Encanto Potash Corp. ("Encanto" or the "Company") (TSXV: EPO and OTCQX: ENCTF) is pleased to announce a private placement of up to $7 million principal amount 5% secured convertible debentures. The principal amount of the debentures will be convertible in whole or in part at the option of the subscribers into common shares of the Company at a price of $0.25 per common share for a period of two years from closing of the private placement. The private placement is subject to acceptance for filing by the TSX Venture Exchange.
Provided the weighted average trading price of Encanto's common shares are in excess of $0.50 for 20 consecutive days, the Company may prepay the debentures in whole or in part prior to the maturity date by providing 60 days written notice to the subscribers. A finders' fee of 5% of the gross proceeds will be paid in connection with the financing. The Company intends to use the proceeds to complete the Pre-Feasibility Study on the Muskowekwan First Nation property ("PFS") in January 2013, initiate a Bankable Feasibility Study ("BFS") and provide general working capital for the Company.
About Encanto:
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 the joint venture agreement with Muskowekwan Resources Ltd. on our flagship property, Encanto has been successful in adding a 3.5 fold increase to the project land package, which now totals approximately 58,300 acres. A Preliminary Economic Assessment (PEA), based solely on the Home Reserve Lands (15,500 acres), was released in August of 2011 and an updated NI 43-101 report describing the increase to the compliant resource estimate was filed on May 10, 2012.
Encanto's Muskowekwan First Nation property has a current NI 43-101 resource estimate dated May 9, 2012 titled "2012 Potash Resource Assessment for the Muskowekwan First Nations Home Reserve Project South Eastern Saskatchewan, Canada" containing Measured and Indicated resources of 130.7MMt grading 29.6% KCl or 18.7% K2O and Inferred resources of 234.7MMt grading 28.3% KCl or 17.9% K2O.
The Company has a 100% interest in two additional potash properties in Saskatchewan: the 55,000 acre Ochapowace/Chacachas property and the 91,550 acre Spar property.
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
For further information please contact:
James Walchuck
President and CEO
Tel: 604-683-2402
Martin Gagel CFA, MBA
Vanguard Shareholder Solutions
Tel: 604-608-0824
Toll Free: 1-866-918-0824
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.
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