June 29 MD&A HighlightsBoth Phase 1 and 2 drilling program is paid for, and so far hole#2 has provided evidence of a 750 metre extension in the northeast part of the deposit. All in all, a good read.
The Company initially planned a Phase I, 2,500 metre diamond drilling programme which focused on confirming previous results, upgrading the Inferred Resource to Measured and Indicated resources and providing drill hole access for down hole seismic studies. Once the seismic signature of the potash-bearing horizon is identified, a 2D surface seismic survey over the Allana property will be initiated. The budget for the Phase 1 programme is approximately US $ 3,000,000.
Allana engaged Meridian Drilling to complete 10,000 metres of additional drilling on its Ethiopian potash project. This drilling is in addition to the Phase I program (2500 m -3000 m) and has been part of the overall program announced by the Company in its presentations and other public communications. The drilling will be done in conjunction with 2 D and down hole seismic surveys and is part of the Phase II drilling program designed to establish sufficient resource to support a feasibility study. A second drill rig and equipment capable of drilling to a depth of 800 metres are being mobilized out of the UK and the program will continue with two drill rigs to completion. The Phase I drilling program is progressing on the project and hole DK-10-03 was recently completed to a depth of approximately 208 m. The drill rig is currently drilling hole DK-10-04 in the centre part of the basin. In this area, two Parsons drill holes intersected thick (~ 45 m) zones of potash mineralization at a depth of approximately 650 metres. Hole DK-10-03 has been logged, sampled and the samples have been shipped to the lab for analyses. The budget for the Phase II programme is approximately US $5,000,000.
On June 15, 2010, the Company announced confirmation of shallow potash mineralization. Analytical results were received and evaluated for holes DK-10- 01 and DK-10-02. The highlight of these results is hole DK-10-02 which intersected 25.8 % KCl over 5.50 metres including 34.8 % KCl over 2 metres. These two holes, along with hole DK-10-03, are situated in the northwestern portion of Allana?s claim block and were targeted to confirm historic drill results and test the extension of the Musley Deposit to the northeast.Hole DK-10-02 was drilled vertically and is collared east of Parsons holes 226 and 270. Hole DK-10-02 intersected strong potash mineralization yielding 25.8% KCl over 5.5 metres (drilled width) from 150.10 metres to 155.65 metres, including 34.8% KCl over 2 metres (drilled width) from 150.10 metres to 152.10 metres. This zone is interpreted to be the upper portion of the Houston Formation and additional X-Ray Diffraction (XRD) work is ongoing to determine the potash mineralogy. The confirmation of strong potash mineralization in this hole extends the Musley Deposit approximately 750 metres to the northeast and the deposit remains open to expansion in that direction. Other potash intervals returned lower values, typically less than 5% KCl.Drill hole DK-10-01 was drilled vertically and is located between Parsons holes 236, 226, 159, and 232. Historic drilling in this northern extension of the Musley Deposit shows isolated zones of low grade potash mineralization surrounded by higher grade potash zones. The potash zone intersected in DK-10-01 returned low potash values, KCl values are less than 5% and it is interpreted that this hole also intersected a similar isolated zone of weak potash mineralization. Sand and silt intersected immediately below the potash zone suggests a localized influx of sediment into this part of the basin which may have eroded, or inhibited, potash mineralization. Hole DK-10-03 has been logged, sampled and samples are in transit to the Saskatchewan Research Council Laboratory in Saskatoon. Drilling is continuing at hole DK-10-04 in the centre part of the basin south of the Crescent Carnallite Deposit. Additional sampling has been completed on other prospective horizons in hole DK-10-01 and these samples are also en route to Saskatoon. As mentioned above, mineral species identification is also in progress for holes 1 and 2 as selected samples have been chosen for XRD analysis to determine the mineralogy of the complex potash and evaporite minerals.