Allana Potash Corp.

Allana Potash Corp.

July 13, 2010 13:02 ET

Allana Potash Announces Positive Potash Mineralization at 110 Metres in Drill Hole DK-10-01

TORONTO, ONTARIO--(Marketwire - July 13, 2010) - Allana Potash Corp. (TSX VENTURE:AAA) ("Allana" or the "Company") is pleased to announce that the additional evaluation and sampling of drill hole DK-10-01 has identified shallow potash mineralization. This mineralized zone in DK-10-01 returned 6.55 metres, from 110.80 metres to 117.35 metres (drilled width), of 17.65 % KCl highlighted by two metres (drilled width) of 19.94 % KCl from 114.15 metres to 116.15 metres.

Farhad Abasov, President and CEO, commented: "We are pleased to have identified potash mineralization in hole DK-10-01 and at even shallower depth than Holes 02 and 03. This was the first drill hole completed at Dallol in almost 40 years and the Allana team is gaining valuable information from this work. Preliminary study of the drill results from the first three holes indicates that the potash zone now covers an area approximately three km long by two km wide expanding the zone defined by Parsons drilling by approximately 20% and exceeds our expectations. I would like to thank our potash consultants and exploration team for their perseverance in identifying and additional sampling of Hole 1. Allana's management is very pleased with the progress of our exploration program so far. Drilling in the centre part of the basin is progressing and a second drill rig is due on site to expedite the additional 10,000 metre programme. The seismic program agreement is being finalized."

Previous sampling of prospective potash horizons in hole DK-10-01 returned low potash values. After further evaluation by the Allana geologists and consultants, a prospective potash horizon was identified at a depth of approximately 110 metres and sampled. This zone returned 6.55 metres of potash mineralization grading 17.65% KCl including a two metre section of 19.94% KCl and is interpreted to be the upper part of the Houston Formation. XRD analysis will need to be conducted in order to determine potash mineralogy of the horizon including magnesium content which currently ranges from 0.22 % to 17 %.

Interpretation and evaluation of the drill results from the northern and eastern extensions of the Musley Deposit on Allana ground is ongoing and the drill results are compiled in Table 1. A preliminary study indicates that the potash zone now covers an area approximately three km long by two km wide expanding the zone defined by Parsons drilling by approximately 20%. The three Allana drill holes in this area confirm the results of the historic Parsons drill holes for the upper portion of the Houston Formation.

Table 1
HOLE FROM (m) TO (m) WIDTH (m)* KCl (%)
DK-10-01 110.80 117.35 6.55 17.65
including 114.15 116.15 2.00 19.94
DK-10-02 150.10 155.65 5.50 25.80
including 150.10 152.10 2.00 34.80
DK-10-03 151.25 161.20 9.95 19.52
including 152.35 154.35 2.00 28.90
* Drilled Width

Diamond drilling is continuing on hole DK-10-04 in the centre part of the basin, south of the Crescent Carnallite Deposit. This hole, and proposed hole DK-10-05 located two km south of DK-10-04, are part of Allana's Phase I exploration program which is comprised of approximately 2,500 metres of diamond drilling and 2D and down-hole seismic surveys. Allana is also planning a Phase II programme with an additional 10,000 metres of drilling that is being designed to expand the potash resource and a second drill rig is due on site in the coming weeks.

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 117.7 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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