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Allana Potash Corp. Management’s Discussion and Analysis For the three months ended October 31, 2012 Table 6. Summary of 2011 Measured, Indicated and Inferred Mineral Resources, effective as of June 13, 2011. CATEGORY POTASH MEMBER IN-SITU TONNAGE (MT) KCl (%) MEASURED Sylvinite 16.00 29.09 Upper Carnallitite 14.93 19.88 Lower Carnallitite 77.96 12.00 Kainitite 98.73 19.77 Total 207.62 17.57 INDICATED Sylvinite 81.84 30.23 Upper Carnallitite 63.52 18.02 Lower Carnallitite 134.68 12.05 Kainitite 185.49 19.76 Total 465.53 19.13 TOTAL MEASURED AND INDICATED 673.15 18.65 INFERRED Sylvinite 108.25 31.32 Upper Carnallitite 85.61 17.05 Lower Carnallitite 130.69 11.68 Kainitite 271.17 20.33 Total 595.72 19.96 TOTAL INFERRED 595.72 19.96 Notes: 1. MT=Million Tonnes, tonnage is for in-situ resource with no discount for recovery as mining method is to be determined. 2. The numbers for tonnage, average KCl per cent are rounded figures. 3. 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. 4. Average densities used in resource calculations are 2.14, 1.81, 1.91, and 2.10 for the Sylvinite, UC, LC and Kainitite members respectively. To be included in the resource estimate, drill hole intersections must meet the following criteria: � Sylvinite Member > 20% KCl, minimum width of 2 metres � UC Member > 40% Carnallite, minimum width of 2 metres � LC Member > 60% Carnallite+Kieserite, minimum width of 5 metres � Kainitite Member > 50% Kainite, minimum width of 5 metres Allana has drilled 23 holes prior to the resource evaluation all of which provided geological information for the report, but several holes (14, 18, 4) did not meet these criteria and consequently were not included in the resource. The resource estimates were calculated by extrapolating grades and widths using the radius of influence (“ROI”) from each Allana drill hole and historical drill holes based on industry standards for potash exploration. This process starts with the interpretation of the Radius of Influence of each exploration hole. The following ROIs were used for the calculation of the area of mineralized material in each of the resource categories: � Sylvinite, Upper Carnallitite Members � Measured Resource 250 metres � Indicated Resource 750 metres � Inferred Resource 1500 metres 18
Allana Potash Corp. Management’s Discussion and Analysis For the three months ended October 31, 2012 � Lower Carnallitite, Kainitite Members � Measured Resource 500 metres � Indicated Resource 1000 metres � Inferred Resource 2000 metres For historical drill holes a ROI of 750 metres was used for Inferred Mineral Resources in the different members. Preliminary Economic Assessment and Feasibility Study 2011 In July 2011, the Company engaged Ercosplan to complete a Feasibility Study (“FS”) on its Danakil potash project. The initial investigation of the FS was to be a Preliminary Economic Assessment (“PEA”) to determine the optimal mining and processing methods for the potash deposits. The PEA is based on commercial operations that produce one million tonnes per year (“MTPY”) of a standard Muriate of Potash (“MOP”) product over an initial estimated operating life of 30 years. The PEA examined open pit and solution mining methods. Following a review of the costs and other operating considerations, solution mining with processing using solar evaporation and standard flotation yielded significant advantages and was therefore the preferred mining method selected for the Project. The PEA yielded, on an unlevered basis, an after-tax IRR of 36.8% and an after-tax NPV of US$1.85 Billion based on a 12% discount rate. The mineral resource estimate used for the PEA was completed by Ercosplan in June 2011 and includes insitu Measured and Indicated Resources of 126 Million tonnes of KCl and Inferred Resources of 119 Million Tonnes of KCl as set out in the Technical Report (see News Release, June 20, 2011 and “About Allana” section at the end of the news release). The current mineral resource estimate completed in April 2012 was not the base data used for this PEA. Production of more than one million tonnes per year will be evaluated during the Feasibility Study as the management intends to start production with one million tonnes at the initial stage and then ramp it up to two million tonnes. The key economic highlights of the PEA are outlined in the table below (all dollar amounts are stated in US$): After-tax NPV@12% $1.85 billion After-tax IRR (based on 30% income tax rate) 36.8% Estimated Total Capital Expenditures (including $796 million production, port and logistics) Estimated Total Operating Expenditures (Production, transportation, port, FOB on vessel) $90.54/tonne KCl Payback period 3.5 years For the purpose of the PEA, CAPEX were estimated for three main categories: Production using solution mining, solar evaporation and flotation (“Production”); Transportation and handling of product between the production site and port; and Port facilities in Djibouti. The Production CAPEX includes costs associated with cavern development, the solar evaporation ponds, brine processing, and infrastructure including power. Solar evaporation of the saturated brine solution is possible at the Danakil Project due to the yearround hot temperatures averaging 40°C and very little rainfall. Salts harvested from the ponds will be processed by standard flotation to create an MOP product. Transportation CAPEX costs are based on a company owned fleet of trucks and all support such as maintenance. Port CAPEX costs are based on Allana constructing its own port terminal in Djibouti including product unloading and storage, shipping facilities and supporting infrastructure such as power and minor road construction. The table below outlines the estimated capital expenditures in US$ for all categories. Estimated Production CAPEX $664 million Estimated Transportation/Handling CAPEX $39 million Estimated Port CAPEX $93 million 19
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Page 3 and 4: STRATEGY Allana Potash Corp. Manage
Page 7 and 8: Table 2. Nova drill hole results Al
Page 9 and 10: Table 3. Drill hole locations. Alla
Page 11 and 12: Table 4. Selected drill results. Al
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Page 31 and 32: Dependence on Outside Parties Allan

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