Allana Potash Corp. (TSX:AAA)(OTCQX:ALLRF) said Wednesday that the Republic of Djibtouti's government has started the pre-qualification process to select contractors for the construction of the new port at Tadjoura, Djibouti.
With financing from the Arab Fund for Economic and
Social Development and the Saudi Fund for Development, the Djibouti
government-owned Port Authority will build and operate marine civil
facilities and common services - to be constructed with an initial
30-hectare yeard and a 435 metre quay, the company said.
said it will continue to work with the Djibouti authorities to integrate
the required potash storage and handling facilities into the new port
With a recently-completed, positive preliminary economic
assessment (PEA) under its belt for its Dallol potash project in
Ethiopia, Allana Potash is expecting a host of developments in 2012, including a feasibility study later this year.
on the PEA plan, transportation of the product to Djibouti would be
completed through a company-owned fleet of trucks, with port costs based
on Allana constructing its own port terminal in Djibouti, including
product unloading and storage, shipping facilities and supporting
With regards to infrastructure developments for
the project, Allana said again today that highway construction by
Ethiopian government contractors was "actively proceeding" to connect
the project area with paved roads both to the company's project
development staging facilities in Mekele, and to the southern highway
access to ports in Djibouti.
The company also said that
discussions were progressing with government departments and private
sector operators regarding regarding rail facilities linking road and
port infrastructure. Allana continues to expect that the infrastructure
required for the company's Dallol potash project to reach full operation
will be in place at the same time as, or in advance of its projected
construction period, it said.
The company is planning to start
production at Dallol with one million tonnes at the initial stage by
2015, to reach peak production by year 2017. Start of construction at
the project is anticipated as early as late 2012, with minimal output
expected by the end of 2014.
President and CEO of Allana, Farhad
Abasov, said in a statement Wednesday: "Allana is encouraged by the
admirable progress made by the Djibouti Government in the ongoing
development of the country's transportation infrastructure.
understands that both the Djibouti and Ethiopian Governments are
looking to the strategic Danakhil potash resource as one of the
catalysts for the development of road, port and rail facilities critical
to the continued economic growth within the region and we are pleased
to have the opportunity to participate in supporting these
Last November, the company announced the results
of the PEA for its Dallol potash project for production of one million
tonnes, with the potential to expand output at the site to two million
tonnes of muriate of potash (MOP) product per year at a later stage.
economic study, conducted by Ercosplan and based on solution mining
with a solar evaporation method, 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.
results exceeded management's expectations, said Abasov, with the
project having "one of the lowest capex and opex in the world" in the
potash industry, especially when compared to Saskatchewan players in
Solar evaporation of the saturated brine solution is
possible at the Dallol project due to the year-round hot temperatures
and very little rainfall, in contrast to Saskatchewan. Salts harvested
from the ponds at Dallol will be processed by standard flotation to
create an MOP product.
The Ethiopia project also hosts shallower
deposits, which means the company is not required to drill that deep,
allowing for cost savings, Abasov told Proactiveinvestors in December.
ongoing feasibility study, which will consider additional MOP and
sulphate of potash (SOP) output, is due out in the third quarter of
Meanwhile, pilot evaporation pond testwork, hydrogeological
studies and solution mining testwork are underway as the company's
feasibility study advances. Heavy machinery to construct the ponds is on
site, and engineering work and earthworks are in progress, Allana
An update to the NI 43-101 compliant technical report is
also expected by the end of the first quarter of 2012, with Abasov
expecting substantial additions to resources on the eastern side, and an
upgrade to the measured and indicated category on the western side.
drilling has now shifted to the far eastern part of the property as
part of the program designed to add mineral resources.
already has financial support from two strategic investors, IFC, a
member of the World Bank Group, and Liberty Metals and Mining, and
recently announced the closing of a $20 million private placement
Total measured and indicated resources now 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%