EDITOR: | June 26th, 2013

Allana Announces Updated Mineral Resource Estimate: Measured+Indicated Mineral Resources Increase by Over 90% to 2.4 Billion Tonnes; Inferred Resources Increase by 94%

| June 26, 2013 | No Comments

Allana-Potash-200x125June 26, 2013 — Toronto, Ontario (Source: Marketwired) — Allana Potash Corp. (TSX:AAA)(OTCQX:ALLRF) (“Allana” or the “Company”) is pleased to announce that it has received an updated mineral resource estimate prepared in accordance with National Instrument 43-101 (“NI 43-101”) from ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau (“ERCOSPLAN”) on its Danakhil Potash Project in Ethiopia.

The measured and indicated mineral resource estimate totals 2,481.3 Million tonnes with an average grade of 17.9 % KCl, representing approximately 444 Million tonnes of KCl. This is more than a 90% increase over the April 2012 measured and indicated mineral resource estimate of 1,297 Million tonnes at an average grade 19.3% KCl, and close to a doubling of the KCl tonnes in these resource categories (see news release dated April 30, 2012) (the “April 2012 report”). In addition to the strong increase in estimated measured and indicated mineral resources, the inferred mineral resource estimate for all four potash units is an additional 1,141,200,000 tonnes grading 16 % KCl. This represents a 94% increase in the inferred mineral resource estimate as well as a 67 % increase in contained KCl to approximately 183 Million tonnes. A summary of the mineral resource estimates is presented in Tables 1 and 2 below.

The increase in estimated measured and indicated mineral resources was dominated by increases of over 80% in both categories with the revised measured mineral resource estimate totaling approximately 1,038. Million tonnes containing 185 Million tonnes of KCl versus 567.82 Million tonnes of measured mineral resource and approximately 107.07 Million tonnes of KCl delineated in the April 2012 report.

In particular, the measured and indicated Sylvinite mineral resource estimate increased over 90% to approximately 327,400,000 tonnes with an average grade of 28.3 % KCl. This mineral resource estimate is consistent with the measured and indicated Sylvinite mineral resource estimate utilized in Allana’s recently released Feasibility Study (see press release date Feb. 2, 2013 and technical report filed on SEDAR on March 19, 2013) and forms the basis for the estimate of Sylvinite reserves.

Farhad Abasov, President and CEO, commented: “We are excited to see the large increase in total mineral resources on the project and the significant conversion of inferred mineral resources into measured and indicated mineral resource categories. Potash resources continue to expand with our exploration activities which are ongoing on the Nova license. We are encouraged that significant additional mineralization of Carnallite and Kainitite have been delineated and will initiate further studies on these resource estimates. Exploration drilling continues on the Nova license with three holes remaining in this program, after which a revised mineral resource estimate is scheduled for completion.”

The mineral resource estimate is based on drilling conducted by Allana in 2010-2012 (60 holes), on the core Allana license, 28 drill holes completed on the Nova licence and the historic drill holes completed by the Ralph M. Parsons Company (Parsons) in the 1950s and 1960s. The April 2012 report included 45 Allana drill holes and the Nova licence was acquired in November 2012 therefore data from additional drilling on the Allana licence, as well as data from the Nova license are now included in this mineral resource estimate update. The top of the potash sequence is identified by the Sylvinite Member, followed by the Upper Carnallitite Member (UC), the Bischofitite Member, the Lower Carnallitite Member (LC) and the Kainitite Member.

Table 1: Estimated Measured & Indicated Resources effective as of April 17, 2013
JUNE 2011
JUNE 2011
MEASURED Sylvinite 115.3 27.8 32.1
Upper Carnallitite 121.5 17.5 21.3
Lower Carnallitite 235.0 9.7 22.8
Kainitite 566.5 19.2 108.8
SubTotal 1,038.3 17.8 82.9 185.0 72.8
INDICATED Sylvinite 212.1 28.6 60.7
Upper Carnallitite 289.8 17.2 49.9
Lower Carnallitite 322.2 8.9 28.7
Kainitite 618.9 19.5 120.7
SubTotal 1,443.0 18.0 97.8 260.0 81.0
TOTAL MEASURED+INDICATED 2,481.3 17.9 90.4 445.0 76.9
Table 2: Estimated Inferred Resources effective as of April 17, 2013
KCl (MT)
INFERRED Sylvinite 90.8 27.8 25.2
Upper Carnallitite 175.5 16.5 29.0
Lower Carnallitite 369.3 7.7 28.3
Kainitite 505.6 19.7 99.6
TOTAL INFERRED 1,141.2 16.0 182.1
Cautionary Notes:
1. MT=Million Tonnes, tonnage is for in-situ resource with no discount for recovery as mining method is to be determined. Potash deposits have been mined by underground, open pit and solution mining methods, a Feasibility Study has indicated solution mining and solar evaporation are the optimal mining methods.
2. The numbers for tonnage, average KCl per cent are rounded figures
3. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimates of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
4. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.
5. Average densities used in resource calculations are 2.14, 1.81, 1.91, and 2.10 g/cm3 for the Sylvinite, UC, LC and Kainitite members respectively

The measured, indicated and inferred mineral resource estimate was reviewed and optimized by Dr. Sebastiaan van de Klauw, Ph.D., EurGeol., who is a “qualified person” as such term is defined in National Instrument 43-101. He has supervised the preparation, reviewed and approved, the technical information and data included in this news release. The mineral resource estimates were generated using the parameters set out below.

Drill hole intersections must meet the following criteria for inclusion in the mineral resource estimate:

  • Sylvinite Member > 20% KCl, the combined minimum width of Sylvinite and UC Members over 4 metres
  • UC Member > 40% Carnallite, the combined minimum width of Sylvinite and UC Members over 4 metres
  • LC Member > 60% Carnallite+Kieserite, minimum width of 5 metres
  • Kainitite Member > 50% Kainite, minimum width of 5 metres

The mineral resource estimates were calculated by extrapolating grades and widths using the Radius of Influence (ROI) from each Allana drill hole and historical drill holes based on industry standards for potash exploration. This process starts with the interpretation of the Radius of Influence of each exploration hole. The following ROIs were used for the calculation of the area of mineralized material in each of the resource categories:

  • Sylvinite, Upper Carnallitite Members
    • Measured Resource 350 metres
    • Indicated Resource 750 metres
    • Inferred Resource 1500 metres
  • Lower Carnallitite, Kainitite Members
    • Measured Resource 500 metres
    • Indicated Resource 1000 metres
    • Inferred Resource 2000 metres

For historical drill holes, an ROI of 750 metres was used for inferred mineral resources in the different members.

The difference in ROI between the two groups is directly related to the geology of the evaporite mineralization. The Sylvinite and UC members are interpreted to be secondary deposits formed from carnallite and therefore not as uniform as a primary evaporite deposit. The Kainitite and LC members are formed by primary evaporite deposition and are relatively consistent throughout the Allana property. Due to this consistency, there is a greater degree of confidence in the lateral extent of the mineralization of the Kainitite and LC members and the ROI can be increased.

A copy of the Technical Report prepared in accordance with NI 43-101 supporting the updated mineral resource estimates will be available under the Company’s profile on SEDAR (www.sedar.com) within 45 days of this news release. The mineral resource estimates were estimated by Dr. Henry Rauche, Ph.D., EurGeol, Managing Director, CEO ERCOSPLAN and Dr. Sebastiaan van de Klauw, Ph.D., EurGeol., Consulting Geologist, ERCOSPLAN. Dr. van de Klauw is the Qualified Person for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators, and has reviewed and verified the data disclosed in this news release.

Exploration Update

Allana continues to conduct exploration drilling on the Nova license with 17 holes completed to date and 3 holes pending. Data compilation and analysis from earlier holes are ongoing and results will be released upon completion of the entire program. Pilot solution wells continue to produce sylvinite crystal product on site which is being utilized as test material to optimize processing parameters.

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 as at February 2, 2013 of 327.4 million tonnes of 28.3% KCl; and inferred Sylvinite resource of 90.8 million tonnes grading 27.8% KCl, (see Allana’s Technical Report entitled “Summary of the Feasibility Study for a Solution Mine on the ALLANA Potash Project, Danakhil Depression, Afar State, Ethiopia” dated March 19, 2013, effective February 4, 2013). In addition, the Danakhil Projects hosts measured and indicated Kainitite resources of 1,185.4 million tonnes at 19.4% KCl, inferred Kainitite resource of 505.6 million tonnes of 19.7% KCl; measured and indicated Upper Carnallitite resources of 411.3 million tonnes grading 17.3% KCl, inferred Upper Carnallitite resource of 175.5 million tonnes of 16.5% KCl; measured and indicated Lower Carnallitite resources of 557.2 million tonnes of 9.2% KCl, inferred Lower Carnallitite resource of 369.3 million tonnes grading 7.7% KCl. The foregoing mineral resource estimates with respect to Kainitite and Carnallitite are as at April 17, 2013. For more information with respect to the data verification procedures undertaken and the key assumptions, parameters and risks associated with the foregoing estimates refer to Allana’s Technical Report entitled “Updated Resource Report for the Danakhil Potash Deposit, Afar State/Ethiopia” dated effective April 17, 2013 to be filed within 45 days of this release and the Allana’s Technical Report entitled “Summary of the Feasibility Study for a Solution Mine on the ALLANA Potash Project, Danakhil Depression, Afar State, Ethiopia” dated March 19, 2013, effective February 4, 2013. filed at www.sedar.com. Allana has approximately 276.45 million shares outstanding. Allana trades on the Toronto Stock Exchange under the symbol “AAA”.

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. 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.

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 press release.

Raj Shah


Raj Shah has professional experience working for over a half a dozen years at financial firms such as Merrill Lynch and First Allied Securities Inc., ... <Read more about Raj Shah>

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