Allana Potash Corp.

Allana Potash Corp.

April 03, 2012 07:00 ET

Allana Intersects Further Strong Potash Mineralization and Extends Drilling Program

TORONTO, ONTARIO--(Marketwire - April 3, 2012) - Allana Potash Corp. (TSX:AAA)(OTCQX:ALLRF) ("Allana" or the "Company") is pleased to announce that it has intersected strong potash mineralization in Holes DK-11-35, DK-11-36, and DK-11-37 ("Holes 35, 36,and 37") at its Dallol potash project located in Ethiopia (the "Property"). All Holes are located southeast of the Musley Deposit towards the southern boundary of the Property. Holes 35 and 36 intersected two main zones of potash mineralization, sylvinite and kainitite, and Hole 37 intersected kainitite. Hole 35 intersected 5.7 metres of 31.3% KCl in the Sylvinite Zone and included a higher grade interval of 3 metres of 39.1 %. Hole 35 also intersected 7.5 metres of 20.3% KCl in the underlying Kainitite Zone. Hole 36 intersected 4 metres of 24.6% KCl in the Sylvinite Zone and 5.1metres of 20.2% KCl in the Kainitite Zone. Hole 37 intersected only the Kainitite Zone at a depth of 344.5 metres which returned 5.3 metres of 19.7% KCl. Potash mineralization was intersected at relatively shallow depths in Holes 35 and 36 with sylvinite occurring at depths of 142.5 metres and 83 metres respectively.

Farhad Abasov, President and CEO, commented: "Allana continues to be pleased with the continuity and strength of potash mineralization in the western portion of the property as exhibited by the results of the latest drill holes. In-fill drilling continues to outline potash mineralization and management believes this may allow Allana to upgrade mineral resources from Inferred to Measured and Indicated categories as well as add to the Indicated and Inferred mineral resource categories. Due to excellent drill results management has decided to extend the drill program. Management is planning to release an updated 43-101 compliant mineral resource estimate in April and revised updates as needed after further expansion drilling."

Holes 35, 36, and 37 are part of an in-fill drilling program in the west designed to decrease the spacing between drill holes to increase the level of confidence that potash mineralization is continuous. Management remains confident that this may allow upgrading of the current mineral resource estimate to the Measured and Indicated Mineral Resource categories and Hole 36 will also allow Allana to add potash resource as it occurs in an area previously not drilled. The results for Holes 35, 36, and 37 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:

HOLE FROM (m) TO(m) WIDTH*(m) KCl (%) ZONE
DK-11-35 142.50 148.20 5.70 31.29 Syl
Including 143.50 146.52 3.02 39.10 Syl
153.38 160.92 7.54 20.33 Kain
DK-11-36 82.99 86.95 3.96 24.63 Syl
89.89 95.02 5.13 20.19 Kain
DK-11-37 344.54 349.82 5.28 19.73 Kain
* Drilled width

Hole 35 was drilled vertically and was collared approximately 500 metres northeast of Hole 16 and between holes 8 and 24 (see attached Figure 1 set out below). Hole 35 is located in the southwestern part of the concession block and indicates that potash mineralization extends from Hole 26 to Hole 8. Previously released Allana drill holes in this region yielded strong sylvinite grades (see attached Figure 1 set out below) and the results of Hole 35 further support the interpretation of the extension of potash throughout the region.

Hole 36 was drilled vertically and is located approximately 1,000 metres southwest of Hole 11 (see attached figure). Hole 36 is the southernmost hole on Allana's exploration license and suggests that potash mineralization extends to southern boundary of the concession.

Hole 37 was drilled vertically and is approximately 1,000 metres east of Hole 34. Hole 37 intersected primarily kainitite as volcanic tuffs and altered salt were present in the interpreted sylvinite zone suggesting minor dissolution of potash mineralization by localized faulting.

Activity Update

Exploration drilling continues in the far eastern part of the property (Hole 47) and in the northern part of the property (Hole 48) as part of the program to expand the mineral resources. Samples from Holes 38 through 46 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. Allana has recently initiated a ground geophysical survey over its property to identify aquifers in the alluvial fans. Mobilization of drilling equipment is ongoing and water well drilling is expected to commence shortly. Procurement of equipment for installation of pilot solution wells is well underway. Additional photographs of evaporation pond construction are available to be seen on the company's web-site.

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 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 IngenieurgesellschaftGeotechnik und BergbaumbH, 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.

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