Ethiopian Agricultural Transformation Agency and Allana Potash Corp. Sign MOU to Promote Potash Use as Soil Nutrient in Ethiopia

ADDIS ABABA, ETHIOPIA and TORONTO, ONTARIO -- (Marketwire) -- 02/12/13 -- Allana Potash Corp. (TSX: AAA)(OTCQX: ALLRF) ("Allana") and the Ethiopian Agricultural Transformation Agency ("ATA") are pleased to announce that they have signed a Memorandum of Understanding (MOU) to demonstrate the use of potash, a potassium rich mineral salt in Ethiopian agriculture.

Historically, Ethiopian farmers primarily rely on only two fertilizers to supplement the nutrient content in their soil, phosphorus in the form di-ammonium phosphate (DAP) and nitrogen in the form of Urea. A standard application of 100kg of DAP and 100kg of Urea has traditionally been recommended across Ethiopia for all crops and soil types. However, this recommendation fails to take into account the current fertility status of a soil, or specific crop needs. Since only DAP and Urea fertilizers are commercially available, their positive effect of stimulating crop growth also increases the rate of draw-down of native soil fertility, including potassium, thereby reducing native soil fertility levels of essential nutrients not supplied by fertilization.

Trials conducted to date by various stakeholders, including the ATA, have demonstrated the need for using potash-containing fertilizers in many agricultural areas of the country. To help improve this situation and aid Ethiopia's smallholder farmers in increasing their crop production, the ATA is facilitating a variety of soil-related interventions, in partnership with the Ministry of Agriculture (MOA) and the Regional Bureaus of Agriculture. Some of these interventions include: a geostatistical soil fertility mapping of the agricultural land in the country; recommending relevant fertilizer applications for each local woreda based on the information from the mapping work; and the development of fertilizer blending facilities in key regions throughout the country. These local blending plants will make an expanded range of soil nutrients available to farmers in field-level quantities, customized to their specific soil types, crops, and agro-ecologies. As potassium is one the vital crop nutrients to be supplied via these new fertilizer blending facilities, Allana is partnering with the ATA to demonstrate, through a series of systematic local balanced fertilizer field trails, the important role of potash fertilizer to farmers, in blends or as straight fertilizers.

Khalid Bomba, CEO of the Ethiopian Agricultural Transformation Agency, noted that, "Providing and popularizing a full range of soil nutrients to Ethiopia's smallholder farmers is essential to helping them realize the full production and profit potential from their farming lands. As part of this objective, partnering with Allana is an ideal way to introduce and promote the benefits of potassium fertilizers among Ethiopia's smallholders."

Farhad Abasov, President and CEO of Allana Potash Corp. commented: "Allana is very proud to contribute to the agricultural growth strategy of Ethiopia. The Government of Ethiopia has provided support and encouragement to the company during its developmental phase and, so, it is in this light that Allana happily partners with the ATA. A strong agricultural economy is a critical step in creating a robust national economy, one that Allana Potash considers vital to its future. Mark Stauffer, Allana's Chair and the former President of the Potash and Phosphate Institute of Canada, will lead the initiative with ATA on Allana's behalf."

Pursuant to the MOU and subject to certain conditions, Allana, has agreed to donate a total of USD$200,000 per year for the first two years of the effort, or directly pay for the procurement and shipping of blended fertilizers from abroad in an equal amount. In addition, Allana has agreed to donate potash fertilizer, estimated to be valued at no more than USD$300,000-$400,000, in year-3 of the plan, conditional upon Allana having begun commercial production of potash fertilizer in Ethiopia by that time.

Although the fertilizer for the 2013 demonstrations and scale-up will be sourced from overseas, the long-term intention for the plan is based on Allana's development of the Dallol project in northeastern Ethiopia. Working with Ethiopia's Ministry of Mines, Allana will help tap into the country's natural potash reserves, providing an overall boost to the Ethiopian economy through mining and infrastructure development, in addition to the related potential benefits in the agriculture sector.

The expanded fertilizer project being implemented by the MoA and the Regional Bureaus of Agriculture, with support from the ATA, is currently working to build four fertilizer blending plants across the country, to be run as independent, profitable businesses by the selected agricultural cooperative unions.

About ATA: The Ethiopian Agricultural Transformation Agency is a catalyst for change, providing smallholder farmers with access to innovative technologies and techniques, along with proven mechanisms and systems to help increase productivity and improve livelihoods. The Agency is committed to facilitating real change through problem solving, enhancement of existing linkages, coordination of key stakeholders and partners, and lending support to the transparent and swift implementation of growth oriented interventions.

About Allana Potash Corp: Allana Potash is a publicly traded corporation with a focus on the international acquisition and development of potash assets. The Company is currently developing its previously explored, flagship property, the Dallol Potash Project, in Ethiopia. Allana has secured financial support from two significant strategic investors: IFC, a member of the World Bank Group, and Liberty Metals and Mining Holdings, LLC, a subsidiary of Liberty Mutual Group.

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 press release.

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 and timing of the fertilizer program; 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.

Contacts:

Allana Potash Corp.

Richard Kelertas

Senior Vice President, Corporate Development

514 717 6256
rkelertas@allanapotash.com