Allana closes sale of $14.4-million in units to ICL

2014-03-31 17:09 ET - News Release

Mr. Richard Kelertas reports

ALLANA POTASH COMPLETES SECOND INVESTMENT ROUND BY ICL AS PART OF STRATEGIC ALLIANCE

Allana Potash Corp. has closed a second round of investment by ICL totalling approximately $14.4-million through the sale of 30,614,488 units of the company to ICL at a price of 47 cents per unit. The sale was completed following approval of the previously announced private placement financing by disinterested shareholders at a special meeting that was held on March 28, 2014. (See our press release dated February 12, 2014.) Each Unit consists of a common share of the Company ("Common Share"), one and one half Series A Common Share purchase warrants ("Series A Warrants") and one half of one Series B Common Share purchase warrant ("Series B Warrants", and collectively with the Series A Warrants, the "Warrants"). Each Warrant will be exercisable for one Common Share for a period of 36 months from issuance of the Warrant. Each Series A Warrant will be exercisable for a price of $0.54 per Common Share, and each Series B Warrant will be exercisable for a price of $0.60 per Common Share.

The Second Tranche Offering is part of the Company's strategic alliance with ICL pursuant to which an ICL subsidiary entered into a Share Purchase Agreement with Allana on February 12, 2014 for an aggregate investment of $25 million in Units of the Company at a price of $0.47 per Unit on a private placement basis (the "Offering") with the potential for a total investment of up to $84 million upon full exercise of the Warrants comprising part of the Units. The Company closed on the initial $10.6 million investment on February 12, 2014.

Farhad Abasov, President and CEO of Allana, commented, "We are extremely gratified by the support of our shareholders for this important strategic alliance with ICL. We believe that our shareholders' overwhelming response in favour of the Second Tranche Offering, with over 99% of the votes cast at the meeting being voted in favour, demonstrates their appreciation for the transformative potential of our alliance with ICL, not only for our respective companies, but for Ethiopia and East Africa, as well. ICL is a recognized, global leader in potash production, distribution and research. Its alliance with Allana, following ICL's comprehensive due diligence, is a credible endorsement of the project's significant potential and will further bolster Allana's long-standing commitment to its advancement. We also believe that ICL's validation of the project, as demonstrated by its equity investment, take-or-pay offtake and technical assistance, will serve to further de-risk the project, increase the confidence level of lenders participating in the project's debt financing and help to pave a clear path to securing full funding for the project."

Following the closing of the Second Tranche Offering, ICL holds approximately 16.38% of the issued and outstanding Common Shares of Allana on a non-diluted basis.

The Company plans to use the proceeds from the Offering exclusively to fund further optimization and pre-construction activities, to construct the project and for other general corporate and working capital purposes related to the advancement of the project.

Please see Allana's press release dated February 12, 2014 and the management information circular dated February 26, 2014, both available on SEDAR, for additional information with respect to the Company's strategic alliance with ICL.