Gensource Potash Provides 2021 Year End Review and 2022 Outlook
Gensource Potash Provides 2021 Year End Review and 2022 Outlook
Not for Distribution to U.S. News Wire Services or Dissemination in the United States
SASKATOON, Saskatchewan & LONDON--(BUSINESS WIRE)--January 27, 2022--
Gensource Potash Corporation (“Gensource” or the “Company”) (TSXV: GSP, AIM: GSP) is
pleased to provide its 2021 review and an outlook for 2022.
Highlights:
Strong outlook for the potash industry - elevated pricing and demand driven by food
security concerns, high crop prices and supply dislocation has driven retail potash prices
in the US to over $890 per metric tonne
A new low cost, green supply of potash - utilizing innovative, sustainable production
methods that are environmentally sound and socially responsible Gensource is aiming to
have lowest quartile operating costs and high margins
Excellent project partners secured:
o CAD $50 million project equity commitment letter from project offtaker HELM
AG, creating new direct supply chains in the potash industry
o Commitment letters for $CAD 280 million from two mandated joint lead debt
arrangers KfW IPEX-Bank and Société Générale to provide a senior secured debt
facility
Low initial capex – an additional approximate CAD $105 million is required to finance
construction and the Company has been actively marketing the story to global
institutional and strategic investors to secure the remaining capital
Active ramp up – pre-execution activities involving planning, scheduling, systems
implementation and initial staffing efforts as well as design verification and equipment
confirmation ongoing to be ready for full execution once project financing is complete
Land purchase – recent land purchase of Block 59 provides Gensource with a new
package of minerals directly adjacent to Tugaske’s mining area
Gensource’s President and CEO Mike Ferguson comments, “The road ahead for Gensource
in 2022 is an exciting one. The Gensource team has long been working to the goal of putting its
first module into construction and this is our year. As we transition from financing to
construction, we will celebrate the milestones met, but there is much work ahead in the
preparations for full project execution and management of the construction effort. We have a
strong and focused team already working on the project and look forward to rolling up our
sleeves to get this done.”
Update on the Tugaske Project:
The development of the Tugaske Project continues as scheduled and planned. The Tugaske
Project, located in southern Saskatchewan, represents the first of its kind; an ultra-low
environmental impact potash production facility. Uniquely, the Project will produce no salt
tailings and require no brine ponds on surface: a first for a potash mine. Tugaske will consume
up to 75% less fresh water per tonne of final product compared to conventional solution mining
methods. The lack of tailings and brine ponds not only vastly improves the environmental profile
of the Project, but in this case, it creates an additional synergy in reducing capital and operating
costs.
2021 in Review:
2021 was a fruitful and exceptionally busy year for Gensource, with several key milestones
achieved within the rapidly changing potash and fertilizer industry. Amidst the backdrop of
strong agricultural commodity prices, sanctions on key potash exporter Belarus, potash mine
closures in Saskatchewan due to water inflow and flooding, global supply chain problems, food
price escalations, and the doubling of global potash prices, the Tugaske Project itself is
materially unchanged.
As shareholders are aware, the Tugaske Project initially comprises a single Gensource module of
nominally 250,000 t/a production. From the current Technical Report (Gensource news release
dated October 19, 2021, and also available on www.sedar.com), Tugaske has been optimized to
produce a premium granular product suitable for HELM, the Project’s off-taker and equity
partner, to market to its customers in the USA.
2021 Highlights:
Completion of a non-brokered private placement financing under the difficult marketing
conditions imposed by worldwide lockdowns
Added Alton Anderson as the Company’s new CFO. Alton brings a strong background of
financial management to Gensource as the Company grows and matures into a fertilizer
producer.
Added Brent Cherkas to the Company’s team as a project advisor. Brent’s broad
experience throughout his 40-year career is central in helping the Company succeed in
executing and operating the Project
Completion of National Instrument (“NI”) 43-101 technical report summarising the
Tugaske potash Project (the “Tugaske Project” or the “Project”). Highlights included
output capacity of 250,000 tonnes per year of final saleable product and a mine life of
58+ years.
Strengthened the Board with two new board appointments in Alton Anderson and
Stephen Dyer both bringing a wealth of sector knowledge and experience to the team
Secured a CAD $50 million project equity commitment letter from project offtaker
HELM AG. This reaffirmed Gensource’s fundamental business proposition of creating
new direct supply chains in the potash industry to assist in transitioning the industry to a
more manufacturing model rather than the conventional “bulk mining” model
Received commitment letters from its two mandated joint lead debt arranges KfW IPEX-
Bank and Société Générale to provide a senior secured debt facility for a total of up to
$CAD 280 million
On November 05, 2021, Gensource commenced trading on the AIM market of the
London Stock Exchange, marking a significant milestone for the Company and allowing
access a global investor base as Gensource continues progressing Tugakse Project into
production
Announced a Filing of a Base Shelf Prospectus for up to CAD$ 200 million
Gensource closed the year by announcing the acquisition of an additional potash permit
area, Block 59, through the recent Government of Saskatchewan public offering of
subsurface Mineral Crown Dispositions S010. Block 59 abuts current Gensource leases
and is approximately 7,244 hectares and signifies a direct addition to mineral leases
KL244 and KL245 in Gensource’s Vanguard Area. Strong outlook for potash industry
and for Gensource’s business model as global importance of fertiliser continues to grow
and supply becomes constrained. Preparatory activities for Tugaske’s development are
underway and will continue with construction targeted to commence summer 2022
Gensource will sell all its production from Tugaske through its 100% offtake agreement with
equity partner, HELM AG and HELM Fertilizers, ensuring that all product from the Project is
pre-sold before it invests any capital in the construction of the facility. This approach creates a
capital efficient production facility, and an independent supply chain for the movement of potash
fertilizer from the producing facility in Saskatchewan to the identified end market, eliminating
unnecessary warehousing, wholesalers, or re-sellers. The elimination of product re-handling
between the Tugaske Project and the intended product destination is expected to result in a
better-quality product, with less product lost to degradation and prevention of financial loss to re-
seller margins.
Further information on Gensource Potash Corporation can be found at www.gensourcepotash.ca.
Follow us on Twitter @GensourcePotash
About Gensource
Gensource is a fertilizer development company based in Saskatoon, Saskatchewan and is on
track to become the next fertilizer production company in that province. With a small scale and
environmentally leading approach to potash production, Gensource believes its technical and
business model will be the future of the industry. 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, that
demonstrates environmental leadership within the industry, producing no salt tailings, therefore
eliminating decommissioning risk, and requiring no surface brine ponds, thereby removing the
single largest and negative environmental aspect of potash mining.
Neither the 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 Statement
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’s future
plans, objectives or goals, to the effect that Gensource or management expects a stated condition
or result to occur, including any offering of securities by Gensource. 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 could differ materially from
those currently anticipated in such statements for many reasons such as: failure to complete an
offering of securities; failure to finance the Company’s Tugaske 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 Tugaske 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’s activities; an inability to predict and counteract the effects of
COVID-19 on the business of Gensource, including but not limited to the effects of COVID-19
on the price of commodities, capital market conditions, restriction on labour and international
travel and supply chains, failure to obtain required regulatory approvals; 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’s forward-looking statements. These
and other factors should be considered carefully, and readers should not place undue reliance on
Gensource’s 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
For further information on Gensource Potash:
Gensource Potash Corporation
Mike Ferguson – President & CEO
+1-306-974-6414
Strand Hanson Limited (Nominated & Financial Adviser)
Ritchie Balmer / Rory Murphy / Charles Hammond
+44 (0) 20 7409 3494
Peel Hunt LLP (Broker)
Ross Allister / David McKeown / Georgia Langoulant
+44 (0) 20 7418 8900
Camarco (Financial PR)
Gordon Poole / Charlotte Hollinshead / Lily Pettifar
+44 (0) 20 3757 4997
For any press enquiries