I am not saying that this is the worst management team on the Exchange, i will just have to look harder to find a worse one. This business is not viablea at this time with these product prices and an enormous over supply.
Encanto Potash lays out plan to revive business
2020-08-28 12:31 ET - News Release
An anonymous director reports
ENCANTO SHAREHOLDERS UPDATE AND REPORT FROM AGM
Encanto Potash Corp. has received shareholder approval for all regular matters, including re-electing the entire board of directors. At a directors meeting held immediately following the Annual Shareholders Meeting held August 19, 2020, the management agreed to adopt a "Step Strategy to Success". The steps discussed were:
Step One: Initiate the process to monetize the existing business relationships with current "Off-Take" parties. The intent is to begin establishing a sales and supply chain channel for marketing sustainable fertilizers for both the conventional and organic markets. Encanto will begin developing this marketing division in conjunction with taking the necessary steps required to complete the Muskowekwan Project. Creating an organizational structure focused on pursuing revenue generation prior to the build out of the Muskowekwan Project will be a critical element for securing long term funding of approximately $300M for the Muskowekwan Project.
Step Two: Restructure the Corporation's debt as discussed as Related Party transactions and Convertible Debentures in the recent public filings. Firstly, current negotiations with the Related Party debt is a proposal for the Related Parties to accept a royalty agreement on future sales in lieu of carrying the liability on the balance sheet. The concept is to remove the current debt obligation, restructure the financial terms of the debt and repay the amount owed from a producing revenue contract. Secondly, address the $7,700,000 Convertible Debt. Management is working on modifying the certificate of rights and preferences of the existing preferred shares to use them to exchange the convertible debenture for an equity based preferred shares, thereby removing the debt obligation from Encanto and converting it to equity.
Step Three: Identify an industry partner to acquire up to a 24.9% ownership percentage of Encanto's ownership of the joint venture of Muskowekwan Resources Ltd. (MRL). Encanto's management has begun engaging in discussion with an arm length party to secure between $7 to $8,000,000 CDN in equity consideration for the transfer of ownership percentage. One of the key considerations for Encanto in regard to the new partner purchasing the ownership percentage as a minority partner is to be able to provide Encanto's team with access to innovative formulas and products to compete in the global fertilizer markets.
Step Four: In Canada the goal is to have the common shares of the Company reinstated on the TSX.V or a senior exchange. Management will begin filing the necessary disclosures in the United States to improve the tier listing in the United States to gain access to a greater pool of capital. Improving Encanto's standing in the capital markets will provide increased value for the shareholders and provide greater access to the global capital markets. After positioning Encanto on the path to generate revenue, completing the debt restructuring to improve the corporate balance sheet and securing an active working partner for the development of the assets, management will seek the advice of investment advisors to ensure the capital formation of Encanto is positioned to allow for long term equity appreciation. Two intial steps on this path include: (1) Confirming to the markets the suspension of any capital consolidation for a minimum of 90 days from today; and, (2) subject to regulatory approval, initiating a rights offering on terms to be determined.