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Allana Potash Corp. (TSX VENTURE:AAA) said the mineral exploration licences for the three mineral concessions in Ethiopia’s northeastern Danakil Depression, totaling approximately 150 square kilometers, have been transferred to Allana effective July 22, 2011.
Allana agreed to acquire the properties pursuant to an option agreement in September 2008, as amended, entered into with SB Management Inc., Forbes & Manhattan Inc. and Ethio-Gibe Canada Mining PLC. Pursuant to the agreement, Allana had the option to acquire the Dallol Project in consideration of an aggregate of $2.5 million in cash payments over 3 years and the issuance of 4 million shares, which have now been paid/issued in full. SB Management Inc., Forbes & Manhattan, Inc. and Ethio-Gibe have retained a 3.0% net smelter return royalty on the property (the “NSR”). The company has the option, exercisable at any time, to buyout 50% of the NSR (thereby reducing the NSR to 1.5%) for $5,000,000 (see news releases dated September 17, 2008 and February 9, 2009).
Farhad Abasov, President and CEO, commented: “We are very pleased with the transfer of title having been completed, particularly in light of the recently announced dramatic increase in the potash resources at the Dallol Project (see news release dated June 20, 2011). Now that title has been formally transferred, Allana can focus on proceeding with its Feasibility Study and continuing to advance the Dallol Project towards production.”
At the time of entering into the Agreement, both Forbes & Manhattan Inc. and SB Management Inc. were non-arms-length parties to the transaction as a result of an insider of each, being a 10% shareholder of Allana. This shareholding has been subsequently diluted and both Forbes & Manhattan Inc. and SB Management Inc. are no longer non-arms length to Allana. During 2009, the president of Ethio-Gibe became an officer of Allana.
About Allana Potash Corp.
Allana is a publicly traded corporation with a focus on the acquisition and development of potash assets internationally with its major focus on a previously explored potash property inEthiopia. Allana has secured financial support from two significant strategic investors: IFC, a member of World Bank Group, and Liberty Metals and Mining, a member of Liberty Mutual Group. Allana has Measured and Indicated Sylvinite Resources of 97.8 million Tonnes of 30.0% KCl; Inferred Sylvinite Resource of 108.3 million tonnes grading 31.3% KCl; Measured and Indicated Kainitite Resources of 284.2 million tonnes at 19.8%, Inferred Kainitite Resource of 271.2 million tonnes of 20.3% KCl; Measured and Indicated Upper Carnallitite Resources of 78.5 million tonnes grading 18.4% KCl, Inferred Upper Carnallitite Resource of 85.6 million tonnes of 17.1% KCl; Measured and Indicated Lower Carnallitite Resources of 212.6 million tonnes of 12.0% KCl, Inferred Lower Carnallitite Resource of 130.7 million tonnes grading 11.7% KCl. Allana has approximately 196.5 million shares outstanding and trades on the TSX-Venture Exchange under the symbol “AAA”.
Peter J. MacLean, Ph.D., P. Geo., Allana’s Senior VP Exploration, is a Qualified Person as defined under National Instrument 43-101 and has reviewed and approved the technical information presented in this release.
