Allana's optimistic Danakil Depression resource estimate lifts stock 9.8%
Allana Potash (TSX:AAA) surged 9.8% on Tuesday on higher than usual trading volumes, after upping the resource at its Danakhil project by 90%.
Allana’s Ethiopian project has the backing of the World Bank and most the latest announcement comes on the heels of a string of discoveries at its land position in Dalol, part of the Danakil Depression.
By the close the developer was trading at $0.56 on the Toronto big board, its highest for the day. The mining sector was generally positive on the day with the TSX S&P Global Mining index up 0.77%
Around 1.65 million shares in the $127 million company changed hands compared to the daily average of 900,000. The counter is still showing steep losses for 2012 – it is down 32% year to date.
After the bell on Monday the Canadian company said it National Instrument 43-101 compliant mineral resource estimate showed a measured and indicated mineral resource of 1,297,529,000 tonnes with an average grade of 19.32% KCl, compared with the previous estimate of 673 Million tonnes at an average grade 18.65% KCl in June 2011.
"We are excited to see the large increase in total resources on the project and the significant conversion of inferred mineral resources into measured and indicated mineral resources. The exploration drill campaign over the past 11 months accomplished its twin goals of converting inferred mineral resources to measured and indicated mineral resources and adding significantly to the total project resource base. An over 90% increase in the measured and indicated mineral resource estimate supports management's belief that the Danakhil Depression has the potential to become a world class potash basin," said Allana President and CEO Farhad Abasov in a statement.
Picture of naturally occurring hot springs on Allana’s potash property that can reach temperatures of 120 degrees Celcius on surface, courtesy of the company.