Fertilizer Markets and Finance

TORONTO, ONTARIO—(Marketwire - Feb. 20, 2013) - Ethiopian Potash Corp. (the “Company” or “EPC”) (TSX VENTURE:FED) is pleased to announce that Danakil Potash Corporation (“Danakil Corp.”) has agreed to terms for the advance of US$1.5 million to G and B Central African Resources Ltd. (“G&B”), the owner of the Danakil Property, to be used towards immediate exploration and the continued development of the Danakil Property. Funds will initially be applied to re-establishing operations at site and completion of work related to the upgrading of the existing resource estimate in the South West corner of the property.

Danakil Corp. has agreed to advance US$1.5 million to G&B by way of a loan (the “Loan”), which will be guaranteed by G&B’s sole shareholder, ZRH Nominees (0105) Ltd. (“ZRH”), and secured by a pledge of all of the shares of G&B owned by ZRH. Advance of the Loan is expected to occur in tranches over a 30-day period, with the initial advance of US$200,000 to be made immediately following signing.

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Allana Potash Corp, a Canadian Company and  Ethiopian Agricultural Transformation Agency signed a memorandum of understanding to introduce and promote the use potash fertilizer in Ethiopian sector. The agreement which last for three years and worth around USD 800,000 is geared towards facilitating trails and popularization of potash fertilizers in Ethiopia.

On the occasion, Khalid Bomba, CEO of the Ethiopian Agricultural Transformation Agency signified the importance of the agreement for small holder farmers saying, “providing and popularizing a full range of soil nutrients to Ethiopia’s small-holder farmers is essential to helping them realize the full production and profit potential from their farming lands.”

Read more at 2Merkato.com 

TORONTO, ONTARIO—(Marketwire - Feb. 12, 2013) - Ethiopian Potash Corp. (the “Company” or “EPC”) (TSX VENTURE:FED) is pleased to announce an updated compilation of drilling results from a drill programme completed in February 2011, from the Danakil Projects in Ethiopia. No further drilling has taken place on the property.

The Company has drilled 7,781m in 32 holes located along the Western margin of the Danakil Basin covering an area measuring approximately 15 kilometres by 5 kilometres, situated north of the property boundary and south of the village of Bada (see attached Schedule “A”).

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Allana Potash Corp. (AAA.TO:Quote) said Tuesday that it has entered into a definitive agreement to acquire all of the issued and outstanding common shares of Nova-Ethio Potash Corporation.

Nova-Ethio Potash Corporation is a private company which indirectly holds a 100 percent interest in a strategically located potash license adjacent to Allana’s potash project in the Danakhil Depression in Ethiopia.

Allana noted that the acquisition will be effected through the merger of one of its wholly-owned subsidiary and Nova, in accordance with the laws of the British Virgin Islands.

As per the merger agreement, Allana shall issue 12,716,667 common shares to the shareholders of Nova in exchange for all of the common shares of Nova. It will also issue an additional 35,610,000 common shares to be held in escrow, which shall be released to Nova shareholders in accordance with certain escrow release conditions.

Allana noted that the transaction is expected to occur on or before October 17, 2012, subject to the approval by Nova shareholders and Nova delivering a balance sheet indicating no less than $1.3 million in cash and cash equivalents at the time of closing.

The transaction is also subject to Nova shareholder entering into an escrow agreement with Allana in respect of the Allan Escrowed Shares, and the confirmation from Nova to Allana, in writing that the license underlying the Nova Property has been renewed with the Ethiopian Ministry of Mines.

Ethiopian Potash Corp. (the “Company” or “EPC”) (TSX VENTURE:FED)(TSX VENTURE:FED.WT) announces that it has arranged to settle outstanding debts owed to certain arms-length service providers by issuing an aggregate of 14,687,163 common shares at a deemed price of $0.15 per common share. Such arrangements remain subject to TSXV approval. The common shares that will be issued in connection with this debt settlement will be subject to a hold period of four months and one day from issuance.

About Ethiopian Potash Corp.

Ethiopian Potash Corp. (TSX VENTURE:FED)(TSX VENTURE:FED.WT) is a Canadian company based in Toronto, Ontario and Addis Ababa, Ethiopia.

On behalf of the Board of Directors

George Roach, CEO & Director

Ethiopia has made more than 4 million hectares (9.9 million acres) of “fertile and unutilized” land available for agriculture companies that meet government requirements, Prime Minister Meles Zenawi said.

About 300,000 hectares has been leased for commercial farming so far, he said at an Ethiopian investment forum today in the capital, Addis Ababa.

“There has been a significant flow into large-scale state- type commercial farming in our country and we seek even more in the future,” he said

Investors in Ethiopian land include Bangalore-based Karuturi Global Ltd. (KARG), the world’s largest rose grower, which is developing 100,000 hectares in Ethiopia’s southwestern Gambella region. The farm will have its first harvest in October, Managing Director Sai Ramakrishna Karuturi told the forum today.

Horizon Plantations Ethiopia, which is majority owned by Saudi billionaire Mohamed al-Amoudi, leased a 20,000-hectare plot in the western Benishangul-Gumuz region in March to grow groundnuts to produce cooking oil.

Read more at Bloomberg

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.

Read more at Mining.com

In 2009 Yara entered into an agreement with two partners to participate with 16.67% ownership in Ethiopotash. The partners were XLR with 57.33% ownership and management of the company, and Seftec with 26% ownership. Yara has now agreed to increase its ownership to 51% and take over management of the company, while XLR will retain a 49% ownership.

Ethiopotash is developing a potash resource in Dallol in the Danakil Depression of Ethiopia, based on the mining and exploration permits held by the company.

Drilling activity started at site in 2010, and most drilling and drilling related activities have now been completed. The project development phase will be finalized with a Definitive Bankable Feasibility study which is expected to be completed in mid 2013. This study will be the basis for a decision on whether to proceed with project execution and realization, with production start-up 2-3 years thereafter.

Estimated capacity for the Dallol project is 1-1.5 million tons potash per year, with resources of more than 30 years mining. 

TSX-V-listed Ethiopian Potash Corp (EPC) on Thursday announced the appointment of Bruce Cumming and CFO Michael Galloro as directors, following the resignation of Paul DesLauriers, Robert Metcalfe and Binh Vufrom the board.

Acting CEO and director George Roach said the board changes were part of the process of reorganisation required to facilitate the early exercise of EPC’s option to acquire G&B Central African Resources, the owner of prospective properties in the Danakil desert, Ethiopia.

EPC anticipated the successful conclusion of the negotiations in the near future.

“In addition, these changes are an important requirement in the ongoing negotiations intended to secure additional finance through a strategic investor,” Roach said.

The appointment of Cumming to the board should be seen as further confirmation of the commitment of G&B to EPC and the exercise of the option. Cumming would also be evaluating the exploration undertaken to date and EPC anticipated the release of the results of this in early May.

Simultaneously, EPC would develop an exploration programme to be implemented in the central and eastern regions of the licences, which are known to have mineralisation at shallow depth, identified in recent and historic drilling.

“EPC anticipates the appointment of a new CEO and further restructuring of the board as the negotiations progress,” Roach added.

(“Allana” or the “Company”) is pleased to announce that it has intersected two zones of strong potash mineralization in Holes DK-11-32, DK-11-33, and DK-11-34 (“Holes 32, 33,and 34″). All Holes are located southeast of the Musley Deposit, an area targeted to test the extension of the Sylvinite Zone into a gap in the previous drilling pattern.

Read more at Mining.com

Canada’s Allana Potash Corp said lenders have indicated their interest in pumping in more than C$600 million for the construction of its Ethiopia potash project, exceeding the amount of debt financing it was originally contemplating.

The potash explorer said initial discussions with various prospective lenders “have been very positive” and that it expects to receive financial commitments for the project by late 2012, with construction slated to start in early 2013.

Last October, Allana Potash appointed investment bank BNP Paribas as financial adviser for the debt financing.

In June, the company said potassium chloride reserves at Ethiopia’s Danakil Depression, where the Dallol project is currently underway, had grown to 673 million tonnes of measured and indicated resources.

About 90 percent of potash produced is used as fertilizer, known as potassium chloride.

Ethiopian Potash Corp. was downgraded to sell from under review at Mackie Research as a result of the company’s cash position, its burn rate, and the option agreement under which it can acquire the rights to the Danakil property.

As of Sept. 30, 2011, Ethiopian Potash had $4.1-million in cash on its balance sheet. However, Mackie analyst Jaret Anderson believes that number is now much lower, thereby posing a risk to the company’s ability to continue drilling and pursuing other development activities at an appropriate pace.

While management did not disclose the company’s current burn rate, given that it has two rigs in operation and considering the burn rate of others operating in the area, Mr. Anderson believes it is at least $500,000 per month.

“While a company can always ratchet down activity in order to preserve cash, we are uncomfortable with the burn rate given the low cash position,” he said in a research note.

The analyst said he understands that there are eight years left on Ethiopian Potash’s 10-year option to acquire the Danakil property, which would require the purchase of all the shares of G&B Central African Resources Ltd.

 Ethiopian Potash Corp. (the “Company” or “EPC”) CA:FED -5.88% is pleased to announce the appointment of Binh Vu as a director of the Company, effective February 27, 2012.

The Company also announces the resignation of Sanjay Joshi from the board of directors (the “Board”), effective February 27, 2012. The Company thanks Mr. Joshi for his service to EPC since listing.

Commenting on the Board changes, President & CEO and Director of the Company, David Wahl said, “Now that the company is operationally moving through its development milestones, Sanjay Joshi is stepping aside to allow for individuals with Africa and resource experience to join the board of EPC. Binh Vu, who has worked in Africa and Europe for various resource companies will fill his place on the board and be a true asset to the company at this stage of its maturity”.

Read more at The Market Watch