African Potash Ltd.: Blockchain Joint Venture Agreement and proposed Change of Name

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

28 November 2017

AFRICAN POTASH LIMITED

("African Potash" or the "Company")

Blockchain Joint Venture Agreement and proposed Change of Name

Joint Venture

African Potash, is pleased to announce that it has entered into a Joint Venture agreement with FinComEco Limited a subsidiary of GMEX Group Limited.  The agreement is to jointly develop and operate a range of platforms/projects and initiatives in the agricultural commodity markets sector in sub-Saharan Africa. This will be underpinned by the deployment of a complete blockchain-based agricultural ecosystem solution. This supply-to-demand chain links together smallholder farmers, small-scale traders, brokers, storage, transportation, and commodity buyers. It will help enable smallholder farmers to raise productivity andpotentially obtain a better price for their produce. In the longer term, it may provide opportunities for further income growth as well as opening alternative added-value opportunities including broader e-commerce-enabled enterprises.

It is anticipated that demand will be driven by the provision of microloans by the Company direct to Small Scale farmers ("SSF").  The microloans are expected to bear interest at approximately 12% per annum, a rate which will be a significant disrupter in the countries of operation where farmers can pay well over double this rate.  The portfolio of loans will be insured against non-performance.  All supply chain financing and transaction logging will be by blockchain. This will offer a much more secure and cheaper alternative to present systems where they exist.  Dealing direct with the farmer will limit government interference and cut out "the middlemen" and thereby potentially lower costs further. 

FinComEco, backed by GMEX, will ensure the purchase of agricultural commodities grown by the SSF through the deployment of existing warehouse receipt systems and commodity exchanges with secure payment of profit to the farmer after the repayment of the loan and interest to the Company.

Shareholders will benefit both from the revenue from the sale of fertiliser and other inputs direct to SSFs, as well as the sale of outputs and from interest on the loans.

Change of Name

This joint venture with FinComEco to deploy an integrated microloan financed, token-based, input and output trading ecosystem is a significant step forward in our strategy to build a vertically integrated fertiliser business from initial resource through to selling directly to the farmer. Furthermore, it demonstrates the advantages the role of blockchain technology-based solutions can bring to commodity trading.  In light of this significant development of the Company's strategy, the Board is proposing changing the Company's name to reflect the technology that will be core to its envisaged growth. A resolution to change the name of the Company to Block Commodities Limited will be proposed at the forthcoming Annual General Meeting, details of which will be sent to shareholders in due course.  Rt. Hon. Mark Simmonds, non-executive director of African Potash, is also currently Chairman of FinComEco and was the former UK Foreign & Commonwealth office Minister with responsibilities for Africa, the Caribbean, UK Overseas Territories, International Energy and Conflict Prevention.

Hirander Misra, Founder and Deputy Chairman of FinComEco and CEO of GMEX Group, said "We are delighted to be working with AFPO to transform the lives of smallholder farmers across sub-Saharan Africa. Our unique collaborative approach is delivering best-of-breed technology, standards and inputs (including seeds, fertilisers and pesticides) coupled with agricultural finance facilitation to link the supply to market side demand creating a holistic agricultural value chain."

Chris Cleverly, Executive Chairman, said, "By linking agriculture to blockchain technology, the joint venture will facilitate agricultural value-chain efficiencies through provision of strategic value-added services.  Demand for agricultural inputs will be driven by the provision of low cost microloans direct to Small Scale Farmers ("SSF") for them to purchase inputs from our designated warehouses; with repayment in the form of warehouse receipts of SSF outputs. In addition, other value-added services such as the provision of market information, training and capacity building will be provided, working together with FinComEco and other appropriate partners.  The blockchain system tokens are expected to generate other e-commerce opportunities as demand evolves. This agreement represents a further step in our strategy to build a vertically integrated fertiliser business from initial resource through to selling, using blockchain technology, direct to the farm.  This strategy is reflected in the proposed change of name to Block Commodities limited".

The Company will make further updates in due course.

The Directors of the Company accept responsibility for the content of this announcement.

**ENDS**

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

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About African Potash (AFPO)

African Potash is an NEX Exchange-quoted company focussed on building a vertically integrated platform for the mining, production and distribution of fertiliser, primarily within Africa.

The Company operates the Lac Dinga Project in the Republic of Congo, which is prospective for potash, a key source of potassium fertiliser, and has a trading agreement to supply and deliver fertiliser primarily to the African continent.

For more information please visit http://www.africanpotash.com

About FinComEco

FinComEco, the financial and commodities ecosystem is fostering financial inclusion with social responsibility in collaboration with local stake-holders, development organisations, governments and the private sector with the aim of improving food security and economic diversity.

The new electronic commodities exchange solution is establishing and reinvigorating local spot exchanges and enabling trade across multiple regions with a focus on the agricultural sector to create a holistic secure financial system.

It includes:

●        Price discovery and transparency

●        Electronic warehouse receipts

●        Trade finance and micro lending facilitation as a distribution hub

●        Risk management and hedging

●        Integrated Electronic banking and payments platform

●        Standards framework

●        Traceability and tracking enablement

●        Capacity building and education

●        Operational and technology consultancy

●        Working with trusted local partners

Operational objectives include:

●        Maximising the earnings potential for smallholder farmers

●        Supporting smallholder farmers to thrive enabled with best of breed-of-technology and inputs (including seeds, fertilisers and pesticides), coupled with a unique Agri-finance business model to solve credit and financing issues.

●        Leveraging as well as enhancing current logistics, warehousing and standards to establish a fully vitalised agricultural ecosystem efficiently linking supply to demand.

FinComEco has proven its concept in Malawi at the Agricultural Commodity Exchange for Africa (ACE) through GMEX Group and is establishing fully regulated market places in other African countries and South-East Asia.

Current shareholders include GMEX Group Limited, Saescada Limited and Houghton Street Capital Limited as well as individuals.

For more information visit www.FinComEco.com

About GMEX Group

GMEX Group is a set of companies that offer sustainable and innovative solutions for a new era of global financial markets. Providing business expertise, the latest technology, connectivity & operational excellence delivered through an aligned partnership driven approach.  It uses its extensive market infrastructure experience and expertise to create an appropriate strategic master plan with exchanges, clearing houses, depositories, registries and warehouse receipt platforms.

The Group's key business solutions enable the creation and operation of cost effective electronic exchanges and post trade infrastructure in multiple asset classes including equities, debt, FX, derivatives and commodities. It operates in both developing and developed markets through the establishment of cohesive business and technology ecosystems. GMEX offers the added benefit of interconnection to multiple partner exchanges, to create global networks of liquidity.