TSXV: EPO
VANCOUVER, Oct. 4, 2018 /CNW/ - Encanto Potash Corp.
("Encanto" or the "Company") (TSXV: EPO) announces it will complete
a private placement of convertible debentures for gross proceeds of
$9,505,200 (the "Offering"). The
proceeds of the Offering will discharge and replace a portion of
the principal owing under the Company's previous convertible
debentures that matured on September 1,
2017 which are due and payable, as well as to offset other
outstanding payables. The debentures will be secured by a charge
over all of the Company's assets, will bear interest at the rate of
5% per annum and will mature 18 months from date of issue. The
debentures will be convertible into common shares at the option of
the holders at any time on or before the maturity date at a price
of $0.25 per share.
Hamad M. Al-Wazzan, an insider of
the Company, has agreed to purchase $4.25
million in the Offering. Horgen Holdings Inc. has agreed to
purchase $5 million in the Offering
and will become an insider on a partially diluted basis pursuant to
the private placement. These purchases will constitute a "related
party transaction" under Multilateral Instrument 61-101
"Protection of Minority Shareholders in Special
Transactions" ("MI 61-101"), and but for available exemptions
would be subject to formal valuation and minority approval
requirements under MI 61-101. The Company will be relying on the
exemption from formal valuation requirements set forth in section
5.5(b) of MI 61-101 on the basis that none of its securities are
listed on the Toronto Stock Exchange, Aequitas NEO Exchange Inc.,
the New York Stock Exchange, the American Stock Exchange, the
NASDAQ Stock Market, or a stock exchange outside of Canada and the
United States other than the Alternative Investment Market
of the London Stock Exchange or the PLUS Markets operated by PLUS
Markets Group plc. The Company will be relying on the financial
hardship exemption from minority approval requirements set forth in
section 5.7(e) of MI 61-101.
The Offering is subject to acceptance for filing by the TSX
Venture Exchange, and all securities issued in connection with the
Offering will be subject to a four month hold period from the
closing date.
About Encanto Potash Corp.
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, Encanto has secured a
project land package which totals approximately 61,000 largely
contiguous acres. 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 and Probable KCI Reserves
totaling 162 Mt grading 28% KCl (average) which supports primary
and secondary mining for over 50 years at an assumed annual rate
extraction rate of 2.8 Mt of MOP. The PEA dated May 24, 2017 titled " NI 43-101 Technical Report
on a Preliminary Economic Assessment and Preliminary Feasibility
Study of the Muskowekwan Potash Project, South-Eastern
Saskatchewan, Canada" summarizes an alternative development option
that supports primary and secondary mining of the Mineral Resources
for 48 years at an annual extraction rate of 3.4 Mt of MOP. On
December 30, 2016, Encanto signed a
20-year off-take agreement with the National Federation of
Farmers' Procurement, Processing, and Retailing Cooperatives of
India Ltd., (NACOF) registered under the Ministry of Agriculture,
Government of India to supply 5
million metric tons a year of potash. 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
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PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
THIS DOCUMENT MAY CONTAIN "FORWARD-LOOKING INFORMATION" WITHIN
THE MEANING OF CANADIAN SECURITIES LEGISLATION AND "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE
UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995. THIS INFORMATION AND THESE STATEMENTS, REFERRED TO HEREIN AS
"FORWARD-LOOKING STATEMENTS" ARE MADE AS OF THE DATE OF THIS
DOCUMENT. GENERALLY, THESE FORWARD-LOOKING STATEMENTS CAN BE
IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS
"EXPECTS", "ANTICIPATES", "PLANS", "PROJECTS", "ESTIMATES",
OR VARIATIONS THEREOF OR STATING THAT CERTAIN ACTIONS, EVENTS
OR RESULTS "MAY", "COULD", "WOULD", OR "MIGHT" BE TAKEN, OCCUR OR
BE ACHIEVED. FORWARD-LOOKING STATEMENTS, WHILE BASED ON
MANAGEMENT'S BEST ESTIMATES AND ASSUMPTIONS, ARE SUBJECT TO RISKS
AND UNCERTAINTIES THAT MAY CAUSE ACTUAL RESULTS TO BE MATERIALLY
DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS, INCLUDING BUT NOT LIMITED TO: RISKS RELATING TO
VARIATIONS IN THE MINERAL CONTENT WITHIN THE MATERIAL IDENTIFIED AS
MINERAL RESOURCES FROM THAT PREDICTED; VARIATIONS IN RATES OF
RECOVERY AND EXTRACTION; THE GEOTECHNICAL CHARACTERISTICS OF THE
ROCK MINED OR THROUGH WHICH INFRASTRUCTURE IS BUILT DIFFERING FROM
THAT PREDICTED, DEVELOPMENTS IN WORLD METALS MARKETS; RISKS
RELATING TO FLUCTUATIONS IN THE CANADIAN DOLLAR RELATIVE TO THE US
DOLLAR; INCREASES IN THE ESTIMATED CAPITAL AND OPERATING COSTS OR
UNANTICIPATED COSTS; DIFFICULTIES ATTRACTING THE NECESSARY WORK
FORCE; INCREASES IN FINANCING COSTS OR ADVERSE CHANGES TO THE TERMS
OF AVAILABLE FINANCING, IF ANY; TAX RATES OR ROYALTIES BEING
GREATER THAN ASSUMED; CHANGES IN DEVELOPMENT OR MINING PLANS DUE TO
CHANGES IN LOGISTICAL, TECHNICAL OR OTHER FACTORS; CHANGES IN
PROJECT PARAMETERS AS PLANS CONTINUE TO BE REFINED; RISKS RELATING
TO RECEIPT OF REGULATORY APPROVALS; DELAYS IN STAKEHOLDER
NEGOTIATIONS; CHANGES IN REGULATIONS APPLYING TO THE DEVELOPMENT,
OPERATION, AND CLOSURE OF MINING OPERATIONS FROM WHAT CURRENTLY
EXISTS; THE EFFECTS OF COMPETITION IN THE MARKETS IN WHICH ENCANTO
OPERATES; AND OPERATIONAL AND INFRASTRUCTURE RISKS. ALTHOUGH
MANAGEMENT HAS ATTEMPTED TO IDENTIFY IMPORTANT FACTORS THAT COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN
FORWARD-LOOKING STATEMENTS, THERE MAY BE OTHER FACTORS THAT CAUSE
RESULTS NOT TO BE AS ANTICIPATED, ESTIMATED OR INTENDED. THERE CAN
BE NO ASSURANCE THAT SUCH STATEMENTS WILL PROVE TO BE ACCURATE, AS
ACTUAL RESULTS AND FUTURE EVENTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN SUCH STATEMENTS. ACCORDINGLY, READERS SHOULD NOT
PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS. ENCANTO
DISCLAIMS ANY OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS
CONTAINED HEREIN OR TO PUBLICLY ANNOUNCE THE RESULT OF ANY
REVISIONS TO ANY SUCH STATEMENTS TO REFLECT FUTURE RESULTS, EXCEPT
AS REQUIRED BY APPLICABLE SECURITIES LAW. PLEASE REFER TO ENCANTO'S
MOST RECENT FILINGS UNDER ITS PROFILE AT WWW.SEDAR.COM FOR FURTHER
INFORMATION RESPECTING THE RISKS AFFECTING ENCANTO AND ITS
BUSINESS.
SOURCE Encanto Potash Corp.