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Allana Potash Corp. Management’s Discussion and Analysis For the three months ended October 31, 2012 Estimated OPEX were also calculated for Production, Transportation/Handling, and Port. The OPEX costs in US$ per tonne are outlined in the table below: Estimated Production OPEX $70.24/tonne Estimated Transportation/Handling OPEX $8.85/tonne Estimated Port OPEX $2.88/tonne Estimated general & administrative and contingency costs were also calculated in US$ per tonne and are outlined in the table below: Estimated G&A $5.70/tonne Estimated Contingency $2.87/tonne The main assumptions used in the PEA are as follows: Production: One million tonnes MOP per year Mine life: 30 years Mining method: Solution mining Processing: Solar evaporation and flotation Transport: Trucking to Djibouti Power: Diesel generation with fuel shipped to site Water: Water on site Potash Price: US$500 per tonne in 2013 Sustaining CAPEX: US$44 million (before cavern or process design optimization) Feasibility Study work is ongoing and on schedule for completion in yearly 2013. In the PEA, Ercosplan recommends hydro-geological studies to identify large water sources, dissolution testwork, rock mechanical testwork, a pilot solution mining operation and solar evaporation ponds tests. Allana initiated these studies in November 2011 and the work is proceeding. Five geotechnical drill holes have been completed to supply large diameter (PQ) core for rock mechanic testwork which is underway in Germany. Pilot solar evaporation ponds are complete and preliminary evaporation tests on synthetic brine indicate evaporation rates of approximately 1 cm per day. The crystal crop from this brine serves as preliminary test material and 1000 kg were shipped to Germany for flotation studies to prepare the processing flow sheets. Pilot solution mining is also underway on the project. A trial well has completed sump leaching and undercut leaching. Production leaching of the Sylvinite Zone was initiated in December and the resulting crystal crop will be utilized to optimize processing. In addition, hydrogeological studies are underway throughout the Allana license. To date, 18 holes have been drilled and all have encountered water. Pump down tests and recharge tests are ongoing but preliminary data indicated flow rates of up to 150 m 3 per hour from some wells. . Ercosplan is evaluating the costs and benefits of increasing production of MOP to two MTPY after the third year of full production. The potential increase would coincide with the planned completion of rail capacity for potash transport in the area. The PEA, with a target accuracy of +/- 35%, was completed as an initial scope within Allana’s full Feasibility Study program currently being undertaken by Ercosplan, a widely recognized world leader in potash exploration techniques and potash mining and processing. 20
Allana Potash Corp. Management’s Discussion and Analysis For the three months ended October 31, 2012 The PEA is preliminary in nature and is based on a number of assumptions that may be changed in the future as additional information becomes available. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The PEA includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. The PEA is not based on and has not been amended to reflect the updated resource estimates published by the Company effective April 30, 2012. Latin American Potash Corporation, Neuquen Province, Argentina On May 28, 2008, the Company announced that it had acquired 100% of Latin American Potash Corp. (“LAPC”), a company which holds potash prospective assets in Argentina. The purchase transaction was subsequently amended to an acquisition of 100% of the assets of LAPC. The Company acquired mineral concessions totaling 154,000 hectares in the potash-rich Neuquen province of Argentina (the concessions are under application and have not yet been granted). Some properties adjoin Rio Tinto’s Potasio Rio Colorado potash project, which is scheduled for production in 2011. The Company acquired these properties for cash consideration of $130,000 and by issuing 3,000,000 common shares of the Company. The LAPC properties are located in the same evaporite basin as the Rio Colorado project and display the correct stratigraphy to host potash. Potash in the Neuquen basin is found at depths varying from 500 metres to 2,500 metres below surface. The potash beds do not outcrop on the properties; however the insoluble remnants of Sylvite, the main potash mineral, have been identified in outcrop. The Company has engaged Engineer Luis Martin Arce to complete work program recommendations and Environmental Impact Assessments reports for the concessions. The concession applications are currently under review by the Neuquen government. In May 2011, the Company engaged Geomnia Natural Resources SLNE (“Geomnia”) to complete data compilation for the Neuquen projects. Geomnia has extensive experience in the Neuquen evaporite basin and have worked extensively with Rio Tinto, previous owners of the nearby Rio Colorado potash project. Geomnia has an extensive database comprised of geological information, seismic survey data and oil well information which it will compile for the project areas and define drill targets. This compilation work has been expanded to include reprocessing of selected seismic lines completed by various petroleum exploration companies working in the area. RESULTS OF OPERATIONS The following were key results of operations for the three months ended October 31, 2012. The Company recorded a net loss and comprehensive loss for the three months ended October 31, 2012 of $1.22 million compared to $0.90 million during the comparative period ended October 31, 2011. Allana is an exploration and development stage company and has no revenue at this point in time. Expenses for the three months ended October 31, 2012 were $1.43 million. Comparative expenses for the three months ended October 31, 2011 were $1.06 million, representing an increase of $0.37 million or 35% for three months ended October 31, 2012. The primary reasons for the decrease in expenses are described below. The Company grants stock options to officers, directors and consultants of the Company and applies the Black–Scholes option pricing model to estimate the fair value of the options granted as at the date of grant. 21
Page 1 and 2: Allana Potash Corp. Management’s
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
Page 13 and 14: Table 4. Selected drill results (Co
Page 15 and 16: Figure 1. Drill hole locations. All
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Page 23 and 24: Summary of Quarterly Results Net (l
Page 31 and 32: Dependence on Outside Parties Allan

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