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Allana arranges $10-million private placement with IFC
2011-03-24 10:14 ET - News Release
Mr. Farhad Abasov reports
ALLANA POTASH ANNOUNCES A STRATEGIC INVESTMENT BY INTERNATIONAL FINANCE CORPORATION
Allana Potash Corp., has arranged a non-brokered private placement with International Finance Corp., a member of the World Bank Group, for 6.25 million units at a price of $1.60 per unit for gross proceeds of $10-million. Each unit shall consist of one common share in the capital of the company and one-half of one common share purchase warrant, with each whole warrant exercisable for $2.08 for a period of three years from the date of the issue.
Farhad Abasov, president and chief executive officer, commented: "I am very pleased to welcome IFC as a proposed strategic investor in Allana. This investment will be a strong testament to the merits of our potash project in Ethiopia. IFC is one of the largest multilateral financing organizations contributing to the development of key mining, infrastructure and industrial projects worldwide by investing $18-billion in fiscal 2010 alone. This is an important development not only for Allana but also for Ethiopia. Our board and senior management team have carefully evaluated the merits of an investment of this nature at this stage in Allana's growth, and have unanimously decided that the support that IFC can provide to us in Ethiopia is significant. In addition, we believe that developing a strong relationship with IFC places Allana in a very solid position to secure possible future debt financing from IFC and other international organizations for the construction of a potash mine in Ethiopia."
IFC has done a thorough due diligence on Allana's potash project. As part of its due diligence process, IFC has completed a site visit and conducted technical, environmental, social, financial and market analyses. As part of IFC's proposed investment, Allana will be required to meet IFC's environmental, social and safety standards in the continuing and future development of its project. Allana and IFC personnel have already begun to evaluate Allana's current programs to ensure that Allana has appropriate environmental and social management systems in place, and that the Dallol potash projects will benefit local communities, as well as Ethiopia in general. In connection with the offering, IFC shall have certain rights, including without limitation, information, policy and pre-emptive rights.
The company plans to use the net proceeds from the offering to finance a drilling program and feasibility study for the company's main asset, its Ethiopian potash property in the Danakhil evaporate basin, and for general corporate purposes.
Closing of the offering is anticipated to occur on or about May 1, 2011, and is subject to the receipt of all required approvals, including without limitation approval of IFC's board of directors and the receipt of all applicable regulatory approvals, including approval of the TSX Venture Exchange. The common shares and the common shares issuable upon the exercise of the warrants will be subject to a statutory hold period for four months and one day following the closing date.
Peter J. MacLean, PhD, PGeo, Allana's senior vice-president exploration, is a qualified person as defined under National Instrument 43-101 and has reviewed and approved the technical information presented in this release.
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FACT SHEET
POTASH in AFRICA. AAA: TSX.V
Ethiopian Potash Project
Three potash concessions (Dallol Potash Project) locatedin Ethiopia’s northeastern Danakil Depression totalingapproximately 150 square kilometers. The potash mineralization in the Danakil Depression is well known with small-scale potash mining carried out intermittently from the early 1900s.Allana’s project has been previously explored. TheUS-based Parsons potash company drilled nearly300 drill holes from 1958-1967 and even sanka shaft to conduct underground mining.
Major Advantages
Allana has completed a NI 43-101 compliant technicalreport for the three concessions. The technical report highlighted several unique advantages of this project:
· An inferred mineral resource of 105,200,000 tonnes of potash mineralization (Sylvite and Kainite) with a composite grade of 20.8% KCl
· Near-surface (shallow-depth) potash mineralization (within 50 meters of surface)
· Potential for solution or open-pit potash mining
· 16 drill holes immediately on Allana’s property
· Unique environment that may provide for low-costproduction utilizing solar evaporation and geothermal power
· MOP (muriate of potash) and SOP (sulphate of potash) production are both feasible Identifying a historical drill hole Sampling brines at Dallol Mountain on Allana’s Potash Project
POTASH in AFRICA. AAA: TSX.V
Ethiopia – Strong Economic Growth and Attractive Investment Climate
The Ethiopian government is strongly supportive of mining initiatives in the country. Allana’s relationship with the Ethiopian government is very strong and will greatly assist rapid advancement of the project.
Ethiopia is the oldest independent country in Africa. The macro-economic environment has been stable, experiencing double-digit growth since 2003. Most major economic sectors have been liberalized. Government guarantees as stated in Ethiopia’s Investment Code (1991) are provided to foreign investors, in addition to providing constitutional protection from expropriation. Ethiopia is a member of the Multilateral Investment Guarantee Agency (MIGA) and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States.
Strong Management With Successful Track Record
Allana has strong management and board to develop its Ethiopian potash project. The company is stewarded by Farhad Abasov with a solid track record of building successful resource companies in potash, uranium and energy sectors. Most recently, Mr. Abasov was in a senior management position with a uranium company before it was sold to a larger uranium producer for $1.8 billion in 2007. The uranium company was listed on the TSX and was one of the only two uranium companies listed on New York Stock Exchange
Management
Farhad Abasov, MBA, President and CEO
Peter MacLean, Ph.D., P. Geo. Senior Vice President,
Exploration Nejib Abba Biya, Senior Vice President,
Business Development
Board of Directors
Mr. Rene Bharti, B.Sc., Director
Major-General (ret) Lewis MacKenzie, Director
Farhad Abasov, President and CEO, Director
Advisory Board
Dr. Mark Stauffer, Senior Advisor, former President Potash and Phosphate Institute of Canada
Mr. Richard Lacroix, Senior Advisor, former Senior VP of Potash Corp and board member of Canpotex
Dr. Steve Halabura, Senior Advisor, founder of North Rim Exploration, Canada’s leading potash consulting firm.
The information contained in this factsheet is subject to the same disclaimers disclosed on Allana’s website at www.allanaresources.com/disclaimer.asp
Forward-Looking Statement
Except for statements of historical fact relating to the Company, certain information contained herein constitutes "forward-looking information" under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the impact of the drilling contract on the Company, the effect of the appointment on the Company, estimated production, the estimation of mineral reserves and mineral resources; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; capital expenditures; success of exploration activities; permitting time lines and permitting, mining or processing issues; government regulation of mining operations; environmental risks; unanticipated reclamation expenses; title disputes or claims; litigation liabilities; limitations on insurance coverage and the effect of terminating the investor relations contract. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions and 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. 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. 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.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE
Contacts: Allana Resources Inc. Farhad Abasov +1 416 309-2691 fabasov@allanaresources.com Allana Resources Inc. Peter MacLean +1 416 861 2262 peter@allanaresources.com
SOURCE: Allana Resources Inc.
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