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Looks like SOP on the way !!!

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Sep 08, 2014

Allana Potash Initiates Preliminary Economic Assessment On Production Of Sulphate Of Potash (Sop)

Toronto, Ontario, September. 8, 2014 - Allana Potash Corp. (TSX: AAA) ("Allana" or the "Company") announces that it has engaged ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau ("ERCOSPLAN") to complete a Preliminary Economic Assessment ("PEA") on Kainitite resources that may be amenable to SOP production on its Danakhil Project in Ethiopia. SOP is commonly used on chloride sensitive crops such as tobacco, fruits and vegetables and vineyards and typically commands a premium price to Muriate of Potash (MOP). The price differential between MOP and SOP is substantial, and has averaged approximately US$ 125-150/tonne above the MOP price over the past several years. However, recently the differential has increased to over US$350/tonne.

Farhad Abasov, President and CEO of Allana, commented, "We are pleased to have engaged ERCOSPLAN to complete a PEA evaluating the potential of the vast Kainitite resources on the Danakhil Project. As we move to completion on the development of our MOP operations, it makes sense to start to plan for the development of SOP as an Allana product line, particularly given the extent of our estimated SOP-based resource. The SOP PEA will proceed independently but in parallel with our development and optimization work on our MOP production facility as outlined in the MOP project's Feasibility Study completed in 2013. The Kainitite is ubiquitous on our project license and management believes a positive PEA may allow Allana to add significant value for our shareholders. If the results of the SOP PEA are positive Allana may consider establishing a special purpose company dedicated to developing the SOP resources for sale in the global market."

The Kainitite mineral resources on Allana's Danakhil Project are extensive (see table below) and dominated by the mineral kainite (4KMg(SO4)Cl*11H2O). For details on the Kainitite mineral resources see Technical Report entitled "Resource Update for the Danakhil Potash Deposit, Danakhil Depression, Afar State, Ethiopia" dated effective April 17, 2013 filed under the Company's SEDAR profile at www.sedar.com on August 7, 2013.

RESOURCE ESTIMATE	TONNAGE (MT)	GRADE (% KCL)
MEASURED	552.3	19.2
INDICATED	598.2	19.5
INFERRED	481.8	19.8

Notes

1. MT=Million Tonnes, tonnage is for in-situ resource with no discount for recovery as mining method is to be determined.
2. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimates of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.
3. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.

The PEA will outline the potential to produce SOP (K2SO4) from kainite derived from the Kainitite Horizon in the project area. The Kainitite Horizon is interpreted as a primary evaporite unit in the basin and has been intersected in diamond drilling in most of the mining license area. The PEA will examine the use of solution mining to mine the Kainitite Horizon and produce 1,000,000 tonnes per year of SOP product from the brine as a separate operation from the current development program which will produce 1,000,000 tonnes per year of MOP.

The PEA will focus on six main areas covering the following:

1. Preliminary Brine Field Design
2. Preliminary Evaporation Ponds Design
3. Preliminary Process Development
4. Preliminary Definition of Additional Infrastructure
5. Preliminary Cost Estimates (CAPEX and OPEX)
6. Preliminary Market Study and Financial Model

ERCOSPLAN has extensive experience with potassium sulphate minerals and processing through its work in the potash industry in Germany where SOP is and has been produced from different combinations of potassium chloride and/or magnesium sulfate bearing minerals. The PEA is expected to be completed by Q1, 2015