Encanto announces closing of $7 million convertible debenture and
appointment of two directors
TRADING SYMBOL: TSXV:EPO
VANCOUVER, Jan. 14, 2013 /CNW/ - Encanto Potash Corp.
("Encanto" or the "Company") (TSXV: EPO and OTCQX: ENCTF) is
pleased to announce the completion of an aggregate $7 million principal amount 5% secured
convertible debentures. The principal amount of the
debentures are convertible in whole or in part at the option of the
subscribers into common shares of the Company at a price of
$0.25 per common share until
January 14, 2015.
Provided the weighted average trading price of
Encanto's common shares are in excess of $0.50 for 20 consecutive days, the Company may
prepay the debentures in whole or in part prior to the maturity
date by providing 60 days written notice to the subscribers.
A finders' fee of $300,000 was paid
in connection with the financing. The Company intends
to use the proceeds to complete the Pre-Feasibility Study on the
Muskowekwan First Nation property ("PFS") in January 2013, initiate a Bankable Feasibility
Study ("BFS") and provide general working capital for the
Company. The securities issued in connection with this
offering are subject to a 4-month "hold period" as prescribed by
the TSX Venture Exchange and applicable securities laws expiring
May 15, 2013.
The Company announces the appointment of Mr.
Hamad Al-Wazzan and Mr. Aref Kanafani to the Board of Encanto.
Hamad Al-Wazzan
is the Chairman and Managing Director of Arabian Motors Group and
the Al-Wazzan Group of Companies headquartered in Kuwait. A 1979 graduate of Kuwait University, Mr. Al-Wazzan and his partners
have a proven track record in the development of a variety of
construction, petrochemical and natural resource projects in
Europe and the Middle East. More recently, Mr. Al-Wazzan has
focused his attention on acquisitions in the North American mining
sector. Mr. Al-Wazzan participated in $5 million of the offering and has invested an
aggregate of $7.5 million in Encanto
convertible debentures.
Aref Kanafani is
a resident of Montreal and a
graduate of McGill University. He
received his Masters of Business Administration degree from
Oxford University, England. For the past 7 years Mr. Kanafani has
acted as the Senior Principal Advisor to the Al-Wazzan Group of
Companies. Mr. Kanafani's career has been concentrated on
strategic acquisitions and investments in petrochemical,
infrastructure construction and natural resource projects.
About Encanto:
Encanto Potash Corp. is a TSX Venture Exchange
listed and OTCQX traded Canadian resource company engaged in the
development of potash properties in the Province of Saskatchewan, Canada, the largest producing
potash region in the world. Through the joint venture agreement
with Muskowekwan Resources Ltd. on our flagship property, Encanto
has been successful in adding a 3.5 fold increase to the project
land package, which now totals approximately 58,300 acres. A
Preliminary Economic Assessment (PEA), based solely on the Home
Reserve Lands (15,500 acres), was released in August of 2011 and an
updated NI 43-101 report describing the increase to the compliant
resource estimate was filed on May 10,
2012.
Encanto's Muskowekwan First Nation property has
a current NI 43-101 resource estimate dated May 9, 2012 titled "2012 Potash Resource
Assessment for the Muskowekwan First Nations Home Reserve Project
South Eastern Saskatchewan, Canada" containing Measured and
Indicated resources of 130.7MMt grading 29.6% KCl or 18.7%
K2O and Inferred resources of 234.7MMt grading 28.3% KCl
or 17.9% K2O.
The Company has a 100% interest in two
additional potash properties in Saskatchewan: the 55,000 acre
Ochapowace/Chacachas property and the 91,550 acre Spar
property.
The technical content of this news release has
been reviewed by Ross Moulton,
Vice-President of Exploration for Encanto, a qualified person as
defined by NI 43-101.
For additional information about Encanto Potash
Corp., please visit the Company's website at www.encantopotash.com
or review the Company's documents filed on www.sedar.com.
ON BEHALF OF THE BOARD OF DIRECTORS
"James Walchuck"
Per: _________________
James Walchuck
President and CEO
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
THE FOREGOING INFORMATION MAY CONTAIN
FORWARD-LOOKING INFORMATION RELATING TO THE FUTURE PERFORMANCE OF
THE COMPANY. FORWARD LOOKING INFORMATION IS SUBJECT TO A NUMBER OF
KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE ANTICIPATED IN
OUR FORWARD LOOKING STATEMENTS. SUCH RISKS AND OTHER FACTORS
INCLUDE, AMONG OTHERS, THE ACTUAL RESULTS OF EXPLORATION
ACTIVITIES, CHANGES IN WORLD COMMODITY MARKETS OR EQUITY MARKETS,
THE RISKS OF THE MINING INDUSTRY INCLUDING, WITHOUT LIMITATION,
THOSE ASSOCIATED WITH THE ENVIRONMENT, DELAYS IN OBTAINING
GOVERNMENTAL APPROVALS, PERMITS OR FINANCING OR IN THE COMPLETION
OF DEVELOPMENT OR CONSTRUCTION ACTIVITIES, TITLE DISPUTES, CHANGE
IN GOVERNMENT AND CHANGES TO REGULATIONS AFFECTING THE MINING
INDUSTRY, AND OTHER RISKS AND UNCERTAINTIES DETAILED FROM TIME TO
TIME IN THE COMPANY'S FILINGS WITH THE CANADIAN SECURITIES
ADMINISTRATORS (AVAILABLE AT WWW.SEDAR.COM). FORWARD-LOOKING
STATEMENTS ARE MADE BASED ON VARIOUS ASSUMPTIONS AND ON
MANAGEMENT'S BELIEFS, ESTIMATES AND OPINIONS ON THE DATE THE
STATEMENTS ARE MADE. SHOULD ONE OR MORE OF THESE RISKS AND
UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE
INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED
IN THE FORWARD-LOOKING INFORMATION CONTAINED HEREIN. THE COMPANY
UNDERTAKES NO OBLIGATION TO UPDATE FORWARD-LOOKING STATEMENTS IF
THESE ASSUMPTIONS, BELIEFS, ESTIMATES AND OPINIONS OR OTHER
CIRCUMSTANCES SHOULD CHANGE, EXCEPT AS REQUIRED BY APPLICABLE
LAW.
SOURCE Encanto Potash Corp.
