Encanto Potash Corp

Published : August 18th, 2011

Releases Positive Preliminary Economic Assessment For Muskowekwan

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Encanto Potash Group

NEWS RELEASE
---------------------------------------------------------------
ENCANTO POTASH RELEASES POSITIVE PRELIMINARY ECONOMIC ASSESSMENT FOR MUSKOWEKWAN PROJECT

August 18, 2011

Vancouver, British Columbia - Encanto Potash Corp.(TSXV: EPO)(OTCQX: ENCTF)  is pleased to report results of a positive Preliminary Economic Assessment ("PEA") carried out on the Muskowekwan Project in Saskatchewan, Canada by Wardrop, a Tetra Tech Company ("Wardrop").

Encanto President and CEO Jim Walchuck comments:  "We are very pleased with the robust internal rate of return ("IRR") of 24% attributed to a solution mine in the PEA, as compared to 20.9% IRR for a conventional mine.   Wardrop's recommended solution option gives Encanto a concise economic direction as how best to take the Muskowekwan Project into production."

The following table provides a comparison summary of the two mining methods analyzed on the Home Reserve land package forming part of the Muskowekwan Project:   

epo pea1

Based on the above analysis Encanto intends to pursue the development of a solution mine for a number of reasons:

  • Annual potash solution production of 2.5 MM tpy from the caverns on the Home Reserve will result in a 32 year mine life and this can be extended an additional 24 years should the Inferred Resource be converted to an Indicated Resource.  This is a much longer mine life compared to a  conventional mining scenario.
  • Lower CAPEX and CAPEX/Tonne produced.
  • Lower overall manpower requirements, however, opportunities for employment by First Nation members will likely be greater. Overall, 320 full time employees are planned. 
  • Higher internal rate of return.
  • Shorter time to production.
  • Ability to utilize poor quality or even brackish water in the mining process to enhance environmental stewardship and lower costs.
  • Over 1000 workers to be employed in the construction phase.
  • The potential to improve the IRR to 25.7% @ $450/t KCL and 28.4% @ $500/t KCL if a local water aquifer can be accessed.

In addition:

  • As disclosed in prior news releases, Encanto anticipates adding an additional 15,500 acres to the Muskowekwan Project's land package which nearly doubles the land on the Muskowekwan property through a Treaty Land Entitlement process.
  • Encanto plans to drill the TLE lands and provide an updated resource report which will include this acreage.  Additional resources if confirmed on the TLE lands could possibly extend the mine life by decades.

With this positive PEA the Company will focus its immediate attention on the commencement of Environmental Baseline Studies.  Once the additional holes are drilled and assays received the Company will commence a Prefeasibility Study.

This Wardrop PEA was prepared by John Cairns, P. Eng., reviewed by Vern Funk, P. Eng., and authorized by Stan Kotowski, P. Eng.  Vern Funk, P. Eng. and Stan Kotowski, P. Eng reviewed technical information in this news release and had reviewed the results as reported in tables above. Stan Kotowski reviewed and approved the contents of this news release in respect to PEA. He was also responsible for the supervision of all disciplines involved in PEA preparation and adherence to strict QA/QC protocol. Wardrop, a worldwide engineering firm, offers Encanto a wide range of engineering experience ranging from PEA's, through to feasibility studies, detailed design, equipment procurement, construction management and commission/start up.

The PEA was completed in conjunction with the NI 43-101 compliant technical report prepared by North Rim Exploration of Saskatoon, Saskatchewan and released by the Company on March 18, 2011. North Rim has extensive experience in the resource characterization and preparation of NI 43-101 technical reports on potash resources having worked on Saskatchewan potash projects for Mosaic, Potash One and Athabasca Potash.

The technical content of this news release has been reviewed by James Walchuck, P. Eng., President  & CEO of Encanto, a qualified person as defined by NI 43-101.

About Encanto:
Encanto Potash Corp. is a TSX Venture Exchange-listed Canadian resource company engaged in the exploration and development of potash properties in the Province of Saskatchewan, Canada, the largest producing region for potash in the world.

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"
President and CEO

---------------------------------------------------------------
For further information please contact:

James Walchuck, President & CEO
Encanto Potash Corp.
Tel: 604.683.2402

Vanguard Shareholder Solutions
Tel: 604.608.0824
Tel: 866.918.0824
ir@vanguardsolutions.ca
www.encantopotash.com

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.

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Encanto Potash Corp

EXPLORATION STAGE
CODE : EPO.V
ISIN : CA29251N1042
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Encanto Potash is a exploration company based in Canada.

Encanto Potash holds various exploration projects in Canada.

Its main exploration properties are OCHAPOWACE and MUSKOWEKWAN in Canada.

Encanto Potash is listed in Canada. Its market capitalisation is CA$ 22.0 millions as of today (US$ 16.1 millions, € 14.5 millions).

Its stock quote reached its lowest recent point on May 23, 2008 at CA$ 0.02, and its highest recent level on February 11, 2011 at CA$ 0.65.

Encanto Potash has 440 820 000 shares outstanding.

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In the News and Medias of Encanto Potash Corp
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Project news of Encanto Potash Corp
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3/1/2012New and Upgraded Target Prices for Encanto Potash
2/29/2012MGI Securities Raises Target on Encanto Potash
2/2/2012Announces Major New Land Addition
12/8/2011Updates The Treaty Land Entitlement Designation Process
9/21/2011Announces Drilling Has Begun on Treaty Land Entitlement Prop...
5/26/2011(Muskowekwan)Updates Designation Process
4/12/2011(Muskowekwan)Updates Muskowekwan Project
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4/17/2015Encanto Receives Expression of Interest of $250 Million to D...
3/31/2015Encanto Potash Congratulates Muskowekwan Chief and Councillo...
10/31/2014Encanto Announces Re-pricing and Extension of Muskowekwan Fi...
10/28/2014Encanto Announces Re-pricing and Extension of Muskowekwan Fi...
10/22/2014Encanto Announces Closing of Private Placement
10/9/2014Encanto announces closing of private placement
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4/28/2014Encanto Potash announces option grant and re-pricing
4/16/2014Encanto Potash and Muskowekwan First Nation Report on Succes...
4/15/2014Encanto announces closing of $3.65 million prospectus offeri...
4/1/2014Encanto announces pricing of prospectus offering
10/10/2013(Ochapowace)Announces Funding for an Ochapowace Test Well
10/9/2013in the National Investor
4/10/2013(EPO-TSXv) Technicals
4/4/2013Congratulates Chief Reginald Bellerose on Re-Election
6/7/2012(Ochapowace)Announces Successful Outcome of Ochapowace Vote
4/26/2012Encanto Potash Enters Development Stage
2/29/2012Encanto Potash Trading Volume Triples
2/27/2012Announces Positive Outcome from Designation Vote
2/24/2012Share Correction Sparks Technical Commentary
2/21/2012Industrial Alliance Initiating Coverage - Encanto Potash
2/15/2012CORRECTION - Encanto Potash in Gold Newsletter - February
2/15/2012in Gold Newsletter
2/14/2012(Muskowekwan)Announces Issuance of Shares to Muskowekwan First Nations
2/3/2012in Growth Stocks Weekly
1/23/2012Announces Designation Vote Date
1/9/2012in Gold Newsletter
12/12/2011(Muskowekwan)Announces Closing Of Muskowekwan First Nations Investment
11/28/2011s Designation Vote
10/25/2011in Minesite
10/13/2011Video - Prospecting Journal on Encanto Potash
10/12/2011in Winston's Growth Stock Report
9/30/2011Update On Successful TLE Property Drilling
9/19/2011in Gold Newsletter
9/2/2011Announces Results of AGM Voting and Options Grant
8/31/2011VIDEO - First Nation Invests in Potash in Saskatchewan - Enc...
8/18/2011(Muskowekwan)Releases Positive Preliminary Economic Assessment For Muskow...
8/17/2011Video Interview with Jim Walchuck & Chief Bellerose
8/4/2011Announces Date Of First Nations Treaty Land Entitlement Vote
7/14/2011The Bottom Is In
5/16/2011Provides Operational Update
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4/12/2010Brien Lundin on Encanto Potash
2/17/2010Rick Mills on Encanto Potash
2/9/2010Exercises repurchase option
2/8/2010Growth Stocks Weekly
2/2/2010Phase I Exploration Drilling Hits Big
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12/15/2009completes drilling and 2D seismic
10/8/2009announces 2D seismic has begun on the Muskowekwan first nati...
9/10/2009Agreement on Large New Potash Property
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