Encanto Potash releases positive Preliminary Economic Assessment for Muskowekwan Project

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[{"type":"text","content":"\n\n\n\n\n\nTRADING SYMBOL:  TSXV  EPO.V\n\n\nVANCOUVER, Aug. 18, 2011 /CNW/ - Encanto Potash Corp. (\"Encanto\" or the\n \"Company\") (TSXV: EPO)(OTCQX: ENCTF)  is pleased to report results of a\n positive Preliminary Economic Assessment (\"PEA\") carried out on the\n Muskowekwan Project in Saskatchewan, Canada by Wardrop, a Tetra Tech\n Company (\"Wardrop\"). This news release has been revised to include\n required cautionary statements for a Preliminary Economic Assessment\n and to delete the term \"ore\" from resources.\n\n\nEncanto President and CEO Jim Walchuck comments:  \"We are very pleased\n with the robust internal rate of return (\"IRR\") of 24% attributed to a\n solution mine in the PEA, as compared to 20.9% IRR for a conventional\n mine. Wardrop's recommended solution option gives Encanto a concise\n economic direction as how best to take the Muskowekwan Project into\n production.\"\n\n\nThe following table provides a comparison summary of the two mining\n methods analyzed on the Home Reserve land package forming part of the\n Muskowekwan Project:\n\n \n\n\nSolution Mine\n\n\nConventional Mine\n\n\nIndicated Resource (% KCL)\n\n\n79.1 MMt @ 29.4%\n\n\n45.9 MMt @ 34.8%\n\n\nInferred Resource (% KCL)\n\n\n60.5 MMt @ 29.7%\n\n\n32.7 MMt @ 36.1%\n\n\nInitial Mine Life (Indicated)\n\n\n32 years\n\n\n23 years\n\n\nPossible Additional Mine Life (Inferred)\n\n\n24 years\n\n\n16 years\n\n\nAnnual Production (Primary Secondary) t KCL\n\n\n2,500,000 tpy\n\n\n2,000,000 tpy\n\n\nTotal Estimated Capital Cost\n\n\n$2,418,100,000\n\n\n$2,716,200,000\n\n\nProject Unit Operating Cost/Tonne\n\n\n$68.14/t KCL\n\n\n$55.07/t KCL\n\n\nEstimated Net Present Value (NPV10)\n\n\n$2,859,000,000\n\n\n$2,347,000,000\n\n\nEstimated After Tax Royalty (IRR) @ $450 t KCL\n\n(Base Case)\n\n24.0%\n\n\n20.9%\n\n\nEstimated After Tax Royalty (IRR) @ $500 t KCL\n\n\n26.6%\n\n\n23.4%\n\n\nEstimated After Tax Royalty (IRR) @ $400 t KCL\n\n\n21.3%\n\n\n18.3%\n\n\n*Mineral resources that are not mineral reserves do not have\n demonstrated economic viability.\n\n\nBased on the above analysis Encanto intends to pursue the development of\n a solution mine for a number of reasons:\n\n\nAnnual potash solution production of 2.5 MM tpy from the caverns on the\n Home Reserve will result in a 32 year mine life and this can be\n extended...

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