Encanto announces closing of $7 million convertible debenture and appointment of two directors
TRADING SYMBOL: TSXV:EPO
VANCOUVER, Jan. 14, 2013 /CNW/ - Encanto Potash Corp. ("Encanto" or the "Company") (TSXV: EPO and OTCQX: ENCTF) is pleased to announce the completion of an aggregate $7 million principal amount 5% secured convertible debentures. The principal amount of the debentures are 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 until January 14, 2015.
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 $300,000 was 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. The securities issued in connection with this offering are subject to a 4-month "hold period" as prescribed by the TSX Venture Exchange and applicable securities laws expiring May 15, 2013.
The Company announces the appointment of Mr. Hamad Al-Wazzan and Mr. Aref Kanafani to the Board of Encanto.
Hamad Al-Wazzan is the Chairman and Managing Director of Arabian Motors Group and the Al-Wazzan Group of Companies headquartered in Kuwait. A 1979 graduate of Kuwait University, Mr. Al-Wazzan and his partners have a proven track record in the development of a variety of construction, petrochemical and natural resource projects in Europe and the Middle East. More recently, Mr. Al-Wazzan has focused his attention on acquisitions in the North American mining sector. Mr. Al-Wazzan participated in $5 million of the offering and has invested an aggregate of $7.5 million in Encanto convertible debentures.
Aref Kanafani is a resident of Montreal and a graduate of McGill University. He received his Masters of Business Administration degree from Oxford University, England. For the past 7 years Mr. Kanafani has acted as the Senior Principal Advisor to the Al-Wazzan Group of Companies. Mr. Kanafani's career has been concentrated on strategic acquisitions and investments in petrochemical, infrastructure construction and natural resource projects.
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.
The technical content of this news release has been reviewed by Ross Moulton, Vice-President of Exploration for Encanto, a qualified person as defined by NI 43-101.
ON BEHALF OF THE BOARD OF DIRECTORS
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.
SOURCE: Encanto Potash Corp.For further information:
President and CEO
Martin Gagel CFA, MBA
Vanguard Shareholder Solutions
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