L-R Muskowekwan Chief Reginald Bellerose, Encanto CEO and
president Stavros Daskos, and Federation of Sovereign Indigenous Nations (FSIN)
Chief Bobby Cameron.

Set amidst just a handful of junior potash developers, one company making huge strides recently to stand above the rest is Encanto Potash, trading on the TSX-V under the symbol EPO.

Encanto and its Muskowekwan First Nations (MFN) partner in Saskatchewan have developed a substantial proven and probable KCI reserves of 161.97 million metric tonnes (MMT), allowing the company to declare a substantial 47-year mine life (based on 3.4 MMT per year) and still open to expansion on the large 61,000-acre property.

Encanto has announced a landmark offtake agreement with a Government of India’s largest international trading company and one of the largest buyers of potash in the world, MMTC. It would be the largest offtake (two-million tons minimum annually) ever signed by a junior potash developer, and the largest ever signed by India as well. Understanding the domestic agricultural landscape in India, Encanto worked to establish a second offtake agreement (five-million tons annually) with a noteworthy Indian farmer’s cooperative, National Federation of Farmers’ Procurement, Processing and Retailing Cooperatives of India (NACOF). Each agreement has a full 20-year term.

MMTC has also agreed to a globally unique clause to allow for the possibility of buying potash through Encanto in the near term from a current producer, an extreme rarity for a potash junior which would allow for substantial near-term revenues. They have also negotiated the rights to market the company’s eventual production worldwide. Encanto subsequently announced that they have secured interest from a current producer to supply those contracts.

Encanto has made continual and steady progress considering the number of industry firsts required to mine on First Nations land. Having passed a number of required voting processes in order to proceed, the leadership and members of the Muskowekwan First Nation are active and supportive partners in this major project.

The company has already received their water rights license from the Saskatchewan Water Security Agency, signed a Tripartite Agreement with the Saskatchewan Provincial Government and the Canadian Federal Government in February 2017, and also obtained both their sub-surface mineral lease and completed the First Nations Commercial Industrial Development Act requirement in March 2017. The latter act allows for existing provincial mining laws to apply to the federal land on which the proposed mine site sits; an important step and a first for a major mine in Canada. Encanto continues to enjoy unprecedented support from all levels of First Nation, provincial, federal and India governments.

From L to R: Canadian high commissioner to India, Mr. Nadir Patel,
Muskowekwan Chief Reginald Bellerose (Saskatchewan), and Encanto CEO and
president, Mr. Stavros Daskos standing in front of Canada House in
New Delhi, India.

Armed with a successful pre-feasibility study and new preliminary economic assessment (June 2017) on a larger 3.4 mmtpy mine capacity, Encanto is currently conducting a final feasibility study on the project. A 3.4-million-tonne capacity would present a project NPV of over C$1 billion based on current depressed market prices.

Encanto recently (Sept 20, 2017) announced that they had secured a $100M funding facility from a well-respected and globally connected New York-based investment group to be used primarily to commence the engineering and design phase of the mine, and for the aforementioned procurement and supply of third-party potash to buyers in India. This is a company changer and just another way that Encanto has separated itself from other junior hopefuls. Leading-edge selective solution mining technologies are also being evaluated with a goal of being a globally lowest-cost producer.

It’s actually quite difficult to catalogue the entire list of near-term goals at the company and 2018 promises to be a very busy and eventful year. Encanto director of corporate development, Gary Deathe confirmed to PotashWorks magazine that there hadn’t been a junior potash developer that progressed all the way to production in Canada over the last 50 years. Many had either been bought out or changed control recently. But Encanto feels it now has all the right milestones being crossed off the project development list and has succeeded in attracting important long-term strategic partners with the same vision: to build a new, modern, and profitable solution potash mine in the most favourable place for potash mining in the world – Saskatchewan, Canada.

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