Encanto Potash Corp. announces First Nations and Metis Fund/Muskowekwan investment in Encanto

Encanto Potash Corp. (“Encanto” or the “Company”) (TSXV:EPO) (OTCQX:ENCTF) is pleased to announce that the Muskowekwan First Nation (“MFN”) through its development corporation Muskowekwan Resources Limited (“MRL”)  will be making up to a $3,000,000 Cdn equity investment into the Company.  The First Nations and Métis Fund (“FNMF” see www.fnmf.ca) has approved and will be providing the financing to MRL, subject to the completion of the requisite legal documentation.

The equity investment will be effected by a non-brokered private placement of up to 13,043,479 Units (the “Units”) at$0.23 per Unit to raise gross proceeds of approximately $3,000,000.  Each Unit will consist of one common share and one-half of one common share purchase warrant.  Each whole warrant will entitle the holder to acquire one common share of the Company at an exercise price of $0.35 per common share for a period of three years from the date of closing.  The private placement will be subject to TSX Venture Exchange approval and all securities issued in connection with the private placement will be subject to a four month hold period.

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The FNMF is the first Aboriginal fund in Canada to make investments in Saskatchewan-based First Nations and Métis businesses. The mandate of the FNMF is to strengthen Aboriginal participation in Saskatchewan’s diverse economy and to help create economic development opportunities and jobs for First Nations and Métis people.

The fund is administered and operated by First Nations and Métis Fund Inc., a corporation wholly owned by Crown Investments Corporation (CIC), a financial holding company for Saskatchewan’s commercial Crown corporations.  Westcap Mgt. Ltd. (“WML”) provides professional fund management services and makes recommendations to FNMF on potential transactions.  WML, Saskatchewan’s largest venture capital and private equity fund manager with over$500 million under management, provides a wide range of investment banking activities to a diversified client base worldwide including institutions, retail investors, governments, and high net worth individuals.

MFN Chief Reginald Bellerose explains: “We approached the Company’s management with the idea of MFN, through MRL making a direct investment into Encanto. As a First Nation, we’re not only looking forward to the employment, royalties and education opportunities that the joint venture with Encanto offers our people, but feel that at this stage in Encanto’s development, the direct investment offers the opportunity to strengthen the strategic partnership between MRL and Encanto as well as the opportunity for appreciation as Encanto moves toward building a solution mine on our lands.”

Encanto President and CEO Jim Walchuck comments: “We’re extremely pleased to welcome the MFN, through MRL, with a direct investment in the Company.  I believe that this strategic investment by the MFN sends a strong reaffirmation of our joint commitment to see this great project through to production.”

The technical content of this news release has been reviewed by Ross Moulton, VP of Exploration for Encanto, a qualified person as defined by NI 43-101.

About Encanto:
Encanto Potash Corp. is a TSX Venture Exchange and OTCQX listed Canadian resource company engaged in the exploration and development of potash properties in the Province of Saskatchewan, Canada, the largest producing region for potash in the world.  The flagship Muskowekwan First Nation property has a recent NI 43-101 resource estimate containing 79.1 million tonnes of KCI grading 29.4% in the Indicated resources category along with 60.5 million tonnes grading 29.7% in the Inferred resource category (see the Company’s news release dated March 18, 2011).  These resources, based on the solution mining method, have the potential to substantially increase by adding additional acreage through a Treaty Land Entitlement process, currently underway.  A Preliminary Economic Assessment (PEA), based solely on the Indicated Resource estimate, was released in August of 2011 (see the Company’s news release of August 18, 2011) and a further release of an expanded resource estimate is scheduled in Q1 of 2012.

For additional information about Encanto Potash Corp., please visit the Company’s website atwww.encantopotash.com