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NEWS RELEASE
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ENCANTO POTASH CORP. PROVIDES OPERATIONAL UPDATE
May 16, 2011
VANCOUVER -
Encanto Potash Corp. (TSXV:
EPO) is pleased to provide an operational update and
clarifications to our shareholders.
Muskowekwan Property Resource:
The Company is
on track to fulfill its objective of nearly doubling the Muskowekwan
Project's resource with further drilling anticipated to commence upon a
successful designation vote of the Treaty Land Entitlement
("TLE") Reserve Land.
The current
resource excluding the TLE Reserve lands, based on using the in-situ
leach mining method, establishes a resource of 79.1 Mt Indicated KCl and
60.5 Mt Inferred KCl. (See News Release dated March 18, 2011)
The Company
confirms that all funding requirements for the next 12 months, including
the Preliminary Economic Assessment, the TLE Reserve land designation
vote, a two well drilling program, and updated 43-101 resource
calculation are in hand.
First Nation's Public Meetings In Support of
Designation (mineral surrender) Process:
Encanto
President and CEO Jim Walchuck is encouraged by the efforts of newly
re-elected Chief Reginald Bellerose and his Council to streamline and
vigorously support the mineral rights designation process for the TLE
Reserve lands. The designation process is a simple majority
referendum of the Muskowekwan membership to seek approval and consent to
the surrender by them of the mineral rights on the TLE Reserve lands to
Canada, which in turn, will enable those rights to be transferred to
Muskowekwan Resources Ltd., by lease from Canada and enable North Rim
Exploration Ltd., to include the minerals in a revised 43-101 Report.
The anticipated
successful consent vote will result in a 90% increase in the project's
land package for resource analysis, from 17,000 acres to 32,500
acres. The
mineral rights to these additional lands are included in the JVA between
Muskowekwan and Encanto and, on conclusion of the referendum and
surrender, the mineral rights are held in trust by Muskowekwan First
Nation through Canada for the benefit of the JVA and its participants.
A series of public information meetings organized
and supported by Muskowekwan and Encanto will be held in multiple
Canadian cities to insure the off-Reserve membership are fully aware of
the Project benefits to Muskowekwan Band members both on and off Reserve
prior to the formal vote which is conducted under the authority of INAC
for Canada and the First Nation.
Upcoming
Near Term Milestones:
In the next 14 days, the Company anticipates to
update shareholders on the TLE Reserve Land designation process, including
an overview and projected time frames.
Preliminary
Economic Assessment:
Encanto is pleased to confirm that work on the
Preliminary Economic Assessment continues with Wardrop, a Tetra Tech
company. The report is on schedule for completion in Q3 of this
year. This report will provide NPV and capital expenditure
estimates for both in-situ leach and conventional potash mining methods.
Cash
Position:
With approximately $11.5 million in cash and
marketable securities the Company has sufficient working capital to
achieve the necessary steps outlined above which will result in an
updated 43-101 resource calculation. This includes 10,600,000
shares that the Company owns in Sundance Energy Inc., who are currently
preparing to drill on the Ochapowace Project's property in their
exploration for oil and gas assets.
Encanto recently presented to various institutional
accounts in various cities including Toronto, Montreal, New York, Oslo,
Madrid, Amsterdam, Munich and Zurich. We continue to field calls
from analysts, institutional and retail investors who see future value in
the Company's potential. Encanto wishes to thank our loyal
shareholders and are committed to providing regular updates as we move
down the path towards opening Saskatchewan's next potash mine.
The technical content of this news release has been
reviewed by Ross Moulton, VP of Exploration for 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
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For further
information please contact:
James
Walchuck, President & CEO
Encanto Potash
Tel: 604.683.2402
Vanguard Shareholder Solutions
Tel: 604.608.0824
Tel: 1.866.918.0824
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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