POTASH PLAYS

[Max Power]

Article in RESOURCE WORLD MAGAZINE on ALLANA

http://www.allanaresources.com/docs//june122009pdf.pdf

Allana Resources developing Ethiopian potash resources
Farhad Abasov, President/CEO, reports that Allana Resources Inc. [AAA-TSXV] has completed its initial reconnaissance exploration program on its 150 square kilometre Ethiopian potash project located in the Danakil Depression region about 100 kilometres from the Red Sea coast. The project is accessible through roads leading from north and south. The southern road is being completely rebuilt by the Ethiopian government. By the end of the year there will be a new paved highway leading to the property. The government is also planning a railway system for the entire country, including this region. Allana holds an option to earn 100% interests in three potash concessions, collectively called the Dallol Potash Project.
The concessions have seen past potash mining which was carried out intermittently since the early 1900s. Today, other mining companies working in the basin include BHP Billiton and India-based Sainik Coal Mining. Allana’s concessions cover part of the Musley potash deposit on the edge of the 1,000 square kilometre evaporate basin. Most of the world’s reserves of potassium were formed when ancient inland oceans evaporated and the potassium salts crystallized into beds of potash ore.
The recent exploration work focused on structural mapping of the salt domes in the centre of the basin, structural mapping of the west side of the Danakil Graben and sampling of geothermal hot springs to determine the chemistry of the brines.
“While more work is required, we have been encouraged that all studies to date indicate continuity of the potash horizon,” said Abasov. “It is also encouraging that the brine chemistry indicates that dissolution of the potash horizon by hot brines is not a major factor.” Abasov says that the project may prove to be one of the lowest cost potash producers in the world due to the lower capex and opex requirements. The project is amenable to solution mining and due to climatic conditions in the region, solar evaporation ponds could be utilized to reduce both capital expenditures and especially operating costs. Due to these advantages, global industrial players have recently expressed their interest in Allana’s potash property in Ethiopia.
The northwest part of the property, which constitutes about 10% of the entire land position, has over 100 million tonnes of NI 43-101 compliant inferred resource. The company has planned 1,500 metres of diamond drilling, downhole seismic studies and 2D seismic surface studies for 2009. The drill program is designed to confirm and expand the NI 43-101 resource. Allana also plans to upgrade inferred resources to the measured and indicated category through the drill program.
Independent consultant, ERCOSPLAN Ingenieugesellschaft Geotechnik und Bergbau mbH, stated in its report on the property that a reasonable target would be to increase the inferred resources by at least 10 times.
Abasov said that if all is on track and financing is secured, then commercial production can be achieved within three or four years. He pointed out that depending on how and with whom the asset is developed, the primary customers may be either China, Brazil or possibly some other country or region.
Allana also holds a 100% interest in over 154,000 hectares in the Potash-rich Nequen province of Argentina.