Mr. Glen Macdonald reports

ENCANTO POTASH ANNOUNCES CLOSING OF RIGHTS OFFERING

Encanto Potash Corp. has closed its previously announced guaranteed rights offering for aggregate gross proceeds of $201,886.30. The company issued 19,098,379 rights to holders of its common shares at the close of business on the record date of Aug. 20, 2026, on the basis of one right for each one common share held. One point two five rights will permit the shareholder to purchase one unit at a price of two cents per unit. The company filed a rights offering circular dated Aug. 12, 2026, with respect to the rights offering under the company's profile on SEDAR+.

Each unit consists 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 until Sept. 10, 2027. As further described in the circular, the securities underlying each unit will be separable on the date that is the earlier of: (1) Nov. 9, 2026, being the date that is 60 days following the expiry date of Sept. 10, 2026; or (2) approval from the board of directors of the company.

The company received subscriptions for 1,187,995 units pursuant to the basic subscription privilege and 4,968,280 units pursuant to the additional subscription privilege.

The full amount of the rights offering was guaranteed by each of Nadir Nathoo, Shahnaz Khoja, James Watt, Daniel Boase, Steve Voelpel, Clair Calvert, Gerald Hannahs, Peter Dalrymple and Gordon Keep (each as to one million units, being approximately 9.09 per cent of the total standby commitment) and Paul Chow and Nick Watters (each as to 500,000 units, being approximately 4.55 per cent of the total standby commitment). The company entered into standby guarantee agreements with each of the standby guarantors, pursuant to which the standby guarantors agreed to purchase, on a pro rata basis, all of the units issuable under the rights offering, which remained unsubscribed under the basic subscription privilege and the additional subscription privilege, up to a maximum of 10 million units in aggregate.

Following exercises under the basic subscription privilege and the additional subscription privilege, a total of 3,938,040 units were required to be purchased pursuant to the guarantee agreements. The company entered into release agreements with Mr. Chow, Mr. Keep, Mr. Hannahs, Mr. Watt, Mr. Dalrymple and Mr. Boase to release them from their obligations under the guarantee agreements. As a result, the following units were issued to the remaining standby guarantors pursuant to their guarantee agreements.

The total number of units issued under the rights offering was 10,094,315 units. Following the closing of the rights offering and following the separation date, the company will have 29,192,694 common shares issued and outstanding.

Mr. Watters, a director of the company, acquired 500,000 units solely pursuant to his standby commitment. No insider of the company subscribed for securities under the basic subscription privilege or the additional subscription privilege.

In consideration for the purchase commitments provided by the standby guarantors under the guarantee agreements, the company has issued non-transferable common share purchase warrants to the standby guarantors. Each of Mr. Nathoo, Mr. Khoja, Mr. Voelpel, Ms. Calvert and Mr. Watters received bonus warrants representing 25 per cent of the number of units purchased by each standby guarantor for a total aggregate issuance of 984,510 bonus warrants. Each bonus warrant entitles the holder to purchase one common share at an exercise price of seven cents per common share until Sept. 10, 2027. Bonus warrants were issued to the standby guarantors pursuant to the prospectus exemption provided in Section 2.1.1 of National Instrument 45-106 (Prospectus Exemptions).

The rights offering is subject to the final approval of the TSX Venture Exchange. The company has obtained conditional approval from the exchange. The net proceeds of the rights offering will be used in the manner disclosed in the circular.

About Encanto Potash Corp.

Encanto is a publicly listed company trading on the TSX Venture Exchange 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 mineral 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 nations reserve. The company is working to advance the spirit of truth and reconciliation with the first nations people of Canada.

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