So here’s my take on how financing might proceed. There are two scenarios:

Fact: Allana’s CAPEX is USD 642 Million

1)It has already been widely reported that Afreximbank has given the green light to Allana for an 11 billion BIRR loan. At current exchange rates that comes out to 565 Million USD. According to other reports, African Development Bank (AfDb) will lend Allana another USD 50 million. That’s a total of USD 615 million from the two banks, and that leaves a “shortfall” of $27 million. BUT, Allana already got $25 million from ICL (53 million shares at .47 per share) so that only leaves a shortfall of $2 million which will be covered by a small loan from ICL, if necessary. Also, the $642 CAPEX probably already includes a contingency of 15% cost overruns, so the shortfall of $2 million may not even happen.

2)The second scenario assumes we will get 65% to 70% debt and 30% to 35% equity financing. Since Allana already has $25 million from the ICL deal, they only need $615 million more for CAPEX. That’s $400 million in loans and $215 million in equity financing. Allana has already stated that financing will come in “chunks” and that any equity or share offering will be done at a much higher price (unlike the bozos on SH who think it will be done at 35 cents). So let’s assume they get $200 million now and another $200 million a year from now when the mine construction is well under way. They would have to raise $215 million at that point to finish the construction. I would venture to say that at that point in time the SP would be well north of $1.00 and probably closer to $2.00. Merely the fact that they are in the construction phase will bring in institutional monies which will drive the share price.

Lastly I just want to point out that the IFC / World Bank stated goals are to end extreme poverty by 2030 and boost shared prosperity in developing countries. Part of their vision is to deploy resources where they will achieve the greatest impact. In short, the IFC would love to see a country like Ethiopia succeed and thrive. The image that most people have upon hearing the word Ethiopia is a poor country that has suffered through mass starvation and relied on a worldwide effort to feed it’s people. So I think the IFC is looking at Ethiopia closely as an example of what can be achieved with the proper policies and investment. I’m sure the IFC would love to see Ethiopia go from a country that was in the midst of mass starvation 30 years ago to a country that can not only feed itself but end up exporting food through proper agricultural policies and land management. By investing in Allana Potash, the IFC is looking at the long term benefits of it’s policies. After all, by investing in Allana, they are not investing in a company that produces grommets, nails or even computer parts. They are producing a vital ingredient for increasing crop yields and hence, food production.

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