Overview

Allana's potash project is comprised of four potash concessions (Dallol Potash Project) located in Ethiopia's northeastern Danakil Depression totaling approximately 160 square kilometers (Fig. 1). The potash mineralization in the Danakil Depression is well known with small-scale potash mining carried out intermittently from the early 1900's.

In June 2011 Allana released an updated NI 43-101 compliant resource estimate based on the results of 19 drillholes and results of the 2D seismic survey. The resource was prepared by Ercosplan and is comprised of Measured and Indicated Mineral Resources totaling 673M tonnes containing 126M tonnes of KCl and additional Inferred Mineral Resources of 596M tonnes containing 119M tonnes of KCl. Details of the resources are given in Tables 1 and 2. Geological studies in drill core from Allana's work in 2010 and 2011 identified four potash horizons rather than the two horizons identified by Parsons in the 1960s. On the Allana property potash occurs in the Sylvinite, Upper Carnallitite, Lower Carnallitite, and Kainitite Members.


Table 1 Mineral Resources June 2011, by Potash Member

SYLVINITE	TONNAGE (MT)*	KCL (%)	TONNAGE KCL (MT)
Measured + Indicated	97.84	30.04	29.39
Inferred	108.25	31.32	33.87
KAINITITE
Measured + Indicated	284.22	19.76	56.16
Inferred	271.17	20.33	55.05
UPPER CARN.
Measured + Indicated	78.45	18.38	14.42
Inferred	85.61	17.05	14.60
LOWER CARN.
Measured + Indicated	212.64	12.03	25.59
Inferred	130.69	11.68	15.29
TOTAL MEAS+IND	673	18.65	125.56
TOTAL INFERRED	596	19.96	118.90

*MT=Million tonnes

Table 2 Resource Estimate by Category.

CATEGORY	POTASH MEMBER	IN-SITU TONNAGE (MT)*	KCl (%)
MEASURED	Sylvinite	16	29.09
	Upper Carnallitite	14.93	19.88
	Lower Carnallitite	77.96	12
	Kainitite	98.73	19.76
Total		207.62	17.57
INDICATED	Sylvinite	81.84	30.23
	Upper Carnallitite	63.52	18.02
	Lower Carnallitite	134.68	12.05
	Kainitite	185.49	19.76
Total		465. 53	19.13
TOTAL M+I		673.16	18.65
INFERRED	Sylvinite	108.25	31.32
	Upper Carnallitite	85.61	17.05
	Lower Carnallitite	130.69	11.68
	Kainitite	271.17	20.33
Total		595.72	19.96
TOTAL INF.		595.72	19.96

The 2011 resources represent a significant increase over the original Inferred Mineral Resource of 105,200,000 tonnes. The Inferred Minerals Resources are now approximately 596M tonnes and previously there were no Measured or Indicated Resources on the property. Allana's drilling and seismic work has resulted in Measured and Indicated Resources of approximately 673 M tonnes containing 119M tonnes of KCl where as in 2008 there were no Measured and Indicated Resources.

The resources outlined above are located on only 40% of the land area on Allana's property. Additional drilling is underway on the far eastern, unexplored region of the property to increase the resources. In-fill drilling is also underway in the southwestern portion of the property to increase the confidence level in the resources and move material from the Inferred to Indicated category.

In 2010-2011 Allana completed a comprehensive exploration programme which included camp construction, diamond drilling, a 2D seismic survey and water drilling. A modern camp and roads were established in Q1, 2010 and the camp has grown from 25 people to a capacity of 100 people.

Two diamond drill rigs worked from April, 2010 to present (June 2011) completing 19 diamond drill holes totaling approximately 12,000 m with all holes intersecting potash mineralization. Hi-grade potash was intersected at shallow depths, up to 45.9 % KCl over 2.8 metres and as shallow as 100 metres below surface. Drill hole locations are shown in Fig. 2 and significant results are shown in Table 3.


Table 3 Selected drill results, 2010-2011

HOLE	FROM (m)	TO (m)	DRILLED WIDTH (m)*	KCl (%)
DK-10-02	150.10	155.65	5.50	25.80
including	150.10	152.10	2.00	34.80
DK-10-07	136.00	145.20	9.20	23.41
Including	142.00	144.00	2.00	37.75
	214.14	220.80	6.66	22.04
DK-10-08	164.30	168.40	4.10	24.60
including	165.40	167.40	2.00	31.58
	172.70	180.20	7.50	22.08
DK-10-10	257.00	269.40	12.40	23.71
including	263.40	266.20	2.80	37.64
	350.70	357.20	6.50	21.30
DK-11-11	115.85	119.20	3.35	33.77
including	117.25	119.20	1.95	38.85
	125.20	132.50	7.30	17.62
DK-11-13	224.40	227.20	2.80	45.86
	342.00	350.70	8.70	22.91
DK-11-16	125.20	129.20	4.00	29.80
	168.20	173.20	5.00	20.29
DK-11-19	263.50	270.80	7.30	37.74
including	266.40	267.30	0.90	61.26
	547.35	550.40	3.05	30.85
	625.47	632.70	7.23	22.09

In addition to drilling, Allana completed approximately 45 km of 2D seismic surveys over the southern half of the evaporite basin. Interpretation of this information is ongoing and being updated as new drill hole information is generated. A final interpretation is expected in Q2, 2011. Additional exploration activity on the project includes downhole geophysical studies (gamma, density etc.), water drilling and environmental baseline studies.

In addition to the strong and promising technical aspects of the project, the Ethiopian government is strongly supporting mining initiatives in the country. Allana has had advanced discussions with the Minister of Transportation, Minister of Mines and the Minister of Defense regarding infrastructure improvements in the Danakil region which would greatly enhance the economics of the projects. Allana's relationship with the Ethiopian government is very strong and will greatly assist rapid advancement of the project.

Technical Reports

• Preliminary Economic Assessment
• NI43-101 Technical Report

About Ethiopia

Geography, people and political system

Ethiopia, formally known as the Federal Democratic Republic of Ethiopia, is the oldest independent country in Africa. The country's economy is based on agriculture, which accounted for approximately 47% of GDP in 2007, along with various industries (i.e. food processing, beverages, textiles, leather, chemicals, metals processing and cement), and services. Ethiopia's export commodities include coffee, qat, gold, leather products, live animals and oilseeds, with Germany, Saudi Arabia, Djibouti, China, Italy, Japan and the Netherlands listed as the country's primary export partners.

Approximately 83.1 million people live in Ethiopia, of which 2.3 million reside in Addis Ababa, the country's capital, and surrounding areas (United Nations, 2007). Major Ethiopian languages include Amharic, Oromo, Tigrinya and Somali, with Christianity and Islam considered the dominant religions.

Strong Economic Growth and Attractive Investment Climate

A stable economic environment is one reason why foreign investors invest in Ethiopia. The macro-economic environment is stable, experiencing double-digit growth since 2003. Stable exchange rates, government commitment to the private sector, safe and secure working and living environments and the absence of corruption have also contributed to the favourable investment climate. As well, all major economic sectors have been liberalized and remittance from invested capital is permitted out of the country.

Government guarantees as stated in Ethiopia's Investment Code (1991) is provided to foreign investors, in addition to providing constitutional protection from expropriation. Ethiopia is a member of the Multilateral Investment Guarantee Agency (MIGA) and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. The country provides one-stop professional services for foreign investment through the Ethiopian Investment Agency (EIA).

Tax incentives are also provided to foreign investors. All imported investment capital goods (plant machinery, construction materials, etc.) are 100 percent exempted from customs duty charges, including spare parts worth up to 15 percent of the imported investment capital goods. In addition, exemption is provided for import of raw materials needed for the production of export goods. Products and services developed in Ethiopia are also exempt from paying export taxes on goods leaving the country.

Situated in north eastern Africa, Ethiopia covers over 1.13 million square kilometres. Ethiopia has easy access to the major ports of the Horn. Ethiopia is a member of the Common Market for Eastern and Southern Africa (COMESA), which provides it with preferential tariff rates on exports to 33 member countries. Ethiopia's participation in the WTO is currently under negotiation.

Ethiopia's labour force boasts 10,000-plus new university graduates each year. Graduates come from a range of disciplines, which include business, management, economics, accounting, law and engineering. Technical and vocational education and training schools are also attended in Ethiopia. Private universities and colleges are also popular in Addis Ababa and regional cities.

Infrastructure standards are good in Ethiopia, with three international and 18 domestic airports providing flight services to over 45 cities on four continents and domestic flights to 26 destinations. Capital investments in airport infrastructure are on-going, with a modern air cargo terminal and maintenance hanger approaching completion at Bole International Airport in Addis Ababa. Road infrastructure is also a priority, with an expanding road network and international highways linking Ethiopia with bordering countries. Travellers may also connect to regional cities via a 500-mile rail service, which links Addis Ababa to the port of Djibouti.

An established telecommunication network connects cities with smaller towns. International communications are maintained through two satellite earth stations, which provide telephone, Internet and other communication services in Ethiopia.

Ethiopia's power supply consists of hydropower and promising geothermal energy resources, which includes nine hydro-electric power plants. The total electricity generated is less than two percent of the potential power supply; further developing the country's power supply is an area of government focus. Industrial towns are connected to the country's power grid and electricity is relatively affordable. Foreign investors are allowed to participate in power generating projects, however grid transmission and distribution remains the government's domain.