Allana Potash Corp. (TSE:AAA) said late Friday existing strategic investors Liberty Metals & Mining, a subsidiary of Liberty Mutual Insurance, and International Finance Corp (IFC), a member of the World Bank Group, have chosen to exercise their participation rights in a $20 million bought deal financing.
As such, Liberty Metals & Mining has acquired
4.62 million common shares of Allana and IFC has acquired 1.31 million
common shares at $0.80 each, for total gross proceeds of $4.74 million.
financing remains subject to the receipt of final approval of the TSX
and the common shares will be subject to a statutory hold period
expiring on July 10, 2012.
"We are very pleased that both our
strategic investors, LMM and IFC, are fully committed to supporting
Allana's potash project in Ethiopia," said president and CEO Farhad
"Their continuous support will be critical in further development of our project as we are advancing the feasibility study."
Last week, Dundee Capital Markets reiterated its sector "top pick" for Allana Potash (TSE:AAA),
after the junior potash explorer received non-binding indications of
interest from potential lenders totaling more than $600 million, for
funding the company's Dallol project in Ethiopia.
announcement of initial discussions with potential lenders was made last
Monday, and interest was received for around 65 percent of the total
estimated capex for the project - which exceeds the amount of debt
financing Allana was originally planning to use.
Allana said it
expects the technical and commercial commitments for the project to be
completed by late 2012, allowing for the closing of the project debt
financing and start of construction in early 2013.
the Dundee report, upcoming share price catalysts for Allana include an
updated resource estimate expected for the first or second quarter,
formal debt financing agreements, a bankable feasibility study and
possible offtake agreements.
The company expects to issue an
updated estimate this month or next, which will include its recent
infill and exploration drilling results.
Given the positive
results from these holes, Dundee said it expects Ercosplan, Allana's
technical consultant, to assign additional tonnage to the measured and
indicated categories from inferred, as well as increase the total
resource as a result of drilling on the eastern bloc.
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% KCI.
feasibility study for the project is expected around the end of the
third quarter, for the construction of a one to two million tonne per
year solution mine using solar evaporation - targeted for start up by
late 2014 or early 2015.
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
The 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