HispanicBusiness

TORONTO, ONTARIO -- (Marketwire) -- 01/07/13 -- Allana Potash Corp. (TSX: AAA)(OTCQX: ALLRF) ("Allana" or the "Company") provides an update on its hydrogeological study being completed by Fugro Consult GmbH ("Fugro") on its Dallol Potash Project in Ethiopia. The study, consisting primarily of ground geophysics and water well drilling, has delineated a significant water reservoir, estimated at 160 million cubic metres, in the alluvial sand and gravel on the Allana and newly acquired Nova license. In addition, based on pump tests and drawdown tests, Fugro has estimated the annual recharge into the alluvial material at 35.7 million to 55.2 million cubic metres of water per year.

To date, Fugro has completed ground geophysics (EM) as well as 18 observation wells, 3 pumping wells and 2 solution wells on Allana's Dallol Potash Project with several wells at each location (see attached figure). Ground geophysical surveys measuring resistivity were completed on the Allana and newly acquired Nova properties. The ground geophysics outlined aquifers in the alluvial fans extending from the Ethiopia Highlands into the Danakhil Depression. The surveys identified a surface zone approximately 20 metres thick predominantly underlain by a fresh water aquifer which is underlain by a slightly brackish aquifer. The two aquifers have a combined thickness of 30-40 metres. Fugro has estimated that the water reservoir contained within the aquifer on the Allana licenses to be approximately 160 Million cubic metres.

Pump tests on the large diameter pumping wells yielded flows of up to 150 cubic metres per hour from the production wells. Long term pump tests of 168 hours drawing 100 cubic metres per hour down to a depth of a few metres. The pumping tests show that the groundwater table recovers rapidly and completely at the end of a test indicating it is suitable for well field development.

Basin analysis and investigation of rates of precipitation in the catchment areas of the Ethiopian Highlands west of the project area allows for estimation of the annual recharge rate in the Dallol region and more specifically in the alluvial fans located on the Allana license area. In addition, by monitoring water levels in observation wells, as initiated in March, 2012, the recharge rate can be estimated. This work is ongoing, however, Fugro has calculated, based on a conceptual geohydraulic model, a recharge rate of between 35.7 million cubic metres and 55.2 million cubic metres of water annually for the combined Allana license areas.

Farhad Abasov, President and CEO, commented: "Allana is extremely pleased that the hydrogeological studies in the alluvial fan area have outlined a significant water reservoir and significant yearly recharge. With annual consumption estimated at 16 million cubic metres of water per year for a 1 million tonnes per year MOP operation, the recharge rate alone is adequate to expand future production to 2-3 million tonnes per year of MOP. Delineation of these water resources marks an important milestone for Allana's potash project and has further de-risked the project as sufficient water has now been identified for operations."