investor presentation - allana potash

www.allanapotash.com | TSX: AAA \ OTCQX: ALLRF

6

BRINGING LOW COST POTASH TO

NEW MARKETS IN AFRICA

MINING ON TOP Conference-London June, 2014

2www.allanapotash.com | TSX: AAA \ OTCQX: ALLRF

CAUTIONARY NOTES

Except for statements of historical fact relating to the Company, certain information contained herein constitutes “forward-looking information” under Canadian securities legislation. 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”. Statements with respect to estimated production, the estimation of mineral reserves and mineral resources; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; capital expenditures; success of exploration activities; permitting time lines and permitting, mining or processing issues; government regulation of mining operations; environmental risks; unanticipated reclamation expenses; title disputes or claims; litigation liabilities; and limitations on insurance coverage, as well as statement with respect to the ICL strategic alliance including with respect to the anticipated use of proceeds of the Offering, the timing of closing of the Offering and the expected benefits of the strategic alliance with ICL are forward-looking statements. Forward-looking statements are based on the opinions, assumptions 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. Such risks include the uncertainty with respect to the shareholder approval of the Second Tranche not being obtained, the fact that the expected benefits of the strategic alliance may not materialize, the inherent capital markets consequences of an equity controlling position, regulatory risks and such other risks as discussed in the risk factors sections of our latest annual information form, our technical reports and other continuous disclosure documents filed from time to time 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

The Units described herein with respect to the ICL strategic alliance have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and accordingly, may not be offered or sold within the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions there from. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the Company's securities in the United States.

Investors are advised that National Instrument 43-101 of the Canadian Securities Administrators requires that each category of mineral reserves and mineral resources be reported separately. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Due to the uncertainty of measured, indicated or inferred mineral resources, these mineral resources may never be upgraded to proven and probable mineral reserves

The information presented uses the terms “measured”, “indicated” and “inferred” mineral resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize these terms. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable.

The measured, indicated and inferred mineral resource and reserve estimates were reviewed and optimized by EuroGeol. Dr. Henry Rauche and EuroGeol. Dr. Sebastiaan van der Klauw, who are “qualified persons” as such term is defined in National Instrument 43-101 .For information regarding the mineral resource and reserve estimates, including parameters used to generate the estimates, please see the Company’s press release dated February 4, 2013 and the technical report titled “TECHNICAL REPORT Summarizing the Feasibility Study for a Sylvinite Solution Mine for the ALLANA Potash Project (The ALLANA and NOVA properties), Afar State, Ethiopia" filed on SEDAR on March 19, 2013 as well as the press release dated June 26, 2013 and the supporting NI 43-101 technical report titled “TECHNICAL REPORT Resource Estimate for the Danakhil Potash Project, Danakhil Depression, Afar State, Ethiopia” filed on SEDAR on August 6, 2013.

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 in this presentation


BUILDING THE FIRST POTASH MINE IN AFRICA

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WHAT DOES ICL’S ALLIANCE WITH ALLANA POTASH MEAN FOR THE COMPANY:

VALIDATION OF THE PROJECT BY A MAJOR POTASH PRODUCER

FINANCIAL SUPPORT Strong equity investment allowing AAA to conduct

optimization and preconstruction work and contribute to construction start-up

Paving the way for the rest of equity and debt financing to follow

Lenders want to see substantial investment from a strategic player – completed

ICL’s involvement increases the potential for future production expansion (MOP + SOP)

SOLID OFFTAKE 80% of production is take-or-pay and the rest

marketed, guaranteed placement of the product with a strong established global potash player

Offtake – major requirement from lenders, will contribute to accelerated debt financing process

Critical transportation and logistics/sales expertise provided by ICL, thus reducing costs for AAA

TECHNICAL COOPERATION Technical support and expertise during

construction and operation from a established potash producer – also important for lenders and shareholders

Significant mitigation of construction, start-up, ramp-up and full operational risks


WORLD CLASS POTASH RESOURCE Significant high grade deposit Estimated mineral reserves and resources delineated

ROBUST ECONOMICS & LOW COST PROVEN MINING METHOD

Low- cost, proven Solution Mining technology; shallow potash beds Low capex (US$642m) and opex (US$125/tonne including transportation and

sustaining capex) due to solution mining and solar evaporation processes Water resources available on the project site

STRATEGICALLY LOCATED Geopolitically stable / environmentally benign Proximity to growing African, and key Asia/Pacific markets

SOLID MANAGEMENT & BOARD AND SUPPORTIVE GOVERNMENT

Experienced in potash and large development projects, with a track record of delivering enhanced shareholder value

CLEAR PATH TO FULL DEBT PLUS EQUITY FINANCING

Debt mandate letters signed with development financing banks (debt financing)

Comprehensive strategic alliance with ICL (one of the largest potash producers in the world) completed

ICL (16.4%), Liberty Metals & Mining (11.9%) and IFC (2.3%) as strong strategic partners1

FAST TRACK TO PRODUCTION Mining license secured Infrastructure – build well underway, project production expected to

commence late 2016

INVESTMENT

HIGHLIGHTS

(1) Shareholding numbers are approximate and to the best of the company’s knowledge only (as of March 1, 2013)


AFRICAN POTASH CONSUMPTIONIS ABOUT TO RISEDRAMATICALLY


AFRICAN POTASH CONSUMPTION1

IS ABOUT TO RISE DRAMATICALLY

Dramatic structural changes in the agricultural sectors in African nations including Ethiopia: • Significant FDI into the agribusiness sector, better

funding, export orientation, need for more fertilizers (potash demands to grow by 5-6% CAGR through to 2025)

Governments along with NGOs and private companies building rural infrastructure and educating farmers on the use of fertilizers including potash • (Ethiopia – 15% of public spending goes to

agribusiness sector; length of rural roads quadrupled, rail network under construction, extreme poverty reduced by 49% 1995-2011)

African nations including Ethiopia announced plans to build NPK blending facilities which will increase the amount of potash used

Ethiopia and other countries are becoming significant exporters of various agricultural products

Source: IFIA + Argus Consulting Inc. – 2013, New African Magazine, March 2014


AFRICA

A POTENTIALLY VAST MARKET FOR POTASH

African population projected to reach 2.2 billion by 2050+

African demand for fertilizers is expected to increase significantly over next decade

Current KCI usage <750,000 tpy

AFRICA: CLIMATE MAP

Source: IFAThe term “Africa” includes North African countries, sub-Saharan Africa and South Africa.

NUTRIENT CONSUMPTION BY REGION

Sources: Wendt, J., 2012. Potash Fertilizers in Africa: Background, Assessment and Prospects. Electronic International Fertilizer Correspondence (e-ifc) No. 32, 11/2012. International Potash Institute (IPI), Horgen, Switzerland. http://www.ipipotash.org/en/eifc/2012/32/6+ World Bank forecast – current population of approximately 900 million in 2010

Source: IFDC, derived from FAOSTAT

FERTILIZER USE FOR VARIOUS REGIONS & MARKETS (2012)

http://www.ipipotash.org/en/eifc/2012/32/6


STRATEGY EXECUTION

GEOLOGY AND RESOURCE DELINEATION

SYLVINITE RESERVES (1)

In Situ Resource

(MT)

KCl (%) Contained KCl(MT)

Proven 32.97 28.0 8.2

Probable 60.81 28.8 15.5

Total reserves 23.7

RESOURCE SYLVINITE

In Situ Resource

(MT)

KCl(%) Contained KCl(MT)

Measured 115.31 27.8 32.0

Indicated 212.11 28.6 60.7

Inferred 90.76 27.8 25.2

KAINITITE

Measured 552.3 19.2 105.9

Indicated 598.2 19.5 116.8

Inferred 481.8 19.8 95.3

UPPER CARNALLITITE

Measured 121.5 17.5 21.3

Indicated 289.8 17.2 49.9

Inferred 175.5 16.5 29.0

DELINEATION OF SIGNIFICANT RESOURCERESOURCE ESTIMATE SUMMARY (FEASIBILITY STUDY)

Source: ERCOSPLAN Feasibility Study Feb.2013 & Resource Estimate Jun.2013 – Please refer to page 2 for full source of FS and resource estimate


STRATEGY EXECUTION

PROVEN MINING METHOD & PROCESSING

THE SOLUTION MINING PROCESS INVOLVES:1. Drilling boreholes (0.5m wide and up to 450m deep).2. Pumping water down the holes to dissolve potash

bearing material.3. Brine is pumped to the surface.4. Brine is transported to the evaporation ponds.5. Brine is evaporated in the evaporation ponds to

produce potash bearing crystals.6. Crystals from the evaporation ponds are crushed.7. The crushed crystal material is processed in the

processing plant.Source: ERM & the Company

PROVEN MINING AND PROCESSING TECHNOLOGIES

Proven extraction and production process: Solution Mining • Used in some large Saskatchewan potash mining operations as well as in the USA (Utah)

Low opex and capex due to efficient eco-friendly solar evaporation and no need to preheat the brine

Minimal impact on the environment

Allana has conducted solution mining and solar evaporation tests on its project with evaporation rates of 7.0-7.5mm/day


STRATEGY EXECUTION

FEASIBILITY STUDY COMPLETED

PROJECT COSTS FINANCIALS

10% After-tax NPV US$1.32 billion

IRR (after tax) 33%

Payback Period 3.1 years from COD

CAPEX(US$M)

Brine Field $ 85

Evaporation Pond 93

Plant & Storage 148

Utilities 102

Truck Loading 5

Transportation Capex 18

Port Capex 24

Total Direct* 475

EPCM 47

Owners Cost, Contingency & Other 120

Total Capex $642

OPEX(US$/tonne)

Production Opex $ 65

Transportation & Port Opex 28

G&A, Contingency 6

Total Opex (loaded on ship) 99

Total Opex (includes sustaining Capex) $125

KEY ASSUMPTIONS

Potash Price (US$2013) US$430 / tonne

Proven and Probable Reserves (Sylvinite)

24 million tonnes MOP

Annual Production 1 million tonnes MOP

Mine Life 25 years

Accuracy of Study +/-15%

* NOTE:In 2013 US$ terms. MOP denotes muriate of potash. The Feasibility Study was prepared by ERCOSPLAN IngenieurgesellschaftGeotechnik und Bergau (“ERCOSPLAN”) under the supervision of EuroGeol. Dr. Henry Rauche and EuroGeol. Dr. Sebastiaan van derKlauw, who are “qualified persons” as such term is defined in National Instrument 43-101. Dr. Peter MacLean, , Ph.D., P. Geo. Senior, Vice President, Exploration is the Company’s designated Qualified Person for the purposes of the Feasibility Study. For more information regarding the Feasibility Study, including parameters used to generate the estimates, please see Company’s press release dated February 4, 2013, and supporting technical report filed on SEDAR on March 19, 2013.


STRATEGY EXECUTION

PRE-CONSTRUCTION ADVANCEMENT

Secured a strategic alliance with large experienced industry player (ICL) with technical knowhow

Technical cooperation agreement signed and will de-risk the project

ICL operational expertise are a perfect match for our site

Work with Ethiopian and Djibouti government to complete infrastructure build up

MITIGATE CONSTRUCTION AND OPERATIONAL RISKS AND BUILD A COMPETENT OPERATING TEAM

DE-RISK THE REVENUE MODEL FOR INVESTORS AND LENDERS

MITIGATEFINANCING RISK

1

2

3 Secured a strategic equity investment (ICL), and more interest from new equity investors (ICL invested C$25 million for 16.5% of AAA – can invest up to C$84 million through exercise of warrant)

Working to secure debt financing (debt mandate letters signed and process is well underway

More interest from new large lender Visibility on debt financing for the competition in

the junior potash sector is problematic at best

Secured take-or-pay offtake for 80% of production and marketing offtake for the remaining 20% (1 million TPY)

ICL is a major fertilizer producer/marketer with global sales and logistics operations


Entered option agreements for three Danakhil licenses in 2008

Commenced drilling Acquired adjacent

Haro license Initial investment by

Liberty Metals & Mining

Strategic investment by IFC

Completed acquisition of three Danakhil options

Mineral resource estimate increase to M&I 673Mt @ 19% KCl& 596Mt Inferred @ 20% KCl

PEA completed; ESIA & feasibility study initiated

Mineral resource estimate increase to M&I of 1.3Bt @ 19.3% KCl& 588Mt Inferred @ 18.6% KCl

Acquired adjacent Nova license

Feb 2013: Major hydrogeological study completed

Feb 2013: Feasibility Study completed

May 2013: Environmental & Social Impact Assessment approved

June 2013: Resource estimate increase announced, with measured & indicated resources bolstered by 85% to 2.4Bt @ 17.9% KCI; Debt LOIs received for over 65% of total capex

July 2013: Debt due diligence process underway

August 2013: Discussions continuing with off-take and strategic partners; Debt mandate letters signed

October 2013: Mining License issued consolidating all licenses and acquisitions into single property

ALLANA’S TRACK RECORD

DELIVERING ON SIGNIFICANT MILESTONES

2009 & PRIOR 2010 2011 2012 2013

2014 – AAA & ICL FORM MAJOR STRATEGIC ALLIANCE (FEBRUARY 12)


2014

STRATEGIC PLAN

TARGETS AND OBJECTIVES PERFORMANCE

Off-Take and Strategic Partnership Negotiations /Agreement

COMPLETED

EPCM Selection Q1-Q2/14

Debt Financing Completion 2Q-4Q/14

Infrastructure Build Completion 1Q/14→2016

Mine Construction and Start-up 2H/14 → 2H/16

Ramp up to full production 2H/17

PLEASE NOTE: The timeline above is indicative only, subject to change by the Company at any time. Each stage of the exploration is conditional on prior stages being completed satisfactorily and the program may change


CONTACT US Allana Potash Corp.

Richard A. KelertasSenior Vice President – Corporate [email protected]

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