African Potash Regulatory News (AFPO)

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

28 September 2015

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

Framework agreement for fertiliser supply

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 following meetings in Lusaka, Zambia last week, it has entered into a legally binding framework fertiliser supply agreement ("FFSA") with Cudolog (Pty) Ltd ("Cudolog"), a South African based company. The FFSA is a significant milestone in implementing the Company's strategy of becoming a vertically integrated African focused fertiliser business by securing the supply of fertiliser for onward sale pursuant to the Company's first trading MOU (as announced on 24 August 2015).

The FFSA was signed during the East and Southern Africa Fertiliser Trade Platform (ESAF) annual conference and fertiliser Expo held in Lusaka, Zambia between 24-26 September 2015 (the "ESAF Expo"). African Potash co-hosted with COMESA, the ESAF Expo Cocktail Evening during which a presentation was made to delegates by the Company's Executive Chairman, Chris Cleverly. Photos from the ESAF Expo Cocktail Evening can be viewed using the following PDF link: http://www.rns-pdf.londonstockexchange.com/rns/4040A_-2015-9-28.pdf

Pursuant to the first order made by the Company under the terms of the FFSA, Cudolog will supply 50,000 metric tonnes ("MT") of fertiliser (25,000 MT of NPK D Compound and 25,000 MT UREA), in order to satisfy the Company's obligations under the memorandum of understanding announced on 24 August 2015 to supply fertilisers to a Zambian purchaser introduced by COMESA/ACTESA. Cudolog will deliver the fertiliser to chosen port destinations and in-continent transport mechanics are currently being organised by the Company with further details to be provided in due course.

As announced on 25 September 2015, the Company is in negotiations to establish 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 and further details will be announced once finalised. No purchases will be made under the FFSA until the trade finance facility is finalised.

African Potash Executive Chairman Chris Cleverly said, "Having established a sale price of US$500 per MT in respect of the 50,000 MT of fertiliser product to be supplied in connection with our first trading MOU, we are now pleased to have concluded this agreement for fertiliser supply, which provides us with access to the required quantity and quality of fertilisers, at competitive pricing structures. We are continuing to establish relationships and work towards concluding agreements to complete the full trading chain and look forward to providing further updates on these developments in due course."

**ENDS**

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