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TORONTO, ONTARIO–(Marketwire – Feb. 6, 2012) – Allana Potash Corp. (TSX:AAA)(OTCQX:ALLRF) (“Allana” or the “Company”) is pleased to announce that it has intersected two zones of strong potash mineralization in both Hole DK-11-29 (“Hole 29”) and Hole DK-11-31 (“Hole 31). Hole 29 is located in the western portion of the concession block and was targeted to test potash mineralization west of Hole 9. Hole 29 intersected a strong Sylvinite Zone at a depth of 124.50 metres which yielded 20.51% KCl over 6.80 metres including a high grade section of 2.5 meters of 33.84% KCl from 124.50 metres to 127.00 metres. The Kainitite Zone was also intersected deeper in the hole at a depth of 227.30 metres and returned 21.35% KCl over 9.00 metres.
Hole 31 is located at the central-west portion of the project area approximately 1200 metres north of Hole 16 and was positioned to target the extension of the Musley deposit south of the historic drilling by Parsons. The Sylvinite Zone returned 18% KCl over 1.70 metres starting at a depth of 73.50 metres and the Kainitite Zone yielded 21.41% KCl over 6.10 metres starting at a depth of 82.30 metres.
Farhad Abasov, President and CEO, commented: “Allana continues to be encouraged by the continuity and strength of potash mineralization in the western portion of the property as exhibited by the results of Holes 29 and 31. This area continues to yield high grade potash in the Sylvinite and Kainitite zones which management believes will allow Allana to upgrade mineral resources from Inferred to Measured and Indicated categories as well as add to the Inferred category. The relatively shallow and high grade nature of the Sylvinite Zone make this area ideal for solution mining with recovery through solar evaporation. Pilot studies for the Feasibility Study are well underway and Allana has made significant progress on road, port and rail infrastructure planning.”
Holes 29 and 31 are part of an in-fill drilling program in the west designed to test the extension of the potash mineralization associated with the historic Musley Deposit and allow upgrading of the resource to the Measured and Indicated mineral resource estimate categories. The results for Holes 29 and 31 are presented in the table below. True widths of the potash zones are estimated to be very similar to drilled widths due to the flat-lying nature of the potash horizons. The zones of potash mineralization are outlined in the following table:
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HOLE ID FROM (m) TO (m) WIDTH (m)(i) KCL (%) ZONE
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DK-11-29 124.50 131.30 6.80 20.51 Sylvinite+UC
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Including 124.50 127.00 2.50 33.84 Sylvinite
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227.30 236.30 9.00 21.35 Kainitite
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Including 227.30 233.50 6.20 23.14 Kainitite
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DK-11-31 73.50 79.20 5.70 15.76 Sylvinite+UC
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Including 73.50 75.20 1.70 18.06 Sylvinite
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82.30 88.40 6.10 21.41 Kainitite
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(i)Drilled width
Hole 29 was drilled vertically and was collared approximately 1000 metres west of Hole 9 (see attached figure). Hole 29 is located in the western part of the concession block 10 and east of the historic Musley Deposit suggesting that potash mineralization at Musley continues and is consistent at least to Hole 9. Previously released Allana drill holes in this region yielded high sylvinite grades (see attached figure) and the results of Hole 29 further support the interpretation of the extension of potash throughout the region.
Hole 31 was drilled vertically and is located approximately 1200 metres north of Hole 16 (see attached figure). The presence of sylvinite and kainitite in this region suggest the continuity of the potash mineralization extends south from the Musley Deposit as defined by the Parsons work and towards Hole 16 and Hole 8.
Exploration drilling has shifted to the far eastern part of the property (Hole 44) as part of the resource expansion drilling program that management has designed to add mineral resources. Samples from holes 32-43 are undergoing analysis or are en route to the laboratory in Saskatoon, Canada.
Feasibility Study Update
In addition to exploration drilling Allana has completed two geotechnical holes to provide large diameter core for rock mechanic testwork. Two holes remain to be completed in the geotechnical drilling program. Pilot evaporation pond testwork, hydrogeological studies and solution mining testwork are underway as the Company’s Feasibility Study advances. Heavy machinery to construct the ponds is on site and engineering work and earthworks are in progress.
Infrastructure Progress
Highway construction by Ethiopian government contractors is actively proceeding to connect the project area with industrial quality, paved roads both to the Company’s project development staging facilities in Mekele and to the southern highway access to ports in Djibouti. Discussions are progressing with government departments and private sector operators regarding expansions of existing port operations and development of new port and rail facilities that would be available with sufficient capacity to serve the project. The Company continues to expect that the infrastructure required to begin and ramp-up operations will be in place concurrently with or in advance of the Company’s project construction period.
Operations expansions in the project area continue to be well-served by immediately available water supplies and on-site electrical generators. Current geotechnical, hydrogeological and environmental survey work is defining locations and capacities for water sources and results will be integrated with the feasibility study.
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 in Ethiopia. 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% KCl, 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. The foregoing mineral resource estimates are as at June 13, 2011 and are set out in the Company’s NI 43-101 compliant Technical Report entitled “Resource Report for the Danakhil Potash Deposit, Afar State/Ethiopia” dated June 24, 2011 filed on SEDAR. Allana has approximately 222,607,557 million shares outstanding and trades on the Toronto Stock Exchange under the symbol “AAA”.
Quality Control and Quality Assurance
Allana employees follow standard operating and quality assurance procedures intended to ensure that all sampling techniques and sample results meet international reporting standards. Procedures for handling core samples begin with securing the potash-bearing HQ-NQ-sized core at the drill site in plastic poly-tubing which is then thermally sealed. Core is placed in plastic core boxes and transported to Allana’s camp for geological logging, geotechnical logging and photographing. Significant intervals are dry cut in half using a specially modified tungsten carbide bladed band-saw. Half core samples are then double bagged and thermally sealed prior to transporting to Addis Ababa by Allana personnel. In this initial phase, halite blanks are randomly inserted into the sample stream at a rate of 1 in 20 and sent for analysis with the core samples. The remaining core is re-sealed in plastic poly-tubing and the core boxes secured at Allana’s exploration camp. Upon arrival in Addis Ababa core samples are stored at Allana’s small warehouse facility and then taken to the Ethiopian Ministry of Mines & Energy where permission is obtained to export the samples. The bagged samples are then carefully packed into boxes and shipped via DHL to the Saskatchewan Research Council in Saskatoon. This sampling procedure was initiated by ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau mbH, Allana’s potash consulting firm, supervised by Allana’s Ethiopian based Project Manager Jason Wilkinson, M.Sc., and periodically reviewed by Allana’s Senior Vice President of Exploration, Peter J. MacLean, Ph.D., P. Geo.
Allana is utilizing SRC’s Potash ICP Analysis package designed for multi-element analysis of potash samples. Upon arrival at SRC Geoanalytical Laboratories, core samples are jaw crushed to 60 % @ -2mm and 100 g sub sample is split out using a riffler and transferred to vials. The subsample is pulverized to 90 % @ -106 microns using a puck and ring grinding mill to create a pulp. The grinding mills are cleaned between groups using Quintus quartz. The pulp is then transferred to a labelled plastic snap top vial. An aliquot of pulp is placed in a test-tube with 15 ml of 30 degrees C DI water. The sample is shaken. The soluble solution is then analyzed by ICP-OES. The method is suitable for the soluble analysis of commercial potash (Sylvite). The soluble solution is then analysed by ICP-MS. In addition, samples are analysed for FeO (wt%), Br and Cl by MS, plus insolubles. SRC Geoanalytical Laboratories has been certified by the Standards Council of Canada (SCC) to conform to the requirements of ISO/IEC 17025:2005 (CAN-P-4E).
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.
Forward-Looking Statement
Except for statements of historical fact relating to the Company, certain information contained herein constitutes “forward-looking information” under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the effect and estimated timeline of the drilling and assay results on the Company, the estimation of mineral reserves and mineral resources; the timing and amount of estimated future exploration; costs of exploration; capital expenditures; success of exploration activities; permitting time lines and permitting, ; government regulation of mining operations; environmental risks; unanticipated reclamation expenses; and title disputes or claims; Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except in accordance with applicable securities laws.
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