TORONTO (miningweekly.com) – Allana Potash, which announced on Tuesday that its Danakhil project in Ethiopia would cost around $800-million to build, told investors it aimed to raise nearly $500-million of this from development agencies.
CEO Farhad Abasov said the company benefitted from the project being in one of the least developed countries in the world, providing the impetus for non-commercial entities such as development agencies to provide funding for its construction.
He said “almost all” of the debt funding would come from non-traditional sources, naming the International Finance Corp (IFC), the African Development Bank, export-import banks out of the US, Canada and Europe.
The remaining $300-million would come from equity, with Abasov detailing on a conference call to discuss the results of Danakhil’s preliminary economic assessment (PEA) that this would be split into three equal parts.
The first would be to sell more stock to its two existing strategic shareholders – the IFC and Liberty Metals and Mining. Liberty owns around 17% of the company.
TSX-listed Allana is hoping to secure another one-third of the equity component from an offtake agreement with a customer, and the final around $100-million would come from a market offering or bringing on a new set of strategic partners, Abasov said.
While the current market rout might make things difficult for the company on the equity raising side, its plans to source debt from non-commercial sources made it easier, as these entities were “insulated” from the troubles banks were facing.
Abasov said Allana had between 12 and 18 months to raise the equity, and he was hoping the company’s share price would stabilise during this timeframe to provide the opportunity to sell shares without too much dilution.
The Toronto-based firm dropped 3.4% on Wednesday in a broader market sell-off to close at C$1.13 a share. The stock has gained 121% over the past 12 months as potash prices rose and the company advanced Danakhil.
Allana hopes to start producing at the project in 2014, with the PEA outlining an initial one-million ton a year solution mining operation.
The $800-million price tag includes building port facilities to Djibouti, and roads to truck the product there.
www.miningweekly.com/article/...pian-potash-project-2011-11-23
Keine Kauf-Verkaufsempfehlung. "Das Glück des einen ist das Unglück des anderen"
Zurück
