Encanto announces closing of private placement and short term loan
February 19, 2014 (Source: CNW) — Encanto Potash Corp. (“Encanto” or the “Company”) (TSXV: EPO) (OTCQX: ENCTF) is pleased to announce that, further to its news release dated February 13, 2014, it has closed its private placement of 3,150,000 units at a price of $0.17 per unit for gross proceeds of $535,500. Each unit consists of one common share and one share purchase warrant, each warrant entitling the holder to purchase one common share at $0.30 until August 18, 2015. The proceeds from the private placement will be used for general working capital.
The Company is also pleased to announce that it has closed the short term loan of $750,000 announced in its news release of February 13, 2014. The loan is for a term of 60 days maturing on April 20, 2014 and bears interest at the rate of 15% per annum. The lender also received warrants entitling it to purchase up to 1,000,000 common shares at a price of $0.20 per share on or before February 19, 2015.
All securities issued under the private placement will have a four month statutory hold period expiring June 19, 2014. In connection with the private placement and loan, the Company has paid advisory fees of $48,085 to Secutor Capital Management Corp.
Pursuant to the Company’s Stock Option Plan, a total of 750,000 incentive stock options have been granted to employees and consultants of the Company. The options are exercisable at a price of $0.20 per share for a period of 10 years, subject to regulatory approval.
Encanto Potash Corp. is a TSX Venture Exchange listed and OTCQX 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. (“MFN JV”) on our flagship property, 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 tonnes.
The Company has an interest in two additional potash properties in Saskatchewan: 20% interest in the 55,000 acre Ochapowace/Chacachas property and 100% interest in the 55,437 acre Spar property.
Encanto is currently exploring domestic & international strategic partnerships for the financing, development and sale of potash production from its MFN JV Property.
The technical content of this news release has been reviewed by James Walchuck, a qualified person as defined by NI 43-101.
ON BEHALF OF THE BOARD OF DIRECTORS
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.
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