Allana Potash Corp.

Allana Potash Corp.

December 06, 2010 07:30 ET

Allana Potash Intersects Significant Potash Horizon in A New Area of Ethiopian Potash Project

TORONTO, ONTARIO--(Marketwire - Dec. 6, 2010) - Allana Potash Corp. (TSX VENTURE:AAA) ("Allana" or the "Company") is pleased to announce that drill hole DK-10-06, located in the southwestern centre of the evaporite basin, intersected two significant zones of potash mineralization. Hole DK-10-06 intersected 30.9% KCl over 3 metres, and 24.5% KCl over 4.2 metres in two distinct intersections at relatively shallow depths beginning at 495 metres. The lower interval occurs within a thick potash sequence that returned 17.3% KCl over 17.7 metres.

Farhad Abasov, President and CEO, commented: "We are very pleased to have identified two robust zones of potash mineralization in hole DK-10-06 in a part of the evaporite basin that has no past exploration. We believe that this hole further demonstrates 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. Now that the seismic program is completed, we are awaiting the seismic interpretation that will assist us in determining the potential in our project." 

Hole DK-10-06 was collared in the southwestern portion of the evaporite basin approximately three kilometres south west of drill hole DK-10-04 (see attached figure). This area was not previously explored by Parsons and the potash zones remain open in all directions. As such, Allana believes that the potash mineralization intersected in DK-10-06 represents potential for a significant expansion of Allana's potash resource. Zones of potash mineralization were intersected throughout the bottom part of the drill hole and the main intersections are outlined below:

FROM (m)   TO (m)     WIDTH (m)*   KCL (%)
495.3   498.3     3.0   30.9
567.3   585.0 (EOH )   17.7   17.3
Incl. 567.3   576.6     9.3   17.5
Incl 580.8   585.0 (EOH )   4.2   24.5
*Drilled width

Geological logging of the hole suggests that the upper intersection correlates with the Sylvinite Zone defined by Parsons at the historic Musley Deposit. Similarly, the lowest intersection, 4.2 metres at 24.5% KCl, is dominated by kainite and appears to correspond to the Kainitite Zone in the Parsons stratigraphy. The drilling ended at 585 metres in kainitite and the zone remains open at depth. The hole was terminated at this depth due to mechanical difficulties with the drill rig. The middle intersection, 9.3 metres at 17.5 % KCl, is dominated by carnallite and appears to correspond with the Intermediate Member as defined by Parsons. XRD work is in progress at Saskatchewan Research Council to better define the potash mineralogy.

Exploration drilling is continuing with one drill rig working on the Haro concession (see news release dated November 9, 2010) and the second continuing in the southern part of the basin. Hole DK-10-07, located at the north end of the Haro concession and approximately 700 metres south east of hole 03, was completed to a depth of 236 metres. Logging and sampling of this hole are complete and samples are en route to SRC in Saskatoon for analysis which is expected to be completed in approximately 10-14 days. This northern drill rig has mobilized to drill hole DK-10-09, located in the centre part of the Haro concession, and is at a depth of 50 metres. Drill hole DK-10-05 was drilled to a depth of 680 metres where the drilling equipment experienced technical issues. A larger drilling rig is currently being sourced and this hole will be re-drilled in the future. The southern rig is currently drilling on hole DK-10-08 and is at a depth of 188 metres. 

Allana is also pleased to announce the completion of its 2D surface seismic survey. Approximately 45 km of 2D seismic was shot over the southern part of the evaporite basin. Preliminary data indicates a number of reflectors are present and display continuity. Data interpretation and reports are ongoing and final results are expected by the end of the year.

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 143.3 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 seismic 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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