News
Encanto completes purchase of Raytec potash assets

August 12, 2009

Encanto Potash Corporation is pleased to announce that it has closed its previously announced transactions with Raytec Metals Corp. ("Raytec").

Raytec has transferred all of its interests in its potash properties in
Saskatchewan to Encanto's operating subsidiary in exchange for 19,846,525 common shares of Encanto, at a deemed total value of $0.25 per share ($4,961,631 in total). One of the Raytec properties, Permit KP 441, which is part of the Spar Property, is the subject of a technical report (the "Report") prepared by Agapito Associates, Inc., dated July 29, 2009 the authors of which are Dr. Michael Hardy, P.Eng, Dr. Douglas F. Hambley, P.Eng, and Joseph E. Crawford, L.P.G. 

See the complete news release on this subject.

Raytec will also incur $6,500,000 in expenditures on Encanto's existing
potash properties and Raytec's potash properties (collectively, the "Potash
Properties") by December 31, 2009, to earn a 51 percent interest in the Potash Properties. Encanto will have the option to repurchase the 51 percent Raytec interest in the Potash Properties for 26,000,000 common shares of Encanto. If this Option is exercised, Raytec will own an aggregate of up to 45,846,525 shares of Encanto which will be equal to an estimated 28.57 percent of the Company's issued shares based on its current issued share capital.

The agreements between the parties contain certain terms including that
for so long as Raytec owns or has the right to own not less than 10 percent of the issued shares of the Company:

    (i)    Raytec will have the right to nominate up to two directors to the
           board of directors of the Company proportional to its interest in
           the Company; and

    (ii)   Raytec will have a pre-emptive right to participate in future
           financings of the Company so as to preserve its percentage
           interest in the Company