Encanto announces non-brokered private placement financings of up to $2.7 million

/NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES./

VANCOUVER, May 16, 2016 /CNW/ - Encanto Potash Corp. ("Encanto" or the "Corporation") (TSXV:  EPO) is pleased to announce a non-brokered private placement consisting of a non flow through and flow through financing, of up to $2,700,000 (the "Private Placements").  The non flow through Private Placement of up to $2,200,000 will consist of up to 20.95 million units (the "Units") at a price of $0.105 per Unit.  Each Unit will consist of one common share of the Company and one common share purchase warrant, with each warrant entitling the holder to purchase one common share of the Company at a price of $0.16 per share for a period of 30 months after closing.  The flow through Private Placement of $500,000 will consist of 3,125,000 shares (the "Shares") at a price of $0.16 per Share.  Proceeds from the Private Placements will be used towards general working capital and development of Encanto's Muskowekwan property in Saskatchewan.  Finder's fees on the gross proceeds of the offering may be paid.

In addition to the non flow through Private Placement, the Company will make up to 5 million Units available to existing shareholders who, as of the share register record date of May 13, 2016 (the "record date") held common shares in the Company, under the prospectus exemption as set out in BC Instrument 45-534, or other similar instruments in place in other jurisdictions of Canada (the
"Existing Shareholder Exemptions").  Further information in respect of the Existing Shareholder Offering is set out below.

The Existing Shareholder Offering is available to shareholders residing in all Canadian provinces other than Newfoundland and Labrador and will be open for acceptance for a period of three (3) calendar days from the date of this news release expiring May 19, 2016.  Shareholders interested in participating in the Existing Shareholder Offering should contact the following individuals at the Company for a subscription form:

James Walchuck

604.683.2402

jwalchuck@encantopotash.com 

Gordon Keep

604.609.6110

gkeep@fiorecorporation.com 

Melinda Coghill

604.609.6148

mcoghill@fiorecorporation.com

 

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 and one day "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 Existing Shareholder 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.

Except in certain circumstances, the aggregate acquisition cost to a subscribing shareholder under the Existing Shareholder Offering 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 their jurisdiction of residence.

Alternatively, the Company may utilize other available prospectus exemptions in addition to the Existing Shareholder Exemption in issuing Units to existing shareholders. 

The maximum aggregate gross proceeds under the Existing Shareholder Offering are $525,000.  The Company will accept qualifying subscriptions of $5,000 or larger.  If more than the maximum of 5 million Units are subscribed for under the Existing Shareholder Offering, the Units will be allocated pro rata among all subscribers for Units under the Existing Shareholder Offering qualifying under all available exemptions. 

ABOUT ENCANTO:

Encanto Potash Corp. is a TSX Venture Exchange listed and 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. on our flagship Muskowekwan Project, 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 tons.

The Company also has a 5% interest in the 55,000 acre Ochapowace/Chacachas property also located in Saskatchewan.

The technical content of this news release has been reviewed and approved 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"

Chief Executive Officer

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 OUTCOME OF NEGOTIATIONS WITH THIRD PARTIES, 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: Gary Deathe, Corporate Development - Toronto Office, (647) 728-7987

RELATED LINKS
www.encantopotash.com

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