A Pre-Feasibility Study dated February 28, 2013 referenced below confirms Proven and Probable KCI Reserves on the Muskowekwan Project totalling 162 MMt grading 28%, which supports primary and secondary mining for over 50 years at an assumed annual extraction rate of 2.8 million tonnes.
MMTC, established in 1963, is a Government of India Public Sector Undertaking ("PSU"), India's Largest International Trading Company and one of the two highest foreign exchange earners for the country with a turnover of ~US $10 billion and a current market cap of US $35 billion dollars. MMTC is the first Public Sector Enterprise to be accorded the status of "FIVE STAR EXPORT HOUSE" by the Government of India for long standing contribution to exports and, most importantly, is one of the world's largest buyers of fertilizers. MMTC is owned by the Ministry of Commerce that is also responsible for the Export Credit Guarantee Corporation of India Limited.
The MOU also allows for the immediate supply of potash by Encanto to MMTC, which can be sourced from existing producers while Encanto concurrently continues to develop the Muskowekwan Project. To that effect, Encanto now intends to create a joint trading company in an expanded working relationship with the Muskowekwan First Nation to ensure that the Company can begin to supply potash to satisfy MMTC's needs in the near future as well. The plan is to become an active potash company and to secure substantial near term cash flow; a rarity for a junior potash developer.
In addition, the MOU provides that MMTC will also act as Encanto's worldwide distributor of potash on an exclusive basis, which is expected to provide access to markets and increased pricing well beyond the primary market in India.
