Agreewith with First NationENCANTO AND MUSKOWEKWAN FIRST NATIONS SIGN JOINT VENTURE AGREEMENT
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VANCOUVER, Oct. 22 /CNW/ - Encanto Potash Corp. ("Encanto" or the"Company") is pleased to announce that it has signed a formal JointVenture 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 onthe 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 and200,000 share purchase warrants exercisable at
.22 for a period oftwo years from the date of issuance;
(c) Property taxes payable are defined and capped at a rate thatwill not exceed that average rate charged by the Municipalities inSaskatchewan for similar projects;
(d) MFN and MRL will contribute all mineral leases granted by theCrown, pursuant to the governing regulations, and will hold said leasesin 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 ofwhich the initial $200,000 has been paid; and
(f) the parties will jointly appoint a Management Committee tosupervise the business affairs of the Joint Venture.
The JVA confirms and sets out the process and specific covenants of theparties to allow the project to proceed to mine operation stageuninterrupted and without further negotiation.
Encanto President & CEO James Walchuck commented "We are very pleased tohave achieved this landmark step in our relationship with theMuskowekwan First Nation. The agreement provides the certainty oftitle while concurrently affording an equitable far reaching agreementfor the Muskowekwan First Nation."
Muskowekwan Chief and MRL President Reg Bellerose today said that hisNation "is committed to becoming more self-reliant as a community andis determined to reduce its historical dependence on government fundingthrough increasing its own-source revenue." He went on to say that"this Agreement with Encanto Potash is a solid opportunity to do thatover the long term. It provides a framework for potash development inour Territory, allows our Nation to participate and benefit fully, andmost importantly, ensures that these developments do not compromise ourexisting rights, assets, environment and culture. This is a formulaour Nation can accept and obviously so can Industry. Today is a goodday."