TRADING SYMBOL: TSXV: EPO
VANCOUVER, March 1, 2013 /CNW/ - Encanto Potash Corp.
("Encanto" or the "Company") (TSXV: EPO and OTCQX: ENCTF) is
pleased to report that the Technical Report summarizing the
Preliminary Feasibility Study for the Muskowekwan First Nations
Project (the "Project") dated February 28,
2013 has been filed on SEDAR.com and available on the
Company's website at www.encantopotash.com. The Company
advises that a correction to the Pre-Feasibility Study results
which were announced February 4, 2013
was necessary and the revised results are stated below.
During the NI 43-101 finalization review of the economic model, it
was determined an inflation adjustment factor was not applied to
all the royalties and taxes. The inflated taxes and royalties
now used have been taken into account in the financial model and
result in the IRR for the project now being 18.0% (20.0 % before
tax) versus the announced IRR of 19.1% (20.4% before taxes) and the
after tax NPV, discounted at 10%, is now $2.84 billion ($4.12
billion before tax) versus the announced after tax NPV
discounted at 10% of $3.63 Billion
($4.47 billion before tax). There has
been no change to the announced Mineral Reserves that are
sufficient to support the production of 2.8 million tonnes per year
of Potash (MOP) for 58 years.
Jim Walchuck,
President & CEO of Encanto commented "The Company is pleased to
have achieved another milestone of filing the completed NI 43-101
and with these adjustments, the Project remains robust. The
Company is continuing to move the Project forward toward production
with the Feasibility Study ongoing."
A summary of the Revised Financial Model is as follows:
| Realized Potash Price (FOB
Vancouver) |
$460/t standard
$485/t granular |
| Discount Rate |
10% |
NPV - After Tax
NPV - Pre-Tax |
$2.84B
$4.12B |
IRR - After Tax
IRR - Pre - Tax |
18.0%
20.0% |
| Inflation Rate |
2% |
OPEX at full capacity
(includes utilities, labour, maintenance, reagents, fuel,
insurances and municipal taxes)
Sustaining capital cost
(includes brine field and Tailing Management Area
extensions) |
$54.32/t
$32.21/t |
| Logistics Costs (rail and port) |
$50.50/t |
Taxes and Royalties
(includes Potash Production Tax, Crown Royalty and Saskatchewan
Resource Surcharge, average over the life of the project) |
$65.37/t |
Initial CAPEX
(includes contingency and escalation) |
$2.86 billion |
| Deferred CAPEX |
$130 million |
All CAPEX and OPEX costs are in $CAD, revenues are
in $US
US to CAD exchange assumed as 1. |
|
| Annual Production rate |
2.8 Mt of K62 grade potash (98% KCl) |
| Construction Start Date |
Q2 2014 |
| Mine Start up |
Q1 2017 |
| Lifespan of Project |
50 years + |
The technical content of this news release has
been reviewed by Jim Walchuck, P.
Eng., a qualified person as defined by NI 43-101.
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 a joint venture agreement
with Muskowekwan Resources Ltd. ("MFN JV") on our flagship
property, Encanto has a project land package, which totals
approximately 61,000 largely contiguous acres. A Pre-Feasibility
Study was released in February
2013 confirming Proven & Probable KCI Reserves totaling
162 MMt grading 28% which supports primary and secondary mining for
over 50 years at an annual rate of 2.8 million tonnes.
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.
Encanto is currently exploring domestic &
international strategic partnerships for the financing, development
and sale of potash production from its MFN JV Property.
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.
