22 Sep 2011 10:41 ET
Marketwire Canada Allana Potash Corp. (TSX:AAA)(OTCQX:ALLRF) ("Allana" or the "Company") is pleased to announce that it has intersected three zones of strong potash mineralization in Hole DK-11-27 ("Hole 27"). Hole 27 is located in the northern portion of the concession block and was targeted to test potash mineralization west of Hole 13. Hole 27 intersected a strong Sylvinite Zone at a depth of 159.9 metres which yielded 37.70% KCl over 3.45 metres. This hole also displayed a prominent Upper Carnallitite Zone which returned 13.00 metres grading 17.41% KCl. A robust Kainitite Zone was also intersected deeper in the hole at a depth of 259 metres and returned 23.05 % KCl over 7.67 metres. Feasibility Study Progress Allana is completing an infill drilling program to upgrade elements of its resource estimate in its target initial production zones as part of the company's Feasibility Study ("FS") activity. The FS is contracted to ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau ("ERCOSPLAN") (See news release dated September 6, 2011). Allana's infill and some related extension drilling is intended to upgrade previously assessed Inferred Resources to the Measured and Indicated categories in support of the reserve estimate component of the FS. An update to the Company's June 2011 National Instrument 43-101 ("NI 43-101") compliant resource estimate is expected by the end of 2011. Logistics Progress Assessment and development of key infrastructure is proceeding with on-the-ground assessments of the road routes from the project site through to port. The western road toward Mekele has been rehabilitated by the Ethiopian government. The southern road linking Allana's project to the port of Djibouti is substantially completed, and it is expected that it will be fully completed before the construction stage. The Company is also continuing discussions with government departments and potential operators on plans and specifications for road, rail, port and power facilities. Water infrastructure planning is integrated across the FS and the Environmental and Social Impact Assessment Study ("ESIA"), contracted to Environmental Resources Management ("ERM") (See news release dated August 24, 2011), is proceeding, supported by the hydrogeological evaluation drilling program. Ongoing formal project status updates with ERCOSPLAN and ERM continue to support the scheduled Q3 2012 completion for FS and ESIA work, as well as the continued expectation that technical and economic parameters of open pit and solution mining methods will be determined by the end of 2011 to assess the optimal mining method and product output at the initial production stage. Project Finance and Strategic Partnership Development Supported by the graduation of Allana to the Toronto Stock Exchange (TSX) on September 9, 2011, the Company has commenced formal processes for the development of project financing, with a focus on engaging debt financing advisory support and on securing long-term product sales and project support arrangements with strategic potash processors and users. Allana has received project finance advisory proposals from several large international banks and is currently finalizing work in this regard. The Company has also been advancing talks with large fertilizer and industrial organizations on off-take and strategic investment. Farhad Abasov, President and CEO, commented: "Allana is extremely encouraged by the three zones of strong potash mineralization intersected in Hole 27 and that we were able to confirm the extension of the potash west of Hole 13. This area continues to yield high grade potash in the Sylvinite Zone and we believe drilling in this area will allow Allana to upgrade resources from Inferred to Measured and Indicated categories as well as add to the Inferred category. We are also very excited about the progress made by the company in the development of the financing aspect of the project. We expect to provide further information on our plans and advisors for the project in the next few weeks, which will allow Allana to stay on track with our development plans." Drill Hole 27 Hole 27 is part of a drilling program in the north, designed to test extensions of potash mineralization and allow more material to be included in the Measured and Indicated Resource categories. The results for Hole 27 are presented in the table below. True widths of the potash zones are estimated to be very similar to drilled widths due to the flat-lying nature of the potash horizons. The zones of potash mineralization are outlined in the following table: ----------------------------------------------------------------------------HOLE ID FROM (m) TO (m) WIDTH (m)(i) KCL (%) ZONE--------------------------------------------------------------------------------------------------------------------------------------------------------DK-11-27 159.90 163.35 3.45 37.70 Sylvinite---------------------------------------------------------------------------- 163.35 176.35 13.00 17.41 Upper Carn.---------------------------------------------------------------------------- 259.23 266.90 7.67 23.05 Kainitite----------------------------------------------------------------------------(i)Drilled width Hole 27 was drilled vertically and was collared approximately 750 metres west of Hole 13 (see attached figure). Hole 27 is located in the northern part of the concession block west of Hole 13 and east of the historic Musley Deposit, suggesting that potash mineralization at Musley continues and is consistent at least to Hole 13. Previously released Allana drill holes in this region yielded very high sylvinite grades (see attached figure) and the results of Hole 27 suggest continuity of potash throughout the region. Exploration drilling is continuing in the southwestern part of the property (Hole 35) as part of the infill drilling program that management has designed to add resources and increase confidence in current resources by reducing the spacing between holes allowing more material to qualify for Measured and Indicated categories. Samples from holes 28-34 are undergoing analysis or are en route to the laboratory in Saskatoon, Canada. |