Allana Potash Corp.

Allana Potash Corp.

June 12, 2012 09:47 ET

Allana Continues to Intersect Strong Potash Mineralization

TORONTO, ONTARIO--(Marketwire - June 12, 2012) - Allana Potash Corp. (TSX:AAA)(OTCQX:ALLRF) ("Allana" or the "Company") is pleased to announce that it continues to intersect strong potash mineralization throughout its Dallol potash project located in Ethiopia (the "Property"). Holes DK-11-38, 39, 40 and 41 as well as Holes DK-12-43, 44, 45, 46, 47, 48 49 (holes 38, 39, 40, 41, 43, 44, 45, 46, 47, 48, 49) are located throughout the Property. With the exception of Hole 48, these holes are primarily in-fill holes. Hole 48 is located outside the current NI 43-101 compliant mineral resource estimate and returned 3 metres of 28% of potassium chloride ("KCl") in the Sylvinite Zone and 6 metres of Kainitite Zone yielding 21.01% KCl. Allana's drilling work is focused on supporting the completion of the project feasibility study and related estimates of reserves within the feasibility study. The Company anticipates that work on the feasibility study will be completed by Q4 2012. Analytical results up to and including Hole 45 were utilized in Allana's most recent mineral resource estimate (see press release dated April 30, 2012).

Farhad Abasov, President and CEO, commented: "Allana continues to be pleased with the continuity and strength of potash mineralization in the eastern and western portions of the property, as exhibited by the results of the latest drill holes. The successful in-fill and expansion drilling programs continue to outline potash mineralization and management believes this may allow Allana to continue to upgrade mineral resources from Inferred to Measured and Indicated categories in adding to all mineral resource categories. The results from Hole 48 are particularly encouraging outlining potash mineralization further north than any of the Company's previous drilling. Additional drilling is underway in this region to further delineate potash mineralization on the northernmost part of the property and to fill in gaps from previous programs."

Holes 38, 39, 40, 41, 42, and 43 are part of an in-fill drilling program in the southwest designed to decrease the spacing between drill holes to increase the level of confidence that potash mineralization is continuous. All holes, with the exception of Hole 42, intersected potash mineralization, highlighted by Hole 41 which returned 5.44 metres of Sylvinite Zone yielding 33.24% KCl including a 1.28 metres section of 49.86% KCl (see Table 1, Figure 1). Hole 42 did not intersect potash as it was located directly on a narrow fault. Also of note is Hole 43, the easternmost hole in the southwest, which returned 2.9 metres of Sylvinite with 36.89% KCl and 6.01 metres of Kainitite. Potash mineralization remains open to the east and additional exploration drilling will be undertaken to define the mineral resource in the next quarter.

The results for Holes 38-49, 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:

Table 1 Summary of analytical results, Holes 38-49.
DK-11-38 396.37 403.33 6.96 9.00 KAIN
including 396.37 397.75 1.38 12.63 KAIN
DK-11-39 470.10 473.20 3.10 33.85 SYL
including 470.10 472.20 2.10 41.60 SYL
611.00 619.30 8.30 25.32 KAIN
DK-11-40 190.87 192.00 1.13 16.62 UC
193.00 206.30 13.10 21.22 KAIN
DK-11-41 352.47 357.91 5.44 33.24 SYL
including 355.77 357.05 1.28 49.86 SYL
361.22 366.92 5.70 21.79 KAIN
DK-12-43 503.40 506.30 2.90 36.89 SYL
586.60 592.61 6.01 23.68 KAIN
DK-12-44 281.30 289.00 7.70 23.13 UC
DK-12-45 215.30 225.80 10.50 16.51 UC
276.00 282.50 6.50 22.59 KAIN
DK-12-46 345.48 350.58 5.10 25.99 KAIN
DK-12-47 490.59 494.71 4.12 22.52 KAIN
DK-12-48 326.20 329.20 3.00 28.02 SYL
419.20 425.20 6.00 21.01 KAIN
DK-12-49 351.97 384.10 32.13 19.96 UC
400.00 405.75 5.75 22.01 KAIN
*Drilled width

Holes 44, 45, 46, 47 and 49 are located in the far eastern portion of the Allana Property and were targeted to better define potash mineralization intersected in Holes 20 and 23. All holes were drilled vertically and intersected potash mineralization (see Table 1). Similar to Holes 20 and 23, no Sylvinite Zone was intersected; however strong Kainitite was intersected in all holes and in Hole 49 a very thick zone of Upper Carnallitite of 32.13 metres yielded 19.86% KCl.

Hole 48 was drilled vertically and is located approximately 2000 metres north of Hole 9 and represents the northernmost hole drilled by the Company to date indicating the potash mineralization is open to the north. This is significant as no mineral resource was calculated for this area due to the lack of drill hole information. Since the completion of Hole 48, holes 50, 52, 53 and 55 have been drilled between holes 9 and 48. Exploration drilling will continue north of Hole 48 to expand the potash resources.

Activity Update

Exploration drilling continues in the northwestern part of the property (Hole 58) as part of the ongoing program to expand the mineral resources. Samples from Holes 50-57 are undergoing analysis or are en route to the laboratory in Saskatoon, Canada.

Technical studies in support of the Feasibility Study are in progress including solution mining cavern preparation, solar evaporation pond construction, environmental baseline studies, and hydrogeological studies.

Brine is now in the evaporation ponds and salt formation is underway. Salt precipitation is in progress and it is estimated sufficient sample for processing evaluation will be available in one month. Additional photographs of brine evaporation in the test ponds are available on the company's web-site.

In addition, the Company is pleased to report that water well drilling has commenced and pre-drilling of six large diameter holes targeting aquifers in the alluvial fans has been completed. These holes have been cased and cemented in preparation for deepening by a large diameter core drilling rig and installation of water monitoring equipment.

Environmental Resource Management ("ERM") has completed a Scoping Report as part of the ongoing ESIA. In addition, ERM has held numerous stakeholder meetings throughout the region and flora and faunal studies are well-advanced.

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 171.36 Million Tonnes of 30.9% KCl; inferred Sylvinite resource of 46.62 million tonnes grading 30.25% KCl; measured and indicated Kainitite resources of 701.55 million tonnes at 20.26% KCl, inferred Kainitite resource of 373.71 million tonnes of 20.35% KCl; measured and indicated Upper Carnallitite resources of 78.5 million tonnes grading 18.4% KCl, inferred Upper Carnallitite resource of 155.53 million tonnes of 16.95% KCl; measured and indicated Lower Carnallitite resources of 269.10 million tonnes of 10.86% KCl, inferred Lower Carnallitite resource of 130.7 million tonnes grading 11.7% KCl. The foregoing mineral resource estimates are as at April 30, 2012. Allana has approximately 228.5 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°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; the anticipated timing with respect to the preparation of the Feasibility Study; 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. The reader is cautioned that quantity and grade of the results from Holes 35, 36 and 37 are conceptual in nature and that there is insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource.

To view Figure 1, please visit the following link:

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