An independent preliminary economic assessment of Allana Potash gave the assent an after-tax net present value of 1.85 billion US dollars and a 36.8% internal rate of return.
The PEA stated that a one million ton per annum mine at the Dankil project will cost 796 million US dollars to build.
The capital cost figure makes the projects the lowest cost and possibly the highest return potash project in the world according to Farhad Abasov CEO of Allana.Allana had announced earlier last week that its Danakil project will cost 796 million US dollars including all infrastructural, equipment and transport costs.
"The PEA's extremely positive results give Allana great confidence in advancing its feasibility study, which has been underway since August," Abasov said in a statement.
Total operational costs including production and transportation were in line with the figures established by the PEA at 90.54 US dollars per ton including transportation to port Djibouti.
The PEA also concluded that a solution mining operation would be more profitable than conventional potash mining.
The PEA enables Allana to move forward in planning its project finances and continuing discussions with potential partners said Abasov.
Allana expects to begin production in 2014 according to Abasov.
Source: Canadian Press/Mining Weekly