Mr. James Walchuck reports

ENCANTO RECEIVES EXPRESSION OF INTEREST OF $250 MILLION TO DEVELOP, CONSTRUCT AND FINANCE POWER CO-GENERATION PLANT FOR POTASH MINE

Encanto Potash Corp., through its strategic adviser, Horgen Holdings Inc., has received an expression of interest from Fengate Capital Management Ltd. to undertake the development, construction and financing of a 100-megawatt power-generating station for the proposed new potash mine and processing plant to be built for the company's Muskowekwan project.

"Encanto is very pleased to be receiving significant interest and proposals to develop a co-gen plant for the Muskowekwan project in anticipation of building our potash mine and plant," explained Encanto president and chief executive officer James Walchuck. "Should we come to acceptable commercial terms for the cost of power, and we see no reason that we would not, the capex as calculated in the prefeasibility would be reduced by $250-million with the associated positive financial impact. It's a big win for Encanto and shows the confidence from the financial industry that we are committed to building this mine."

Fengate expects the project will produce energy using natural-gas-fired electricity generation technology that produces both heat for steam production and electricity (co-generation). The technology is proven and highly efficient in respect of fuel consumption and air emission. The engineering, procurement and construction cost of the project is expected to be in excess of $250-million.

Fengate would undertake the project with a development partner that would lead the technical scope of the project -- Fengate has identified several qualified candidates. Fengate would lead the capital financing of the project, including investing the equity capital and arranging the project debt. Fengate is experienced in power plant development and financing. Fengate is a private equity fund manager specializing in the development and financing of power and infrastructure projects.

Fengate's involvement with the project, including the investment of capital and the application of professional resources, will rely on a high level of confidence that (i) the potash mine will be developed within a reasonable time period, and (ii) SaskPower is prepared to enter into an acceptable long-term power purchase agreement for the purchase of the electricity generated by the project. Once the project is completed, it will make it possible for this region of Saskatchewan to be serviced by the new infrastructure and receive preferential electrical rates.

About Fengate Capital Management

Fengate Capital Management is an investment management firm specializing in originating and managing investments in the infrastructure and real estate sectors. Fengate is a subsidiary of Fengate Corp., which began operations in 1974. The firm's operations encompass asset management, real estate and infrastructure development, and commercial property management across North America and international markets.

Fengate began its operations in 2000 with the launch of Northgate Properties Inc., a real estate fund established on behalf of a group of high-net-worth investors. In 2006, Fengate established its first infrastructure fund targeting investments in Canadian public-private partnerships and independent power projects.

For the past seven years, Fengate has been named one of Canada's 50 best managed companies, a program sponsored by the National Post, Deloitte, CIBC and Queen's School of Business.

We seek Safe Harbor.