African Potash Regulatory News (AFPO)

African Potash Limited / Index: AIM / Epic: AFPO / Sector: Mining

1 October 2015

African Potash Limited ("African Potash" or "the Company")

Signing of Fertiliser Sale Agreement

African Potash, the AIM listed exploration company focused on sub-Saharan potash assets and the vertical integration of fertiliser operations in Africa, is pleased to announce that it has signed a legally binding fertiliser sale agreement with a Zambian based purchaser introduced by COMESA/ACTESA (the "Sale Agreement"). This follows the signing of a framework fertiliser supply agreement ("FFSA") announced earlier this week.

The Sale Agreement is a further significant milestone in the implementation of the Company's strategy of creating a vertically integrated African focused fertiliser business and implements the transaction contemplated in the Company's first trading MOU (as announced on 24 August 2015).

Under the terms of the Sale Agreement, the Company will supply 50,000 metric tonnes ("MT") of fertiliser (25,000 MT of NPK D Compound and 25,000 MT UREA), to a collateral managed warehouse facility in Zambia for seasonal demand in October and November 2015. The sale price achieved by the Company under the Sale Agreement is US$500/MT.

The fertiliser product required to satisfy the Company's delivery obligations under Sale Agreement will be supplied to the Company under the previously announced FFSA and will be delivered under the FFSA to designated port destinations; in-continent transport mechanics to Zambia are currently being organised by the Company, with further details to be provided in due course.

Additionally, the Company is continuing to negotiate a trade finance facility of up to US$50m to fund its trading operations. The facility will remain in place until the Company's fertiliser trading operations become self-funding, further details of which will be announced once finalised. The Company hopes to be able to provide further information to the market in respect of the trade finance facility in the near future.

African Potash Executive Chairman Chris Cleverly said, "Securing this sales contract means that we are now very close to consummating our inaugural fertiliser trade. This initial transaction is important as it acts as a "proof of concept" of our trading facility, in association with and with the support of COMESA/ACTESA. It is worth noting that our sales price of US$500/MT will enable us to hit our margin targets and position us well to execute trades under the other MOUs which we have already announced and those which we are working on. We anticipate finalising our financing arrangements in the near future, and will provide updates in due course."

**ENDS**

For further information visit www.africanpotash.com or contact the following: