Encanto Potash Working To Develop First Ever Potash Mine on First Nations Land
With a key partnership in place, Encanto Potash is one step closer to becoming the next big potash producer of the future
Since 2008, plant nutrients like potash have become a hot commodity. As a major source of potassium, potash helps plants grow by improving water retention, strengthening roots and stems, and assisting in nutrient transfer. With no known substitutes, potash is a major ingredient in most commercial fertilizers and one of the most effective ways to increase crop yields. With more than 50 percent of the worlds potash reserves, Canadas Saskatchewan area is home to some of the worlds most viable potash resources.
Encanto was first created to work with First Nations Peoples in Saskatchewan in order to develop potash resources on their lands. By partnering and working with the Muskowekwan First Nations and others, Encanto has been able to explore for potash on their southeastern Saskatchewan property with an eventual goal of providing education, training and careers for the people of several First Nations. As the forecasted demand for potash rapidly increases, Encanto is looking to become the next important potash producer of the future.
We have a wonderful relationship with the First Nation and a lot of support from the Federal and Provincial government to get this started, says Jim Walchuck, CEO of Encanto Potash. We have a solid joint venture agreement and plan to become the first mine built on a Canadian First Nation ever.
FIRST NATION PARTNERSHIP
For the past four years, the junior mining company has been working with the people of Muskowekwan First Nations to develop potash resources on their 60,000+ acres of land. The potash formation found in Saskatchewan is known as the Prairie Evaporite, containing four significant potash-bearing beds, making the Canadian area a hot spot for the potassium nutrient. The two groups have been working closely with Canadas Ministry of Aboriginal Affairs and Northern Development so all treaties are respected and followed, and in a way where both parties will benefit from equity involvement and cash flow from a successful potash mine on First Nations land.
Prime Minister Harper and the PMO have endorsed this project and the Minister from Aboriginal Affairs Canada is in full support, says Chief Reginald Bellerose of Muskowekwan First Nations. Were also working with the local RN, town council and government levels to work with other First Nations in our area.
When the founders of Encanto first came to Saskatchewan looking for potash licenses, they found that most of the potash leases in Saskatchewan were taken up with very limited availability. Having previous experience with First Nations in the oil and gas space, the founders were introduced to Chief Bellerose among others and the two groups were able to consummate a joint venture agreement based on Canadas INAC permit process.
Our relationship with Encanto is built on a lot of mutual respect and understanding, says Chief Reginald Bellerose of Muskowekwan First Nations. Ultimately, both partners want to see a mine built on Muskowekwan to the mutual benefit of both the Muskowekwan people and Encanto shareholders.
As part of the partnership, Encanto acts as an economic facilitator with both the First Nations and Canada to ensure that First Nations opportunities for business development and human resources are maximized through resource development. The potash mine is expected to generate tens of millions in revenue royalties for the First Nation annually as well as generate approximately 1,000 construction jobs for the development of the mine and nearly 300 full-time jobs once it is fully operational.
According to Chief Bellerose, Our goal is to create careers. This is a significant project and the only kind in Canada on First Nations land. Once we can get to construction and become operational, we can then begin creating jobs and careers for the people of Muskowekwan First Nation.
The two groups are working together to build training programs for the Muskowekwan people with a goal of putting a training school on site.
My dream is to have a First Nation General Manager running the mine, says Walchuck.
Encantos partnership with the First Nations has led the junior mining company to head down the production path with multiple rounds of confirmatory drilling and 3D seismic work behind them, a Preliminary Economic Assessment (PEA), Resource Estimates and Pre-Feasibility Study (PFS) and further updated resource estimates all completed. Together, the two groups have developed Proven and Probable recoverable KCI potash of 161.97 million tones of Proven and Probable Reserves plus Measured and Indicated Resources of 197.37 million tones. In addition, there are 165.80 million tones of Inferred Resources still to be converted to higher categories. At a planned full extraction rate of 2.8 million tones a year, this agreement between the two groups will support a solution mine life in excess of 70 years Clearly this is a very large and important asset being developed.
Unlike other mining companies, Encanto uses an alternative approach to mining potash called solution mining. The technology behind solution mining is simple. By pushing a heated solution down the development well, dissolving the potash, pumping the resulting brine solution back to the surface for processing and finally putting through an evaporation process, the company is able to extract 98 percent pure potash. The solution mining process allows for a lower cost to build a new mine since legacy style shafts are not required, providing no underground access, no risk of flooding, the ability to mine multiple potash layers and lower Capex needed. It also provides a quick turnaround time allowing the project to get into full production faster.
We did two economic studies with one based on conventional mining and the other on solution mining to determine the most economical way to go forward, explains Walchuck, who is a third generation mining man and has 34 years of his own in the mining industry. Hands down solution mining was the best step forward.
Encanto has already completed seven drill holes and multiple 3D seismic programs on the MFN lands.
Encanto Potash Corp. recently announced the addition of Global Engineering Firm SNC-Lavalin to join NovoPro Projects, Agapito Associates and North Rim Consulting to their feasibility study team. The SNC-Lavalin firm will help perform the design of the solution mining process, processing plant, storage and shipping, along with delivering mining plans and ongoing reserve estimates, detailed designs and production schedules.
As a team, we all work extremely well together, with one goal in mind; an efficient, environmentally sensitive and profitable potash producing mine offering increased hope and a future for the local economy and beyond, stated Walchuck.
As for the next step, Encanto Potash is currently exploring domestic and international strategic partnerships for the financing, development and sale of potash production from its Muskowekwan JV Property with a goal of securing a strategic investor or significant off take agreement. With potash currently selling at more than $400/ton and forecasted to rise, the Company is working on their final feasibility study. With those in place, Encanto can begin construction on their solution mine and move toward an actual production date.
Were getting a lot of positive feedback from both the Federal and Provincial governments of Canada as well as the government of Saskatchewan to see this mine built, says Walchuck. Its a win-win situation for everyone.
The good news and potential doesnt end there. The Company is anticipating exploring for potash on the Ochapowace/Chacachas First Nation properties.
This is another very promising property, prospective for potash and in the vicinity of some of the worlds largest operating potash mines. Seismic data has already been shot there and the current plan is to drill a well to test the grade sometime in the H2-13. That too would be good news.