May 17, 2010 / 2:54 PM / 9 years ago

UPDATE 1-Encanto Potash to raise C$6 mln via private placement

* Says to use proceeds for exploration, working capital

* Says to offer flow-through shares at C$0.23/shr

* Says to offer units at C$0.20/unit

* Mackie Research Capital to act as lead agent

May 17 (Reuters) - Encanto Potash Corp (EPO.V) said it would raise C$6.0 million ($5.80 million) through a private placement and plans to use the proceeds to fund exploration programs on its properties in the Province of Saskatchewan and as working capital.

The company said it would raise up to C$5.0 million through flow-through shares at 23 Canadian cents per share and up to C$1.0 million through units at 20 Canadian cents per unit.

Each unit will consist of one common share and half a share purchase warrant. Each warrant entitles the holder to acquire a common share at 25 Canadian cents per share for two years after the offer closes.

Mackie Research Capital Corp will act as lead agent and sole bookrunner, Encanto said in a statement.

Encanto said it plans to use the proceeds from the sale of units for working capital and the proceeds from the flow-through shares sale on exploration programs on its qualifying properties.

Shares of the company were up nearly 3 percent at 18 Canadian cents Monday morning on the Toronto Stock Exchange. ($1=1.035 Canadian Dollar) (Reporting by Abhiram Nandakumar in Bangalore; Editing by Roshni Menon)

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