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Allana Potash Initiates Feasibility Study on Its Ethiopian Potash Project

TORONTO, ONTARIO--(Marketwire -09/06/11)- Allana Potash Corp.   (TSX-V: AAA.V - News) ("Allana"or the "Company"), is pleased to announce that it has awarded a Feasibility Study contract to ERCOSPLAN Ingenieurgesellschaft Geotechnik und Bergbau ("ERCOSPLAN") for its Ethiopian Potash Project.   ERCOSPLAN has been involved in Allana's Ethiopian Potash project since 2008 and completed an updated National Instrument 43-101 ("NI 43-101") compliant resource estimate for the property in June 2011.   ERCOSPLAN is a widely recognized world leader in potash exploration techniques and potash mining and processing.   In addition to Allana, ERCOSPLAN's clients include some of the largest potash exploration companies and potash producers in the world.

Farhad Abasov, Allana's President and CEO, stated: "Allana is very pleased to engage ERCOSPLAN to complete a Feasibility Study for our potash project.   As a world leader in potash mining, processing and related operations, ERCOSPLAN will play a key role in advancing this project.   The Study will begin immediately with additional equipment being mobilized to the site and expansion of the camp underway.   With relatively shallow potash deposit Allana will consider open pit mining method along with solution mining.   We expect that by the end of 2011 technical and economic parameters of open pit and solution mining methods will have been examined so that the management can determine what is the optimal mining method at the initial production stage.   Once the mining method is determined the rest of the feasibility study will focus on the details based on that method.   This is an important milestone for Allana since this timely start of the feasibility study will allow us to stay on track with our development plans.   We look forward to working with ERCOSPLAN as we move forward to production and continue advancing our strategic talks with large fertilizer organizations."

As the successor to the former Kali-Ingenieurburo Erfurt, ERCOSPLAN is a specialist consulting and engineering group whose core activities include project management in all aspects of the extraction and processing of industrial potash and mineral salts.

ERCOSPLAN recently completed a NI 43-101 compliant resource estimate for Allana's Ethiopian Potash Project which will form the basis for the Feasibility Study (see news release dated June 20, 2011).   ERCOSPLAN will investigate the potential to extract potash via open pit mining as well as solution mining and solar evaporation, to produce MOP and SOP products.   The Feasibility Study is estimated to be completed in the second half of 2012 and will begin immediately.

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, PLC, a subsidiary of Liberty Mutual Group.   Allana has Measured and Indicated Sylvinite Resources of 97.8 million tonnes of 30.0% KCl; Inferred Sylvinite Resource of 108.3 million tonnes grading 31.3% KCl; Measured and Indicated Kainitite Resources of 284.2 million tonnes at 19.8%, Inferred Kainitite Resource of 271.2 million tonnes of 20.3% KCl; Measured and Indicated Upper Carnallitite Resources of 78.5 million tonnes grading 18.4% KCl, Inferred Upper Carnallitite Resource of 85.6 million tonnes of 17.1% KCl; Measured and Indicated Lower Carnallitite Resources of 212.6 million tonnes of 12.0% KCl, Inferred Lower Carnallitite Resource of 130.7 million tonnes grading 11.7% KCl.   Allana has approximately 196.5 million shares outstanding and trades on the TSX-Venture 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 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 and timing of the Feasibility Study on the Company, the impact and estimated timeline of the drilling and assay results, the estimation of mineral reserves and mineral resources; the timing and amount of estimated future exploration; 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.   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.