Encanto Potash Corp. announces muskowekwan resources

Mar. 18, 2011 (Canada NewsWire Group) --

TRADING SYMBOL:  TSXV  EPO.V

VANCOUVER, March 18 /CNW/ - Encanto Potash Corp. ("Encanto" or the "Company") is pleased to release the results of the NI 43-101 Technical Report prepared by North Rim Exploration Ltd. ("North Rim") of Saskatoon, Saskatchewan on the Company's Muskowekwan project situated on the Muskowekwan First Nation ("MFN") Home Reserve (16,831 acres) in Saskatchewan.  At the Company's request, North Rim has prepared resource calculations based on both the solution mining extraction method and on the conventional mining extraction method.  Encanto decided to evaluate and report the two resource calculations in order to determine, at a later date in future engineering studies, the most economically viable method for extraction. These resources are restricted to the Home Reserve only and do not take into account the Treaty Land Entitlement ("TLE") Reserve lands (15,500 acres contiguous to the Home Reserve) whose mineral resources and lands are owned by MFN and are included in our Joint Venture agreements with MFN and Exploration Permits from Indian and Northern Affairs Canada ("INAC").  The TLE Reserve lands and minerals are currently undergoing a designation process to surrender the mineral rights to Canada, these rights are then returned back to MFN.  Once the TLE lands are designated, North Rim will recalculate to include those resources in an amended NI 43-101 Technical Report and has the potential of adding up to15,500 acres, or 90% to the resource area.  Encanto's completed 2D and 3D seismic program was conducted on both the MFN Home Reserve and on the TLE Reserve lands. 

North Rim has extensive experience in the resource characterization and preparation of NI 43-101 Technical Reports on potash resources having worked on Saskatchewan potash projects for Mosaic, Potash One, Athabasca Potash and Karnalyte Resources.

The reader is cautioned that the 2 mining scenarios presented below should be treated as separate mineral resource calculations and should NOT be added together. The solution mining scenario was prepared as the base case with the conventional resource provided as a sensitivity case until additional engineering studies are completed.  Engineering factors that are yet to be determined to assess the economic viability may be, but are not limited to:

• Study of the geothermal gradient to determine the energy inputs required (solution mining scenario).
• Study of potential engineering challenges to determine suitable pillar sizes and extraction ratios (conventional mining scenario).
• The "recoverable K₂O" resource may change due to the uncertainty of the mining method at this time.  Additional work on economic viability may be necessary.

The resource for the potential solution mining intervals (Patience Lake and Belle Plaine members excluding interbeds) are calculated as follows:

• Indicated Resource: 1,144.2 MMt in place sylvinite grading 29.4% KCl or 18.6% K₂O (79.1 MMt of recoverable KCl, or 49.9 MMt recoverable K₂O) and
• Inferred Resource:  868.4 MMt in place sylvinite grading 29.2% KCl or 18.5% K₂O (60.5 MMt of recoverable KCl, or 38.2 MMt of recoverable K₂O).  

Details of the solution mining scenario are presented below in Table 1:

Table 1: Solution Mining Scenario Indicated and Inferred Mineral Resource

*Search Radius: 2.0km (between drill holes); MMt = million tonnes; Density used 2.08; KCl = 1.58303 K₂O
**Search Radius: 2.0km inner radius and 5.0km outer radius (between drill holes); MMt = million tonnes; Density used  2.08; KCl = 1.58303 K₂O
¹ "Average K₂O Grade" and "Average KCl Grade" refer to the weighted averages.
² " In-Place Sylvinite Tonnage"   refers to Volume of Rock*Density of Sylvinite in the project area.
³ "Net K₂O Resource" and "Net KCL Resource" refer to total amount of extractable K₂O and KCl resource in the project area. (Volume of Rock*Density of Sylvinite*Grade*Deductions).  Deductions include 10% for unknown anomalies, a 35% extraction ratio, and 24% for cavern and plant losses.
⁴  Assuming 640 acres (2589988.11 m²) per section.

The resource for the potential conventional mining intervals (Patience Lake and Belle Plaine members) is calculated as follows:

• Indicated Resource:  461.5 MMt in place sylvinite grading 36.2% KCl or 22.9% K₂O (45.9 MMt in recoverable KCl, or 30.0 MMt recoverable K₂O) and
  
  
• Inferred Resource:  327.4 MMt in place sylvinite grading 36.4% KCl or 23.0% K₂O (32.7 MMt recoverable KCl, or 20.7 MMt recoverable K₂O).

Details of the conventional Indicated and Inferred resource are presented in Table 2 as follows:

Table 2: Conventional Mining Scenario Indicated and Inferred Mineral Resource

*Search Radius: 2.0km (between drill holes); MMT = million tonnes; Density used is 2.08; KCl = 1.58303 K₂O
**Search Radius: 2.0km inner radius and 5.0km outer radius (between drill holes); MMT = million tonnes; Density used is
2.08; KCl = 1.58303 K₂O
¹ "Average K₂O Grade" and "Average KCl Grade" refer to the weighted averages.
² " In-Place Sylvinite Tonnage"   refers to Volume of Rock*Density of Sylvinite in the project area.
³ "Net K₂O Resource" and "Net KCL Resource" refer to total amount of extractable K₂O and KCl resource in the project area. (Volume of Rock*Density of Sylvinite*Grade*Deductions).  Deductions include 10% for unknown anomalies, a 35% extraction ratio, and 12% for plant losses.
⁴  Assuming 640 acres (2589988.11 m²) per section.

The resource estimate was prepared in accordance to the NI 43-101 guidelines of the Canadian securities regulators.  As required by NI 43-101, a technical report to support the resource estimate will be filed with SEDAR and be publically available within 45 days following the date of this news release.

James Walchuck, President and CEO of Encanto commented "Encanto is obviously very pleased with the resource calculations which have clearly established a substantial resource on the Muskowekwan First Nation Home Reserve.  The resource easily justifies a Preliminary Economic Assessment (PEA) which will be conducted by Wardrop, A Tetra Tech Company, ("Wardrop") A Tetra Tech engineering firm based in Saskatoon, Saskatchewan.  The PEA will apply engineering and economic principles to determine the best financially advantageous method for the future Pre-Feasibility and Feasibility studies.   Wardrop's team will carry out the PEA starting April 2011 and is expected to issue a draft report in the third quarter of this year."

About Wardrop, A Tetra Tech Company:
Wardrop, a leading provider of Engineering Consulting services to the Potash and Mining Industries, has relevant recent experience conducting studies for projects of this nature both within Canada and internationally.

The Wardrop team, assembled to complete this project, specifically, has experience in the following areas:

• Experience and familiarity with the potash industry, past and present as demonstrated by our 50 years experience in our work at active Saskatchewan mine sites.
  
  
• More than 40 years of experience directly with the Saskatchewan potash mining industry.
  
  
• Experience with potash related scoping, pre-feasibility, feasibility studies along with existing plant capacity studies.

For additional information about Wardrop, a Tetra Tech Company, please visit the Company's website at www.wardrop.com.

Tabetha Stirrett, P. Geo., of North Rim Exploration Ltd., is the Qualified Person (as defined by NI 43-101) for having prepared the mineral resource estimates and scientific and technical information in this press release and has reviewed the results as reported in the tables above.  She also reviewed and approved all content in this press release.  Tabetha Stirrett was the individual responsible for the supervision of data collection used to calculate the resource and adhered to strict QA/QC protocol.

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.

ON BEHALF OF THE BOARD OF DIRECTORS

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

THE FOREGOING INFORMATION MAY CONTAIN FORWARD-LOOKING INFORMATION RELATING TO THE FUTURE PERFORMANCE OF THE COMPANY. FORWARD LOOKING INFORMATION IS SUBJECT TO A NUMBER OF KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE ANTICIPATED IN OUR FORWARD LOOKING STATEMENTS. SUCH RISKS AND OTHER FACTORS INCLUDE, AMONG OTHERS, THE ACTUAL RESULTS OF EXPLORATION ACTIVITIES, CHANGES IN WORLD COMMODITY MARKETS OR EQUITY MARKETS, THE RISKS OF THE MINING INDUSTRY INCLUDING, WITHOUT LIMITATION, THOSE ASSOCIATED WITH THE ENVIRONMENT, DELAYS IN OBTAINING GOVERNMENTAL APPROVALS, PERMITS OR FINANCING OR IN THE COMPLETION OF DEVELOPMENT OR CONSTRUCTION ACTIVITIES, TITLE DISPUTES, CHANGE IN GOVERNMENT AND CHANGES TO REGULATIONS AFFECTING THE MINING INDUSTRY, AND OTHER RISKS AND UNCERTAINTIES DETAILED FROM TIME TO TIME IN THE COMPANY'S FILINGS WITH THE CANADIAN SECURITIES ADMINISTRATORS (AVAILABLE AT WWW.SEDAR.COM). FORWARD-LOOKING STATEMENTS ARE MADE BASED ON VARIOUS ASSUMPTIONS AND ON MANAGEMENT'S BELIEFS, ESTIMATES AND OPINIONS ON THE DATE THE STATEMENTS ARE MADE. SHOULD ONE OR MORE OF THESE RISKS AND UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING INFORMATION CONTAINED HEREIN. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE FORWARD-LOOKING STATEMENTS IF THESE ASSUMPTIONS, BELIEFS, ESTIMATES AND OPINIONS OR OTHER CIRCUMSTANCES SHOULD CHANGE, EXCEPT AS REQUIRED BY APPLICABLE LAW