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Allana Potash Corp.
Management’s Discussion and Analysis
For the three months ended October 31, 2012
license adjacent to the Company’s potash project in the Danakil Depression in Ethiopia (the “Nova
Property”).
� Pursuant to the terms of the Normal Course Issuer Bid (“NCIB”), and in accordance with the policies
of the TSX, during the period ended October 31, 2012, the Company purchased 1,719,400 common
shares pursuant to the block purchase exception. These shares were cancelled on November 1, 2012
(see Other and Subsequent events sections).
� On September 11, 2012, the Company announced that it has signed a Memorandum of Understanding
(“MOU”) for the development and operation of a potash terminal at the Tadjourah Port to be
constructed by the Djibouti Port and Free Zones Authority (“DPFZA”). The MOU defines the terms
and intent of the parties regarding:
o specific allocation and use of lands within Tadjourah Port for the Company’s potash terminal;
o integration of designs, construction plans and operating plans for the Company’s potash terminal;
o services to be provided by DPFZA to the Company at the Tadjourah port; and
o co-operation in advancing discussions and agreements with governments regarding regulatory,
import/export and other sovereign terms, and completion of road and rail infrastructure serving
Tadjourah Port in time to meet the operational needs of DPFZA and the Company.
� The Company continued talks with a number of potential strategic partners regarding strategic
investment, a joint venture and/or other potential structures for its Danakil Depression potash project.
Danakil Depression Properties, Dallol area, Afar Region, Ethiopia
On October 24, 2008, as subsequently amended, the Company entered into an acquisition agreement to
purchase a 100% interest in three mineral concessions with the potential to host potash deposits in the
Danakil Depression Afar region, Ethiopia from SB Management, Forbes & Manhattan Inc. and Ethio-Gibe.
As consideration for the property, the Company agreed to an aggregate of $2,500,000 in cash payments
which were completed in 2011.
The vendors have retained an aggregate of 3.0% net smelter return royalty on the property (the “NSR”).
The Company has the option, exercisable at any time, to buyout 50% of the NSR (thereby reducing the
NSR to 1.5%) for $5,000,000.
At the time of the transaction, both Forbes & Manhattan Inc. and SB Management were non-arms-length
parties to the transaction as a result of an insider of each, being a 10% shareholder of Allana. This
shareholding has been subsequently diluted and both Forbes & Manhattan Inc. and SB Management are no
longer non-arms length to Allana. During 2010, the president of Ethio-Gibe became an officer of the
Company.
In July 2011, following the completion of all conditions pursuant to the acquisition agreements and as per
Company’s policy, licenses were transferred to Allana Potash Afar PLC (“Allana Afar”), a wholly owned
subsidiary of the Company registered in Ethiopia. The exploration licenses were consolidated into one
license which is valid until July 18, 2014 and may be extended twice for an additional term of one year
each, subject to the terms of the licenses.
On October 12, 2010, subsequently amended on January 19, 2011 and on April 5, 2012, the Company
entered into an agreement with Haro Petroleum Corporation, a private company operating in Ethiopia, to
acquire a 100% interest in the Haro concession, a potash mining license within the greater Allana land
package. The Haro concession is approximately 11 km 2 and is located between the Sainik mining and
exploration concessions. The Haro concession has no historic drill holes but occupies a strategic location
between the historic Musley Deposit and the Crescent Carnallite deposit. In addition, the concession is
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