Ethiopian Potash Signs Definitive Agreements Regarding Early Exercise of Option, US$10 Million Investment and Joint Venture on Danakil Property

TORONTO, ONTARIO--(Marketwired - April 22, 2013) - Further to its press releases of January 30, February 20 and March 28, 2013, Ethiopian Potash Corp. (the "Company" or "EPC") (TSX VENTURE:FED) is pleased to announce that it has executed definitive agreements (the "Definitive Agreements") in respect of, among other things, the early exercise of EPC's option (the "Option") to acquire G and B Central African Resources Ltd. ("G&B"), which owns the Danakil Property, and the forming of a joint venture between EPC and Danakil Potash Corporation ("Danakil Corp.") regarding the Danakil Property (the "Danakil Joint Venture"). The Definitive Agreements supersede and replace the memorandum of understanding (the "MOU") dated January 30, 2013, among EPC, Danakil Corp., G&B, ZRH Nominees (0105) Ltd. ("ZRH") and Premier African Minerals Ltd. ("PREM").

Pursuant to the Definitive Agreements, G&B and its sole shareholder, ZRH, have agreed to waive the requirement for a feasibility study (the "Waiver") under the option agreement among EPC, G&B and ZRH (the "Option Agreement") in order to enable early exercise of the Option and Danakil Corp. acquiring a 70% interest in the Danakil Property pursuant to the Danakil Joint Venture. Conditions precedent to the delivery of the Waiver and the completion of the transactions contemplated by the Definitive Agreements (the "Transactions") include, among other things, (i) receipt of TSX Venture Exchange ("TSXV") approval of the Transactions and (ii) EPC obtaining the Shareholder Approvals (as defined below).

Danakil Joint Venture

Danakil Corp. will acquire an interest in the Danakil Property through an ownership interest in a BVI joint venture company ("JVCo"), which EPC has established to hold the shares of G&B acquired under the Option. Pursuant to the Definitive Agreements, EPC will assign to JVCo all of its rights and interests in and to the Option Agreement, together with all rights and privileges to be derived therefrom, at the time the Waiver is delivered to EPC, so as to allow JVCo to acquire the G&B shares upon the exercise of the Option. Danakil Corp. will pay US$3 million (and commit to carry up to US$7 million of future project expenditures, as described below) for 70% of the shares of JVCo (US$1.5 million to be paid into JVCo and US$1.5 million to be paid to EPC). The US$1.5 million payable by Danakil Corp. to JVCo in respect of its subscription for JVCo shares will be partially setoff against all sums owing to Danakil Corp. by G&B pursuant to a loan agreement entered into among Danakil Corp., EPC, G&B and ZRH on February 20, 2013. For further information see the Company's press release dated February 20, 2013.

The Danakil Joint Venture will be governed by a shareholder and joint venture agreement to be entered into by EPC, JVCo and Danakil Corp. ("JV Agreement") at closing, which will provide (among other things) for customary drag & tag and pre-emptive provisions. Danakil Corp. will have nominees appointed to the boards of directors of JVCo and G&B (and any other group company of JVCo), in each case, that together represent a majority of the respective board of directors. EPC will be entitled to have its nominees appointed to fill the remaining positions on each respective board of directors as long as it retains not less than 10% of the issued share capital of JVCo. To the extent that Danakil Corp. and EPC otherwise change their ownership interests in JVCo, they will seek to adjust their respective representation on the boards of directors to reflect such new ownership interests.

The JV Agreement will also provide for Danakil Corp. to solely fund all expenditures of G&B (and any other group company of JVCo) until both (i) a scoping study is completed and (ii) it has funded project expenditures of US$7 million (the "Carried Expenditures"). After Danakil Corp. has funded such expenditures, EPC and Danakil Corp. will contribute to expenditures of G&B on a pro rata basis, subject to customary dilutive provisions in the event of any failure of a party to fund its pro rata contribution from time to time. Once a party's interest has been diluted to less than 10% (which can only occur following completion of a definitive "feasibility study" (within the meaning of National Instrument 43-101)), the interest shall be converted into a 1% royalty over sales revenue from potash received by the JVCo (and any other group company of JVCo).

Failure by Danakil Corp. to fund the Carried Expenditures will result in a claw-back of Danakil Corp.'s ownership interest in JVCo, on a pro rata basis (i.e. in order for Danakil Corp. to have maintained a 70% ownership interest in JVCo at the time of the first pro rata funding by the parties, it must have funded aggregate expenditures of at least US$10 million, inclusive of the US$3 million paid to acquire the G&B shares).

Full details of the transactions noted above will be set out in materials that will be mailed to all shareholders of EPC, as well as filed on SEDAR, once all regulatory approvals have been obtained (see section titled "EPC Shareholders Meeting" below).

Danakil Corp. is a wholly owned BVI subsidiary of Circum Minerals Ltd., incorporated to pursue mineral opportunities in Eastern Africa. As at the date of the Definitive Agreements, each of Circum and Danakil Corp. is at arm's length to EPC.

Restructuring of Outstanding Debt

Pursuant to the Definitive Agreements, EPC has assumed all outstanding debt of G&B incurred on behalf of EPC, or otherwise incurred by G&B, in connection with the Option (being CAD$1,972,630.79) and will arrange with creditors to have certain outstanding debt of EPC, including but not limited to a majority of the G&B debt to be assumed, satisfied by the issuance of common shares in the capital of EPC at a deemed price of CAD$0.10 per share (subject to TSXV approval) (the "Debt Restructuring").

EPC to Acquire Rights to New Potash Permits

Pursuant to the Definitive Agreements, EPC will acquire all of the issued and outstanding shares (the "Mali Share Purchase") of G and B African Resources Mali SARL ("G&B Mali"). G&B Mali is a subsidiary of PREM and the holder of certain rights to acquire potash exploration permits for a group of mineral substances in Mali. The area is known to have produced table salt (NaCI), other salts and Sylvite (KCI).

As consideration for the purchase of the G&B Mali shares, EPC will issue PREM 20,000,000 EPC common shares at a deemed price of CAD$0.10 per share.

PREM is a mineral exploration and development company of which ZRH is a principal shareholder, and George Roach and Pamela Hueston are directors. As a result, minority shareholder approval of the Mali Share Purchase may be required under applicable securities laws and the rules of the TSXV. As PREM is admitted to trading on AIM, the sale will need to comply with the AIM Rules and other regulatory requirements in the United Kingdom.

Proposed Name Change

It is proposed that EPC will (subject to shareholder approval) change its name to "AgriMinco Corp." or such other name as may be approved by the board of directors and/or the TSXV (the "Name Change").

Exercise of Option

Immediately following the satisfaction of all applicable conditions precedent to the completion of the Transactions, G&B and ZRH will provide the Waiver, and the Option will be exercised immediately thereafter. Notwithstanding the assignment by EPC to JVCo of all of its rights and interests in and to the Option Agreement, EPC remains obligated, pursuant to the terms of the Definitive Agreements, to issue common shares of EPC in accordance with the Option Agreement in connection with the exercise of the Option.

As previously announced, the parties to the Definitive Agreements will endeavour to satisfy all applicable conditions precedent to the completion of the Transactions by no later than June 30, 2013. There can be no assurance that the Transactions will be consummated.

As each of G&B and ZRH are considered related parties to EPC the Board of EPC formed special committees to consider the Transactions, other than the Danakil Joint Venture (which was negotiated at arm's length). The Special Committee formed to consider the Mali Share Purchase is comprised of Michael Galloro and Anthony Vella.

EPC Shareholder Meeting

The Company will be calling a special meeting of its shareholders (the "Shareholder Meeting") to consider and approve, among other things, (i) Danakil Corp. acquiring a 70% interest in the Danakil Property from EPC pursuant to the Danakil Joint Venture, (ii) the Debt Restructuring, (iii) the Mali Share Purchase and (iv) the Name Change (collectively, the "Shareholder Approvals"). The Shareholder Meeting is expected to be held in June 2013.

Filing of Definitive Agreements

The Definitive Agreements will be filed and made available under EPC's SEDAR profile at www.sedar.com.

About Ethiopian Potash Corp.

Ethiopian Potash Corp. (TSX VENTURE:FED) is a Canadian company based in Toronto, Ontario and Addis Ababa, Ethiopia.

On behalf of the Board of Directors

George Roach, CEO & Director

Forward-Looking Information

This press release may contain forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. All statements that address future activities, events or developments that the Company believes, expects or anticipates will or may occur (including, but not limited to, the potential for and timing of the early exercise of the Option, the Mali Share Purchase, the Danakil Joint Venture and the Debt Restructuring, as well as the expected terms and conditions of each such transaction) are forward-looking information. Forward-looking information is based upon assumptions by management that are subject to known and unknown risks and uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, the failure to satisfy all conditions precedent within the requisite time, including (without limitation) obtaining the requisite third-party consents, TSXV approval of the Transactions and the Shareholder Approvals, and changes in general economic conditions or conditions in the financial markets. Such forward-looking information is based on a number of assumptions, including but not limited to, the ability of the parties to satisfy all applicable conditions precedent to the completion of the Transactions, there are no material changes to the terms of any proposed transaction, and no significant decline in existing general business and economic conditions. There can be no assurance that the Option will be exercised, or that the Danakil Joint Venture, the Debt Restructuring and/or the Mali Share Purchase will be completed as currently proposed or at all. Accordingly, readers should not place undue reliance on forward-looking information. The Company undertakes no obligations to update publicly or otherwise revise any forward-looking information, except as may be required by law. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to the Company's filings with the Canadian securities regulators available on www.sedar.com.