NEWS Bought Deal to $27,900,000Allana Potash Increases Previously Announced Bought Deal to $27,900,000
TORONTO, ONTARIO--(Marketwire - Feb. 4, 2011) -
NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES
Allana Potash Corp. (TSX VENTURE:AAA)("Allana" or "the Company"), is pleased to announce that it has amendedthe terms of the previously announced bought deal financing to increasethe size of the offering from $20,010,500 to $27,900,000. The Companyhas entered into an amendment agreement with a syndicate ofunderwriters led by Dundee Securities Ltd. as sole-bookrunner, togetherwith Wellington West Capital Markets Inc. as co-lead underwriter andincluding Cormark Securities Inc. and Fraser Mackenzie Limited (the"Underwriters"), whereby the Underwriters have agreed to purchase, on abought deal basis, 18,000,000 common shares (the "Common Shares") ofthe Company at a purchase price of $1.55 per Common Share (the "AmendedOffering"). The Company has also granted the Underwriters anover-allotment option to increase the size of the Amended Offering byup to an additional 2,700,000 Common Shares, such option beingexercisable at any time up to 48 hours prior to the closing of theAmended Offering. If the over-allotment option is exercised in full,the aggregate gross proceeds raised will be $32,085,000.
Thenet proceeds from the Amended Offering will be used to fund continuedexploration and development work, including a definitive feasibilitystudy, at the Company's Ethiopian potash project as well as futurepotential strategic land acquisitions and general corporate purposes.
Closingof the Amended Offering is anticipated to occur on or about March 1,2011 (the "Closing Date") and is subject to the receipt of applicableregulatory approvals including approval of the TSX Venture Exchange.The Common Shares will be subject to a statutory hold or restrictedperiod of four months and one day following the Closing Date.
Inconnection with the financing, the Company has agreed to pay to theUnderwriters a cash commission of 6.0% of the gross proceeds raised andissue to the Underwriters that number of compensation options equal to5.0% of the number of Common Shares sold. Each compensation optionshall entitle the holder to acquire one Common Share of the Company ata price of $1.55 for a period of 18 months from the date of closing ofthe Amended Offering.