Allana gets cash for feasibility in Ethiopia

With $12.4 million in its pocket, Allana Potash (AAA-V) is set to take its potash play in Ethiopia to the next level.

The company managed to close a private placement for 24.3 million shares priced at 51¢ apiece — a 4% premium to the 20-day volume-weighted average price of its shares.

That’s enough capital, Allana says, to fully finance its Dallol potash project through to feasibility.

On the other side of the placement is Liberty Metals & Mining Holding (LMM) — a subsidiary of Liberty Mutual Group. Allana described LMM as a “long-term investor” that is committed to helping the company when, and if, it reaches the construction stage.

With its latest purchase, LMM now holds 17% of Allana.

The financing came with the stipulation that LMM could elect one member to Allana’s board and that person has been named as LMM’s president Diana Walters.

“We continue to receive considerable interest from various organizations regarding our Ethiopian potash project and we are free to continue these discussions from a strong position, knowing that we are well-financed through the completion of a bankable feasibility study,” Farhad Abasov, president and CEO of Allana, said in a statement.

Dallol covers 150 sq. km in Ethiopia’s Danakil evaporate basin and has an inferred resource of 70.3 million tonnes of kainitite mineralization grading 61.7% kainite and 30.3 million tonnes of sylvinite resource grading 25.4% sylvite.

Combined the site hosts 105.2 million tonnes with a composite grade of 20.8% potassium chloride.

In Toronto on Dec. 1 — the day the news was released — the company’s shares were up 3¢ to 59¢ on 1.93 million shares traded. Over the last year, its share price has moved between 26¢ and 61¢.