Ethiopian Potash Corp.: Danakil Potash Corporation Agrees to Advance US$1.5 Million Towards Exploration on Danakil Property

Ethiopian Potash Corp. (the "Company" or "EPC") (TSX VENTURE:FED) is pleased to
announce that Danakil Potash Corporation ("Danakil Corp.") has agreed to terms
for the advance of US$1.5 million to G and B Central African Resources Ltd.
("G&B"), the owner of the Danakil Property, to be used towards immediate
exploration and the continued development of the Danakil Property. Funds will
initially be applied to re-establishing operations at site and completion of
work related to the upgrading of the existing resource estimate in the South
West corner of the property.


Danakil Corp. has agreed to advance US$1.5 million to G&B by way of a loan (the
"Loan"), which will be guaranteed by G&B's sole shareholder, ZRH Nominees (0105)
Ltd. ("ZRH"), and secured by a pledge of all of the shares of G&B owned by ZRH.
Advance of the Loan is expected to occur in tranches over a 30-day period, with
the initial advance of US$200,000 to be made immediately following signing. 


The Loan will bear interest at a rate of 10% per annum, and will become
repayable in full (together with accrued interest) on August 18, 2013. Events of
default under the Loan include the Danakil Property ceasing to be held in good
standing, non-payment on maturity and other customary events of default. Danakil
Corp.'s ability to enforce its security over the G&B shares will be restricted
until June 30, 2013, unless EPC fails to obtain the approval of its shareholders
for the Danakil Joint Venture contemplated by the memorandum of understanding
(the "MOU") described in EPC's press release dated January 30, 2013 (in which
case Danakil Corp. will be entitled to enforce its security immediately
following the date of such meeting). In the event that any draw-down request by
G&B is not satisfied, Danakil Corp.'s security over the G&B shares will
terminate immediately and the funds advanced under the Loan as at the
termination date will become repayable at maturity of the Loan.


The MOU contemplates (among other transactions) G&B and ZRH waiving the
requirement for a feasibility study (the "Waiver") under the option agreement
(the "Option Agreement") among EPC, G&B and ZRH in order to enable early
exercise of EPC's option (the "Option") over the G&B shares and Danakil Corp.
acquiring a 70% (with EPC retaining a 30% interest) in the Danakil Property
pursuant to the Danakil Joint Venture. Repayment of the Loan will be set-off
against Danakil Corp.'s US$1.5 million subscription into the JVCo (as described
in EPC's press release dated January 30, 2013).


The Waiver and establishment of the Danakil Joint Venture will be subject to
satisfaction of all applicable conditions precedent, which will include (but not
be limited to) the restructuring of all outstanding debt of G&B (other than the
Loan) incurred on behalf of EPC in connection with the Option, due diligence,
the execution of mutually satisfactory definitive agreements among the parties
and obtaining all required approvals, including but not limited to TSXV and
shareholder approvals. 


The parties to the MOU have agreed to extend the deadline for the execution of
the agreements contemplated therein to April 1, 2013. All third-party and
regulatory approvals, as may be required, must be obtained by no later than June
30, 2013. There can be no assurance that the definitive agreements will be
entered into within the time required and/or that the transactions contemplated
in the MOU will be consummated. Details regarding the transactions contemplated
by the MOU are described in EPC's press release dated January 30, 2013.


The Company will be calling an annual and special meeting of its shareholders to
consider and approve the transactions described in the MOU following the
execution of all relevant definitive agreements, or if definitive agreements are
not entered into on or before April 1, 2013 to consider and approve the wind-up
of the Company.


The Company also announces the grant of 250,000 options to one of its directors
pursuant to the Company's stock option plan. Each option entitles the holder to
acquire a common share of EPC at a price of $0.10 per share for a period of five
years.


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 timing and extent of advances of the proceeds of the Loan to G&B, the
expected use of proceeds and planned work program, the potential for and timing
of the early exercise of the Option, the Danakil Joint Venture and the
restructuring of outstanding debt, 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, Danakil Corp. being unable to
satisfy G&B's draw-down requests under the Loan, the failure to satisfy all
conditions precedent within the requisite time, including (without limitation)
the entering into of all necessary definitive agreements, obtaining the
requisite third-party consents and regulatory and 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 fulfill their respective
obligations under the Loan, the ability of the parties to negotiate and enter
into definitive agreements, the parties being satisfied with their respective
due diligence investigations, there are no material changes to the terms of any
proposed transaction, completion of the planned work will result in an upgrade
of the resource estimate on the property and no significant decline in existing
general business and economic conditions. There can be no assurance that the
Company will be successful in negotiating and entering into all definitive
agreements or that the Option will be exercised or that the Danakil Joint
Venture will be formed. 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.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Ethiopian Potash Corp.
George Roach
Chief Executive Officer and Director
[phone]
[e-mail]


Ethiopian Potash Corp.
Michael Galloro
Chief Financial Officer
416 907 5644