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/THIS PRESS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES/
TRADING SYMBOL: TSXV:EPO
VANCOUVER, March 12, 2014 – Encanto Potash Corp. (“Encanto” or the “Corporation”) (TSXV: EPO) (OTCQX: ENCTF) is pleased to announce that it has filed, and received a receipt for, a preliminary short form prospectus in the Provinces of British Columbia, Alberta, Saskatchewan and Ontario to raise gross proceeds of up to $6,000,000 (the “Offering”) through the issuance of units (“Units”) and flow-through units (“Flow-Through Units”).
Encanto will raise up to $5,000,000 from the sale of the Units, with each such Unit consisting of one common share and one half of one share purchase warrant, each whole warrant entitling the holder to purchase one common share for a period of 18 months from the closing date of the Offering.
Encanto will raise up to $1,000,000 from the sale of the Flow-Through Units, with each such Flow-Through Unit consisting of one flow through common share (“FT Share”) and one half of one share purchase warrant, each whole warrant entitling the holder to purchase one non flow-through common share for a period of 18 months from the closing date of the Offering. The FT Shares will be “flow-through” shares pursuant to the Income Tax Act (Canada).
Secutor Capital Management Corporation (“Secutor”) has agreed to act as lead agent in connection with the offering and Haywood Securities Inc. (“Haywood”) has agreed to act as agent (Secutor and Haywood collectively the “Agents”). The pricing of the Units and Flow-Through Units and the exercise price of the warrants will be established before the filing of the final prospectus by negotiation between Encanto and the Agents.
The proceeds from the sale of the Units will be used for general working capital. The proceeds from the sale of the Flow-Through Units will be used by the Encanto to incur eligible Canadian Exploration Expenses as defined by the Income Tax Act (Canada).
The Corporation has granted the Agents an over-allotment option (the “Over-Allotment Option”), exercisable in whole or in part, at the sole discretion of the Agents, for a period of 30 days from the closing date of the Offering, to purchase that number of additional Units (the “Additional Units”) at the offering price per Unit and having the same terms as the Units, as is equal to 15% of the aggregate number of Units and Flow-Through Units sold under the Offering solely to cover over allotments, if any.
In consideration for the services rendered by the Agents in connection with the Offering, the Agents will be paid a cash fee equal to 6% of the gross proceeds of the Offering, including any proceeds received pursuant to the exercise of the Over-Allotment Option. As additional compensation, the Corporation will grant to the Agents compensation options (the “Compensation Options”) exercisable to purchase that number of common shares (the “Compensation Shares”) as is equal to 4% of the total number of Units and Flow-Through Units sold pursuant to the Offering, including any Additional Units sold pursuant to the exercise of the Over-Allotment Option. Each Compensation Option will entitle the holder thereof to acquire one Compensation Share at a price equal to the offering price of the Units, until the date which is 12 months following the closing date of the Offering.
ON BEHALF OF THE BOARD OF DIRECTORS
Per: “James Walchuck”
President and CEO
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.
For further information:
President and CEO
Martin Gagel CFA, MBA
Vanguard Shareholder Solutions
Toll Free: 1-866-918-0824
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