Gensource Announces Major Milestone - Initiation of Senior Debt Financing
Gensource Announces Major Milestone - Initiation of Senior Debt Financing
SASKATOON, Saskatchewan--(BUSINESS WIRE)--August 12, 2019--Gensource Potash Corporation
(“Gensource” or the “Company”) (TSX-V: GSP), is pleased to announce today that it has reached a significant
milestone in the financing of its initial Project (the “Project”). As previously disclosed in a news release dated May
22, 2019, the Project is one of Gensource’ small-scale potash production facilities within its wholly owned
Vanguard Area, defined by mineral leases KL-244 and KL-245.
Gensource is pleased to report that it has received Letters of Intent from KfW IPEX-Bank of Germany and Export
Development Canada (“EDC”) Both parties are currently evaluating how they can support the project by providing
senior debt. Gensource is also in discussions with a major global bank that may be engaged to round out the club.
KfW IPEX-Bank is planning to assume a role as the arranger of the senior debt financing and will work with EDC
and other senior lenders to conduct customary due diligence and possibly utilize official export promotion schemes
as credit enhancement.
KfW IPEX-Bank is an affiliate of KfW Bank Group. It is responsible for over € 66 billion in assets, completed €
17.7 billion in new financings in 2018 and is AA+ rated. It is in charge of international project and export finance
within the larger KfW Bank Group. For more than 60 years, KfW IPEX-Bank has been providing medium to long
term financing solutions as its core product supporting German and European exporters and investors. It has in-
depth resource industry experience and supports economically viable businesses and projects - specifically,
environmentally responsible projects.
EDC, the second major participant in the senior debt financing club pending successful completion of its due
diligence process, is a highly regarded institution on the global stage, with significant project and structured finance
expertise in resource development projects worldwide.
As is customary, final, definitive, terms have not yet been agreed upon and the financing remains conditional upon
the successful completion of the detailed due diligence process.
Mike Ferguson, President & CEO of Gensource, commented “We are excited to have reached this important
milestone that our shareholders have been anticipating. As anyone who has been involved in bringing a major
project to completion knows, there are a series of critical hurdles or milestones that must be attained. Obtaining debt
financing – an indication by third party capital providers that the project is not only viable, but also attractive – is
among the most important. We are gratified to have attracted major, globally-recognized and experienced lenders to
the Gensource team for this project.
“Together with KfW IPEX-Bank and EDC, both world-class institutions in the resource industry, we now want to
take the next steps. Today’s announcement, together with the May 22nd news release announcing the creation of the
Project through commitments from the off-taker and a third-party equity investor, makes it plain that the Project is
on a clear path to financing. The selected institutions bring extensive experience in structured mining finance in
Canada and internationally. Their support gives us strong confidence in our ability to advance the Project to a
successful financing and confirms the attractiveness of Gensource’ small-scale, modular approach to potash
mining.”
On completion of the outstanding due diligence process, an agreed term sheet will be submitted for senior lender’s
formal credit approval. Following this, Gensource and the Senior Lenders will prepare and execute definitive facility
and security documentation.
Gensource is working with Roc Global LLC of New York as its exclusive financial advisor.
About Gensource
Gensource is based in Saskatoon, Saskatchewan and is focused on developing the next potash production facility in
that province – but with a fundamentally different approach. Gensource’ President & CEO, Mike Ferguson, P.Eng.,
has assembled a management and technical team with direct and specific expertise and experience in potash
development in Saskatchewan.
Gensource operates under a business plan that has two key components: (1) vertical integration with the market to
ensure that all production capacity built is directed, and pre-sold, to a specific market, eliminating market-side risk;
and (2) technical innovation which will allow for a small and economic potash production facility, which is much
friendlier to the environment to construct and operate - the output of which can then be directed to a single, specific
market.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Caution Regarding Forward-Looking Statements
This news release may contain forward looking information and Gensource cautions readers that forward- looking
information is based on certain assumptions and risk factors that could cause actual results to differ materially from
the expectations of Gensource included in this news release. This news release includes certain "forward-looking
statements”, which often, but not always, can be identified by the use of words such as "believes", "anticipates",
"expects", "estimates", "may", "could", "would", "will", or "plan". These statements are based on information
currently available to Gensource and Gensource provides no assurance that actual results will meet management's
expectations. Forward-looking statements include estimates and statements with respect to Gensource’ future plans,
objectives or goals, to the effect that Gensource or management expects a stated condition or result to occur,
including the ability to finance the Vanguard One or the Project or other projects on terms which are economic or
at all, the establishment of vertical integration partnerships and the sourcing of end use potash purchasers. Since
forward-looking statements are based on assumptions and address future events and conditions, by their very nature
they involve inherent risks and uncertainties. Actual results relating to Gensource’ financial condition and
prospects, the ability to finance the Vanguard One or the Project or other projects on terms which are economic or
at all, the ability to establish viable vertical integration partnerships and the sourcing of end use potash purchasers
could differ materially from those currently anticipated in such statements for many reasons such as: failure to
finance the Vanguard One or the Project or other projects on terms which are economic or at all; failure to settle a
definitive joint venture agreement with a party and advance and finance the project; changes in general economic
conditions and conditions in the financial markets; the ability to find and source off-take agreements; changes in
demand and prices for potash; litigation, legislative, environmental and other judicial, regulatory, political and
competitive developments; technological and operational difficulties encountered in connection with Gensource’
activities; and other matters discussed in this news release and in filings made with securities regulators. This list is
not exhaustive of the factors that may affect any of Gensource’ forward-looking statements. These and other factors
should be considered carefully and readers should not place undue reliance on Gensource’ forward-looking
statements. Gensource does not undertake to update any forward-looking statement that may be made from time to
time by Gensource or on its behalf, except in accordance with applicable securities laws.
Contacts
Gensource Potash Corporation:
Mike Ferguson, President and CEO
Telephone: (306) 974-6414
Email: [email protected]