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VANCOUVER, Sept. 25, 2014 /CNW/ - Encanto Potash Corp. ("Encanto" or the "Corporation") (TSXV: EPO and OTCQX: ENCTF) is pleased to announce a non-brokered private placement financing of up to $1,000,000 (the "Private Placement"). Proceeds from the Private Placement will be used towards general working capital.
The Private Placement will comprise two offerings on the same terms. The first offering will be for up to $600,000 (the "First Offering") and will be open to all existing shareholders of Encanto, subject to their jurisdiction of residence. The second offering will be for up to $400,000 (the "Second Offering"), and will be subscribed by certain of the Company's major shareholders, insiders, directors, employees and consultants.
The Private Placement will result in the Company issuing approximately 10 million units (the "Units") at a price of $0.10 per Unit. Each Unit will consist of one common share of the Company and one share purchase warrant, with each warrant entitling the holder to purchase one common share of the Company at a price of $0.30 per share for a period of two years after closing.
As noted above, the Company will make the First Offering available to existing shareholders, who as of the share register record date of September 24, 2014 held common shares in the Company (shareholders resident in Ontario, Newfoundland and Labrador, and countries other than Canada, will need to meet local jurisdiction requirements to participate), under the prospectus exemption as set out in BC Instrument 45-534, or other similar instruments in place in other jurisdictions of Canada. Further information in respect of BC Instrument 45-534 is set out below. If subscriptions received in respect of the First Offering exceed $600,000, units will be allocated pro rata among all subscribers to the First Offering.
The First Offering will be open for acceptance for a period of seven (7) calendar days from the date of this news release expiring October 2, 2014. Shareholders interested in participating in the First Offering should contact the following individuals at the Company for a subscription form:
The Private Placement is subject to certain conditions including, but not limited to, receipt of all required regulatory approvals. The securities issued by the Company in connection with the Private Placement are subject to a 4-month "hold period" as prescribed by the TSX Venture Exchange and applicable securities laws.
BC Instrument 45-534 Information
Under BC Instrument 45-534, a subscribing shareholder, in purchasing the Units being offered in the First Offering, will need to represent in writing that, on or before the record date, they acquired and continue to hold, common shares of the Company.
The aggregate acquisition cost to a subscribing shareholder under BC Instrument 45-534 cannot exceed $15,000. Shareholders wishing to subscribe with an aggregate subscription cost in excess of $15,000 may do so provided they have obtained advice regarding the suitability of the investment from a registered investment dealer in the residential jurisdiction.
Alternatively, the Company may utilize other available prospectus exemptions in addition to the new existing shareholder exemption.
The maximum aggregate gross proceeds under the First Offering are $600,000 (representing the maximum number of Units to be issued of 6 million). The Company will accept qualifying subscriptions of $2,500 or larger.
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.
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
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.
SOURCE: Encanto Potash Corp.
For further information: 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