TRADING SYMBOL: TSXV: EPO
VANCOUVER, March 1, 2013 /CNW/ - Encanto Potash Corp. ("Encanto" or the "Company") (TSXV: EPO and OTCQX: ENCTF) is pleased to report that the Technical Report summarizing the Preliminary Feasibility Study for the Muskowekwan First Nations Project (the "Project") dated February 28, 2013 has been filed on SEDAR.com and available on the Company's website at www.encantopotash.com. The Company advises that a correction to the Pre-Feasibility Study results which were announced February 4, 2013 was necessary and the revised results are stated below. During the NI 43-101 finalization review of the economic model, it was determined an inflation adjustment factor was not applied to all the royalties and taxes. The inflated taxes and royalties now used have been taken into account in the financial model and result in the IRR for the project now being 18.0% (20.0 % before tax) versus the announced IRR of 19.1% (20.4% before taxes) and the after tax NPV, discounted at 10%, is now $2.84 billion ($4.12 billion before tax) versus the announced after tax NPV discounted at 10% of $3.63 Billion ($4.47 billion before tax). There has been no change to the announced Mineral Reserves that are sufficient to support the production of 2.8 million tonnes per year of Potash (MOP) for 58 years.
Jim Walchuck, President & CEO of Encanto commented "The Company is pleased to have achieved another milestone of filing the completed NI 43-101 and with these adjustments, the Project remains robust. The Company is continuing to move the Project forward toward production with the Feasibility Study ongoing."
A summary of the Revised Financial Model is as follows:
|Realized Potash Price (FOB Vancouver)|| $460/t standard
| NPV - After Tax
NPV - Pre-Tax
| IRR - After Tax
IRR - Pre - Tax
| OPEX at full capacity
(includes utilities, labour, maintenance, reagents, fuel, insurances and municipal taxes)
Sustaining capital cost
(includes brine field and Tailing Management Area extensions)
|Logistics Costs (rail and port)||$50.50/t|
| Taxes and Royalties
(includes Potash Production Tax, Crown Royalty and Saskatchewan Resource Surcharge, average over the life of the project)
| Initial CAPEX
(includes contingency and escalation)
|Deferred CAPEX||$130 million|
| All CAPEX and OPEX costs are in $CAD, revenues are in $US
US to CAD exchange assumed as 1.
|Annual Production rate||2.8 Mt of K62 grade potash (98% KCl)|
|Construction Start Date||Q2 2014|
|Mine Start up||Q1 2017|
|Lifespan of Project||50 years +|
The technical content of this news release has been reviewed by Jim Walchuck, P. Eng., a qualified person as defined by NI 43-101.
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 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 was released in February 2013 confirming Proven & Probable KCI Reserves totaling 162 MMt grading 28% which supports primary and secondary mining for over 50 years at an annual rate of 2.8 million tonnes.
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.
Encanto is currently exploring domestic & international strategic partnerships for the financing, development and sale of potash production from its MFN JV Property.
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
Toll Free: 1-866-918-0824