-- After-tax Net Present Value of US $1.32 billion, based on lower price expectations in current potash markets-- After-tax Internal Rate of Return of 33%-- Production capital expenditures including mining and processing facilities ("Production CAPEX") of US$579 million-- Port and logistics infrastructure ("Infrastructure CAPEX") of US $63 million-- Total CAPEX Contingencies of US$64 million included in the Production and Infrastructure CAPEX estimates-- Total production operating expenditures ("Production OPEX") of US$69.25/tonne-- Total transportation expenditures ("Transportation OPEX") (including transportation/handling, port, loading costs) FOB on Vessel of US$29.50/tonne-- Based on Annual Production of one million tonnes of MOP per year using solution mining from Proven and Probable Sylvinite Mineral Reserves only-- Significant Carnallitite or Kainitite resources not included in the production plans in this Feasibility Study
Allana Potash Corp. ("Allana" or the "Company") announces the results of a positive independent Feasibility Study ("FS") prepared by Ercosplan Ingenieurgesellschaft Geotechnik und Bergbau ("ERCOSPLAN") on its Danakhil Potash Project in Ethiopia (the "Project"). Allana's Board of Directors is pleased to congratulate the people and government of the Federal Democratic Republic of Ethiopia on the receipt by Allana of the first NI 43-101-compliant feasibility study on a potash resource in Ethiopia's Danakhil potash basin that defines one of the few economically viable greenfield potash projects in the world.
The FS is based on commercial operations that produce one million tonnes per year ("MTPY") of a standard grade Muriate of Potash ("MOP") product over an initial estimated operating life of approximately 25 years from Sylvinite Reserves at Allana's Danakhil Project in Ethiopia. The FS yielded, on an unlevered basis, an after-tax Internal Rate of Return ("IRR") of 33 % and an after-tax Net Present Value ("NPV") of US$ 1.32 billion based on a 10% discount rate.
Farhad Abasov, President and CEO of Allana commented: "Allana is extremely pleased with the very positive Feasibility Study of its Danakhil Potash Project, as prepared by ERCOSPLAN. Even with current potash market realities driving the lower potash price forecast of USD $430/tonne used in the FS, the favourable total production CAPEX of about US$579 million and port and transport CAPEX of US$63 million, make this project one of the lowest cost and potentially highest return greenfield potash projects worldwide. Similarly, the very competitive production OPEX at US$69.25/tonne, within a total, loaded-on-ship, OPEX of US$98.75/tonne FOB, is one of the lowest among greenfield potash projects currently under development."
Mr. Abasov added, "ERCOSPLAN modeled the production of one million tonnes of MOP from just the Sylvinite Zone on the project, excluding future potential production from the extensive Carnallite and sulphate-based Kainite resources. The FS's extremely positive results give Allana great confidence in advancing its project to development and securing project finance and offtake."