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African Potash Limited reassures on Zambia contract

Chairman Chris Cleverly told investors: “I would like to comfort investors and state that I have confidence that African Potash will deliver and that we will receive the full amount originally reported."
African woman selling produce at market.
Fertilser will be the key to unlocking Africa's agricultural riches.

Interims from African Potash Limited (LON:AFPO) chart a year of transformation for the AIM-listed group as it has morphed from a mining exploration and development firm to a supplier of fertiliser.

Crucial to this change has been a deal with African free trading group COMESA. It expects to supply 500,000 tonnes a year to member countries and signed a number of deals 2015.

The first revenues – a total of US$59,000 – came through in the six months to December 31. Analysts expect to see that figure increase significantly in the second half.

AFPO also provided an update on the delayed payment from a Zambian contract.

Chairman Chris Cleverly told investors: “I would like to comfort investors and state that I have confidence that African Potash will deliver and that we will receive the full amount originally reported. 

“The company is continuing to build a pipeline of opportunities on the auspices of the COMESA agreement; further news will be provided to shareholders in due course via the normal regulatory channels when appropriate.”

He described the hold up as symptomatic of the “teething troubles” encountered when a new business model is implemented at a rapid pace.

As is normal with a business at this formative stage of its development, AFPO posted a loss – the deficit was US$716,000 in the first half. As of December 31 it had cash of US$509,000.

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