Allana Potash Corp.
TSX VENTURE : AAA

Allana Potash Corp.

January 10, 2011 12:52 ET

Allana Potash Intersects Highest Grade Potash Mineralization to Date

TORONTO, ONTARIO--(Marketwire - Jan. 10, 2011) - Allana Potash Corp. (TSX VENTURE:AAA) ("Allana" or the "Company") is pleased to announce that drill hole DK-10-07, located in the northern section of Allana's property, intersected two significant zones of potash mineralization including the highest grade intersection to date. Hole DK-10-07 intersected 37.8% KCl over 2 metres, and 22.0% KCl over 6.7 metres in two distinct intersections at shallow depths beginning at 136 metres. The upper interval occurs within a thick potash sequence that returned 23.4% KCl over 9.2 metres.

Farhad Abasov, President and CEO, commented: "Allana is very pleased to have identified high grade zones of potash mineralization at very shallow depths and to have extended the Musley deposit an additional 700m to the east. Hole DK-10-07 is situated close to the newly acquired Haro concession and we believe that these positive results indicate significant potential for the Musley Deposit to extend to the Haro concession."

Hole DK-10-07 was collared in the northeastern portion of the Allana property approximately 700 metres southeast of drill hole DK-10-03 (see attached figure) near the newly acquired Haro concession. Hole 07 was drilled vertically and may represent a further extension of the Musley Deposit east onto the Haro concession. 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:

FROM (m) TO (m) WIDTH (m)* KCL (%)
       
136.0 145.2 9.2 23.42
Incl. 142.0 144.0 2.0 37.75
       
214.1 220.8 6.7 22.04
*Drilled width

Geological logging of the hole suggests that the upper intersection correlates with the Sylvinite Zone as defined by Parsons at the historic Musley Deposit. Similarly, the lowest intersection, 6.7 m at 22.04% KCl, is dominated by kainite and appears to correspond to the Kainitite Zone in the Parsons stratigraphy. XRD work is in progress at Saskatchewan Research Council to better define the potash mineralogy.

In addition to Hole DK-10-07, holes DK-10-08, 09, and 10 (see figure) were completed prior to the Christmas break and are in the laboratory undergoing analysis. Results should be available in the next few weeks. Down-hole seismic work and down-hole geophysical surveys were also completed prior to the Christmas break and this data are currently being compiled. 

Exploration drilling will resume next week and continue on the Haro concession to define further extensions of the Musley Deposit, and in the south, west of drill hole DK-10-06. Allana will continue to drill in the vicinity of DK-10-06 to investigate the extent of promising potash mineralization intersected in this hole with one drill rig while the second rig finishes additional 1-2 holes on the Haro concession. Road building is scheduled to start in the next month to access drill targets on the far eastern portion of the Allana property where preliminary seismic work suggests the stratigraphy dips back toward the surface.

In addition, the Company announces that it has granted a total of 2,110,000 stock options pursuant to the Stock Option Plan of the Company to various officers, directors and consultants of the Company. The options will be exercisable for $0.69 per option and shall expire on January 10, 2016. Such options shall vest immediately subject to the applicable regulatory hold period. The grant of options remains subject to receipt of all required regulatory approvals.

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 Inferred Mineral Resources of 70.3 million tonnes of kainitite mineralization grading 61.7 % kainite and 30.3 million tonnes of sylvinite resource grading 25.4 % sylvite (combined 105,200,000 tonnes with a composite grade of 20.8 % KCl (see News Release dated Sept. 17, 2008). Allana has approximately 146.3 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.

To view the map associated with this release, please visit the following link: http://media3.marketwire.com/docs/AAAmap.pdf.

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