Ethiopia: the Dallol Potash Project Feasibility Study is due for completion this year

Toronto-headquartered Allana Potash Corp. is a junior mining company with a focus on the acquisition and development of potash assets internationally with its flagship in the Danakhil Potash property (also referred to as the Dallol Potash Project), which is a previously explored potash property in northeastern Ethiopia. The indicated resources are of about 673 million tonnes containing 126 million tonnes of potassium chloride (KCl) and additional inferred mineral resources totaling 596 million tonnes containing 119 million tons of KCl. A Feasibility Study is due for completion in the last quarter of the current year and it includes hydrogeological studies to identify large water sources, dissolution testwork, rock mechanical testwork, a pilot solution mining operation, and solar evaporation pond tests. The company plans to produce one million tonnes of standard MoP per year. There is an initial estimation of the operating life of the mine of thirty years.

The Danakhil Project area is the one of hottest places on earth, which allows for the use of solar evaporation after solution mining and should bring significant cost savings. Salts harvested from the ponds will be processed by standard flotation to create muriate of potash product. There are reports that Ethiopia is the cheapest place to extract potash after Jordan, because the deposits are only 100 meters (328 feet) below the surface, compared with 1,000 meters in Brazil and Canada where the grade is similar. At least part of the output is expected to be shipped to the giant consumers India and China.

The start of production is estimated at the end of 2014-early 2015. The total capital expenditure to develop the project is estimated in US$796 million, which includes costs associated with cavern development, solar evaporation ponds, brine processing and infrastructure, including power.

On April 8, 2011, the Company incorporated a wholly owned subsidiary, Allana Potash Afar PLC (Allana Ethiopia). The major shareholders of Allana Potash are Liberty Metals and Mining (16%) and International Finance Corp. (3%). Besides their Dallol Potash Project, they also have a property in Argentina, which is located near Vale’s Rio Colorado potash solution mining project.

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