Transcript
TSX-V: EPO
SAFE HARBOUR STATEMENT
This presentation contains forward-looking statements that involve risks and uncertainties, which
may cause actual results to differ materially from the statements made. For this purpose, any
statements that are contained herein that are not statements of historical fact may be deemed to
be forward-looking statements made pursuant to the safe harbour provisions of the applicable
securities laws. Without limiting the foregoing, the words “believes”, “anticipates”, “plans”,
“intends’, “will”, “should”, “expects”, “projects” and similar expressions are intended to identify
forward-looking statements. You are cautioned that such statements are subject to a multitude of
risks and uncertainties that could cause actual results to differ materially from those projected in
the forward-looking statements. These risks include, but are not limited to, those associated with
the success of research and development programs, the regulatory approval process,
competition, securing and maintaining corporate alliances, market acceptance of the Company’s
products, the availability of government and insurance reimbursements for the Company’s
products, the strength of intellectual property, financing capability, the potential dilutive effects of
any financing, reliance on subcontractors and key personnel. The forward-looking statements are
made as of the date hereof and the Company disclaims any intention and has no obligation or
responsibility, except as required by law, to update or revise any forward-looking statements,
whether as a result of new information, future events, or otherwise.
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WHAT IS POTASH?
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Potassium is obtained from potash-bearing ores
such as sylvanite.
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Potash in mined from naturally occurring ore
bodies which were formed as sea water
evaporated.
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Potash, or carbonate of potash, is in fact a
mixture of potassium salt with impure form of
potassium carbonate (K2CO3). In other words, it
is the common term used for the fertilizer forms
of the element potassium (K).
Potassium occurs abundantly in nature, being
the 7th most common element in the earth's
crust. Some clay minerals which are associated
with heavy soils are rich sources of potassium.
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WHAT IS POTASH USED FOR?
• 95% of Potash is used for fertilizer
• Fertilizer (NPK) is a combination of Nitrogen (N),
Phosphate (P) and Potassium (K)
• Nitrogen, phosphorus, and potassium are three of
the most essential nutrients that a plant needs to
grow.
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BENEFITS OF POTASH
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Slows growth of crop diseases
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Maintains cell resilience
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Reduces wilting
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Reduces water loss
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Increases the protein available to plants
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Assists in photosynthesis by activating more than 50
enzymes
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Improves drought resistance
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Builds cellulose
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INCREASED CROP YIELDS
Potash has no commercial substitute as a potassium
fertilizer source
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POTASH OR NOT
Visual Comparison of Impact of Potash
Without Potash
Source: International Plant Nutrition Institute
With Potash
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POTASH OR NOT
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POTASH OR NOT
Improved Farmer Economics with Optimal Potash Application
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MAJOR POTASH PRODUCERS
Source: Fertecon
• Only 12 countries currently produce potash
• Canada accounts for 35% of world’s potash – 90% from
Saskatchewan
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MAJOR POTASH CONSUMERS
Source: Fertecon
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POTASH GENERAL
• Annual World Potash Production
50 million (tpy)
• Population 2010
• Projected Population
6 Billion
9 Billion
• Annual Increase in Population
• Projected Increase in Potash Production
+75 million/year
+3-4% year
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WORLD ECONOMIC GROWTH PROFILE
Annual % GDP Growth 2010-2014
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•
•
•
Source: United Nations
Approximately 75% of world’s population comes from countries with GDP growth >5%
China, India and other Asia represent almost 60 percent of the world’s population.
For most people in developing countries, the first priority when they have more money
is to improve their diet.
For the first time in history, a majority of the world’s population is in the process of
attaining a greater ability to purchase higher-quality food.
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GLOBAL MEAT CONSUMPTION
kg/person
Source: FAO Statistics
• One tonne of BEEF requires feed corresponding to 7 tonnes of grain;
• One tonne of PORK requires feed corresponding to 4 tonnes of grain; and
• One tonne of POULTRY requires feed corresponding to 2 tonnes of grain.
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CHINA & INDIA GDP/CAPITA
US$
Source: IMF
•
Over the next several years, China’s GDP is expected to grow by
more than 9%, while India and other Asian countries are
expected to grow at more than 7% annually.
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ENCANTO POTASH
PROJECT LOCATIONS
In the Heart of Potash Country
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INVESTMENT ANALYSIS
• Sovereign Component
• Management Component
• Permitting Component
• Resource Component
• Financial Component
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BUSINESS FRIENDLY
JURISDICTION
• World’s established leading producers – Potash Corp,
Mosaic Co and Agrium – in the heart of
Saskatchewan potash country.
• Potash reserves are typically flat and consistent over
many kilometres
• Resources and infrastructure well developed and
highly accessible
• INAC Support (Federal)
• Federal Government wants economic benefits for
First Nations
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GLOBAL POTASH RESERVES
SASKATCHEWAN IS POTASH CAPITAL
Saskatchewan is
the potash capital
of Canada with
more than 53% of
production coming
from this region
Source: Fertecon
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PROVEN MANAGEMENT
James Walchuck
CEO
Gordon Keep
Chairman
• 30 Years in mining industry including diverse background in
operations, feasibility, construction and finance
• Mine manager at Bulyanhulu Mine for Sutton/Barrick
• Extensive background in corporate finance and investment
banking, and creating public natural resource companies
Rod Hope
Consultant & Director of
Saskatchewan First Nations
Business Development
• Significant legal experience with First Nations
Ross Moulton
VP Exploration
• 35 years of oil and gas experience with various private and
public exploration and production companies
North Rim
• Top potash geological consultant
Exploration
• Well respected in the potash industry
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FIRST NATIONS
PARTNERSHIP
Solid
Alliance
Fast Track
Development
Above:
Muskowekwan Chief Reg Bellerose with Encanto
President James Walchuck
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PARTNERS WITH FIRST NATIONS
Permitting Advantage
• Two stake holders for permitting (INAC and the Chief &
Council)
Strong Community Support
• Jobs
• Training & Education
Mutual Interests
• Upon Production – 3% GORR
• 2 M tpy (tonne per year) mine ~ $24 million/yr for FN
(@$425/t FOB Vancouver)
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FIRST NATIONS ADVANTAGE
CONTINUOUS LAND PACKAGE
Western Potash Leases
40% Freehold
Potash One Leases
26% Freehold
Freehold-Mineral rights owned by other parties
– secondary negotiation required
Encanto Muskowekwan Lease
Owns 100% Continuous Mineral Rights
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RESOURCE STEPS
MUSKOWEKWAN PROJECT
• 2D Seismic
• Drill Hole(s) ~ Grade
• 3D Seismic
• In – Fill Drill Holes
• Resource Calculation
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2D SEISMIC PLAN VIEW
MUSKOWEKWAN PROJECT
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1.5 km lines show good structure over large area
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36,000 of the 43,000 acres appear continuous
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2D results showed resource size potential
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No large Collapse zones, Washouts or Leach zones
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DRILL HOLE(S)
MUSKOWEKWAN PROJECT
2009 Drill Hole
3.6 m of 25.2% K2O (39.9% KCl)
2.4 m of 25.5% K2O (40.4% KCl)
Also:
6 surrounding drill holes show all 3
potash beds present (Chapman
Report)
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3D SEISMIC RESULTS
AUGUST 2010
• Tight spaced 3D allows widely spaced drill
holes (4 km)
• Low cost exploration
• 3D established geologic continuity (NI 43101)
• Significant de-risking of resource
exploration
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3D SEISMIC
MUSKOWEKWAN PROJECT
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3D ANOMOLY MAP – BOYD
PETROSEARCH REPORT AUG 2010
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MUSKOWEKWAN PROJECT
DRILL HOLES
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LOW RESOURCE RISK
MUSKOWEKWAN PROJECT
• 2D Seismic – Completed
• 36,000 acres good structure
• Drill Hole(s) ~ Grade -- Completed
• High grade hole by Encanto
• Surrounding historical holes
• 3D Seismic -- Completed
• Significant de-risking August 2010
• In – Fill Drill Holes – Q4 2010
• Resource Calculation– Q1 2011
• Resource Q4 - Revaluation of Company
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POTASH FUNDAMENTALS
Growing World Population & Less Arable Land
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FERTILIZER DEMAND IS GROWING
Source: Ferticon
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ESTIMATED POPULATION GROWTH BY
REGION (2050)
In Millions
Source: United Nations, Scotia Capital
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MARKET VALUATION
COMPARABLES
COMPARABLE POTASH MINES AND DEPOSITS
Operator
Encanto
Encanto
Encanto
Project/Mine
Muskowekwan
Muskowekwan
Muskowekwan
Project Status
Exploration
Exploration
Exploration
Potash Corp
Athabasca Basin2
Rocanville
Allan
Burr Potash
Vanscoy
Production
Production
Feasibility
Production
Potash Corp
Agrium
Potash Member
LPL
LBP
Esterhazy
Esterhazy
PL
UPL
UPL
Depth
1194
1203
1238
960
1040
930-950
1000-1100
Total Resource1
?
?
?
1921
5090
463
437.7
Ore Zone Thickness
3.6
2.4
5.3
2.59
3.35
3.44
3.1
25.2
25.5
12.4
23.5
27.6
23.2
24.7
Ore Grade
% K20
% MGO
0.1
0.1
5.8
0.5
0
0.04-0.10
?
% Insets
10.2
5.4
1.4
0.9
5.24
7.5
4.75
% Carnallite
<1%
<1%
<5%
5.68
0
trace
trace
Mining Technique
?
?
?
Underground
Underground
Underground
Underground
MOP Production per Year
?
?
?
10-2.8Mt
0.7-1.75Mt
?
1.3-1.8Mt
Note 1: Resources refer to current resources exclusive of historical production
Note 2: Athabasca Potash was acquired by BHP in January 2010
Sources: Corporate filings of the above listed companies and Industrial Alliance Securities
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SHARE STRUCTURE
Issued & Outstanding
225,112,935
Options
19,400,000
Warrants
23,627,108
Fully Diluted
268,140,043
Symbol
TSX-V: EPO
Cash
$4.1m CDN
Warrants and Options
$5.0m CDN
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STRONG SHAREHOLDER GROUPS
Lion Energy
46,000,000
Founders
40,000,000
Endeavor Group
26,000,000
Recent Financing Group
29,000,000
Hutton
6,000,000
Foreign Investors
11,600,000
Float
66,000,000
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MARKET VALUATION
COMPARABLES
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SUMMARY: THE ENCANTO
ADVANTAGE
Partnership
First Nations
Time
Resource
Near Term Milestone
Compliant Resource – Q4
Significant Revaluation
Low Risk
High Potential Valuation
Management
Strong Financial and Technical
Team
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INVESTMENT HIGHLIGHTS
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•
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•
•
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Anticipated Large Resource In Q1/2011
Low Downside Risk for High Value Asset
High Grade Drill Hole
3D – Resource Continuity Demonstrated
Strong Political Support
Only 3 Saskatchewan Potash Juniors Remain
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PROJECT PIPELINE
SPAR PROPERTY
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Compliant Resource
• Indicated resources of 12.49
million tonnes of K20
• Inferred resource of 12.24 million
tonnes of K20
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High Grade Intercepts
• Lower Patience Lake Member =
3.06m @ 31% K20 (50% KCI)
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Indication that Zone Thickens to East
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PROJECT PIPELINE
OCHAPOWACE PROPERTY
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2D Seismic Completed
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Large Contiguous Land Package
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Potential for Solution Mining
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CORPORATE CONTACT
Vancouver Office
www.encantopotash.com
380 - 580 Hornby Street
[email protected]
Vancouver, British Columbia
[email protected]
Canada, V6C 3B6
Telephone: 604-683-2402
Corporate Communications: 866-918-0824
Regina Office
Suite 304, 2505-11th Ave
Regina, SK, S4P 0K6
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