Muskowekwan Project Project Description and Technical Proposal Detailed Executive Summary Prepared for: Canadian Environmental Assessment Agency Winnipeg, MB Saskatchewan Ministry of Environment, Environmental Assessment Branch Regina, SK December 2012 Muskowekwan Project Project Description and Technical Proposal Detailed Executive Summary December 2012 Prepared for: Canadian Environmental Assessment Agency Winnipeg, MB and Saskatchewan Ministry of Environment, Environmental Assessment Branch Regina, SK First Potash Ventures Muskowekwan Project Project Description and Technical Proposal Detailed Executive Summary December 2012 Detailed Executive Summary E.1 GENERAL INFORMATION AND CONTACTS E.1.1 FPV Background First Potash Ventures (FPV), a joint venture between Encanto Resources Ltd. (Encanto), Muskowekwan First Nation (MFN), and Muskowekwan Resources Limited (MRL), proposes to develop a potash mine on the Muskowekwan Reserve (IR #85), Treaty Land Entitlement (TLE), and pre-reserve lands. The Muskowekwan Project (the Project), located about 100 km north-northeast of Regina, Saskatchewan (SK), would comprise a solution mine producing about 2.8 million tonnes (Mt) of potash per year for at least 50 years. The lands subject to development for the Project include the MFN Reserve, TLE, and pre-reserve lands (see Figure E-1). MFN is a First Nation that owns the lands and potash reserves that will be used for the Project. MFN lands and resources are protected by Treaty Rights, which form the basis of MFN’s economic development strategy. MRL is an economic development company of MFN, incorporated in 2009, based in Lestock, SK. Encanto is a subsidiary of Encanto Potash Corp, a Canadian potash exploration company, with offices in Vancouver, BC, Calgary, AB, and Regina, SK. MFN and MRL participate on the Project management committee and provide land and resource access, while Encanto provides financing, technical and management expertise. No federal financial support has been provided in support of this Project. Key Project personnel include the principals of Encanto Potash Corp., who have existing relationships with Saskatchewan First Nations through oil and gas development activity and have recognized the opportunity to develop a potash mine on such lands in cooperation with First Nation landowners. Although FPV is a joint venture formed for this Project, the joint venture partners understand the need to implement measures to reduce likely environmental effects of the Project. FPV has retained the services of highly-skilled professional engineering and environmental consulting companies to conduct its feasibility and environmental assessment (EA) studies. These firms and FPV executives collectively have global expertise in potash mining engineering and major project development. i TWP 33 510000 540000 570000 600000 TWP 32 DRAKE ELFROS HIGHWAY 16 5730000 Biophysical Study Area 5730000 RGE 11 RGE 16 RGE 15 RGE 14 RGE 13 RGE 12 Land Status RGE 19 RGE 18 RGE 17 W2M FOAM LAKE ± Indian Reserve TUFFNELL TLE Land - Muskowekwan BEARDY'S AND OKEMASIS TWP 30 Pre-reserve Land - Muskowekwan WISHART HIGHWAY 743 DAY STAR TLE Land - Other NOKOMIS BANKEND TWP 29 Provincial Park HIGHWAY 744 Major Road TOUCHWOOD HILLS POST Railway KAWACATOOSE PROVINCIAL PARK 5700000 TWP 28 5700000 RAYMORE HIGHWAY 15 SEMANS Proposed Watercourse 640 HIGHWAY Facility Site Waterbody PUNNICHY ! QUINTON Urban Municipality TWP 27 LESTOCK Township MUSKOWEKWAN GOVAN 6 HIGHWAY LEROSS 0 5 10 15 20 KELLIHER Kilometres - 1:750,000 GORDON TWP 26 ARLINGTON BEACH JASMIN 113253770-076 REVB HIGHWAY 52 ITUNA TWP 25 5670000 DUVAL 5670000 Last Mountain Lake HUBBARD TWP 24 HIGHWAY 731 STRASBOURG HIGHWAY 35 HIGHWAY LITTLE BLACK BEAR HIGHWAY 639 HIGHWAY ROWAN'S RAVINE 641HIGHWAY PROVINCIAL PARK TWP 23 BULYEA STAR BLANKET HIGHWAY 22 CUPAR MOHR'S BEACH SOUTHEY DYSART OKANESE EARL GREY MARKINCH LIPTON | TWP 22 ÿ 5640000 5640000 HIGHWAY 322 STANDING BUFFALO DILKE PEEPEEKISIS HIGHWAY 20HIGHWAY Echo Lake BALCARRES LAST MOUNTAIN HOUSE Qu'Appelle River FORT SAN TWP 21 PASQUA LAKE 10 PROVINCIAL PARK MULTIPLE FORT QU'APPELLE KANNATA VALLEY B-SAY-TAH ABERNETHY REGINA BEACH MUSCOWPETUNG LEBRET HIGHWAY354 BUENA VISTA PASQUA Katepwa Lake LUMSDEN BEACH PIAPOT ECHO VALLEY PROVINCIAL PARK TWP 20 BETHUNE CRAVEN HIGHWAY 729 KATEPWA POINT DISTRICT OF KATEPWA PROVINCIAL PARK HIGHWAY 11 TAYLOR BEACH EDENWOLD HIGHWAY56 TWP 19 DISLEY EDGELEY 5610000 LUMSDEN 5610000 HIGHWAY 624 HIGHWAY TWP 19A HIGHWAY 734 QU'APPELLE HIGHWAY 10 INDIAN HEAD HIGHWAY364 HIGHWAY 1 MCLEAN TWP 18 NEKANEET BALGONIE PILOT BUTTE SINTALUTA ST. JOSEPH'S SAKIMAY OCHAPOWACE HIGHWAY642 HIGHWAY 730 REGINA 619 HIGHWAY GRAND COULEE CRAWFORD ESTATES TWP 17 PENSE WHITE CITY BELLE PLAINE COWESSESS 620 HIGHWAY HIGHWAY 48 DAVIN HIGHWAY 33 CARRY THE KETTLE TWP 16 5580000 5580000 VIBANK KRONAU DRINKWATER ODESSA 510000 540000 570000 600000 PREPARED BY MUSKOWEKWAN POTASH PROJECT PREPARED FOR AB SK MB Saskatoon Project Location ! Area of Regina ! Interest FIGURE NO. Acknowledgements: Original Drawing by Stantec. Basedata: Canvec Ver10 2012, GeoSask. TLE Lands: NorthRim April 2012. USA E-1 Last Modified: Nov 28, 2012By: aolson Muskowekwan Project Project Description and Technical Proposal Detailed Executive Summary December 2012 E.1.2 Project Proponent Contact Information The proponent of the Muskowekwan Project is FPV. FPV was formed through a Joint Venture Agreement (JVA) between MRL, MFN and Encanto in 2010. The contact information for the proponent is provided in Table E-1, below. Table E-1 Proponent Contact Information Proponent First Potash Ventures Contact at MFN Chief Reg Bellerose P.O. Box 249 Lestock, SK S0A 2G0 Telephone: 306-274-7641 Email: [email protected] Contact at MRL Chief Reg Bellerose President (MRL) P.O. Box 129 Lestock, SK S0A 2G0 Telephone: 306-274-7641 Email: [email protected] Contact at Encanto James Walchuck President and CEO Suite 450 - 800 W. Pender Street P. O. Box #6 Vancouver, BC V6C 2V6 Telephone: 604-683-2402 Email: [email protected] Principal Contact for Purposes of Wayne Stanley Regulatory Review Manager, Government and Regulatory Affairs First Potash Ventures Suite 500, 1414 8th Street SW Calgary AB T2R 1J6 Telephone: 403-538-8447 Email: [email protected] E.1.3 Federal and Provincial Regulatory Requirements The Project constitutes a “designated project” for the purposes of the Canadian Environmental Assessment Act, 2012, as it involves the: • construction and operation of a potash mine with a potassium chloride (KCl) production capacity of more than 1,000,000 tonnes per year (per article 15(e) of the Schedule to the Regulations Designating Physical Activities (SOR/2012-147)); and • short-term use of over 200,000 m3/year of groundwater (per article 8 of the Schedule to the Regulations Designating Physical Activities (SOR/2012-147)). iii Muskowekwan Project Project Description and Technical Proposal Detailed Executive Summary December 2012 Thus, the Project is subject to a screening by the Canadian Environmental Assessment Agency (the CEA Agency or the Agency) under requirements of Section 10 of CEAA 2012, to determine if an EA is required. FPV anticipates, given the nature and scale of the Project and the potential for adverse environmental effects, that an EA will be required. The Project will constitute a “development” for the purposes of Saskatchewan Environmental Assessment Act (SKEAA), as that term is defined in that Act. In particular, the mineral rights underlying certain pre-reserve lands on which the Project will be located are still held by the Province, although these will eventually be transferred to the federal Crown in trust for the MFN, through the TLE process. Also, the Project will use water sourced from water bodies under provincial jurisdiction, although the water supply infrastructure will be undertaken by a third party and is not part of the Project proposed by FPV. The Project is expected to require a provincial EA pursuant to the SKEAA. As the Project will likely be subject to both a federal and provincial EA, it is anticipated that Canada and Saskatchewan will coordinate and cooperate in the exercise of their respective powers and performance of their respective duties to ensure that in effect, a single EA of the Project is conducted in a timely, efficient, yet fully defensible manner. E.1.4 Project Need and Benefits The purpose of the Project is to develop the potash resource that underlies MFN lands, thereby generating a return on investments for the shareholders of FPV and creating economic and social benefits particularly for the Muskowekwan people, but also the surrounding community, Saskatchewan, and Canada. The Project will help to meet the growing global demand for potash and will create employment and procurement opportunities locally, regionally, and provincially. This Project is particularly unique as the MFN is a co-proponent and will benefit in a variety of ways, including increased employment, contracting, training, and business opportunities. The Project will deliver significant economic benefits to MFN. As the owner of the mineral rights, MFN will earn royalty revenue annually for the minimum 50-year operational life of the Project. At current potash prices, this royalty revenue would be about $80 million per year. The total construction personnel required at peak levels will be approximately 1,000, and between 300 and 500 jobs will be created during operation. Opportunities for employment, contracting, and training will be felt in nearby communities