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Jun 20, 2011
ALLANA POTASH ANNOUNCES NEW NI 43-101 COMPLIANT MEASURED AND INDICATED MINERAL RESOURCES OF 673 MILLION TONNES AND AN INCREASE IN INFERRED MINERAL RESOURCES TO 596 MILLION TONNES
  • NEW MEASURED AND INDICATED MINERAL RESOURCES OF 673 MILLION TONNES WITH CONTAINED KCl OF 126 MILLION TONNES
  • INCREASE IN INFERRED MINERAL RESOURCES TO 596 MILLION TONNES WITH CONTAINED KCl OF 119 MILLION TONNES
  • RESOURCE ESTIMATE BASED ON ONLY 40% OF ALLANA'S LICENSED LAND AREA, EXCELLENT POTENTIAL FOR EXPANSION
  • LARGE KAINITITE RESOURCE POINTS TO POTENTIAL SOP PRODUCTION
  • RESOURCE BASED ON FOUR POTASH BEARING BEDS: SYLVINITE, UPPER AND LOWER CARNALLITITE AND KAINITITE


Toronto, Ontario, June 20, 2011 - Allana Potash Corp. (TSX-V: AAA) (OTCQX: ALLRF)("Allana" or the "Company") is pleased to announce that it has received an updated National Instrument 43-101 ("NI 43-101") compliant Mineral Resource Estimate from ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergau ("ERCOSPLAN") on its Danakhil Potash Project in Ethiopia. The updated mineral resource estimate includes all four potash bearing beds (sylvinite, upper and lower carnallite and kainitite) in the project and is comprised of Measured and Indicated Mineral Resources totaling 673 Million tonnes with an average grade 18.65% KCl (composite of all four potash beds) and Inferred Mineral Resources totaling 596 Million tonnes with an average grade of 19.96% KCl (composite of all four potash beds). A summary of the resources is presented in Table 1.

Farhad Abasov, President and CEO of Allana commented "We are very pleased with the dramatic increase in the potash resources at the Company's Dallol Project in Ethiopia which greatly exceeds management's initial expectations. The resource has grown from just over 100 Million tonnes of inferred mineral resources to 673 million tonnes of measured and indicated mineral resources and over 596 million tonnes of inferred mineral resources with good potential to expand on this resource. As stated by ERCOSPLAN, this resource estimate is based on only 40% of Allana's licensed land area in the evaporite basin and we will continue to drill throughout the year to expand the potash resource. In particular, Allana is very encouraged by the significant Measured and Indicated resources which total approximately 673 Million tonnes of mineralized material containing about 126 Million tonnes of KCl. This substantial resource will enable Allana not only to proceed with a Feasibility Study this summer, but also realistically consider a larger production facility after the initial production line. With substantial kainitite resource Allana will have potential for significant premium product (SOP) production too. The relative shallow depth of the resource in the western part of the license area will also enable us to seriously study the potential of open pit mining."

The board and management would like to congratulate Allana's Ethiopian exploration team headed by Peter MacLean, Nejib Abba Biya and Jason Wilkinson for the excellent job they have done on the project. Allana commenced our exploration program in April 2010, in aggregate drilled over 12,000 meters and completed 2D seismic and downhole geophysical programs.

Allana also congratulates the government and people of Ethiopia on this major milestone which positions the country as a potential major potash producer with a significant impact on the Ethiopian economy. The management intends to continue advancing our potash project towards production and looks forward to working with our numerous stakeholders on the next phase of Allana's development and we would like to thank them for their contributions and support thus far.

Table 1 Summary of Measured, Indicated and Inferred Resources

CATEGORY POTASH MEMBER IN-SITU TONNAGE (MT)* KCl (%)
       
MEASURED Sylvinite 16.00 29.09
  Upper Carnallitite 14.93 19.88
  Lower Carnallitite 77.96 12.00
  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

Cautionary Notes:
1. MT=Million Tonnes, tonnage is for in-situ resource with no discount for recovery as mining method is to be determined. Potash deposits have been mined by underground, open pit and solution mining methods however no studies have been completed to date to determine the optimal mining method for the Danakhil Deposit.
2. The numbers for tonnage, average KCl per cent are rounded figures
3. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Due to the uncertainty of measured, indicated or inferred mineral resources, these mineral resources may never be upgraded to proven and probable mineral reserves
4. Average densities used in resource calculations are 2.14, 1.81, 1.91, and 2.10 for the Sylvinite, UC, LC and Kainitite members respectively

The Measured, Indicated and Inferred Mineral Resource estimate was reviewed and optimized by Dr. Sebastiaan van de Klauw, Ph.D., EurGeol., who is a "qualified person" as such term is defined in National Instrument 43-101 and has supervised the preparation of the technical information and data included in this news release. The mineral resource estimates were generated using parameters set out below.



The resource estimate is based on drilling conducted by Allana in 2010-2011 (23 holes) and the historic drill holes completed by the Ralph M. Parsons Company (Parsons) in the 1950s and 1960s. Interpretation of the Allana data and drill core at the project by ERCOSPLAN has refined the potash stratigraphy originally defined by Parsons. The top of the potash sequence is identified by the Sylvinite Member, followed by the Upper Carnallitite Member (UC), the Bischofitite Member, the Lower Carnallitite Member (LC) and the Kainitite Member.

To be included in the resource estimate, drill hole intersections must meet the following criteria:

  • Sylvinite Member > 20% KCl, minimum width of 2 metres
  • UC Member > 40% Carnallite, minimum width of 2 metres
  • LC Member > 60% Carnallite+Kieserite, minimum width of 5 metres
  • Kainitite Member > 50% Kainite, minimum width of 5 metres

Allana has drilled 23 holes, all of which provided geological information for the report, but several holes (14, 18, 4) did not meet these criteria and consequently were not included in the resource.

The resource estimates were calculated by extrapolating grades and widths using the Radius of Influence (ROI) from each Allana drill hole and historical drill holes based on industry standards for potash exploration. This process starts with the interpretation of the Radius of Influence of each exploration hole. The following ROIs were used for the calculation of the area of mineralized material in each of the resource categories:

  • Sylvinite, Upper Carnallitite Members
    • Measured Resource 250 metres
    • Indicated Resource 750 metres
    • Inferred Resource 1500 metres
  • Lower Carnallitite, Kainitite Members
    • Measured Resource 500 metres
    • Indicated Resource 1000 metres
    • Inferred Resource 2000 metres

For historical drill holes a ROI of 750 metres was used for Inferred Resources in the different members.

The difference in ROI between the two groups is directly related to the geology of the evaporite mineralization. The Sylvinite and UC members are interpreted to be secondary deposits formed from carnallite and therefore not as uniform as a primary evaporite deposit. The Kainitite and LC members are formed by primary evaporite deposition and are relatively consistent throughout the Allana property. Due to this consistency there is a greater degree of confidence in the lateral extent of the mineralization of the Kainitite and LC members and the ROI can be increased.

ERCOSPLAN indicates that the current resource is based on only 40% of the licensed land area and believes there is excellent potential to expand the resource and to upgrade Indicated and Inferred resources into Measured and Indicated categories. ERCOSPLAN has recommended a program of infill drilling in certain parts of the southwestern portion of the property as well as additional 2D seismic surveys to increase confidence levels in the resources. Some of this in-fill drilling was previously planned by Allana and recently completed roads now provide access and drilling is underway. Allana is also planning to continue drilling in the eastern portion of the property and additional roads are under construction to provide access in this area.

A copy of the NI 43-101 Technical Report will be available under the Company's profile on SEDAR (www.sedar.com) within 45 days of this news release. The mineral resources were estimated by Dr. Henry Rauche, Ph.D., EurGeol, Managing Director, CEO ERCOSPLAN and Dr. Sebastiaan van de Klauw, Ph.D., EurGeol., Consulting Geologist, ERCOSPLAN. Dr. van de Klauw is the Qualified Person for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators, and has reviewed and verified the data disclosed in this news release.

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 Mineral Resources of 207.6 Million Tonnes of Sylvinite, Kainitite, Upper Carnallite and Lower Carnallite with an average grade of 17.6% KCl; Indicated Resources of 465.5 Million Tonnes of Sylvinite, Kainitite, Upper Carnallite and Lower Carnallite with an average grade of 19.1% KCl; and Inferred Mineral Resources of 595.7 Million Tonnes of Sylvinite, Kainitite, Upper Carnallite and Lower Carnallite with an average grade of 20.0% KCl. Allana has approximately 193.2 million shares outstanding and trades on the TSX-Venture 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°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). Duplicate analysis of pulp samples have been made from 89 samples in an independent certified laboratory in Germany. A comparison of the results show good correlation for KCl in samples from the different members, but suggest that SRC has problems getting consistent results for Magnesium, Calcium, and insolubles for samples rich in sulfate minerals from the Lower Carnallitite and Kainitite Members.

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.

For Further Information, please contact:
Christian Scovenna
Investor Cubed
647 258 3311
or
info@investor3.ca

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE
 

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