Allana Potash Corp. Completes Strategic Acquisition of Nova-Ethio Potash Corporation
TORONTO, ONTARIO -- (Marketwire) -- 11/01/12 -- Allana Potash Corp. (TSX: AAA)(OTCQX: ALLRF) ("Allana" or the "Company") has completed its previously announced merger, whereby the Company has acquired all of the issued and outstanding common shares Nova-Ethio Potash Corporation ("Nova") through the merger of a wholly-owned subsidiary of Allana and Nova pursuant to the laws of the British Virgin Islands (the "Transaction") (See Press Release dated September 4, 2012).
Nova indirectly holds 100% of a strategically located potash license adjacent to the Company's potash project in the Danakhil Depression (the "Nova Property"). The Nova exploration license covers approximately 154 km2 and is located adjacent to the western and southern boundaries of the Allana license (see Fig. 1). The Nova license also incorporates extensions of the alluvial fans and potential aquifers present on the western portion of the Allana license. Coupled with Allana's land position in its adjacent claims, upon closing of the Transaction, Allana will control approximately 312 km2 of the centre of the potash basin in the Dallol area.
Farhad Abasov, President and CEO of Allana Potash, stated: "Allana's Board of Directors and its management are very excited to have completed this merger as it is expected that this significant adjacent property will give Allana additional strategic ground to augment our current land position and potentially add shallow potash resources. Not only does this acquisition extend our potash land package and water resources, but it complements our ongoing development plans, while reaffirming our commitment to discover and develop potash resources in the area."
Tim Diamond, President and CEO of Nova, stated: "On behalf of the company and the Nova shareholders, we are very pleased to have completed this merger and look forward to our ongoing partnership with Allana."
Nova completed 21 drill holes in the western and southern sections of the Nova Property and compilation of data from this drilling is in progress. In accordance with the terms of the Merger Agreement, Allana is required to make exploration expenditures of up to $5 million over twelve months and drill a minimum of 20 additional holes on the Nova Property. Allana and Nova have jointly defined a next phase drill program to evaluate and define the resources on the property, and under the terms of the merger agreement, will complete a National Instrument 43-101 resource estimate on the Nova Property within twelve months from the date hereof (the "Nova Resource Estimate").
Pursuant to the terms of the Transaction, Allana has issued 48,326,627 common shares to the shareholders of Nova in exchange for all of the common shares of Nova. Further, Allana has placed 35,609,972 of these common shares into escrow (the "Allana Escrowed Shares"). The Allana Escrowed Shares will be released to Nova shareholders in accordance with certain escrow release conditions, which are based upon the amount of contained potassium chloride within the sylvinite zone of the Nova Property as set out in the Nova Resource Estimate. In the event the Nova Resource Estimate contains an amount equal to or greater than 29.2 million tonnes of potassium chloride within the sylvinite zone, all of the Allana Escrowed Shares will be released. In the event the Nova Resource Estimate contains an amount less than 29.2 million tonnes of potassium chloride, the Allana Escrowed Shares will be released proportionately based on the amount that the defined potassium chloride supported by the Nova Resource Estimate is of 29.2 million tonnes. If the Nova Resource Estimate is not completed within 12 months, all of the Allana Escrowed Shares will be released from escrow. To date, no resources have been defined on the Nova Property.
About Allana Potash Corp.
Allana is a publicly traded corporation with a focus on the acquisition and development of potash assets internationally with its major focus on a previously explored potash property in Ethiopia. Allana has secured financial support from two significant strategic investors: IFC, a member of World Bank Group, and Liberty Metals and Mining, a member of Liberty Mutual Group. Allana has Measured Sylvinite Mineral Resources of 60.8 million tonnes of 30.7% KCl; Indicated Sylvinite Mineral Resources of 110.6 million tonnes of 31.1% KCl, and Inferred Sylvinite Mineral Resources of 46.6 million tonnes grading 30.3% KCl; Measured Kainitite Mineral Resources of 319.4 million tonnes grading 20.2% KCl; Indicated Kainitite Mineral Resources of 382.1 million tonnes of 20.4% KCl and Inferred Kainitite Mineral Resources of 373.7 million tonnes grading 20.4% KCl; Measured Upper Carnallitite Mineral Resources of 49.9 million tonnes grading 17.5% KCl; Indicated Upper Carnallitite Mineral Resources of 105.6 million tonnes of 16.7% KCl, and Inferred Upper Carnallitite Mineral Resources of 89.7 million tonnes grading 13.8% KCl; Measured Lower Carnallitite Mineral Resources of 137.7 million tonnes grading 11.1% KCl; Indicated Lower Carnallitite Mineral Resources of 131.4 million tonnes of 10.6% KCl and Inferred Lower Carnallitite Mineral Resource of 78.2 million tonnes grading 8.5% KCl. The foregoing mineral resource estimates are as at April 27, 2012. For more information with respect to the data verification procedures undertaken and the key assumptions, parameters and risks associated with the foregoing estimates refer to Allana's Technical Report entitled "Updated Resource Report for the Danakhil Potash Deposit, Afar State/Ethiopia" dated June 13, 2012, effective April 30, 2012 filed at www.sedar.com. Following closing of the Nova acquisition, Allana has 276,862,651shares outstanding, which includes the Allana Escrowed Shares. Allana trades on the Toronto Stock Exchange under the symbol "AAA".
Peter J. MacLean, Ph.D., P. Geo., Allana's Senior 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.
Forward-Looking Statements
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, including the issuance of securities, the effect of the Transaction; the estimation of mineral reserves and mineral resources; the timing and amount of estimated future exploration; the anticipated timing with respect to the completion of the Nova Resource Estimate; costs of exploration; capital expenditures; success of exploration activities; permitting time lines and permitting; government regulation of mining operations; environmental risks; unanticipated reclamation expenses; and title disputes or claims. 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. These risks and uncertainties include, but are not limited to, uncertainties with respect to mineral resource estimates, uncertainties with respect to permitting time lines and permitting, government regulation of mining operations, environmental risks; unanticipated reclamation expenses, title disputes or claims, risks inherent with conducting business in an African country such as civil unrest, bribery, security issues and the lack of respect for the rule of law and other risks discussed in Allana's latest annual information and other disclosure documents filed at www.sedar.com.
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.
To view "Fig. 1 Location of the Nova License, Ethiopia," please visit the following link: http://media3.marketwire.com/docs/AAA0111_Fig1.pdf.
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