Dundee Securities has issued a research note on the potash sector mentioning Allana Potash (TSE:AAA), contributing to an overall positive outlook for the company.
international potash company is currently developing the
previously-explored Dallol potash project in Ethiopia. Total measured
and indicated resources now stand at 673 million tonnes, with an average
grade of 18.65% potassium chloride (KCl), with total inferred mineral
resources of 596 million tonnes at a grade of 19.96% KCl.
Dundee continues to rate Allana Potash a "buy" - the stock is a top pick in the small cap space - with a 12-month target price of $2.00.
Kelertas, senior analyst at Dundee Securities wrote the note following a
recent supply agreement that was reached between potash marketing body
Canpotex and China's largest agricultural company, Sinofert Holdings for
the supply of 500 thousand tonnes of potash at a price of $470 per
Implications for the deal are positive for the potash
industry as the agreed prices show no erosion from the last contract
despite weaker demand and higher potash inventories compared to last
year, Kelertas wrote.
Earlier this week, the company said it
continued to ntersect strong potash mineralization at Musley Deposit
with Hole 34 intersecting 3 metres of 38.4% in the Sylvinite Zone and
7.9 metres of 22.9% KCl in the Kainitite Zone. Hole 33 intersected 1.5
metres of 30.1% KCl in the Sylvinite Zone and 6 metres of 23.9% KCl in the Kainitite Zone.
32 intersected a Sylvinite Zone 1.4 metres wide of 29.6% KCl within a
zone 3.2 metres thick of sylvinite and carnallite. Hole
32 intersected the Kainitite Zone at a depth of 203.2 metres and returned 3.3 metres of 15.4% KCl.
a recent financing deal, strategic shareholder Liberty Metals &
Mining, a subsidiary of Liberty Mutual Insurance, and International
Finance Corp, a member of the World Bank Group, chose to exercise their
participation rights in a $20 million bought deal financing.
preliminary stages of port construction are also underway in the
Republic of Djibtouti where Allana will continue to work with
authorities to integrate its required potash storage and handling facilities into plans for the new port.