VANCOUVER, Jan. 4, 2017 /CNW/ - Encanto Potash Corp.
("Encanto" or the "Company") (TSXV: EPO)
has successfully completed the foundation for an evolutionary
offtake agreement with the National Federation of Farmers'
Procurement, Processing and Retailing Cooperatives of India Ltd
("NACOF"). The terms of the offtake agreement are summarized in a
memorandum of agreement (the "MOA") that provides for a minimum
supply of 5 million tonnes per year for a minimum 20 year
term, pending final negotiations related to the offtake
agreement.
NACOF (www.nacof-india.com) is a national farming
cooperative under the Indian Ministry of Agriculture, Government of
India representing farmers in 25
states across India. One of their
primary goals is to enter into contracts and collaborate for the
purchase, production, manufacture and marketing of raw materials,
finished products and by-products. NACOF also enters into
joint marketing and exchange agreements with Cooperative
Institutions and Public Sector Undertakings such as Metal Mineral
Trading Company of India
("MMTC") (see Company news release dated April 13, 2016) or other Government agencies
in India and abroad. Food
security obtained via procurement of a secure alternative supply
of muriate of potash and eliminating middlemen for Indian
farmers is a fundamental objective. As such, NACOF represents
fertilizer end users in India, being farmers with a membership
comprised of 67 State Level Federations, District Level Federations
and large, primary level societies from 25 Indian States.
The MOA with NACOF now positions Encanto for the transition of
the previously announced memorandum of understanding between
Encanto and MMTC (the "MMTC MOU") into a Commercial Marketing and
Distribution Agreement to provide for the sale of an additional
minimum of 2 million tonnes of potash annually, as MMTC was
appointed Encanto's exclusive worldwide potash marketing
agent. Under the MMTC MOU, MMTC has the ability to sell potash
sourced by Encanto into India or
beyond. Encanto is exploring third party sources as short term
supply under the MMTC MOU until such time as its flagship
Muskowekwan project is developed to supply potash under the NACOF
MOA and the MMTC MOU.
MMTC is a Public Sector Undertaking of the Government of
India and one of the largest
institutional buyers of potash in the world, handling more than 2
million tonnes of potash annually. The MMTC MOU continues
to be expected to provide access to markets and increased pricing
well beyond the primary market in India and as such, it is envisioned that sales
to MMTC will primarily be bound for the Indian export market.
Encanto CEO and President Stavros Daskos stated
"I have so far travelled to India
twelve times in the last 20 months and have developed a very deep
understanding of India's
regulatory systems in trading potash and other minerals. I now have
a better vision of their true agricultural requirements and most
importantly have cemented the trust, integrity and respect that is
necessary to formulate an agreement of this magnitude. These
agreements allow Encanto to participate in satisfying the Indian
Government's need for food security instead of simply trading 5
million tonnes of a commodity for profit. It has taken significant
time and effort, but India is a
key to the world market. These relationships and the proposed
offtake agreement form the basis of our overall strategy and
business plan to develop the Muskowekwan project and
secure project financing required to build Canada's next major potash mine.
There are many key policy individuals in the Government of
India who have helped educate,
guide and give life to this transaction. I would like to formally
acknowledge Shri Vinay Maloo, a very distinct gentleman and
skilled businessman, who among many projects of national
importance, co-founded the first private industry company to enter
into the telecom sector in India,
connecting over 800,000 villages across India. He was and
continues to be instrumental in this process.
I would also like to thank Chief Bellerose, the people of The
Muskowekwan First Nations, as well as his team that worked
tediously and tirelessly to help bring this project together and
whom continue to support its future."
Muskowekwan First Nation Chief Reg
Bellerose commented, "Final commercial terms are currently
being completed by Encanto and NACOF principals and are
expected to be available in the near term. We're extremely
proud to be a partner in this important agreement. For the first
time in history, First Nation potash will help to feed communities
around the world, both in India
and nations beyond and to the benefit of all stakeholders; First
Nations, farmers, the consumers of agricultural products, the
governments of Canada and
India as well
as Encanto shareholders for decades to come."
ABOUT NACOF:
Formed in 2009 under the ministry of Agriculture, Government of
India, the membership of NACOF is
comprised of 67 State Level Federations, District Level Federations
and large size/primary level societies from 25 States i.e. the
States of Delhi, Uttar Pradesh,
Madhya Pradesh, Bihar, Maharashtra, West Bengal, Chhattisgarh,
Uttarakhand, Odisha, Rajasthan, Jharkhand, Himachal Pradesh, Andhra
Pradesh, Gujarjat, Karntaka, Kerala, Punjab, Arunachal Pradesh,
Jammu & Kashmir, Assam, Manipur and Chandigar.
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 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 and Probable KCI Reserves
totaling 162 MMt grading 28% (average) 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 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
"Stavros Daskos"
Per:
Stavros Daskos
CEO, President and
Director
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
INCLUDING IN RESPECT OF THE PROPOSED OFFTAKE AGREEMENT,
SATISFACTION OF ANY APPLICABLE CONDITIONS IN RESPECT OF THE MMTC
MOU, THE MOA OR THE PROPOSED OFFTAKE AGREEMENT, THE ASSUMPTIONS AND
ESTIMATES IN THE COMPANY'S PRELIMINARY ECONOMIC ASSESSMENT OF THE
MUSKOWEKWAN PROJECT (THE "PEA") PROVING TO BE ACCURATE OVER TIME
INCLUDING APPLICABLE RESOURCE ESTIMATES, CHANGES IN WORLD COMMODITY
MARKETS OR EQUITY MARKETS, THE ADEQUACY OF THE COMPANY'S FINANCIAL
RESOURCES AND THE AVAILABILITY OF ADDITIONAL FINANCING ON
REASONABLE TERMS OR AT ALL, 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. READERS ARE CAUTIONED THAT CURRENT MARKET PRICES FOR THE
COMPANY'S PROPOSED PRODUCTS ARE MATERIALLY DIFFERENT THAN THE
ESTIMATES USED IN THE PEA. 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.
