ENCANTO POTASH CORP. ANNOUNCES MUSKOWEKWAN RESOURCES
March 18, 2011
VANCOUVER - Encanto Potash Corp. (TSXV: EPO) is pleased to release the results of the NI
43-101 Technical Report prepared by North Rim Exploration Ltd.
("North Rim") of Saskatoon, Saskatchewan on the Company's Muskowekwan project situated on the Muskowekwan First Nation ("MFN") Home
Reserve (16,831 acres) in Saskatchewan. At the Company's
request, North Rim has prepared resource calculations based on both the
solution mining extraction method and on the conventional mining
extraction method. Encanto decided to
evaluate and report the two resource calculations in order to determine,
at a later date in future engineering studies, the most economically
viable method for extraction. These resources are restricted to the Home
Reserve only and do not take into account the Treaty Land Entitlement
("TLE") Reserve lands (15,500 acres contiguous to the Home
Reserve) whose mineral resources and lands are owned by MFN and are
included in our Joint Venture agreements with MFN and Exploration Permits
from Indian and Northern Affairs Canada ("INAC"). The TLE
Reserve lands and minerals are currently undergoing a designation process
to surrender the mineral rights to Canada, these
rights are then returned back to MFN. Once the TLE lands are
designated, North Rim will recalculate to include those resources in an
amended NI 43-101 Technical Report and has the potential of adding up
to15,500 acres, or 90% to the resource
area. Encanto's completed 2D and 3D
seismic program was conducted on both the MFN Home Reserve and on the TLE
Reserve lands.
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, Athabasca Potash and
Karnalyte Resources.
The reader is
cautioned that the 2 mining scenarios presented below should be treated
as separate mineral resource calculations and should NOT be added
together. The solution mining
scenario was prepared as the base case with the conventional resource
provided as a sensitivity case until additional engineering studies are
completed. Engineering factors that are yet to be determined to
assess the economic viability may be, but are not limited to:
- Study
of the geothermal gradient to determine the energy inputs required
(solution mining scenario).
- Study
of potential engineering challenges to determine suitable pillar
sizes and extraction ratios (conventional mining scenario).
- The
"recoverable K2O" resource may change due to
the uncertainty of the mining method at this time. Additional work on economic viability may be necessary.
The resource
for the potential solution mining intervals (Patience Lake and
Belle Plaine members excluding interbeds) are calculated as follows:
- Indicated
Resource: 1,144.2 MMt in place sylvinite grading 29.4% KCl
or 18.6% K2O (79.1 MMt of
recoverable KCl, or 49.9 MMt recoverable K2O) and
- Inferred
Resource: 868.4 MMt in place sylvinite grading 29.2% KCl
or 18.5% K2O (60.5 MMt of
recoverable KCl, or 38.2 MMt of recoverable K2O).
Details of the solution mining scenario
are presented below in Table 1:
Table 1: Solution Mining Scenario Indicated and Inferred
Mineral Resource
Solution
Mining Scenario
|
Indicated Resource Summary*
|
Member
|
Thickness
(m)
|
Average
K2O
Grade
(%)�
|
Average
KCl
Grade
(%)�
|
In-Place
Sylvinite
Tonnage
(MMT)�
|
Net
K2O
Resource
(MMT)3
|
Net
KCl
Resource
(MMT)3
|
Net
KCl
Resource
Per Section
(MMT/Sec)4
|
Patience
Lake
|
7.02
|
19.69
|
31.17
|
529.85
|
24.36
|
38.56
|
2.75
|
Belle
Plaine
|
8.39
|
17.41
|
27.56
|
614.33
|
25.61
|
40.54
|
2.98
|
Totals
Excluding
Interbed
|
15.41
|
18.57
|
29.39
|
1,144.18
|
49.97
|
79.10
|
5.73
|
Inferred
Resource Summary**
|
Member
|
Thickness
(m)
|
Average
K2O
Grade
(%)�
|
Average
KCl
Grade
(%)�
|
In-Place
Sylvinite
Tonnage
(MMT)�
|
Net K2O
Resource
(MMT)3
|
Net KCl
Resource
(MMT)3
|
Net KCl
Resource
Per Section
(MMT/Sec)4
|
Patience Lake
|
7.16
|
19.28
|
30.52
|
403.74
|
18.64
|
29.50
|
2.82
|
Belle Plaine
|
8.44
|
17.62
|
27.89
|
464.61
|
19.60
|
31.03
|
3.04
|
Totals
Excluding Interbed
|
15.60
|
18.46
|
29.22
|
868.35
|
38.24
|
60.53
|
5.86
|
*Search Radius: 2.0km (between drill holes); MMt = million tonnes;
Density used 2.08; KCl = 1.58303 K2O
**Search Radius: 2.0km inner radius and 5.0km outer radius (between
drill holes); MMt = million tonnes;
Density used 2.08; KCl
= 1.58303 K2O
1 "Average K2O Grade" and
"Average KCl Grade" refer to the
weighted averages.
2 " In-Place Sylvinite
Tonnage" refers to Volume of Rock*Density of Sylvinite in the project area.
3 "Net K2O Resource" and "Net KCL
Resource" refer to total amount of extractable K2O and KCl resource in the project area. (Volume of
Rock*Density of Sylvinite*Grade*Deductions).
Deductions include 10% for unknown anomalies, a 35% extraction ratio, and
24% for cavern and plant losses.
4 Assuming
640 acres (2589988.11 m2) per section.
The resource
for the potential conventional mining intervals (Patience Lake and
Belle Plaine members) is calculated as follows:
- Indicated
Resource: 461.5 MMt in place sylvinite grading 36.2% KCl
or 22.9% K2O (45.9 MMt in
recoverable KCl, or 30.0 MMt recoverable K2O) and
- Inferred
Resource: 327.4 MMt in place sylvinite grading 36.4% KCl
or 23.0% K2O (32.7 MMt
recoverable KCl, or 20.7 MMt recoverable K2O).
Details of the conventional
Indicated and Inferred resource are presented in Table 2 as follows:
Table 2: Conventional Mining Scenario Indicated and Inferred
Mineral Resource
Conventional
Mining Scenario
|
Indicated
Resource Summary*
|
Member
|
Thickness
(m)
|
Average
K2O
Grade
(%)�
|
Average
KCl Grade
(%)�
|
In-Place
Sylvinite
Tonnage
(MMT)�
|
Net K2O
Resource
(MMT)�
|
Net KCl
Resource
(MMT)�
|
Net KCl
Resource
Per Section
(MMT/Sec)4
|
Lower
Patience Lake
|
3.30
|
24.36
|
38.56
|
117.25
|
7.91
|
12.53
|
1.90
|
Belle Plaine
|
5.07
|
22.09
|
34.97
|
344.29
|
21.06
|
33.34
|
2.65
|
Totals
|
8.37
|
22.87
|
36.20
|
461.54
|
28.98
|
45.87
|
4.55
|
Inferred
Resource Summary**
|
Member
|
Thickness
(m)
|
Average
K2O
Grade
(%)�
|
Average
KCl Grade
(%)�
|
In-Place
Sylvinite
Tonnage
(MMT)�
|
Net K2O
Resource
(MMT)�
|
Net KCl
Resource
(MMT)�
|
Net KCl
Resource
Per Section
(MMT/Sec)4
|
Lower
Patience Lake
|
3.31
|
24.14
|
38.21
|
88.61
|
5.93
|
9.39
|
1.89
|
Belle Plaine
|
5.15
|
22.28
|
35.27
|
238.83
|
14.74
|
23.33
|
2.71
|
Totals
|
8.46
|
22.96
|
36.35
|
327.44
|
20.67
|
32.72
|
4.59
|
*Search Radius: 2.0km (between drill holes); MMT
= million tonnes; Density used is 2.08; KCl = 1.58303 K2O
**Search Radius: 2.0km inner radius and 5.0km outer radius (between
drill holes); MMT = million tonnes; Density used is
2.08; KCl = 1.58303 K2O
1 "Average K2O Grade" and
"Average KCl Grade" refer to the weighted averages.
2 " In-Place Sylvinite Tonnage"
refers to Volume of Rock*Density of Sylvinite in the project area.
3 "Net K2O Resource" and "Net KCL
Resource" refer to total amount of extractable K2O and
KCl resource in the project area. (Volume of Rock*Density of
Sylvinite*Grade*Deductions). Deductions include 10% for unknown
anomalies, a 35% extraction ratio, and 12% for plant losses.
4 Assuming 640 acres (2589988.11 m2) per
section.
The resource
estimate was prepared in accordance to the NI 43-101 guidelines of the
Canadian securities regulators. As required by NI 43-101, a
technical report to support the resource estimate will be filed with
SEDAR and be publically available within 45 days following the date of
this news release.
James Walchuck,
President and CEO of Encanto commented "Encanto is obviously very
pleased with the resource calculations which have clearly established a
substantial resource on the Muskowekwan First Nation Home Reserve.
The resource easily justifies a Preliminary Economic Assessment (PEA)
which will be conducted by Wardrop, A Tetra Tech Company,
("Wardrop") A Tetra Tech engineering firm based in Saskatoon,
Saskatchewan. The PEA will apply engineering and economic principles
to determine the best financially advantageous method for the future
Pre-Feasibility and Feasibility studies. Wardrop's team will carry
out the PEA starting April 2011 and is expected to issue a draft report
in the third quarter of this year."
About Wardrop,
A Tetra Tech Company:
Wardrop, a leading provider of Engineering Consulting services to the
Potash and Mining Industries, has relevant recent experience conducting
studies for projects of this nature both within Canada and
internationally.
The Wardrop
team, assembled to complete this project, specifically, has experience in
the following areas:
- Experience
and familiarity with the potash industry, past and present as
demonstrated by our 50 years experience in our work at active
Saskatchewan mine sites.
- More
than 40 years of experience directly with the Saskatchewan potash
mining industry.
- Experience
with potash related scoping, pre-feasibility, feasibility studies
along with existing plant capacity studies.
For additional
information about Wardrop, a Tetra Tech
Company, please visit the Company's website at www.wardrop.com.
Tabetha
Stirrett, P. Geo., of North Rim Exploration Ltd., is the Qualified Person
(as defined by NI 43-101) for having prepared the mineral resource
estimates and scientific and technical information in this press release
and has reviewed the results as reported in the tables above. She
also reviewed and approved all content in this press release.
Tabetha Stirrett was the individual responsible for the supervision of
data collection used to calculate the resource and adhered to strict
QA/QC protocol.
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"
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
------------------------------------------------------------------
For further information, please contact:
James Walchuck, President & CEO
Ph. 604.683.2402
Vanguard Shareholder Solutions
Ph. 604.608.0284
Toll Free 866.918.0824
ir@vanguardsolutions.ca
www.encantopotash.com
|