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Allana Resources Inc.: Allana Resources Initiates Field Reconnaissance Surveys on Potash Resource in Ethiopia

^{Published on 2009-02-09 05:16:06, Last Modified on 2009-02-09 05:17:53 - Market Wire}
 

TORONTO, ONTARIO--(Marketwire - Feb. 9, 2009) - Allana Resources Inc. (TSX VENTURE:AAA) ("Allana"), is pleased to announce the initiation of Field Reconnaissance Surveys on the Ethiopia Potash Project. The Ethiopia Potash Project is comprised of three mineral concessions in Ethiopia's northeastern Danakil Depression totaling approximately 150 square kilometers. The project area is approximately 100 km from the Red Sea coast and the sea port of Mersa Fatma, Eritrea and 600 km via road from the deep water port of Djibouti. The concessions have an inferred resource estimate of 105,200,000 tonnes of potash mineralization (Sylvite and Kainite) with a composite grade of 20.8% KCl (see News Release Sept. 17, 2008) that is open along strike and to depth. Potash deposits of the Danakil Depression are unique due to their shallow depth and may be amenable to open pit or solution mining.

ERCOSPLAN Ingenieurgesellschaft and Allana geologists have mobilized to the Danakil Depression, established a working camp and initiated its Field Reconnaissance Survey programme. The programme consists of structural mapping, geological mapping, satellite interpretation and sampling of geothermal brines from active hot springs. The main objective of the programme is to optimize drill hole locations for confirmation of results from previous drilling in the area including 2 deep holes in the centre of the basin located approximately 5 km from the inferred resources noted above, in which down hole geophysical surveys indicate that potash mineralization was intersected over widths of up to 45 metres but were never followed up. The drill holes will also be used to conduct down hole seismic surveys to characterize the seismic signature of the potash-bearing horizons. A surface 2D seismic survey is planned for the property and will utilize the response-signature from the down hole survey to detect and potentially delineate the potash-bearing horizons in other parts of the basin. This work is scheduled to begin in Q2 2009 upon receipt of the ERCOSPLAN report.

In addition to the onset of technical work on the property, Allana senior management has met with top government officials in Ethiopia, including the President, Minister of Mines and the Minister of Transportation, to discuss the potash project.

Farhad Abasov, Allana's President and CEO, stated: "We are pleased that Allana initiated the initial phase of the exploration program assisted by ERCOSPLAN, a premiere international potash group. Our visit and meetings have shown once more that Ethiopia remains one of the most stable and pro-business countries in the region. The country's top leadership expressed their full support to Allana's efforts in the area as discussions were held on a wide variety of issues including potentially significant economic benefits to Ethiopia and government sponsored infrastructure (roads, railway etc) in the Afar region."

Pursuant to a press release previously released on September 17, 2008, Allana has agreed to acquire the properties from three private companies in consideration for an aggregate of $2.5 million in cash payments over 3 years and the issuance of 4 million shares. The property will also be subject to a 3% NSR of which 50% can be purchased for CDN $ 5,000,000. The completion of the acquisition is subject to the receipt of all required regulatory approvals, including final approval of the TSX Venture Exchange.

In addition, Allana has chosen not to proceed with the engagement of Downshire Capital ("Downshire") to provide business advisory, shareholder information and public relations services, previously announced on January 27, 2009. As a result of this termination, no cash consideration will be paid to Downshire in connection with the consulting contract entered into on January 23, 2009 and the previously announced options will be cancelled effective immediately.

Peter J. MacLean, Ph.D., P. Geo., Allana's VP Exploration, is a Qualified Person as defined under National Instrument 43-101 and has reviewed and approved the technical information presented in this release.

About Allana Resources Inc.

Allana is a publicly traded corporation with a focus on the acquisition and development of potash assets internationally and recently optioned a previously explored potash property in Ethiopia with 43-101-compliant inferred resources of over 100 million tonnes. Allana has approximately 49 million shares outstanding and trades on the TSX-Venture exchange under the symbol "AAA".

Forward-Looking Statement

Except for statements of historical fact relating to the Company, certain information contained herein constitutes "forward-looking information" under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the estimated production, the estimation of mineral reserves and mineral resources; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; capital expenditures; success of exploration activities; permitting time lines and permitting, mining or processing issues; government regulation of mining operations; environmental risks; unanticipated reclamation expenses; title disputes or claims; litigation liabilities; limitations on insurance coverage and the effect of terminating the investor relations contract. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except in accordance with applicable securities laws.