Allana Potash Corp.

Allana Potash Corp.

July 24, 2012 09:00 ET

Allana Potash Hits Water in All Nine Drilled Wells and Provides Update on Feasibility Study at Its Danakhil Potash Project

TORONTO, ONTARIO--(Marketwire - July 24, 2012) - Allana Potash Corp. (TSX:AAA)(OTCQX:ALLRF) ("Allana" or the "Company") is pleased to provide an update on technical studies and infrastructure developments related to its ongoing Feasibility Study ("FS") with respect to the Danakhil Potash project located in Ethiopia. The FS is being completed under the direction of ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergau ("ERCOSPLAN"), the independent technical consultants of the Company and for which studies and analysis are expected to be completed by the end of 2012.

Technical studies in support of the FS include:

  • Hydrogeology;
  • Environmental and Social Impact Assessment ("ESIA").
  • Resource expansion;
  • Pilot Testwork of
    • Evaporation Ponds
    • Solution Caverns
  • Infrastructure Update

Hydrogeology Study

The Hydrogeology Study remains focused on identifying source of water for the solution mining operation with two drill rigs working in tandem on the project. Nine water wells have been drilled to date at five sites in the alluvial fans on the western portion of the Allana license. All holes intersected water and one site is now under development as a production well to service the sylvinite solution mining well. Flow rate and recharge rates will be established with newly installed monitoring equipment in 3 wells. The depth to the water in some areas is as much as 70 metres below surface and the water-bearing gravel zone can be up to 35 metres thick. Eighteen drill sites are planned for this phase of hydrogeological work.

Farhad Abasov, President and CEO of Allana, stated: "I am very excited to see that the preliminary hydrogeological work has yielded positive results, and the rest of the FS work is proceeding very well. The availability of sufficient water for our solution mining operation is very important and this preliminary water drilling results are very encouraging. Management believes Allana is on track for the completion of the FS by the end of 2012 and is also working intensively on various corporate development aspects of the project including construction financing, offtake and other initiatives."

The ESIA studies continue with baseline hydrogeology and ecology studies in dry season undergoing compilation and field data for the wet season to be collected in the coming months. Stakeholder engagement meetings are ongoing at the local, regional and national levels and feedback from all groups has to date been positive.

Updated Resource Estimate

An updated resource estimate for Allana's Danakhil Project was released on April 30, 2012 and included analytical results up to and including Hole DK-12-45. Drilling has continued on the project to fills gaps in the resource and 59 holes have now been completed. Drill holes 46-59 are being evaluated and/or are in the laboratory and partial results are expected over the next several weeks. The completed NI 43-101 compliant technical report with respect to the above, dated June 13, 2012, was prepared by ERCOSPLAN and is available on the Company's SEDAR profile at

Pilot Tests

Pilot testwork on site is ongoing and consists primarily of evaporation pond studies using synthetic brine and the installation and management of a sylvinite solution mining cavern. Brine with chemistry matching the Sylvinite Zone was utilized to test evaporation characteristics at Dallol and to create a crystal crop for preliminary flotation studies. Creation of the synthetic brine was undertaken to expedite the processing engineering for the project. Brine from the solution well will be harvested and the processing will be optimized using this data. Evaporation in the ponds proceeded rapidly averaging approximately 1 cm per day of evaporation. Approximately 925 kilograms of the crop (mixed halite and sylvite) was shipped to Germany for flotation testwork. This work is being conducted by ERCOSPLAN and 700 kilograms was prepared for flotation studies which management anticipates should be completed by the end of September 2012. The Sylvinite Solution Mining cavern is in progress, the upper part of the well was been pre-drilled and the solution well will be developed over the next four weeks and will produce brine in several months. This brine will then be directed to the evaporation ponds and the crystal crop will be used to finalize the flotation process.


Progress continues on project-enabling infrastructure with road construction by the Ethiopian Government in the Danakhil area being well advanced, port construction contracts from the Djibouti Government proceeding toward completion, and a number of railway contracts in Ethiopia being awarded, all of which will support the development of efficient transportation capacity for the project.

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 and are set out in the technical report entitled "Updated Resource Report for the Danakhil Potash Deposit, Afar State/Ethiopia" dated June 13, 2012, prepared by ERCOSPLAN and filed on the Company's SEDAR profile at Allana has approximately 228.5 million shares outstanding and trades on the Toronto Stock Exchange under the symbol "AAA".

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 scientific and 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 estimation of mineral reserves and mineral resources; the timing and amount of estimated future exploration; statements made with respect to the timing of the feasibility study and current development of the property, statements made with respect to infrastructure developments, 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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