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

http://ca.news.finance.yahoo.com/s/15092009/28/link-f-ccnmatthews-allana-s-chinese-partner-successfully-completes-due-diligence.html

TORONTO, ONTARIO--(Marketwire - Sept. 15, 2009) - Allana Resources Inc. (TSX VENTURE: AAA.V) ("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".

Cautionary Notes

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 terms and timing of a definitive agreement, 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.

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.
[phone]
[e-mail]

Peter MacLean
Allana Resources Inc.
[phone]
[e-mail]