Allana Potash fka AAA

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Allana's Chinese Partner Successfully Completes Due Diligence and Receives Government Approval
Tue Sep 15, 12:25 PM

Email StoryIM StoryPrintable View.TORONTO, ONTARIO--(Marketwire - Sept. 15, 2009) - Allana Resources Inc. (TSX VENTURE: AAA.V/PINK ALLRF) ("Allana" or the Company"), is pleased to provide an update on the status of the Company's joint venture MOU with a government-owned Chinese company ("ChinaCo") to develop Allana's Ethiopian potash project announced in its press release of July 20, 2009.

The Company has entered into a memorandum of understanding ("MOU") with a large government-owned exploration and development company in China with respect to the joint financing and development of the Company's Potash project in the Danakil Depression in Ethiopia ("Joint Venture").

Allana is pleased to report that ChinaCo has successfully completed its due diligence on the Ethiopian potash project. The due diligence included extensive data compilation, land title research and two site visits to Allana's potash project. The due diligence period was slightly delayed due to uncharacteristically high rainfall west of the Danakhil which led to minor road obstructions. Allana's technical team accompanied ChinaCo's Ethiopian geological team to the project area where historic drill hole collars and the historic mining shaft were inspected.

ChinaCo has also informed Allana's management that it has received approval from the Chinese government to execute a definitive agreement which will outline the final terms of the partnership.

In addition, Allana is pleased to report that ChinaCo has agreed to discuss enhanced deal terms with Allana in the coming weeks. The final signing of a definitive agreement, originally scheduled for Sept. 14, is now expected to take place by October 31, 2009. This extension was necessary due to the delay in the due diligence as well as the revised terms currently under discussion.

Since the finalization of the definitive agreement is taking longer than anticipated, Allana and ChinaCo have agreed that certain steps should be taken in order to ensure that Allana's exploration and development timelines remain on track. This may include camp construction and other actions prior to the definitive agreement being signed.

ChinaCo is a well-established exploration and development company with a successful track record in China and internationally. They have operated dozens of exploration and development projects in various resource sectors. ChinaCo has substantial potash exploration and development experience as well. Allana's Chinese partner is very active in Africa, particularly in Ethiopia. ChinaCo has an established technical base in Ethiopia which will allow Allana to advance its exploration and development program very quickly.

Upon closing of the transaction, Allana expects to be in a more solid financial and technical condition to deliver on its potash project development objectives.

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 NI 43-101-compliant Inferred Mineral Resource of over 100 million tonnes of potash mineralization (Sylvite and Kainite) with a composite grade of 20.8 % KCl (see News Release Sept. 17, 2008). Allana has approximately 80.5 million shares outstanding and trades on the TSX-Venture exchange under the symbol "AAA".

Contacts

Farhad Abasov
Allana Resources Inc.
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Peter MacLean
Allana Resources Inc.
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