Tuesday, 3 April 2012

Allana encounters further strong mineralization at Dallol, extends drilling

Allana Potash (TSE:AAA)(OTCQX:ALLRF) Tuesday announced that it has intersected strong potash mineralization in three holes at its Dallol potash project in Ethiopia, prompting it to extend its drill program in the southern boundary of Ethiopia.

The holes are part of an in-fill drilling program in the west designed to decrease the spacing between drill holes to increase the level of confidence that potash mineralization is continuous.

Allana said the strong mineralization was intersected in Holes DK-11-35, DK-11-36, and DK-11-37 located southeast of the Musley Deposit towards the southern boundary of the property.

"Allana continues to be pleased with the continuity and strength of potash mineralization in the western portion of the property as exhibited by the results of the latest drill holes," said Allana president and CEO Farhad Abasov.

"In-fill drilling continues to outline potash mineralization and management believes this may allow Allana to upgrade mineral resources from inferred to measured and indicated categories as well as add to the indicated and inferred mineral resource categories.
"Due to excellent drill results management has decided to extend the drill program. Management is planning to release an updated 43-101 compliant mineral resource estimate in April and revised updates as needed after further expansion drilling."

Allana said Holes 35 and 36 intersected two main zones of potash mineralization, sylvinite and kainitite, and Hole 37 intersected kainitite.

Hole 35 intersected 5.7 metres of 31.3% potassium chloride (KCl) in the sylvinite Zone and included a higher grade interval of three metres of 39.1% KCl. The hole also intersected 7.5 metres of 20.3% KCl in the underlying kainitite zone.

Hole 36 intersected four metres of 24.6% KCl in the sylvinite zone and 5.1 metres of 20.2% KCl in the kainitite zone.

Hole 37 intersected only the kainitite zone at a depth of 344.5 metres which returned 5.3 metres of 19.7% KCl.

Potash mineralization was intersected at relatively shallow depths in Holes 35 and 36 with sylvinite occurring at depths of 142.5 metres and 83 metres respectively, Allana said.

The company said it remains confident that the most recent results may allow upgrading of the current mineral resource estimate to the measured and indicated mineral resource categories and that Hole 36 will also allow the company to add potash resource as it occurs in an area previously not drilled.

Exploratory drilling continues in the far eastern part of Allana’s property in Ethiopia (Hole 47) and in the northern part (Hole 48) as part of the program to expand the mineral resources.

Samples from Holes 38 through 46 are undergoing analysis or on the way to the company’s laboratory in Saskatoon.

Allana said that technical studies in support of its feasibility study are in progress, including solution mining cavern preparation, solar evaporation pond construction, environmental baseline studies, and hydrogeological studies.

The company said it has recently initiated a ground geophysical survey over its property to identify aquifers in the alluvial fans.

Mobilization of drilling equipment is ongoing and water well drilling is expected to commence shortly.

Allana Potash is focused on the acquisition and development of potash assets internationally with its major focus on a previously explored potash property in Ethiopia.

It 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.

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