re: Ann: Scoping Study for the Colluli Potash...
Hi Calina,
The Chinese and Indians have invested billions in building out the infrastructure in Ethiopia which includes; rail, roads, bridges and energy.
Allana's PEA for capex and opex are for trucking of the potash to the port at Dijibouti. The PEA was prepared by Ercosplan. In approx. 5 years the rail line will be completed. It's actually not dependent on BHP as there are other very large potash companies that are continguous with Allana's ie. Sainik Corp. which is a very large Indian private company. Sainik Corp. has just purchased $60 million in equipment for their Danakil Basin potash project. Sainik will also be trucking and then using the rail when it's completed as well.
Allana commissioned an on the ground study for trucking potash transport cost in Ethiopia last year. The CEO indicated from the study, that it would cost $20/ton or less. Nice to see that Ercosplan is estimating $9/ton for transport. 450 km of the 600 km road to Dijibouti has been upgraded and is ready to go. The remaining 150 km of road is acceptable for truck transport but is being upgraded. The Ethiopian government is paying for all of the road work.
Allana
------------------------------------------------------------ Production: One million tonnes MOP per year Mine life: 30 years Mining method: Solution mining Processing: Solar evaporation and flotation Transport: Trucking to Djibouti Power: Diesel generation with fuel shipped to site Water: Water on site Potash Price: US$500 in 2013 Sustaining CAPEX: US$44 million (before cavern or process design optimization)
Estimated operating expenditures (OPEX) were also calculated for Production, Transportation/Handling, and Port. The OPEX costs in US$ per tonne are outlined in the table below:
----- Estimated Production OPEX $70.24/tonne ---------------------------------------------------------------------------- Estimated Transportation/Handling OPEX $8.85/tonne ---------------------------------------------------------------------------- Estimated Port OPEX $2.88/tonne
BHP holds a 17,000 sq. km land package which is south of Allana's and Nova's potash tenements. BHP announced at PDAC 2011 that they have purchased 140 light trucks, hired 6 geologists and many support staff for their Ethiopian projects. So, it looks like their projects are going ahead.
A key to Allana's success is it's advanced financing with the World Bank and with Liberty Mutual. If a junior potash company has a great deposit, it's the financing that is the most difficult objective to meet.
It would be great for South Boulder to line up this type of financing, that would get the stock price moving.
STB Price at posting:
$1.57 Sentiment: None Disclosure: Held
