African Potash Signs Fertilizer Sales Agreement With Zambian Purchaser

African Potash (LSE:AFPO) announced that it has signed a legally binding fertilizer sales agreement with purchaser based in Zambia for 500,000 metric tonnes of fertilizer.
As quoted in the press release:

The Sale Agreement is a further significant milestone in the implementation of the Company’s strategy of creating a vertically integrated African focused fertiliser business and implements the transaction contemplated in the Company’s first trading MOU (as announced on 24 August 2015).

Under the terms of the Sale Agreement, the Company will supply 50,000 metric tonnes (“MT”) of fertiliser (25,000 MT of NPK D Compound and 25,000 MT UREA), to a collateral managed warehouse facility in Zambia for seasonal demand in October and November 2015.  The sale price achieved by the Company under the Sale Agreement is US$500/MT.

The fertiliser product required to satisfy the Company’s delivery obligations under Sale Agreement will be supplied to the Company under the previously announced FFSA and will be delivered under the FFSA to designated port destinations; in-continent transport mechanics to Zambia are currently being organised by the Company, with further details to be provided in due course.

Additionally, the Company is continuing to negotiate a trade finance facility of up to US$50m to fund its trading operations.  The facility will remain in place until the Company’s fertiliser trading operations become self-funding, further details of which will be announced once finalised.  The Company hopes to be able to provide further information to the market in respect of the trade finance facility in the near future.

Click here to read the full African Potash (LSE:AFPO) press release.