Ubika Research first highlighted the investment potential in Allana Potash (TSXV: AAA)(CVE: AAA) in its initiation report published on February 26, 2009. All research reports, analyst commentaries and CEO video interview for Allana Potash (TSXV: AAA) are available for free download HERE.
On Jan 24, 2011 Allana Potash (TSXV: AAA) (CVE: AAA) announced that drill hole DK-10-08, located in the southwestern section of Allana's property, intersected two prominent zones of potash mineralization. Hole DK-10-08 intersected 31.6% KCl over two metres, and 22.1% KCl over 7.5 metres in two distinct intersections at shallow depths beginning at approximately 164 metres. The upper interval occurs within a thicker potash sequence that returned 24.6% KCl over 4.1 metres. Similar to previous holes, evaluation of the core suggests that the upper intersection correlates with the Sylvinite Zone as defined by Parsons at the historic Musley Deposit. Similarly, the lower intersection, 6.7 m at 22.04% KCl, is dominated by kainite and appears to correspond to the Kainitite Zone in the Parsons stratigraphy.
Drill hole DK-10-08 was drilled in the south west part of Allana's concession and is 2.5 km away from hole # 6. Also, if drill holes # 9 and 10 were to show there is continued mineralization it will give a strong indication that the Musley deposit (the current resource estimate) may extend all the way to the south. Drill holes DK-10-09 & 10 have been drilled through the middle of the newly acquired land and the cores are being analysed in Saskatchewan. We believe these results may be announced in the coming weeks.
The 2m of 31.6% KCl is amongst the best grades the company has reported in the South side of the property. This grade is higher than the current NI 43-101 resource estimate composite grade of 20.8% KCl. This is significant as it suggests that not only is it probable that Allana will increase the quantity of the resource (based on the drill results released so far), but also the quality of the resource which may potentially improve the economics of a future mining operation.
The assay results released so far suggests that successive drill holes are finding rich potash mineralization at Allana’s potash project. The drilling so far also confirms that Potash is found near surface and the deposit remains open. More drilling will likely provide evidence supporting this assertion and will help in discovering new potash bearing zones. Near surface mineralization, cheap labour and its plan to use solar evaporation may result in Allana’s potash project to potentially have among the lowest operating costs in the industry. Allana has the support of the local government and has already secured a strategic Chinese partner to cover a large part of the mine construction costs.
The company also recently announced on November 30, 2010 the closing of a non-brokered private placement of CAD12.4 million with Liberty Metals & Mining Holdings, LLC ("LMM"), a subsidiary of Liberty Mutual Group. This financing will greatly facilitate and expedite the drilling program and feasibility study for the Company's main asset, its Ethiopian potash property in the Danakhil evaporate basin.
Ubika Research believes that this financing strongly validates the investment potential in Allana Potash and confirms its exploration potential. Allana Potash is one of the few junior potash exploration companies with real potential to move towards production. We understand that its main short-term goal is to finish the initial stage of exploration program and hopefully produce an updated NI 43-101 report by the end of the first quarter of 2011.
Furthermore, we believe that the demand for fertilizer is expected to continue its secular uptrend. This is bringing attention to potash deposits for large mining companies including BHP Billiton (NYSE: BHP) and VALE (NYSE:VALE) as these mining conglomerates scout for high quality potash assets worldwide. We believe that companies like Allana Potash will continue to attract attention due to its exploration potential, its current potash resource deposit and its proximity to the land holdings owned by BHP Billiton in the evaporite basin of the Danakhil Depression. As it moves its project through the exploration and development phases, it can become an attractive target for major mining companies and investment groups looking for high potential potash assets.
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On Jan 24, 2011 Allana Potash (TSXV: AAA) (CVE: AAA) announced that drill hole DK-10-08, located in the southwestern section of Allana's property, intersected two prominent zones of potash mineralization. Hole DK-10-08 intersected 31.6% KCl over two metres, and 22.1% KCl over 7.5 metres in two distinct intersections at shallow depths beginning at approximately 164 metres. The upper interval occurs within a thicker potash sequence that returned 24.6% KCl over 4.1 metres. Similar to previous holes, evaluation of the core suggests that the upper intersection correlates with the Sylvinite Zone as defined by Parsons at the historic Musley Deposit. Similarly, the lower intersection, 6.7 m at 22.04% KCl, is dominated by kainite and appears to correspond to the Kainitite Zone in the Parsons stratigraphy.
Drill hole DK-10-08 was drilled in the south west part of Allana's concession and is 2.5 km away from hole # 6. Also, if drill holes # 9 and 10 were to show there is continued mineralization it will give a strong indication that the Musley deposit (the current resource estimate) may extend all the way to the south. Drill holes DK-10-09 & 10 have been drilled through the middle of the newly acquired land and the cores are being analysed in Saskatchewan. We believe these results may be announced in the coming weeks.
The 2m of 31.6% KCl is amongst the best grades the company has reported in the South side of the property. This grade is higher than the current NI 43-101 resource estimate composite grade of 20.8% KCl. This is significant as it suggests that not only is it probable that Allana will increase the quantity of the resource (based on the drill results released so far), but also the quality of the resource which may potentially improve the economics of a future mining operation.
The assay results released so far suggests that successive drill holes are finding rich potash mineralization at Allana’s potash project. The drilling so far also confirms that Potash is found near surface and the deposit remains open. More drilling will likely provide evidence supporting this assertion and will help in discovering new potash bearing zones. Near surface mineralization, cheap labour and its plan to use solar evaporation may result in Allana’s potash project to potentially have among the lowest operating costs in the industry. Allana has the support of the local government and has already secured a strategic Chinese partner to cover a large part of the mine construction costs.
The company also recently announced on November 30, 2010 the closing of a non-brokered private placement of CAD12.4 million with Liberty Metals & Mining Holdings, LLC ("LMM"), a subsidiary of Liberty Mutual Group. This financing will greatly facilitate and expedite the drilling program and feasibility study for the Company's main asset, its Ethiopian potash property in the Danakhil evaporate basin.
Ubika Research believes that this financing strongly validates the investment potential in Allana Potash and confirms its exploration potential. Allana Potash is one of the few junior potash exploration companies with real potential to move towards production. We understand that its main short-term goal is to finish the initial stage of exploration program and hopefully produce an updated NI 43-101 report by the end of the first quarter of 2011.
Furthermore, we believe that the demand for fertilizer is expected to continue its secular uptrend. This is bringing attention to potash deposits for large mining companies including BHP Billiton (NYSE: BHP) and VALE (NYSE:VALE) as these mining conglomerates scout for high quality potash assets worldwide. We believe that companies like Allana Potash will continue to attract attention due to its exploration potential, its current potash resource deposit and its proximity to the land holdings owned by BHP Billiton in the evaporite basin of the Danakhil Depression. As it moves its project through the exploration and development phases, it can become an attractive target for major mining companies and investment groups looking for high potential potash assets.
Ubika Research first highlighted the investment potential in Allana Potash (TSX VENTURE: AAA)(CVE: AAA) in its initiation report published on February 26, 2009. All research reports, analyst commentaries and CEO video interview for Allana Potash (TSXV: AAA) are available for free download HERE.