Allan potash Nova land results soon Allana Potash Corp. Completes Strategic Acquisition of Nova-Ethio Potash Corporation
TORONTO, ONTARIO--(Marketwire - Nov. 1, 2012) - Allana Potash Corp. (TSX:AAA)(OTCQX:ALLRF) ("Allana" or the "Company") has completed its previously announced merger, whereby the Company has acquired all of the issued and outstanding common shares Nova-Ethio Potash Corporation ("Nova") through the merger of a wholly-owned subsidiary of Allana and Nova pursuant to the laws of the British Virgin Islands (the "Transaction") (See Press Release dated September 4, 2012).
Nova indirectly holds 100% of a strategically located potash license adjacent to the Company's potash project in the Danakhil Depression (the "Nova Property"). The Nova exploration license covers approximately 154 km2 and is located adjacent to the western and southern boundaries of the Allana license (see Fig. 1). The Nova license also incorporates extensions of the alluvial fans and potential aquifers present on the western portion of the Allana license. Coupled with Allana's land position in its adjacent claims, upon closing of the Transaction, Allana will control approximately 312 km2 of the centre of the potash basin in the Dallol area.
Farhad Abasov, President and CEO of Allana Potash, stated: "Allana's Board of Directors and its management are very excited to have completed this merger as it is expected that this significant adjacent property will give Allana additional strategic ground to augment our current land position and potentially add shallow potash resources. Not only does this acquisition extend our potash land package and water resources, but it complements our ongoing development plans, while reaffirming our commitment to discover and develop potash resources in the area."
Tim Diamond, President and CEO of Nova, stated: "On behalf of the company and the Nova shareholders, we are very pleased to have completed this merger and look forward to our ongoing partnership with Allana."
Nova completed 21 drill holes in the western and southern sections of the Nova Property and compilation of data from this drilling is in progress. In accordance with the terms of the Merger Agreement, Allana is required to make exploration expenditures of up to $5 million over twelve months and drill a minimum of 20 additional holes on the Nova Property. Allana and Nova have jointly defined a next phase drill program to evaluate and define the resources on the property, and under the terms of the merger agreement, will complete a National Instrument 43-101 resource estimate on the Nova Property within twelve months from the date hereof (the "Nova Resource Estimate").
Pursuant to the terms of the Transaction, Allana has issued 48,326,627 common shares to the shareholders of Nova in exchange for all of the common shares of Nova. Further, Allana has placed 35,609,972 of these common shares into escrow (the "Allana Escrowed Shares"). The Allana Escrowed Shares will be released to Nova shareholders in accordance with certain escrow release conditions, which are based upon the amount of contained potassium chloride within the sylvinite zone of the Nova Property as set out in the Nova Resource Estimate. In the event the Nova Resource Estimate contains an amount equal to or greater than 29.2 million tonnes of potassium chloride within the sylvinite zone, all of the Allana Escrowed Shares will be released. In the event the Nova Resource Estimate contains an amount less than 29.2 million tonnes of potassium chloride, the Allana Escrowed Shares will be released proportionately based on the amount that the defined potassium chloride supported by the Nova Resource Estimate is of 29.2 million tonnes. If the Nova Resource Estimate is not completed within 12 months, all of the Allana Escrowed Shares will be released from escrow. To date, no resources have been defined on the Nova Property.