Aug 29, 2024 filing - MD&ANothing new to report:
HIGHLIGHTS IN 2023 AND 2024 Management focus in 2023 was for the newly appointed CEO Robert Dzisiak to continue to familiarise himself with the Company and work with counsel to seek a resolution to the Company’s finances and efforts to rectify outstanding issues deficiencies with the JVA with the MFN. In addition, Robert Dzisiak CEO and retired Chief Reginald Bellerose worked along with engineering consultants of the Company to restart the Company’s development of the Potash resources underlying the JVA on faith basis towards resumption of the Company’s obligation under the JVA. On September 27, 2023, the Company received final approval from the TSX Venture Exchange for its five (5) to one (1) share consolidation. Effective at the opening of trading on September 29, 2023, Encanto’s shares commenced trading on the TSX Venture Exchange on a consolidated basis. All common share and per common share amounts in these financial statements have been retroactively restated to reflect the share consolidation. In 2024, management keeps on working on financings and to restart the Company’s development of the Potash resources underlying the JVA towards resumption of the Company’s obligation under the JVA.
MUSKOWEKWAN FIRST NATION POTASH MINE PROJECT The MFN Project is located in southeastern Saskatchewan, approximately 100 km north of Regina, and comprises a total of approximately 61,114 acres. Pursuant to the JVA, Company holds the exclusive right to work with MFN and MRL in proceeding to explore, develop and produce the potash on the property. Pursuant to the terms of the JVA, the Company is obligated to make payments of approximately $375,000 per year to the MFN. The Company is in default of making these payments. Pursuant to the JVA, the MFN may terminate the JVA as the Company is in default. The parties are in discussions regarding resolving the default and advancing the project. The Company has not conducted any work directly on the MFN Project since 2017. In furtherance of the JVA, the Company completed a preliminary economic assessment on the MFN, which was disclosed in a technical report dated May 24, 2017 titled "NI Technical Report on a Preliminary Economic Assessment and Preliminary Feasibility Study of the Muskowekwan Potash Project, South Eastern Saskatchewan, Canada”. The technical report is available under the Company’s profile on SEDAR+ at www.sedarplus.ca. Liabilities and shareholders’ Equity The Company at June 30, 2024 has total liabilities of $30,126,223 and shareholder’s Deficiency of $105,133,400. As disclosed in the financial statements at December 31, 2023, the Company settled outstanding payables owed to Horgen Holdings Inc. against a promissory note of $10,276,550 payable on or after September 1, 2023 with monthly interest of 6% per annum on February 17, 2022. The Company recognized a loss of $34,644 at the time of settlement. OUTLOOK The general public market volatility has continued to affect the overall state of the exploration and development stage companies in the mining industry. Management believes that demand for potash will remain strong, and is working to retain its interest in the MFN Project. There is no guarantee that the Company will be able to maintain its interest in the MFN Project. The development of mineral projects requires significant financial resources. There is no guarantee that the Company will be able to obtain the financing necessary to maintain the MFN Project.