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Allana Resources Announces Joint Venture With Government-Owned Exploration and Development Organization in China and Announces Private Placement Finan
Mon Jul 20, 1:44 PM

http://ca.news.finance.yahoo.com/s/20072009/28/link-f-ccnmatthews-allana-resources-announces-joint-venture-government-owned-exploration.html

TORONTO, ONTARIO--(Marketwire - July 20, 2009) - Allana Resources Inc. (TSX VENTURE: AAA.V) ("Allana" or the "Company"), is pleased to announce the signing of a memorandum of understanding setting out the principle terms and conditions of a joint venture between Allana and one of the largest government-owned exploration and development organizations in China ("ChinaCo") with respect to the financing of exploration works, feasibility study, construction of a solution mine and processing plant and production at Allana's Potash project in the Danakil Depression in Ethiopia (the "Joint Venture").

Pursuant to the Joint Venture, ChinaCo shall be responsible for financing 70% of the costs of the Joint Venture with Allana maintaining responsibility for the remaining 30%. ChinaCo will have to spend 70% of the total project costs at all stages including solution mine and processing plant construction costs in order to earn 70% of the project.

In addition, the terms of the Joint Venture provide for ChinaCo to participate in a private placement financing, pursuant to which Allana shall issue up to 19.99% of its issued and outstanding shares to ChinaCo. at $0.25 per share (the "Offering Price") for approximate total gross proceeds of CAD$4,500,000 maximum to Allana (the "Offering"). ChinaCo will appoint one director to Allana's board.

Closing of the Offering is anticipated to occur within three weeks of the signing of a definitive agreement and the transfer of 100% of the exploration permits from the current owners to Allana or as soon as practicable (the "Closing Date") and is subject to the receipt of applicable regulatory approvals including approval of the TSX Venture Exchange. The common shares issuable are subject to resale restrictions for a period of four months plus one day from the Closing Date.

The net proceeds of the financing will be used to fund exploration and development of Allana's potash project in Ethiopia.

In connection with the Offering, Allana has agreed to pay a finder's fee in the amount of 8% cash and issue finders' warrants that shall entitle the finder to acquire that number of common shares of Allana equal to 3% of the shares issued pursuant to the Offering for a period of five years at a price to be determined in the context of the market and regulatory requirements, but in no event shall it be greater than 125% of the Offering Price.

Farhad Abasov, the President and CEO of Allana, said "We are very pleased to announce this joint venture as this agreement could pave the way to the establishment of one of the first potash production centres in Africa. Our long-term relationship with this partner will provide not only the necessary capital but also significant technical expertise critical for the development of our potash project in Ethiopia. Our future partner is one of China's largest government -owned exploration and development organizations with over 10,000 employees and dozens of projects throughout China and number of foreign countries, including Ethiopia. We view this joint venture as a key strategic step in developing long-term partnerships with China-based mining and fertilizer organizations."

Closing of the Joint Venture remains subject to several conditions, including without limitation, approval of regulatory authorities in both countries, including the TSX Venture Exchange, the completion of due diligence and the signing of a Definitive Agreement, which Allana anticipates occurring on or before September 14, 2009.

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 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 80.2 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 effect of the investment, the proposed terms of the joint venture, the terms of the financing, 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 and the receipt of all required regulatory approvals. 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.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

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.

Contacts

Farhad Abasov
Allana Resources Inc.
416 309-2691
[e-mail]

Peter MacLean
Allana Resources Inc.
416 861-2262
[e-mail]