TRADING SYMBOL: TSXV:EPO
VANCOUVER, April 13, 2016 /CNW/ - Encanto Potash Corp.
("Encanto" or the "Company") (TSXV: EPO) is pleased
to announce that they have finalized important terms for their
Memorandum of Understanding ("MOU") with Metals and Minerals
Trading Company of India (MMTC)
http://mmtclimited.gov.in, for a substantial off-take
agreement.
Following months of continued negotiations subsequent
to the signing of the MOU with MMTC previously announced on
October 15th, 2015,
which outlined the base terms to a long term off-take
agreement, Encanto confirms that the MOU is now expanded for
an annual supply of a minimum of 2,000,000 metric tonnes of potash
(approximately US$600 million at
current prices) from the Company's Muskowekwan Project, located in
Saskatchewan.
A Pre-Feasibility Study dated February
28, 2013 referenced below confirms Proven and Probable KCI
Reserves on the Muskowekwan Project totalling 162 MMt grading 28%,
which supports primary and secondary mining for over 50 years at an
assumed annual extraction rate of 2.8 million tonnes.
MMTC, established in 1963, is a Government of India Public
Sector Undertaking ("PSU"), India's Largest International Trading Company
and one of the two highest foreign exchange earners for the country
with a turnover of ~US $10 billion
and a current market cap of US $35 billion
dollars. MMTC is the first Public Sector Enterprise to
be accorded the status of "FIVE STAR EXPORT HOUSE" by the
Government of India for long
standing contribution to exports and, most importantly, is one of
the world's largest buyers of fertilizers. MMTC is owned by
the Ministry of Commerce that is also responsible for the Export
Credit Guarantee Corporation of India Limited.
The MOU also allows for the immediate supply of potash by
Encanto to MMTC, which can be sourced from existing producers
while Encanto concurrently continues to develop the
Muskowekwan Project. To that effect, Encanto now intends to
create a joint trading company in an expanded working relationship
with the Muskowekwan First Nation to ensure that the Company can
begin to supply potash to satisfy MMTC's needs in the near future
as well. The plan is to become an active potash company and to
secure substantial near term cash flow; a rarity for a junior
potash developer.
In addition, the MOU provides that MMTC will also act as
Encanto's worldwide distributor of potash on an exclusive basis,
which is expected to provide access to markets and increased
pricing well beyond the primary market in India.
Encanto President Stavros Daskos
commented on the transaction, "Various entities in India had been tasked over the years with
reviewing dozens of potash property opportunities worldwide as part
of their formal policy to secure a long term supply of potash for
India. Due to a combination of the size, high grade reserves,
the simple geology, low environmental impact, solution mining
advantages in terms of employment safety and faster path to
production, it was determined that Encanto offers the best potash
opportunity for India such that
MMTC decided to move forward with a long term supply agreement.
This will bring the Company great options, including significant
near term revenue and a bright long term future."
"To that end, I would like to personally thank H.E. Nadir Patel the Canadian High Commissioner
to India and his Government of
Canada staff who provided the
invaluable support and guidance that made it possible to bring an
agreement of this magnitude to this advanced stage."
"This is an exciting day for the Council and the people of
Muskowekwan. Production from the first potash mine on First
Nation land is now one important step closer and we welcome both
the coming direct job creation, spin off employment opportunities
and own source sustainable revenue. The new opportunity of
facilitating an immediate supply of potash to India will allow us to accelerate our joint
goals with Encanto of enhancing First Nations and Indo Canadian
skills training and education in conjunction with preserving our
important cultural heritage" stated Muskowekwan First Nation Chief
Reginald Bellerose.
About Encanto:
Encanto Potash Corp. is a TSX Venture Exchange listed and 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 a joint venture agreement
with Muskowekwan Resources Ltd. on our flagship Muskowekwan
Project, Encanto has a project land package which totals
approximately 61,000 largely contiguous acres. A
Pre-Feasibility Study dated February 28,
2013 titled "Encanto Potash Corp. Technical Report
Summarizing the Preliminary Feasibility Study for the Muskowekwan
First Nations Home Reserve Project in South Eastern Saskatchewan,
Canada" confirms the Proven & Probable KCI Reserves totaling
162 MMt grading 28% which supports primary and secondary mining for
over 50 years at an assumed annual rate extraction rate of 2.8
million tons.
Encanto is currently negotiating financing for the development
and sale of potash production from the Muskowekwan Project.
The Company also has a 5% interest in the 55,000 acre
Ochapowace/Chacachas property also located in Saskatchewan.
The technical content of this news release has been reviewed and
approved by James Walchuck, 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
Per: "James Walchuck"
Chief Executive Officer
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 OUTCOME OF NEGOTIATIONS WITH THIRD PARTIES, 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.
