Allana Potash Corp. launches technical cooperation with ICL
Toronto, Ontario, March 19, 2014 — Allana Potash Corp. (TSX: AAA) (â€œAllanaâ€ or the “Company”) today announced the commencement of technical cooperation activities with ICL pursuant to Allanaâ€™s previously reported strategic alliance with ICL. Senior technical and development teams from both companies have begun to define priorities for a development program to advance the Danakhil Potash Project.
As part of the activities, programs will be launched in Ethiopia and Djibouti in late March focused on hydrology and water supply design, solution mining and evaporation pond operations procedures and output, as well as on production transportation logistics and product staging/storage strategy refinements. These activities will be aligned with the project lenders due diligence program.
Farhad Abasov, President and CEO of Allana, commented, â€œWe reviewed, and have been impressed by ICLâ€™s excellent operations at its Dead Sea Works (DSW) facility in Israel and at Israelâ€™s Ashdod port. Our assessment of ICLâ€™s operations further validates our opinion that ICL will be an optimal partner for Allana. In our joint technical discussions, Allana and ICL identified significant similarities in our facilities and operations, and it is clear that we can replicate ICLâ€™s operations.â€ Mr. Abasov continued, â€œWe look forward to the next stage of our cooperation during which ICLâ€™s experts will advise Allana in connection with its pre-construction work programs to refine our operating procedures for water extraction, solution brine management and transport facility and operations design, among other elements. ICLâ€™s technical assistance, as well as its Â take-or-pay off-take and significant equity investment in Allana, significantly contributes to de-risking the project and will facilitate Allanaâ€™s construction and production activities.â€
ICL is one of the worldâ€™s largest producers of fertilizers, supplying over fiveÂ million tons of potash annually from production facilities located in a number of countries, primarily from solar evaporation ponds at ICLâ€™s DSW facility. The DSW operation employs relatively low-concentration potassium chloride brines from the Dead Sea, produced in over 100Â km2 of evaporation ponds with an annual average daylong temperature of around 26Â ÂºC, to process its solid crystal raw material. Allana will benefit from ICLâ€™s 60-plus years of technical expertise at its Danakhil operations which, in contrast, will employ approximately 10â€‘fold higher potassium concentration brines from its solution wells, crystallized in 6Â km2 of solar evaporation ponds with an annual average daylong temperature of over 35Â°C.
DSWâ€™s operations also utilize in-house and contractor-operated trucking fleets to transport Â 1.5Â toÂ 2Â million tons of potash annually to ICLâ€™s storage and shipping terminal facilities at Ashdod and Eilat ports which are located 150Â and 200 kilometers, respectively, from DSWâ€™s facilities at the Dead Sea. These logistical capabilities are directly applicable to Allanaâ€™s operational plans to truck one million tons of potash 570Â kilometers to Allanaâ€™s potash terminal located at the Tadjoura port in Djibouti.
Nissim Adar, President and CEO of ICL Fertilizers, observed, â€œOur strategic alliance with Allana to develop potash supply for Ethiopia and Africa â€“ the market with the highest growth potential in the fertilizer world â€“ is moving forward at a fast pace. We are pleased that Allanaâ€™s entrepreneurial approach fits well with ICLâ€™s expertise and experience and we look forward to our joint technical teams driving this project to a successful completion as quickly as possible guided by a continual focus on safety, quality, cost-control and sustainability issues. Once in production, Danakhil is expected to become one of the worldâ€™s lowest cash cost potash projects.â€
The Project secured environmental approvals in MayÂ 2013 and its Mining License in OctoberÂ 2013, and, having gained the cooperation of several major development financing institutions and export credit agencies in midâ€‘2013, the Company continues to proceed with its project financing activities.Â ICL has also committed to purchase production of the Project up to 1Mtpa with a takeâ€“or-pay commitment on a minimum of 80% of output from the Project.
As previously announced, the Company has called a special meeting of shareholders on March 28, 2014 to authorize the issuance of a further 30,614,488 Units of Common Shares and Warrants to ICL for gross proceeds of approximately $14.4 million, (the â€œSecond Trancheâ€) (see Allana press release dated FebruaryÂ 12,Â 2014). Subject to the receipt of the required shareholder approval, closing of the Second Tranche is anticipated to occur on or about March 31, 2014.Â Directors and officers of Allana holding an aggregate of 1.4% of the outstanding Common Shares have agreed to vote in favor of the issuance of the Units pursuant to the Second Tranche to ICL.
ICL, a global manufacturer of products based on unique minerals that fulfill humanityâ€™s essential needs, primarily in three markets: agriculture, food and engineered materials. The agricultural products that ICL produce help to feed the worldâ€™s growing population.Â The potash and phosphates that it mines and manufactures are used as ingredients in fertilizers and serve as an essential component in the pharmaceutical and food additives industries. The food additives that we produce enable people to have greater access to more varied and higher quality food; ICLâ€™s water treatment products supply clean water to millions of people as well as industry around the world; and other substances, based on bromine and phosphates help to create energy that is more efficient and environmentally friendly, prevent the spread of forest fires and allow the safe and widespread use of a variety of products and materials. ICL benefits from a broad presence throughout the world and proximity to large markets, including in developing regions. ICL operates within a strategic framework of sustainability that includes a commitment to the environment, support of communities in which ICLâ€™s manufacturing operations are located and where its employees live, and a commitment to all its employees, customers, suppliers and other stakeholders.
ICL is a public company whose shares are traded on the Tel Aviv Stock Exchange (TASE: ICL). The company employs around 12,000 people worldwide, and its sales in 2013 totaled $6.3 billion. For more information, visit the company’s website at www.icl-group.com.Â
About Allana Potash Corp.
Allana is a publicly traded corporation with a focus on the acquisition and development of potash assets internationally with its major focus on a previously explored potash property in Ethiopia. Allana has secured financial support from three significant strategic investors: ICL, one of the worldâ€™s largest potash producers, IFC, a member of World Bank Group, and LMM, a member of Liberty Mutual Group. Allana has estimated measured and indicated Sylvinite mineral resources of 327.4 million tonnes of 28.3% KCl; and an estimated inferred Sylvinite mineral resource of 90.8 million tonnes grading 27.8% KCl, In addition, the Project hosts estimated measured and indicated Kainitite mineral resources of 1,150.5 million tonnes at 19.4% KCl, an estimated inferred Kainitite mineral resource of 481.8 million tonnes of 19.8%KCl; estimated measured and indicated Upper Carnallitite mineral resources of 411.3 million tonnes grading 17.3% KCl, estimated inferred Upper Carnallitite mineral resources of 175.5 million tonnes of 16.5% KCl; estimated measured and indicated Lower Carnallitite mineral resources of 557.2 million tonnes of 9.2%KCl, and estimated inferred Lower Carnallitite mineral resources of 369.3 million tonnes grading 7.7% KCl. The foregoing mineral resource estimates are as at April 17, 2013. For more information with respect to the data verification procedures undertaken and the key assumptions, parameters and risks associated with the foregoing estimates, refer to Allanaâ€™s Technical Report entitled â€œResource Update for the Danakhil Potash Deposit, Danakhil Depression, Afar State, Ethiopiaâ€ dated effective April 17, 2013 filed under the Companyâ€™s SEDAR profile at www.sedar.com on August 7, 2013.Allana has approximately 294Â million shares outstanding.Â Allana trades on the Toronto Stock Exchange under the symbol â€œAAAâ€.
Dr. Peter J. MacLean, Ph.D., P. Geo., Allanaâ€™s Senior VP Exploration, is the Companyâ€™s designated Qualified Person and has reviewed and approved the technical information presented in this release.Â
Except for statements of historical fact relating to the Company, certain information contained herein constitutes â€œforward-looking informationâ€ under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as â€œplansâ€, â€œexpectsâ€ or â€œdoes not expectâ€, â€œis expectedâ€, â€œbudgetâ€, â€œscheduledâ€, â€œestimatesâ€, â€œforecastsâ€, â€œintendsâ€, â€œanticipatesâ€ or â€œdoes not anticipateâ€, or â€œbelievesâ€, or variations of such words and phrases or statements that certain actions, events or results â€œmayâ€, â€œcouldâ€, â€œwouldâ€, â€œmightâ€ or â€œwill be takenâ€, â€œoccurâ€ or â€œbe achievedâ€. Statements with respect to mineral resource estimates, production timelines,Â the timing of closing of the Second Tranche and the expected benefits of the Technical Committee and the strategic alliance with ICL are forward-looking statements.Â Forward-looking statements are based on the opinions, assumptions estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information.Â Such risks include the uncertainty with respect to the shareholder approval of the Second Tranche not being obtained, the fact that the expected benefits of the strategic alliance may not materialize, the inherent capital markets consequences of an equity controlling position, regulatory risks and such other risks as discussed in the risk factors sections of our latest annual information form, our technical reports and other continuous disclosure documents filed from time to time at www.sedar.com. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended.Â There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except in accordance with applicable securities laws.
Senior Vice President, Corporate Development
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