Allana Resources Inc.

Allana Resources Inc.

October 20, 2008 17:01 ET

Allana Resources Updates Announcement of Potash Resource Acquisition

TORONTO, ONTARIO--(Marketwire - Oct. 20, 2008) - Allana Resources Inc. (TSX VENTURE:AAA) ("Allana"), is pleased to update its previously announced acquisition of three mineral concessions in Ethiopia's northeastern Danakil Depression totaling approximately 150 square kilometers (please refer to Allana's September 17, 2008 press release). The project area is approximately 100 km from the Red Sea coast and 600 km via good roads from the deep water port of Djibouti. Mining for potash has been carried out in the Danakil Depression intermittently from the early 1900s. Mining companies currently working in the basin include BHP Billiton and Sainik Coal Mining (Sainik), a leading Indian-based coal mining company, the latter of which is planning to initiate mining at the Musley deposit.

Allana has agreed to acquire the properties from three private companies, Forbes & Manhattan, Inc., SB Management and Ethio-Gibe Canada Mining PLC in consideration for an aggregate of $2.5 million in cash payments over 3 years and the issuance of 4 million shares. The property will also be subject to a 3% NSR of which 50% can be purchased for CDN $ 5,000,000. Both Forbes & Manhattan, Inc. and SB Management are non-arms-length parties to the transaction as a result of Stan Bharti, an insider of each, being a 10% shareholder of Allana. Accordingly, completion of the acquisition is subject to the receipt of approval of the TSX Venture Exchange.

Peter J. MacLean, Ph.D., P.Geo. Allana's VP Exploration, is the Qualified Person for this news release as defined under National Instrument 43-101 and has reviewed and approved the scientific and technical information presented in this release.

About Allana Resources Inc.

Allana is a publicly traded corporation with a focus on the acquisition and development of potash assets internationally and recently completed the acquisition of Latin American Potash in Argentina. Allana has approximately 45 million shares outstanding and trades on the TSX-Venture Exchange under the symbol "AAA".

Forward-Looking Statement

The information presented contains "forward-looking statements", within the meaning of the United States Private Securities Litigation Reform Act of 1995, and "forward-looking information" under similar Canadian legislation, concerning the business, operations and financial performance and condition of the Company. Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to the estimation of mineral resources; the realization of mineral resource estimates; the timing and amount of estimated future exploration; costs of exploration; capital expenditures; success of exploration activities; permitting time lines and permitting; technical and scientific issues; government regulation of mining operations; environmental risks; unanticipated reclamation expenses; title disputes or claims; litigation liabilities; and limitations on insurance coverage. Generally, forward-looking statements and 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 state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements and forward-looking information 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.

Investors are advised that National Instrument 43-101 of the Canadian Securities Administrators requires that each category of mineral reserves and mineral resources be reported separately. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated or Inferred Resources

The information presented uses the terms "measured", "indicated" and "inferred" mineral resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize these terms. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable.

Should you wish to receive company news via email, please email and specify "AAA News" in the subject line.


Contact Information