Government of Canada News Release
March 19, 2013

Harper Government Supports Development of First Ever On-Reserve Potash Mine

SASKATOON, SASKATCHEWAN -The Honourable Bernard Valcourt, Minister of Aboriginal Affairs and Northern Development, along with Muskowekwan First Nation Chief Reginald Bellerose and President and CEO of Encanto Resources Ltd. Jim Walchuck, today announced an important milestone in the development of the first on-reserve potash mine in Canada.

The Muskowekwan First Nation potash mine project has been accepted by the federal government under the First Nations Commercial and Industrial Development Act (FNCIDA). The Act will enable the federal government to enact regulations that incorporate a provincial regulatory regime to govern commercial and industrial activities within a province.

The federal government and the Muskowekwan First Nation will begin discussions with the Province of Saskatchewan to explore a potential regulation under FNCIDA relating to the proposed mine.

“I am pleased to announce that the Muskowekwan First Nation potash project is a step closer to becoming a reality,” said Minister Valcourt. “The development of the first on-reserve potash mine in Canada will create employment and economic growth as well as other long-term benefits for the First Nation and surrounding communities. I applaud the community and its leaders for their vision and commitment to the long-term prosperity of the Muskowekwan First Nation.”

“By achieving this milestone we are one step closer to ensuring our community is a significant resource player in the Province for generations,” said Chief Bellerose. “The employment and training opportunities will benefit our members as we prepare to go forward with this venture, as will economic spin-offs in terms of the purchase of goods and services.”

“Acceptance of the Muskowekwan Project under FNCIDA is a prime example of the cooperation we have observed between both Governments for this project,” commented Encanto President & CEO Jim Walchuck. “This is a crucial milestone and brings us one step closer to the day we construct the first mine on First Nation land.”

The acceptance of the Muskowekwan project under FNCIDA means that the Government of Canada can begin the process of developing regulations for the First Potash Ventures mine. FNCIDA, which came into effect in 2006, reproduces the provincial rules and regulations that apply to similar large-scale commercial or industrial projects off reserve and applies them to a specific on-reserve project.

First Potash Ventures, a joint partnership between Encanto and Muskowekwan Resources Ltd., is working toward developing the mine on the Muskowekwan First Nation, located 100 km northeast of Regina. The mine is expected to produce up to 2.8 million tons of potash annually over a 50-year-plus span. The project will provide real economic opportunities for the Muskowekwan First Nation, as well as the surrounding area, by providing training and employment opportunities during the construction and operation of the mine,

In addition to becoming the first on-reserve potash mine in Canada, the proposed Muskowekwan project is the first in Saskatchewan to utilize FNCIDA to regulate a project on reserve lands.

Once the project gets under way, it is expected to generate approximately 1,000 construction jobs for the development of the mine and nearly 500 jobs once it is fully operational. In addition, the mine is expected to generate tens of millions in revenue royalties for the First Nation annually.

The Harper Government remains focused on four priorities, outlined by the Prime Minister, that Canadians care most about: their families, the safety of our streets and communities, their pride in being a citizen of this country, and their personal financial security.

BACKGROUNDER

Q.1. What is the First Nations Commercial and Industrial Development Act (FNCIDA)?

A.1. The First Nations Commercial and Industrial Development Act (2006) (FNCIDA) is a First Nation led initiative. It is federal legislation that was developed to address existing regulatory uncertainty for major commercial and industrial development on reserve lands.

FNCIDA allows the federal government to produce regulations for complex commercial and industrial development projects on reserves. The Act essentially provides for the adoption of regulations on reserve that are compatible with those off reserve. This compatibility with existing provincial regulations increases certainty for the public and developers while minimizing costs.

Q.2. When does FNCIDA apply to First Nations?

A.2. Regulations are made under FNCIDA only at the request of a First Nation.

A First Nation requests the enactment of regulations under the Act to address regulatory barriers that are preventing them from proceeding with an on-reserve large-scale commercial or industrial project. In order for the Act to be applied, a First Nation needs to identify a regulatory gap, find a commercial or industrial proponent, and confirm provincial engagement.

Q.3. What is First Potash Ventures?

A.3. First Potash Ventures is a joint venture between Encanto Resources Ltd. and Muskowekwan Resources Ltd. First Potash Ventures is proposing the development of a potash mine on the Muskowekwan First Nation.

Q.4. When is construction of the mine expected to begin? When is it expected to be completed?

A.4. As per the First Potash Ventures project description submitted to the Canadian Environmental Assessment Agency, detailed engineering/procurement and construction is estimated to begin by Q3 2014 and to be completed by Q4 2016; the mine is expected to be commissioned in 2017.

Q.5. What are the anticipated benefits of the mine?

A.5. As During the mine construction phase, it is anticipated that 1,000 jobs will be created for members of the Muskowekwan First Nation, as well as residents of the surrounding communities. In addition to the employment and training opportunities, this project is expected to generate economic benefits for local and area businesses through the purchase of goods and services.

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