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Description of business:
African Potash Limited ("African Potash" or "the Company") was incorporated in August 2011 and its entire issued share capital was admitted to trading on AIM in September 2011. The Company was formed, and whose investing policy is, to acquire potash (and associated minerals) assets and/or acquire or invest in businesses with potash (and associated minerals) assets or projects in sub-Saharan Africa. In accordance with the Company's investing policy, African Potash has identified Patagonia Capital Limited ("Patagonia") as an appropriate acquisition target. On 28 January 2013, the Company entered into an acquisition agreement, pursuant to which the Company has agreed to acquire the entire issued share capital of Patagonia for a maximum consideration of US$15 million to be satisfied (i) by the issuance of ordinary shares of African Potash, including the Consideration Shares, up to a value of US$12 million and (ii) by the payment of up to US$3 million in cash (the "Acquisition"). Patagonia is a Mauritian incorporated company, which holds 70 per cent. of the issued share capital of La Societe des Potasses et des Mines S.A. ("SPM"), a company incorporated and registered in the Republic of Congo. On 3 December 2012, SPM was granted a formal "Permis de Recherches" in respect of the Lake Dinga project area of the Republic of Congo, a highly prospective potash region. The Permis de Recherches gives SPM the exclusive right to conduct mining research activities for potash salts and related salts in the Lake Dinga project area for a period of three years, commencing 3 December 2012, and two renewals of two years each provided certain conditions have been satisfied. The Acquisition constitutes a reverse takeover under the AIM Rules and is therefore conditional, inter alia, on the approval by Shareholders at a general meeting. A reverse takeover also involves the cancellation of the Existing Ordinary Shares from trading on AIM and a new application for the Enlarged Share Capital to be admitted to trading on AIM. A separate application will be made for the Consideration Shares to be admitted to AIM.

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African Potash Limited

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