Encanto Potash Corp. (“Encanto” or the “Company”) is pleased to announce that it has signed a formal Joint Venture Agreement (“JVA”) with the Muskowekwan First Nations (“MFN”), and their wholly-owned operating company, Muskowekwan Resources Ltd. (“MRL”) for the purpose of developing and operating a potash mine on the Muskowekwan First Nations’ land.
The salient terms of the JVA are:
(a) MRL will receive a three percent (3%) Gross Overriding Royalty (GORR);
(b)Encanto will immediately issue to MRL 200,000 common shares and 200,000 share purchase warrants exercisable at
.22 for a period of two years from the date of issuance;
(c)Property taxes payable are defined and capped at a rate that will not exceed that average rate charged by the Municipalities in Saskatchewan for similar projects;
(d)MFN and MRL will contribute all mineral leases granted by the Crown, pursuant to the governing regulations, and will hold said leases in trust for the benefit of the JVA; and
(e)MFN will be paid a total fee of one million dollars ($1,000,000) based on certain milestones being achieved over the next 18 months of which the initial $200,000 has been paid; and
(f)the parties will jointly appoint a Management Committee to supervise the business affairs of the Joint Venture.
The JVA confirms and sets out the process and specific covenants of the parties to allow the project to proceed to mine operation stage uninterrupted and without further negotiation.
Encanto President & CEO James Walchuck commented “We are very pleased to have achieved this landmark step in our relationship with the Muskowekwan First Nation. The agreement provides the certainty of title while concurrently affording an equitable far reaching agreement for the Muskowekwan First Nation.”
Muskowekwan Chief and MRL President Reg Bellerose today said that his Nation “is committed to becoming more self-reliant as a community and is determined to reduce its historical dependence on government funding through increasing its own-source revenue.” He went on to say that “this Agreement with Encanto Potash is a solid opportunity to do that over the long term. It provides a framework for potash development in our Territory, allows our Nation to participate and benefit fully, and most importantly, ensures that these developments do not compromise our existing rights, assets, environment and culture. This is a formula our Nation can accept and obviously so can Industry. Today is a good day.”
About Encanto:
Encanto Potash Corp. is a TSX Venture Exchange-listed Canadian resource company engaged in the exploration and development of potash properties in the Province of Saskatchewan, Canada, the largest producing region for potash in the world.
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.