Allana seem to have rushed this analysis to publish ahead of STB's PFS. Their PEA was done by Ercoplan from whom STB have moved away. Allana's investigation of SOP was a copy of STB strategy. Their transportation costs are 5.6c /tonne / km - very low I think - even disregarding the cost any transportation infrastructure, trucks and no contribution to 570km of road uprading or maintenance. What has happened to their railway to Djibouti? No mention of the transport distance in the media release - 570km.
I suspect both companies have been approached by the same potential financiers and Allana is worried their project is not as attractive an investment. Allana has mentioned South African bank interest among others.
This PEA looks like a back of the envelope exercise to look competitive and keep the interest of financiers.
Tomorrows STB's announcement should have a high degree of rigour and be very credible.
STB Price at posting:
26.5¢ Sentiment: Buy Disclosure: Held
