NI 43-101 Technical Report on a Preliminary Economic Assessment
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NI 43-101 Technical Report on a Preliminary Economic Assessment and Preliminary Feasibility Study of the Muskowekwan Potash Project, South-Eastern Saskatchewan, Canada Effective date: 24 May 2017 Prepared for: Encanto Potash Corp. Prepared by: David M. Myers, P.Eng., Amec Foster Wheeler Paul M. O’Hara, P.Eng. Amec Foster Wheeler Tabetha A. Stirrett, P.Geo., CPG, North Rim Douglas F. Hambley, Ph.D., P.E., P.Eng., P.G., Agapito Associates, Inc. James Brebner, Eng., Novopro Projects Inc. Preliminary Economic Assessment and Preliminary Feasibility Study NI 43-101 Technical Report Project No.: 194379 Important Notice This report was prepared as a NI 43-101 Technical Report for Encanto Potash Corp. by Amec Foster Wheeler Americas Limited (Amec Foster Wheeler). The quality of information, conclusions, and estimates contained within the Amec Foster Wheeler prepared content is consistent with the terms of reference, constraints, and circumstances under which the report was prepared by Amec Foster Wheeler and the report is based on: i) information available at the time of preparation, ii) data supplied by outside sources, and iii) the assumptions, conditions, and qualifications set forth in this report. This report is intended to be used by Encanto Potash Corp., subject to the terms and conditions of its contract with Amec Foster Wheeler. That contract permits Encanto Potash Corp. to file this report as with Canadian Securities Regulatory Authorities pursuant to Canadian provincial securities legislation. Except for the purposes legislated under Canadian provincial securities law, any use of this report by any third party is at that party's sole risk. ii Preliminary Economic Assessment and Preliminary Feasibility Study NI 43-101 Technical Report Project No.: 194379 Table of Contents 1 Summary ..................................................................................................................... 1-1 1.1 Introduction .................................................................................................................. 1-1 1.2 Terms of Reference ..................................................................................................... 1-1 1.3 Project Setting ............................................................................................................. 1-1 1.4 Mineral Tenure, Surface Rights, Royalties, and Agreements ....................................... 1-2 1.5 Geology and Mineralization ......................................................................................... 1-2 1.6 History ......................................................................................................................... 1-2 1.7 Drilling and Sampling ................................................................................................... 1-3 1.8 Data Verification .......................................................................................................... 1-3 1.9 Metallurgical Testwork ................................................................................................. 1-3 1.10 Mineral Resource Estimation ....................................................................................... 1-4 1.11 Mineral Resource Statement – PEA 2017 .................................................................... 1-5 1.12 Mineral Reserve Estimation ......................................................................................... 1-7 1.13 Mining Methods ........................................................................................................... 1-7 1.14 Recovery Methods ....................................................................................................... 1-7 1.15 Project Infrastructure ................................................................................................... 1-8 1.16 Market Studies and Contracts ...................................................................................... 1-8 1.17 Environmental Studies, Permitting, and Social or Community Impact .......................... 1-8 1.18 Capital and Operating Costs ........................................................................................ 1-9 1.19 Economic Analysis ....................................................................................................... 1-9 1.20 Adjacent Properties ................................................................................................... 1-10 1.21 Conclusions ............................................................................................................... 1-10 1.22 Recommendations ..................................................................................................... 1-11 1.23 2013 Pre-Feasibility Study ......................................................................................... 1-11 2 Introduction .................................................................................................................. 2-1 2.1 Introduction .................................................................................................................. 2-1 2.2 Terms of Reference ..................................................................................................... 2-1 2.3 Qualified Persons ........................................................................................................ 2-1 2.4 Site Visits and Scope of Personal Inspection ............................................................... 2-2 2.5 Effective Dates ............................................................................................................ 2-2 2.6 Information Sources and References ........................................................................... 2-2 2.7 Previous Technical Reports ......................................................................................... 2-2 iii Preliminary Economic Assessment and Preliminary Feasibility Study NI 43-101 Technical Report Project No.: 194379 3 Reliance on Other Experts ........................................................................................... 3-1 3.1 Introduction .................................................................................................................. 3-1 3.2 Mineral Tenure ............................................................................................................ 3-1 3.3 Surface Rights ............................................................................................................. 3-1 3.4 Environmental .............................................................................................................. 3-1 3.5 Social and Community Impacts .................................................................................... 3-1 3.6 Taxation ....................................................................................................................... 3-2 3.7 Markets ........................................................................................................................ 3-2 4 Property Description and Location ............................................................................... 4-1 4.1 Introduction .................................................................................................................. 4-1 4.2 Property and Title in Saskatchewan ............................................................................. 4-1 4.3 Project Ownership ....................................................................................................... 4-1 4.4 Mineral Tenure ............................................................................................................ 4-3 4.5 Surface Rights ............................................................................................................. 4-3 4.6 Water Rights ................................................................................................................ 4-4 4.7 Royalties ...................................................................................................................... 4-4 4.8 Agreements ................................................................................................................. 4-4 4.9 Permitting Considerations ............................................................................................ 4-4 4.10 Environmental Considerations ..................................................................................... 4-5 4.11 Social License Considerations ..................................................................................... 4-6 5 Accessibility, Climate, Local Resources, Infrastructure, and Physiography .................. 5-1 5.1 Topography and Vegetation ......................................................................................... 5-1 5.2 Accessibility and Local Resources ............................................................................... 5-1 5.3 Climate ........................................................................................................................ 5-1 5.4 Infrastructure ............................................................................................................... 5-2 6 History.......................................................................................................................... 6-1 6.1 Project History ............................................................................................................. 6-1 6.2 2009 Seismic Program ...............................................................................................