) in November.
Studies will include geotechnical drilling for rock mechanic testwork, pilot solution mining cavern testwork and evaporation pond testwork on the salt plain.
Currently, large bore drilling equipment is being mobilized to the site to conduct drilling for water resources and to facilitate the solution mining cavern work.
One drill rig is occupied with geotechnical drilling, while the second rig continues with in-fill drilling and resource expansion drilling.
Allana also said that its planned camp expansion is on schedule, which is expected to increase capacity to 150 people to accommodate additional drill personnel and environmental staff.
In addition, recent meetings between the company and the governments of Ethiopia and Djibouti have progressed with regards to infrastructure needs for the operation. To date, talks have been favourable, the company added.
Allana said that at the annual meeting, shareholders also voted to approve the rolling 10 percent stock option plan, the share bonus plan and the shareholder's rights plan, among other things.
"Allana continues to be encouraged by overwhelming support of its shareholders, demonstrated not only by their attendance at the AGM, but by the high voter turnout and number of votes in favour of the matters put before them this year," said president and CEO, Farhad Abasov.
In late November, Allana announced the "extremely positive" PEA results for its Danakhil potash project in Ethiopia, with the potential to expand production at the site to two million tonnes of muriate of potash (MOP) product per year.
The economic study, conducted by Ercosplan, yielded, on an after-tax basis, an internal rate of return (IRR) of 36.8 percent and a net present value (NPV) of US$1.85 billion based on a 12 percent discount rate.
Estimated total capital expenditures, which include production, transportation and handling and port facilities in Djibouti are $796 million, including $128 million in contingency. Total operating expenses are estimated at $90.54 per tonne of KCI (the composite grade of all four potash-bearing beds including sylvinite, upper and lower carnallite and kainitite), with a projected payback period of three and a half years.
The PEA report was based on an operation that produces one million tonnes per year of a standard MOP product, over an initial estimated mine life of 30 years. The study looked at both open pit and solution mining methods, Allana said, but following a review of costs, solution mining and processing using solar evaporation and standard flotation yielded "significant advantages".
The company also said that there is potential to ramp up operations to two million tonnes of MOP product per year after the third year of full production, with Allana currently considering additional MOP and sulphate of potash (SOP) output as well during the ongoing feasibility study, due out in the third quarter of 2012.
Total measured and indicated resources stand at 673 million tonnes, with an average grade of 18.65% KCI, with total inferred mineral resources of 596 million tonnes at a grade of 19.96% KCI.