AAA.to/ALLRF, .77 - Allana Potash drills 6.8 m of 20.51% KCl at Sylvinite
2012-02-06 12:38 ET - News Release
Mr. Neil Simon reports
ALLANA POTASH DRILLING INTERSECTS ROBUST POTASH AND PROVIDES FEASIBILITY AND INFRASTRUCTURE UPDATE
Allana Potash Corp. has intersected two zones of strong potash mineralization in both hole DK-11-29 and hole DK-11-31. Hole 29 is located in the western portion of the concession block and was targeted to test potash mineralization west of hole 9. Hole 29 intersected a strong sylvinite zone at a depth of 124.50 metres which yielded 20.51 per cent potassium chloride over 6.80 metres including a high-grade section of 2.5 metres of 33.84 per cent KCl from 124.50 metres to 127.00 metres. The Kainitite zone was also intersected deeper in the hole at a depth of 227.30 metres and returned 21.35 per cent KCl over 9.00 metres.
Hole 31 is located at the central-west portion of the project area approximately 1,200 metres north of hole 16 and was positioned to target the extension of the Musley deposit south of the historic drilling by Parsons. The Sylvinite zone returned 18 per cent KCl over 1.70 metres starting at a depth of 73.50 metres, and the Kainitite zone yielded 21.41 per cent KCl over 6.10 metres starting at a depth of 82.30 metres.
Farhad Abasov, president and chief executive officer, commented: "Allana continues to be encouraged by the continuity and strength of potash mineralization in the western portion of the property as exhibited by the results of holes 29 and 31. This area continues to yield high-grade potash in the Sylvinite and Kainitite zones which management believes will allow Allana to upgrade mineral resources from inferred to measured and indicated categories, as well as add to the inferred category. The relatively shallow and high-grade nature of the Sylvinite zone make this area ideal for solution mining with recovery through solar evaporation. Pilot studies for the feasibility study are well under way, and Allana has made significant progress on road, port and rail infrastructure planning."
Holes 29 and 31 are part of an infill drilling program in the west designed to test the extension of the potash mineralization associated with the historic Musley deposit and allow upgrading of the resource to the measured and indicated mineral resource estimate categories. The results for holes 29 and 31 are presented in the attached table. 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 attached table.
Hole ID From To Width (i) KCl Zone
(m) (m) (m) %
DK-11-29 124.50 131.30 6.80 20.51 Sylvinite+UC
Including 124.50 127.00 2.50 33.84 Sylvinite
227.30 236.30 9.00 21.35 Kainitite
Including 227.30 233.50 6.20 23.14 Kainitite
DK-11-31 73.50 79.20 5.70 15.76 Sylvinite+UC
Including 73.50 75.20 1.70 18.06 Sylvinite
82.30 88.40 6.10 21.41 Kainitite
(i) Drilled width
Hole 29 was drilled vertically and was collared approximately 1,000 metres west of hole 9. Hole 29 is located in the western part of the concession block 10 and east of the historic Musley deposit, suggesting that potash mineralization at Musley continues and is consistent at least to hole 9. Previously released Allana drill holes in this region yielded high sylvinite grades, and the results of hole 29 further support the interpretation of the extension of potash throughout the region.
Hole 31 was drilled vertically and is located approximately 1,200 metres north of hole 16. The presence of sylvinite and kainitite in this region suggests the continuity of the potash mineralization extends south from the Musley deposit as defined by the Parsons work, and toward hole 16 and hole 8.
Exploration drilling has shifted to the far eastern part of the property (hole 44) as part of the resource expansion drilling program that management has designed to add mineral resources. Samples from holes 32 to 43 are undergoing analysis or are en route to the laboratory in Saskatoon, Canada.
Feasibility study update
In addition to exploration drilling, Allana has completed two geotechnical holes to provide large-diameter core for rock mechanic testwork. Two holes remain to be completed in the geotechnical drilling program. Pilot evaporation pond testwork, hydrogeological studies and solution mining testwork are under way as the company's feasibility study advances. Heavy machinery to construct the ponds is on site, and engineering work and earthworks are in progress.
Infrastructure progress
Highway construction by Ethiopian government contractors is actively proceeding to connect the project area with industrial-quality, paved roads both to the company's project development staging facilities in Mekele and to the southern highway access to ports in Djibouti. Discussions are progressing with government departments and private sector operators regarding expansions of existing port operations, and development of new port and rail facilities that would be available with sufficient capacity to serve the project. The company continues to expect that the infrastructure required to begin and ramp up operations will be in place concurrently with or in advance of the company's project construction period.
Operations expansions in the project area continue to be well served by immediately available water supplies and on-site electrical generators. Current geotechnical, hydrogeological and environmental survey work are defining locations and capacities for water sources, and results will be integrated with the feasibility study.
