Allana Potash Corp.
TSX VENTURE : AAA

Allana Potash Corp.

May 18, 2010 07:30 ET

Allana Potash Reports Successful Initial Drilling Results Including A New Potash Zone

TORONTO, ONTARIO--(Marketwire - May 18, 2010) - Allana Potash Corp. (TSX VENTURE:AAA) ("Allana" or the "Company"), is pleased to provide an update of its exploration activities on its Ethiopian Potash Project in the Danakhil Depression. Allana initiated its Phase 1 drill programme which consists of 7 holes and is designed to confirm historic drilling results, to confirm the accuracy of the previous resource and to potentially increase the resource.

Two holes (DK-10-01, 02) have been completed to date. These holes are situated at the north end of the Musley Deposit and were targeted to increase the resource east of historic drilling as well as confirm earlier drilling results. 

Hole DK-10-01 intersected potash salts from 155 m - 160 m. Approximately 25 metres of clay and silt were intersected below the potash horizon and the hole was stopped at 185 metres. The preliminary results of DK-10-01 are consistent with management's expectations based on historical drilling completed by Parsons.

Drill hole DK-10-02 is collared approximately 800 m east of the Parsons drill holes and the projected target depth was 190 m. This hole intersected potash salts from 15-20 metres followed by intercalated sand and halite. This shallow horizon is not reported in the Parsons drilling and may represent an important new zone and therefore may increase the resource. A second potash interval was also intersected from 86 m to 106 m and the hole was stopped at 180 metres. While the target depth was not reached in this hole, the second potash interval intersected (86 m to 106 m) may represent the Houston Formation and its position higher up the hole may be due to a flattening of the dip of the stratigraphy and therefore management believes that the second potash interval is generally consistent with historical drilling completed by Parsons.

Core logging and sampling are ongoing and samples were shipped out of Ethiopia to the Saskatchewan Research Council last week. Results are expected within 2-3 weeks of arrival in Canada. 

Farhad Abasov, President and CEO of Allana Potash, stated: "We are very pleased that the initial two holes seem to confirm the shallow depth of the potash beds and, in the case of the second hole, provides us with preliminary evidence of a potentially increased resource. We intend to report the assay results from the first two holes immediately after they are received and we also intend on accelerating the drill program by bringing in another drill rig. Allana is getting quotes on a seismic program that is planned to be launched as soon as seismic equipment can be mobilized."

In other developments, the Ethiopian government has announced positive news regarding new infrastructure projects in the country. After several years of actively seeking financial support for the development of a crucial transportation network, the Chinese Government has granted Ethiopia a multi-billion birr loan towards the construction of railway lines expected to stretch some 5,000 kilometers from Addis Ababa into the various regions of the country. Government officials have commented that it is economically viable to transport minerals by rail from the country's major mineral resource regions, including the Afar region which hosts Allana's potash project. Allana's project is specifically mentioned in the article and government officials have stated that the project is one on the main strategic projects of the country within the coming five years. A copy of the article is available at http://en.afrik.com/article17612.html.

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 115.3 million shares outstanding and trades on the TSX-Venture 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 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 proposed infrastructure on the Company, the receipt of all required regulatory approvals, estimated production, the estimation of mineral reserves and mineral resources; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; capital expenditures; success of exploration activities; permitting time lines and permitting, mining or processing issues; government regulation of mining operations; environmental risks; unanticipated reclamation expenses; title disputes or claims; litigation liabilities; limitations on insurance coverage and the effect of terminating the investor relations contract. 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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