News Briefs

Compiled from ION and other agencies 
15 Jan 2012

The Canadian junior mining company Allana Potash has decided to sell 25 million shares to a group of buyers that is led by Dundee Securities Limited.Allana Potash (TSE:AAA) said Wednesday that it has signed an agreement for a $20 million bought deal financing, proceeds from which will be used to complete a definitive feasibility study on its Dallol potash project in Ethiopia.
The agreement with a syndicate of underwriters led by Dundee Securities consists of the purchase of 25 million common shares of Allana Potash, at a price of 80 cents each, on a bought deal basis.
The company has also given the underwriters an over-allotment option to increase the size of the offering by up to an additional 3.75 million common shares, or up to $23 million in gross proceeds. The option is exercisable anytime before 30 days after the closing of the bought deal financing, which is expected around February 2, subject to regulatory approvals.
Allana said the new funds will be used to complete the definitive feasibility study for Dallol, as well as for working capital and other corporate purposes.bThe Ethiopia project also hosts shallower deposits, which means the company is not required to drill that deep, allowing for cost savings, Abasov told Proactiveinvestors in December.
The company is planning to start production at Dallol with one million tonnes at the initial stage by 2015, to reach peak production by year 2017. Start of construction at the project is anticipated as early as late 2012, with minimal output expected by the end of 2014. Based on recent positive drilling results in the western portion of its concession and the positive PEA, Dundee Capital Markets assigned the company a “Top Pick” rating and a 12 month price target of C$2.00, while Fraser Mackenzie rated Allana as a “Strong Buy” with a target price of $1.65.

Somaliland President Ahmed Mohamed Mahamoud Silyano has appointed a young officer trained in an Ethiopian military academy to head the intelligence services.The President appointed Mr. Jama Mohamed Botan, a recent graduate from Ethiopia military college with several years of intelligence experience as the head of the organization. It was reported that Somalialand police had intercepted and detained a large truck carrying various light firearms and live ammunition in the Las Geel district last week.

+The Ethiopian ministry of agriculture is against the firm Karuturi’s plan to install thousands of Indian farmers in land it has leased in the Gambela region.The Indian company Karuturi Global Ltd, which has been cultivating roses in Ethiopia since 2004, is now in conflict with the Ministry of Agriculture and Rural Development (MoARD) about one of its expansion projects. This firm, which is headed by Ramakrishna Karuturi,    obtained an allocation of 300,000 hectares (about 740,000 acres) in Bako in the Gambela region, south west of Addis Ababa for an ambitious agricultural project to grow crops like maize and oil palm, involving an investment of over $1 billion. It wants to install Indian farmers on a tenant arrangement on one fifth of the 100,000 hectares of which it has already taken possession. But MoARD is against this scheme.

At the end of 2011, a few hundreds of Indians, presented as operators of agricultural machinery, arrived in Ethiopia and Karuturi asked the Ministry of Labour and Social Affairs (MoLSA) to issue them with work permits. MoLSA then consulted MoARD which opposed the attribution of these work permits, deeming that these Indians were future tenant farmers hired by Karuturi. The latter then stated that these Indians would not be hired as farmers but as technical consultants to put the land into production. Nevertheless, in their negotiations with Karuturi, the MoARD officials demanded the Indian company to send these workers home, because Ethiopian legislation only allows work permits to be issued to foreigners when local manpower is insufficiently qualified for the relevant jobs.