Mr. Glen Macdonald reports

ENCANTO POTASH ANNOUNCES RIGHTS OFFERING

Encanto Potash Corp. will be making a rights offering, in which holders of record of the company's common shares, as of the record date of Aug. 20, 2026, will receive rights to subscribe for securities of the company, as further described below. There are currently 19,098,379 common shares issued and outstanding. Each shareholder as of the record date will receive one right for each common share held; 1.25 rights will permit the shareholder to purchase one unit at a price of two cents per unit. The rights will expire at 2 p.m. Pacific Time on Sept. 10, 2026. Holders of rights who fully exercise their rights under the basic subscription privilege will also be entitled to subscribe, on a pro rata basis, for additional units, if available, that were not subscribed for by other holders of rights, subject to certain limitations as set out in the company's rights offering circular.

Description of rights offering

Each unit will consist of one common share and one transferable common share purchase warrant. Every four warrants will entitle the holder to purchase one additional common share at a price of seven cents per common share exercisable for one year from the expiry date. The rights will be transferable; however, they will not be listed for trading on the TSX Venture Exchange.

The units will not separate into common shares and warrants for a period of 60 days from the expiry date or upon earlier director approval.

The rights will not be listed and will expire 2 p.m. Pacific Time on the expiry date, after which time unexercised rights will be void and of no value.

The rights offering is not subject to any minimum subscription level. If the rights offering is fully subscribed, Encanto will issue up to 15,278,703 new common shares and 15,278,703 warrants to purchase up to an additional 3,819,675 common shares for total gross proceeds of approximately $305,574. If the rights offering is fully subscribed and all of the warrants issued on closing of the rights offering are exercised, the additional proceeds to the company will be approximately $267,377. If all rights are exercised, the company's issued and outstanding common shares will increase to 34,377,082, and, if all warrants covered by this rights offering are exercised, the number of issued and outstanding common shares will be 38,196,757 and 40,696,757 if all bonus warrants (as defined below) are exercised.

A notice of rights offering and a rights subscription form will be mailed to each registered shareholder of the company resident in Canada as at the record date. Registered shareholders who wish to exercise their rights must complete the rights subscription form and deliver the rights subscription form, together with the applicable purchase funds, to the rights agent, Endeavor Trust Corp., before 2 p.m. Pacific Time on the expiry date. Shareholders who own their common shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediaries.

The terms of the rights offering and the procedures for exercising rights will be explained in the rights offering circular. The rights offering circular is available under the company's profile on SEDAR+.

The rights offering will be made only in applicable jurisdictions in Canada and is not and under no circumstances to be construed as an offering of any securities for sale in, or to a resident of any jurisdiction, other than Canada, or a solicitation therein or an offer to buy or sell securities. However, certain holders of common shares in jurisdictions outside of Canada may be able to participate in the rights offering where they can establish that the transaction is exempt under applicable laws. If you are a shareholder of the company and reside outside of Canada, please review the notice of rights offering and rights offering circular to determine your eligibility and the process and timing requirements to receive and/or exercise your rights. The company requests any ineligible holder interested in exercising their rights to contact the company at their earliest convenience.

The rights offering is subject to regulatory approval, including the approval of the exchange.

Standby guarantees

Nick Watters, one of Encanto's directors, has agreed to act, directly or indirectly, as a standby guarantor to purchase up to 500,000 units that may be available as a result of any unexercised rights under the rights offering, for subscription funds of up to $10,000. In addition, several arm's-length third parties have agreed to act as standby guarantors to purchase, in the aggregate, up to 9.5 million units that may be available as a result of any unexercised rights under the rights offering for subscription funds of up to $190,000. As consideration for acting as a standby guarantors, the company will issue bonus warrants to Mr. Watters (entitling him to acquire up to 125,000 common shares of the company) and to the other standby guarantors (entitling them collectively to acquire up to 2,375,000 common shares), being 25 per cent of the total number of units the standby guarantors have agreed to purchase under their standby commitments. The bonus warrants are exercisable at a price of seven cents per common share for a period of one year after the date on which performance under the guarantee could be required. With the exception of Paul Chow, all standby guarantors do not own common shares of the company.

One of the standby guarantors, Mr. Watters, is a related party to the company under Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. because Mr. Watters is an insider of the company. The rights offering is not subject to the related party rules under MI 61-101 based on a prescribed exception related to rights offerings.

Use of net proceeds of rights offering

Encanto intends to use the net proceeds raised from the rights offering for repayment of loans advanced to complete the 2023, 2024 and 2025 audited financial statements and general working capital.

There is material uncertainty of the company to continue as a going concern.

About Encanto Potash Corp.

Encanto Potash is a publicly listed company trading on the TSX-V as EPO.H. The company is engaged in the exploration and development of potash properties in the province of Saskatchewan. The focus is on the Muskowekan First Nation potash minerals deposits. located on the reserve lands approximately 100 kilometres north of Regina, Sask. Encanto and Muskowekan continue to work toward developing Canada's first potash mine on a first nation reserve. The company is working to advance the spirit of truth and reconciliation with the first nation people of Canada.

We seek Safe Harbor.