African Potash Share News (AFPO)

LONDON (Alliance News) - African Potash Ltd Monday said it has secured roughly USD2 million in investment resources through a share placing and technical support agreement in order to start Phase 1 drilling at its Lac Dinga Potash Project in the Republic of Congo.

The sub-Sahara focused potash exploration and development company said it has raised USD1.7 million through a conditional placing of 53.8 million shares at 1.9 pence each to new and existing shareholders.

The company also said it has entered into a camp build, logistics support, and operations management deal valued at USD300,000 with Hedgestone Advisory Ltd in order to support an initial exploration project at the Lac Dinga project in an "equity for services" agreement.

Under the terms of the agreement, an initial USD150,000 payment will be made by the issuance of 4.6 million shares at the placing price and a further USD150,000 will be made on completion of its first phase of drilling at Lac Dinga by the further issuance of 4.6 million shares.

The company plans to start the exploration drilling campaign, which is designed to further the understanding of potash mineralisation at the site, in the third quarter, with two holes scheduled to be drilled by September 2014.

"The funds raised today, coupled with the engagement of Hedgestone Advisory (Pty) Ltd, a company owned and run by Paul Quirk, a pre-eminent figure in the Congolese mining industry, strengthens our ability to rapidly implement our exploration plans for 2014 and begin to determine the resource potential of Lac Dinga," Chief Executive Edward Marlow said in a statement.

African Potash shares were down 18% to 1.95 pence, putting it in the top three AIM ALL-Share fallers in early trading Monday.

By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1

Copyright 2014 Alliance News Limited. All Rights Reserved.