Secures up to US$3,750,000

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

8 August 2014

African Potash Limited ('African Potash' or the 'Company')Secures up to US$3,750,000 to support development of Lac Dinga Potash Project

African Potash (AIM : AFPO), the AIM listed exploration company focused on sub-Saharan potash assets, is pleased to announce that it has entered into a convertible securities issuance deed (the "Deed") with Bergen Opportunity Fund, LP ("Bergen"), an institutional investment fund managed by Bergen Asset Management, LLC, a New York asset management firm, in connection with an issuance by the Company of zero coupon convertible securities having a nominal amount of up to US$3,750,000 (the "Convertible Securities").

Highlights:

· Investment of up to US$3,750,000 payable in four tranches, to provide working capital and support growth

· African Potash focussed on advancing its Lac Dinga Potash Project in the Republic of Congo - maiden drilling campaign underway

· Convertible security funding to be provided by New York based fund, Bergen Global Opportunity Fund, LP

· Staged funding potentially minimises dilution to existing shareholders

The Convertible Securities will (subject to the satisfaction of certain conditions) be issued in four tranches and the Company will make an announcement of the issue of each Convertible Security. The initial Convertible Security will have the nominal value of US$830,000 and will be issued shortly. Each of the three subsequent tranches of Convertible Securities will be issued 90 days after the date of issuance of the previous Convertible Security and have the nominal value of between US$500,000 and US$1,000,000.

The Convertible Securities will have a term ending on 7 February 2017.

African Potash will have the right to repurchase the Convertible Securities for cash at 105% of their nominal value (and without a fee or penalty) within a certain redemption period. The Company will additionally have the right to terminate the Agreement at any time and not to issue the remaining Convertible Securities on payment of a modest termination fee.

The Convertible Securities will (subject to the satisfaction of certain conditions) be convertible into ordinary shares of African Potash (the "Shares"), in whole or in part, at the option of Bergen. The Company will make an announcement each time any Convertible Securities are converted in whole or in part and will specify in such announcement the relevant conversion price, which will be the lower of (a) 91% of the average of five daily volume-weighted average prices of the Shares on AIM during a specified period preceding the relevant conversion and (b) 140% of the average of the daily volume-weighted average prices of the Shares for the 20 consecutive trading days preceding the date of execution of the Deed.

Bergen has agreed to certain limitations on its ability to dispose of the Shares following a conversion of the Convertible Securities. Additionally, Bergen has agreed to limitations on its ability to convert the Convertible Securities, including a limit on how much of the Convertible Securities can be converted in a particular time period. Further, the Investor does not, and has agreed not to, and to cause its affiliates not to, short-sell the Shares.

In connection with the Deed:

A. African Potash has issued to Bergen 1,530,613 Shares by way of a commencement fee in relation to the overall funding. The Company has applied for admission of these Shares to trading on AIM ("Admission"), and this is expected to become effective on or about 14 August 2014;

B. African Potash has issued to Bergen 4,800,000 Shares. The Company has applied for Admission of these Shares, and this is expected to become effective on or about 14 August 2014. Bergen may be required to make a further payment to African Potash once all of the obligations of the Company under the Deed have been finally met and no amount remains outstanding to Bergen, depending on the price of Shares at such time; and

C. African Potash has agreed that it will (subject to the satisfaction of certain conditions) issue 3,900,000 warrants with an exercise period of 30 months from the date of issue (the "Warrants") to Bergen entitling Bergen (or any subsequent holder of the Warrants) to subscribe for one Share per Warrant at the exercise price equal to 140% of the average of the daily volume-weighted average prices of the Shares during the 15 trading days prior to the date of execution of the Deed.

The Convertible Securities will only be issued to the extent that African Potash has corporate authority to do so.

The proceeds for the issue of the Shares and the Convertible Securities will be used by African Potash for working capital purposes associated with the Company's future exploration programme(s).

In addition, the Company has today also agreed to issue and allot 1,417,686 new Shares in lieu of payment to an adviser to the Company. Application has been made for the Admission of these Shares and Admission is also expected to occur on or around 14 August 2014.

As at today's date, African Potash has 284,993,582 Shares in issue with each Share carrying the right to one vote. There are no Shares currently held in treasury. The total number of voting rights in the Company is therefore 284,993,582 and this figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change to their interest in, African Potash under the Disclosure Rules and Transparency Rules published by the United Kingdom Listing Authority. The new Shares, when issued, will rank pari passu with the existing ordinary shares of the Company. Following Admission, the Company's issued share capital will comprise 292,741,881 ordinary shares and therefore, with effect from Admission this figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change to their interest in, African Potash under the Disclosure Rules and Transparency Rules published by the United Kingdom Listing Authority.

African Potash CEO, Edward Marlow, said, "With an investment of up to US$3,750,000 we are well set to advance our Lac Dinga Potash Project, which is located in a world-class potash bearing region and has proven potential to host a commercial potash deposit. We recently commenced our maiden drilling campaign in order to improve our understanding of the asset, and the results from this will provide a basis for determining future exploration programmes. With a highly prospective licence, drilling underway, and funding secured to implement future exploration, this is an exciting development for African Potash."

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

About African Potash

African Potash was established to invest in/acquire potash assets or projects in sub-Saharan Africa. The Directors believe the fundamentals of the global potash market, a key source of potassium fertiliser, represent a compelling opportunity to create shareholder value.

The Company is currently focused on the Lac Dinga Project in the Republic of Congo and has a highly experienced Board with a proven track record in identifying, operating and developing resource projects in Africa.

About Bergen Asset Management LLC

Bergen Global Opportunity Fund, LP (the "Fund"), is managed by Bergen Asset Management LLC, a New York-based asset management company. The Fund invests in high-growth public and private companies in a range of industries around the world.