Allana Potash Corp.

Allana Potash Corp.

August 03, 2011 11:06 ET

Allana Potash Continues to Expand Potash Mineralization in Far Eastern License Area With 24% KCL Over 7.05 Metres in Hole DK-11-23

-Hole 23 intersects potash mineralization of 24% kcl over 7.05 metres on eastern portion of property;

-Coupled with hole 20, the results from hole 23 further confirm the extension of the potash mineralization onto the eastern license area;

-Potash mineralization remains open in all directions and management believes the potential to add additional resources is strong;

-Roads under construction to access further east where potash is interpreted at shallower levels.

TORONTO, ONTARIO--(Marketwire - Aug. 3, 2011) - Allana Potash Corp. (TSX VENTURE:AAA) (OTCQX:ALLRF) ("Allana" or the "Company") is pleased to announce that it has intersected potash mineralization in Hole DK-11-23 ("Hole 23") in the eastern portion of Allana's land position. Hole 23 intersected potash mineralization which returned 24.02% KCl over 7.02 metres from the Kainitite Zone. The presence of strong potash mineralization in Hole 23 supports the results from Hole 20 (see July 6, 2011 news release) and suggests strong continuity of the potash horizon across the southern basin and the deposit remains open in all directions. With the exception of Hole 20, there has been no previous drilling in this area and no resource has yet been calculated in this region. Management believes that due to the consistent nature of the Kainitite Zone and the continuity supported by drilling, there is strong potential to add additional resources in this region.

Farhad Abasov, President and CEO, commented: "Allana is extremely encouraged by the continuity of the Kainitite Zone in the eastern portion of the license area as exemplified by Hole 23. Until Allana drilled Hole 20, this area has experienced no previous drilling and the additional potash intersection in Hole 23 further validates our interpretations on the strong continuity of the potash throughout the southern part of the basin. This area is approximately 18 km2 and management believes there is good potential to add potash resources to the project. Road building continues east of holes 20 and 23 and drilling will commence shortly to determine if a large, shallow potash resource is present which may be amenable to open pit mining in both the eastern and western parts of the project."

Hole 23 intersected one main zone of potash mineralization referred to as the Kainitite Zone, from 491.15 metres to 498.20 metres below surface. 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:

DK-11-23 491.15 498.20 7.05 24.02 Kainitite
*Drilled width

Hole 23 was drilled vertically and was collared approximately 1300 metres northwest of Hole 20 or 4 kilometres west of the property boundary (see attached figure). Hole 23 occurs in the eastern part of the Company property in an area that was previously unexplored with the exception of Hole 20. The presence of strong kainitite mineralization approximately 5 kilometres east of the Allana Hole 4 supports the Company's geological model that potash extends throughout the southern half of the basin. The results of Hole 23 suggest good continuity of stratigraphy across this part of the basin as was outlined in Allana's 2D seismic surveys. Road construction is under way which will allow access the eastern boundary of the property, where drilling can test the shallow nature of the potash and its amenability to open pit mining.

Holes 21 and 22 did not reach target depth due to limitations of the drilling equipment and will be re-drilled at a later date. Exploration drilling is continuing in western part of the property (Holes 31-32) as part of the infill drilling program designed to add resource and increase confidence in current resources by reducing the spacing between holes allowing more material to qualify for Measured and Indicated categories. Samples from holes 24-30 are undergoing analysis or are en route to the laboratory in Saskatoon, Canada.

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 the World Bank Group, and Liberty Metals and Mining Holdings, LLC, a subsidiary of Liberty Mutual Group. Allana has Measured and Indicated Sylvinite Resources of 97.8 M Tonnes of 30.0% KCl; Inferred Sylvinite Resource of 108.3 M tonnes grading 31.3% KCl; Measured and Indicated Kainitite Resources of 284.2 M tonnes at 19.8%, Inferred Kainitite Resource of 271.2 M tonnes of 20.3% KCl; Measured and Indicated Upper Carnallitite Resources of 78.5 M tonnes grading 18.4% KCl, Inferred Upper Carnallitite Resource of 85.6 M tonnes of 17.1% KCl; Measured and Indicated Lower Carnallitite Resources of 212.6 M tonnes of 12.0% KCl, Inferred Lower Carnallitite Resource of 130.7 M tonnes grading 11.7% KCl. Allana has approximately 196.5 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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