Allana Potash Announces Positive Preliminary Economic Assessment at its Danakhil Potash Project

- November 22nd, 2011

Allana Potash Corp. (TSX:AAA,OTCQX:ALLRF) announced the results of an independent Preliminary Economic Assessment prepared by Ercosplan Ingenieurgesellschaft Geotechnik und Bergau on its Danakhil Potash Project in Ethiopia.

Allana Potash Corp. (TSX:AAA,OTCQX:ALLRF) announced the results of an independent Preliminary Economic Assessment prepared by Ercosplan Ingenieurgesellschaft Geotechnik und Bergau on its Danakhil Potash Project in Ethiopia.

As quoted in the press release:

The PEA yielded, on an unlevered basis, an after-tax Internal Rate of Return (“IRR”) of 36.8 % and an after-tax Net Present Value (“NPV”) of US$1.85 Billion based on a 12% discount rate. The PEA is based on commercial operations that produce one million tonnes per year (“MTPY”) of a standard Muriate of Potash (MOP) product over an initial estimated operating life of 30 years. The PEA examined open pit and solution mining methods. Following a review of the costs and other operating considerations, solution mining with processing using solar evaporation and standard flotation yielded significant advantages and was therefore the preferred mining method selected for the Project.

Allana Potash President and CEO, Farhad Abasov, said:

“Allana is very excited with the extremely positive preliminary economic assessment of its Danakhil Potash Project, as outlined by ERCOSPLAN. The production CAPEX of about US$664 million (total CAPEX including production, port and other infrastructure of about US$796 million), makes this project one of the lowest cost and potentially highest return potash projects worldwide. Similarly, the production OPEX is very robust at US$70/tonne (total OPEX including production, transportation, port handling and on the ship of about US$90/tonne) and is one of the lowest among greenfield potash projects currently under development.”

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