TORONTO (miningweekly.com) – The TSX-listed shares of Ethiopia-focused project developer Allana Potash on Monday jumped almost 15% after authorities approved its environmental-, social- and health-impact assessment (ESHIA) last week, which was seen as an important milestone on the road to being granted a mining licence for its flagship Danakil project.
“This approval marks the culmination of numerous environmental and social studies, extensive stakeholder cooperation and reflects the strong commitment that Allana has to Ethiopia and the Ministry has to foreign investment,” CEO Farhad Abasov said.
Allana said the groundwork for the ESHIA work was alid about two years ago when the International Finance Corporation (IFC) acquired about 4% of the company through a private placement financing deal. Since then, Allana and the IFC had worked closely to implement management and action plans and to meet the IFC performance standards.
The ESHIA was approved on condition that several action plans be completed, of which most were identified in the ESHIA and already put in place. These included monitoring groundwater in the region, the resettlement of two small villages and the company’s commitment to community development.
Allana said the Ministry of Mines and Energy continued to review its application for the mining licence and that recent meetings in Ethiopia indicated significant progress had been made in evaluating the company's feasibility study.
The company expected the mining licence to be granted “in the next few months”.
The Danakil project has a National Instrument 43-101-compliant measured and indicated mineral resources totalling 1.3-billion tonnes containing 251-million tonnes of potassium chloride (KCl) and additional inferred resources of 588-million tonnes containing 109-milion tonnes of KCl.
The company planned to spend $642-million on the project.
The Danakil resource is located next to that of Canada-based Ethiopian Potash Corp. BHP Billiton also had a large land-holding in the Danakil depression, but made its exit in July 2012, after saying its potash project did not meet its investment criteria.
Allana’s TSX-listed stock traded C$0.08 higher at C$0.64 apiece on Monday, being the most traded stock of the day.