Agreement signed for sale of Togo and Mali Projects

PREMIER AFRICAN MINERALS LTD - Agreement signed for sale of Togo and Mali Projects

PR Newswire

London, May 24

Premier African Minerals Limited (`Premier' or `the Group')

24 May 2013

Premier African Minerals Limited, the AIM quoted multi-commodity naturalresource company with mineral projects located in Western and Southern Africa,announces that, further to the press release of 22 April 2013 relating to theacquisition by Ethiopian Potash Corp. (`EPC') (TSX Venture: `FED'), ofPremier's Mali subsidiary G and B African Resources Mali SARL (`Mali Sub'), on23 May 2013, the Group has entered into a further agreement (`Togo Agreement')with EPC for the sale of its Togo subsidiary, G and B African Resources SARL(`Togo Sub'), and has concluded certain amendments to the sale agreement ("MaliAgreement") relating to the sale of the Mali Sub as part of the sametransaction (together `the Combined Transaction'). The required amendment tothe Mali Agreement arose from a TSX requirement that the 20 million EPC sharesto be issued in satisfaction of the purchase price of the Mali Sub be escrowedpending satisfactory completion of a NI43-101 compliant Technical Report thatrequires a site visit by the Competent Person. The visit will occur when thepolitical situation in Mali has stabilised, provided that visit occurs within12 months.

The sale of the Togo Sub includes the Southern Togo Phosphate and Clays Projectand the Group's Bassar Phosphate Project as described in Premier's AIMadmission document dated 10 December 2012. The Togo Sub's Dapaong Gold Projectin Northern Togo and its Benin branch, which has applications in for Coltan andCassiterite are not included in the Combined Transaction and will remain 100%owned by Premier.

Consideration

Under the revised terms for the Combined Transaction the consideration due toPremier will be satisfied by the issue of 120,000,000 new shares in EPC.Premier will become a Control Person under the rules of the TSX which requiresthat EPC shareholders consent is given. The value of the consideration is C$2.4million based on the EPC midmarket price of C$0.02 at close of business on the21 April 2013, the day before the trading halt requested by EPC in advance ofthe press release of the 22 April 2013 referred to above. Premier will holdapproximately 42% of the enlarged issued share capital of EPC. Any dealingscontemplated by Premier in EPC shares will be subject to TSX rules that includeadvance notification and reporting of any dealings.

Danakil

Through its shareholding in EPC, Premier will gain exposure to EPC'sprospective Danakil property in Ethiopia (`Danakil') in which EPC will hold a30% interest. Danakil borders the advanced properties under development byAllana Potash to the South and South Boulder Mines to the North. EPC has aretained 30% interest in the Danakil and a free carry to Scoping Study and atotal spend of $10 million. Circum Resources Ltd, the holder of the remaining70% of the property has raised the funds required to meet the carry referred toabove and expects to rapidly advance exploration of the property.

Impact of the Combined Transaction

The net effect on closing of the Combined Transaction will be that Premierretains a significant minority interest in the Mali and Togo properties throughits shareholding in EPC, whilst Premier is (1) relieved of their respectiveon-going operating costs and (2) gains exposure to the prospective Danakilproperty. Premier will, on closing of the Combined Transaction, be the largestshareholder in EPC and will exercise control over EPC's board.

Subject to shareholder approval, EPC intends to undergo a name change toAgriMinco and will have a focus on Agricultural and Industrial Mineraldevelopment of assets in West Africa, allowing Premier to better focus on itsspecialised metals explorations both in Togo and Zimbabwe; particularly earlydevelopments at RHA Tungsten. To this end, George Roach, Premier's chairman,has stated that he intends to increase his working capital facility to theCompany from £300,000 to not less than £600,000, subject to agreement with thePremier board.

Further details of the Togo Agreement

Subject to the satisfaction of all conditions precedent, the Togo Agreementwill complete in escrow for a period of 6 months, at which time the Togo Subshares will be released to EPC and the 100 million EPC shares to be issued toPremier under this agreement will be released to Premier. Escrow release of thesecurities shall be accelerated in the event that EPC completes a financing ofat least C$2,500,000, EPC announces an agreement for the sale of EPC assets forproceeds of at least C$2,500,000, or Premier waives the escrow requirements.

However, in the event that EPC fails to maintain certain financial covenants,or EPC loses its interests in the Danakil joint venture with Circum other thanin circumstances contemplated in the joint venture agreements at any timeduring the escrow period, at the election of Premier the escrow arrangementswill thereafter terminate and each of EPC and Premier will re-convey or returnto the other the securities that were subject to escrow, thereby effectivelycancelling and unwinding the Togo Agreement.

Premier shall be entitled to appoint two directors to the board of EPC whilstPremier's shareholding remains above 30% of the issued shares of EPC.

Additional information

Conditions Precedent to closing includes, but is not limited to, TSX VentureExchange and EPC shareholder consent. EPC's shareholder meeting is set for 23June 2013. There can be no certainty that the Combined Transaction will close.

EPC's circular to shareholders, which is available at www.ethopianpotash.com,sets out further information. In particular, the circular deals with EPC'sfinancial position. EPC has warranted that it has sufficient available funds tocover an initial six month period and will need to obtain additional funds tocover periods thereafter. In addition, substantial creditors have accepted adeferment of up to 12 months or such time as EPC is able to effect payment, orat the creditors option, settlement through capitalisation at then prevailingmarket price or C$0.05, whichever is the higher In the event that all thecreditors were capitalised at the minimum price, Premier's shareholding in EPCwill reduce to 37%.

Related party transactions

For the purpose of the Combined Transaction, George Roach, Bruce Cumming andPamela Hueston are not independent directors. Premier and EPC have certainshareholders in common and significant shareholders of Premier who will holdapproximately 15% of EPC shares in issue after closing. The CombinedTransaction is considered to be a related party transaction under the AIMRules.

The Company's independent directors, Leslie Goodman and Ian Stalker, haveconsidered the terms and conditions of the Combined Transaction. TheIndependent Directors consider, having consulted with Cairn Financial AdvisersLLP, the Company's Nominated Adviser, that the terms of the CombinedTransaction are fair and reasonable insofar as the Company's Shareholders areconcerned.

For further information and full details of the Togo Agreement, please visitwww.premierafricanminerals.com or contact the following: