June 20, 2011 - Allana Potash Corp claims to have discovered a new high-grade potash zone in Ethiopia, according to media reports. Its shares have surged by as much as 11 percent as a result of the discovery. The company declared on Monday that it has intersected three potash mineralization zones in the southwest part of its property.
Drilling in Hole 19 at its Dallol potash property in northeastern Danakil Depression of Ethiopia returned more than 61 percent over an area of 0.90 meters. Allana claims that this is the highest grade of potassium chloride the company has discovered so far. It also discovered 22.3 percent potash in Hole 12 in the Ethiopian property over an area of 6.8 meters.
Allana has at least 16 drill holes and more than 105 million tonnes of resources. It can produce at extremely competitive operating cost. Its discovery in Hole 19 (Hole DK-11-19) returned 37.74 percent potassium chloride over 7.3 meters - 22.09 percent over 7.23 meters in Kainitite zone, 30.85 percent over 3.058 meters in Sylvinite zone, and 61.26 percent over 0.9 meters in the new Upper Sylvinite zone.
According to Allana, the discovery indicates that there is a strong continuity of potash horizon in the southwestern part of the property. The vast potash deposit remains open to the south and east, pointing toward the huge resource potential of the region.
Drilling in Hole DK-11-12 returned 22.3 percent of potassium chloride over 6.83 meters. Following the discovery in three different zones of mineralization, Allana Potash’s shares on the TSX Venture Exchange surged by more than 11 percent, gaining more than a third in value in three months. The Ontario-based company plans to include the potash mining results in its NI 43-101 resource report.
Potash Mineralization in Danakil Depression
Danakil Depression in Ethiopia is well known for potash mineralization. Mining activity has been taking place in the potash-rich region since the early 1900s. The Dallol project covers an area of more than 150 square kilometers – about 600 kms from the deep water port in Djibouti and 100 kms from the Red Sea coast.
Importance of Potash
About 90 percent of potash is used in the form of fertilizer, popularly known as potassium chloride. With the increase in demand for fertilizers, mineral-rich regions, such as Danakil Depression, have gained prominence and more and more mining companies are eying the region for exploration drives. India's Sainik Coal Mining and BHP Billiton are the other mining companies in the region. The former plans to start mining at the Musley deposit.