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TORONTO, ONTARIO--(Marketwire - Feb. 3, 2011) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES

Allana Potash Corp. (TSX VENTURE:AAA) ("Allana" or "the Company"), is pleased to announce that it has entered into an agreement with a syndicate of agents led by Dundee Securities Ltd., together with Wellington West Capital Markets Inc. as co-lead underwriter and including Cormark Securities Inc. and Fraser Mackenzie Limited (the "Underwriters"), to purchase 12,910,000 common shares of the Company (the "Common Shares") at a price of $1.55 per Common Share for gross proceeds of $20,010,500 on a bought deal private placement basis (the "Offering"). The Company has also granted the Underwriters an over-allotment option to increase the size of the Offering by up to an additional 1,936,500 Common Shares, such option being exercisable at any time up to 48 hours prior to the closing of the Offering. If the over-allotment option is exercised in full, the aggregate gross proceeds raised will be $23,012,075.

The net proceeds from the Offering will be used to fund continued exploration and development work, including a definitive feasibility study, at the Company's Ethiopian potash project as well as future potential strategic land acquisitions and general corporate purposes.

Closing of the offering is anticipated to occur on or about March 1, 2011 (the "Closing Date") and is subject to the receipt of applicable regulatory approvals including approval of the TSX Venture Exchange. The Common Shares will be subject to a statutory hold or restricted period of four months and one day following the Closing Date.

In connection with the financing, the Company has agreed to pay to the Underwriters a cash commission of 6.0% of the gross proceeds raised and issue to the Underwriters that number of compensation options equal to 5.0% of the number of Common Shares sold. Each compensation option shall entitle the holder to acquire one Common Share of the Company at a price of $1.55 for a period of 18 months from the date of closing of the Offering.

About Allana Potash Corp.

Allana is a publicly traded corporation with a focus on the acquisition and development of potash assets internationally with its major focus on a previously explored potash property in Ethiopia with Inferred Mineral Resources of 70.3 million tonnes of kainitite mineralization grading 61.7 % kainite and 30.3 million tonnes of sylvinite resource grading 25.4 % sylvite (combined 105,200,000 tonnes with a composite grade of 20.8 % KCl (see News Release dated Sept. 17, 2008). Allana has approximately 146.3 million shares outstanding and trades on the TSX-Venture Exchange under the symbol "AAA".

Peter J. MacLean, Ph.D., P. Geo., Allana's Senior 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.

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 terms and use of proceeds of the Offering, the ability of the Company to complete the Offering and the impact of the Offering on the Company. 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 information is 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 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 information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information 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 information. The Company does not undertake to update any forward-looking information that is included herein, except in accordance with applicable securities laws.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.