Placing to raise GBP1.2 million and Notice of AGM

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

17 April 2015

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

Placing to raise £1.2 million and notice of AGM

African Potash Limited, the AIM listed African exploration company, is pleased to announce that it has secured funding of approximately £1.2m by way of a placing of new ordinary shares (the "Placing") through Cornhill Capital Limited ("Cornhill"). The Placing proceeds will enable the Company:

a) to redeem the outstanding convertible securities (the "Convertible Securities") held by Bergen Opportunity Fund, LP ("Bergen"); and

b) be used for the Group's ongoing working capital requirements.

Pursuant to the Placing the Company will issue:

· 216,666,667 new ordinary shares (the "Initial Placing Shares") at a price of 0.3p each on 21 April 2015, raising approximately £650,000; and

· 183,333,333 new ordinary shares (the "Subsequent Placing Shares") at a price of 0.3p each on 22 May 2015, raising approximately £550,000, subject to shareholder approval being granted to the relevant resolutions at the Company's Annual General Meeting ("AGM") which will be held on 21 May 2015;

Under terms agreed with Bergen, the Company will redeem the Convertible Securities for an aggregate amount of US$974,000. Full details of the Convertible Securities are set out in the Company's announcement dated 8 August 2014. A notice convening the AGM will be sent to shareholders and will be available to download from the Company's website at www.africanpotash.com.

African Potash Executive Chairman, Chris Cleverly, said, "Bergen provided the Company with an important bridge in August 2014, and has been an accommodating and flexible financing partner for the Company. Securing this new funding is an important development for African Potash. It enables the Company to continue the evaluation and planning of a further work programme at the Lac Dinga Potash Project as we aim to translate the significant commercial value of this strategic asset into meaningful value for shareholders. I look forward to providing further updates relating to our corporate and operational progress in due course."

Details of the Placing

The Company has conditionally raised approximately £1.2m (before expenses) through the issue of 400,000,000 new ordinary shares of no par value (the "Placing Shares") at a price of 0.3 pence per share (the "Placing Price") to new shareholders including strategic investor White Knight Investment Group, which will subscribe for 98,333,333 Placing Shares of which 53,263,889 will be Initial Placing Shares and which will accordingly represent 9.95% of the enlarged share capital immediately following Admission (as defined below) of the Initial Placing Shares.

The Placing will be effected pursuant to an agreement (the "Cornhill Agreement") with Cornhill Capital Limited ("Cornhill"). Pursuant to the terms of the Cornhill Agreement the Company has also agreed:

· to grant to Cornhill 20 million warrants to subscribe for new ordinary shares in the Company at an exercise price of 0.3p per new ordinary share, exercisable for a period of two years following the AGM; and

· to appoint Cornhill as its joint-broker with immediate effect.

Admission of new Ordinary Shares to trading on AIM

Application has been made for the Initial Placing Shares, which will rank pari passu in all respects with the existing Ordinary Shares of the Company, to be admitted to trading on AIM ("Admission"), which is expected to be effective from 8.00 a.m. on 21 April 2015. Application will be made for the Subsequent Placing Shares, which will rank pari passu in all respects with the existing Ordinary Shares of the Company, to be admitted to trading on AIM as soon as practicable following the conclusion of the Company's AGM.

Total Voting Rights

The Company has no Ordinary Shares held in treasury. The total number of voting rights in the Company following the issue of the Initial Placing Shares will therefore be 535,509,310. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

**ENDS**

For further information visit www.africanpotash.comor contact the following: