Encanto receives expression of interest of $250 million to develop, construct and finance power co-generation plant for potash mine

TRADING SYMBOL: TSXV:EPO

VANCOUVER, March 27, 2015 /CNW/ - Encanto Potash Corp. ("Encanto" or the "Company") (TSXV: EPO and OTCQX: ENCTF) is pleased to announce that through its strategic advisor, Horgen Holdings Inc., that it has received an expression of interest from Fengate Capital Management Ltd. ("Fengate") to undertake the development, construction and financing of a 100-MW power generating station (the "Project") for the proposed new potash mine and processing plant to be built for the Company's Muskowekwan Project.

"Encanto is very pleased to be receiving significant interest and proposals to develop a co-gen plant for the Muskowekwan Project in anticipation of building our potash mine and plant" explained Encanto President and CEO James Walchuck. "Should we come to acceptable commercial terms for the cost of power, and we see no reason that we would not, the Capex as calculated in the Pre-feasibility would be reduced by $250 million with the associated positive financial impact. It's a big win for Encanto and shows the confidence from the financial industry that we are committed to building this mine."

Fengate expects the Project will produce energy using natural-gas fired electricity generation technology that produces both heat for steam production and electricity (cogeneration). The technology is proven and highly efficient in respect of fuel consumption and air emission. The engineering, procurement and construction cost of the Project is expected to be in excess of $250 million.

Fengate would undertake the Project with a development partner that would lead the technical scope of the project – Fengate has identified several qualified candidates. Fengate would lead the capital funding of the Project, including investing the equity capital and arranging the project debt. Fengate is experienced in power plant development and financing. Fengate is a private equity fund manager specializing in the development and funding of power and infrastructure projects. 

Fengate's involvement with the Project, including the investment of capital and the application of professional resources, will rely on a high level of confidence that (i) the Potash Mine will be developed within a reasonable time period, and (ii) SaskPower is prepared to enter into an acceptable long-term power purchase agreement for the purchase of the electricity generated by the Project. Once the Project is completed it will make it possible for this region of Saskatchewan to be serviced by the new infrastructure and receive preferential electrical rates.

About Fengate Capital Management:

Fengate Capital Management is an investment management firm specializing in originating and managing investments in the infrastructure and real estate sectors. Fengate is a subsidiary of Fengate Corporation, which began operations in 1974. The Firm's operations encompass asset management, real estate and infrastructure development, and commercial property management across North America and international markets.

Fengate began its operations in 2000 with the launch of Northgate Properties Inc., a real estate fund established on behalf of a group of high net worth investors. In 2006, Fengate established its first infrastructure fund targeting investments in Canadian public-private partnerships and independent power projects.

For the past seven years, Fengate has been named one of Canada's 50 Best Managed Companies, a program sponsored by the National Post, Deloitte, CIBC and Queen's School of Business.

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 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 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

          "James Walchuck"

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

RELATED LINKS
www.encantopotash.com

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