Allana Potash Corp.

Allana Potash Corp.

September 21, 2010 12:03 ET

Allana Potash Announces Discovery of Thick Potash Horizon in a Previously Unexplored Region and Potential to Expand Known Resource

TORONTO, ONTARIO--(Marketwire - Sept. 21, 2010) - Allana Potash Corp. (TSX VENTURE:AAA) ("Allana" or the "Company") is pleased to announce that drill hole DK-10-04, located in the centre of the evaporite basin intersected a thick horizon (24.8 metres) of potash mineralization at the depth of 700 metres. Hole DK-10-04 returned 17.9 % KCl over 1.3 metres, and 10.4 metres of 10.5 % KCl, within an interval of 24.8 metres of 8 % KCl.

Farhad Abasov, President and CEO, commented: "We are very pleased to have identified impressive, thick potash mineralization in hole DK-10-04 in an unexplored part of the evaporite basin. This hole has demonstrated that Allana's Potash project has the potential to become a significant potash deposit. Each drill hole from our basin-centre program has the potential to substantially expand our current inferred resource. This area which is almost 100 square km has seen virtually no exploration work in the past and it is encouraging that a thick-potash bearing horizon was intersected in our first drill hole in the area. The zone remains open in all directions and two drills are now exploring the strike extensions south and up-dip extensions southwest of hole 04. We believe that the impressive thickness of the zone intersected in hole 04 indicates strong potential to add significantly to Allana's potash resource and we are aggressively working to delineate the extent of the potash mineralization."

Hole DK-10-04 was collared in the centre of the evaporite basin, approximately 3 km south of the Crescent Carnallite Deposit. The hole was drilled vertically but deviated and shallowed towards the bottom of the hole. The thick potash interval is situated at a down hole depth of 746.4 metres to 748.1 metres and the hole terminated at a depth of 848 metres. The thick potash interval returned 8 % KCl over 32.4 metres (true width approx. 24.8 metres) and has higher grade intervals of 13.5 metres (true width approx.10.4 metres) of 10.5 % KCl and 17.9 % KCl over 1.68 metres (approx. true width of 1.3 metres).

The potash mineralization intersected in DK-10-04 represents significant potential for expansion of Allana's potash resource into the centre of the evaporite basin. Prior to drilling, Allana's property contained a NI 43-101 compliant Inferred Mineral Resource of 105,200,000 tonnes with a composite grade of 20.8 % KCl (see press release of September 17, 2008). This resource was concentrated on the western portion of the property. Hole 04 is in the centre of the evaporite basin, approximately 5 km east of the inferred resource indicating significant potential for expansion. It is important to note that each drill hole in the centre part of the evaporite basin, given the widths encountered in hole 04, has the potential to increase the potash resource significantly. In addition the seismic team is gearing up for the 2 D surface survey and this information will be a valuable tool to target the most prospective areas of mineralization for drill testing. 

Several additional prospective zones of potash mineralization in hole DK-10-04, identified during detailed logging, are currently being sampled and shipped for analysis. Select samples are undergoing XRD analysis to determine the potash and salt mineralogy.

Hole DK-10-05, located approximately 2 km south of DK-10-04, is currently at approximately 548 metres and the target horizon is projected to be intersected at vertical depth of approximately 700 metres. The second drill rig is currently working at DK-10-06, located 2 km west of hole 05 and is at a vertical depth of approximately 36 metres.

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 with NI 43-101-compliant Inferred Mineral Resource of over 100 million tonnes of potash mineralization (Sylvite and Kainite) with a composite grade of 20.8 % KCl (see News Release Sept. 17, 2008). Allana has approximately 118 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).

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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