Allana Potash Files Preliminary Economic Assessment Technical Report for Its Danakhil Potash Project

TORONTO, ONTARIO–(Marketwire – Jan. 16, 2012) – Allana Potash Corp. (TSX:AAA) (OTCQX:ALLRF) (“Allana” or the “Company”) is pleased to announce that it has filed a National Instrument 43-101 (“NI 43-101”) Technical Report dated November 28, 2011 on SEDAR atwww.sedar.com. The Technical Report is with respect to Allana’s Preliminary Economic Assessment (“PEA”) completed on the Company’s Danakhil Potash deposit, located in the Afar State, Ethiopia, the results of which were announced in a press release of the Company dated November 22, 2011 and filed on the SEDAR profile of the Company at www.sedar.com.

Highlights of the Danakhil Potash deposit PEA include:

  • After-tax Net Present Value at 12% of US $1.85 billion;
  • After-tax Internal Rate of Return of 36.8%;
  • Total development capital expenditures including mining, processing facilities, port and logistics infrastructure (“CAPEX”) of US $796 million;
  • Total operating expenditures (“OPEX”) on a per tonne basis (including production, transportation/handling, port, loading costs) FOB on the Vessel of US $90.54
  • PEA is based on Annual Production of one million tonnes of MOP per year using solution mining;
  • Potential to expand production to two million tonnes per year of MOP;
  • SOP production potential to be examined during the ongoing feasibility study.

The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the conclusions reached in the PEA will be realized.

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 of 97.8 Million Tonnes of 30.0% KCl; Inferred Sylvinite Resource of 108.3 Million tonnes grading 31.3% KCl; Measured and Indicated Kainitite Resources of 284.2 Million tonnes at 19.8% KCl, Inferred Kainitite Resource of 271.2 Million Tonnes of 20.3% KCl; Measured and Indicated Upper Carnallitite Resources of 78.5 Million Tonnes grading 18.4% KCl, Inferred Upper Carnallitite Resource of 85.6 Million Tonnes of 17.1% KCl; Measured and Indicated Lower Carnallitite Resources of 212.6 Million Tonnes of 12.0% KCl, Inferred Lower Carnallitite Resource of 130.7 Million Tonnes grading 11.7% KCl. Allana has approximately 197.6 million shares outstanding and trades on the Toronto Stock 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 scientific and 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; statements made with respect to the timing of the feasibility study and current development of the property, statements made with respect to infrastructure developments, 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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