* Says Rashtriya seeking advisor on potash sales deal
* No sales agreement struck - Encanto
Jan 14 Encanto Potash Corp, a small
Canadian mining company, said on Monday that it is in talks with
India's Rashtriya Chemicals and Fertilizers Ltd, but
has not struck any agreement for future potash sales.
After markets closed, Encanto said Rashtriya is seeking to
hire an adviser to review a deal that would see a consortium led
by Rashtriya buy 2 million tonnes of potash in the future from
Encanto, which is raising capital to build a Western Canada
Encanto is one of several Canadian companies that own
permits and leases to mine the crop nutrient in the resource
rich Canadian province of Saskatchewan. The companies, who also
include Karnalyte Resources Inc and Western Potash Corp
, have proposals for mines, but not the capital at
present to build them.
Last week, Karnalyte said India's Gujarat State Fertilizers
& Chemicals had agreed to buy a stake of nearly 20
percent in the company and commit to buying at least 350,000
tonnes of potash annually once its Saskatchewan mine is built.
India is one of the world's biggest consumers of potash to
boost crop yields, and is completely reliant on imports.
Encanto has an agreement with the aboriginal Muskowekwan
First Nation to build a mine somewhere on a site of more than
58,000 acres. Rashtriya is owned by the Indian government.
Saskatchewan is home to some of the world's leading potash
producers, Potash Corporation of Saskatchewan, Mosaic
Co and Agrium Inc.
Shares of thinly traded Encanto shot up by more than
one-fifth in the last two trading sessions on the TSX Venture