Gensource Provides 2022 Year-end Update and Outlook for 2023
Gensource Provides 2022 Year-end Update and Outlook for 2023
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN
THE UNITED STATES
SASKATOON, Saskatchewan & LONDON--(BUSINESS WIRE)--January 19, 2023--
Gensource Potash Corporation (“Gensource” or the “Company”) (TSXV: GSP, AIM: GSP)
today provides a 2022 year-end summary and update on its plans for 2023.
As we look forward into 2023, Gensource is thankful for its strong and focussed shareholder
base as we complete the process of financing our first potash project (the “Tugaske Project” or
“Project”). Gensource’s commitment to social and community values reflects our purpose and
our role in supplying a hungry world with a sustainably produced macro nutrient, potash,
essential for the transition of society towards a more food-secure future.
World events of 2022 made for a very challenging year for investors, businesses and
communities alike with rapidly changing global economics negatively impacting global capital
markets and Gensource’s plan to complete full project financing for the Tugaske Project.
In light of these events, combined with recent discussions on investor risk-return expectations,
Gensource is revising the previously proposed ownership structure of KClean Potash
Corporation (“KClean”, the entity created to own and operate the Tugaske Project- see news
release dated September 2, 2021). Currently, KClean and the Tugaske Project are, and continue
to be, 100% owned by Gensource. The proposed 33% equity ownership offer by Helm AG and
Helm Fertilizers (collectively, “Helm”) in KClean resulted in an unappealing risk-return ratio for
new investors, since the investment for all parties only occurs at financial close of the full project
financing. This structure had the effect of creating an unequal ownership structure for incoming
investors in KClean. In this regard, Helm has confirmed it will withdraw its proposed 33%
ownership offer in KClean. The Company thanks Helm for this action, which now provides the
opportunity for Gensource and potential investors to work with an open capital structure to
complete the financing of the Tugaske Project. Of course, Helm remains supportive of the
Project and committed as off-taker for 100% of all granular fertilizer product produced at the
Tugaske Project pursuant to the binding off-take agreement dated May 7, 2021. Further, KfW
IPEX-Bank and Société Générale, the Project’s Mandated Lead Arrangers for the senior debt
financing, remain engaged and fully supportive of the Project.
Gensource continues to progress its short-term financing, which the Company anticipates will
advance the near-complete bridge engineering work for the Tugaske Project. Key deliverables
for the bridge engineering, anticipated to be completed in early 2023 include:
Confirm and update the AACE Level 3 capital cost estimate (first completed in October
2021). For those interested in the depth of detail involved in this work, see
https://library.aacei.org//pgd01/pgd01.shtml;
Confirm and update operating cost estimates;
Pursue exciting new CAPEX and OPEX reduction opportunities; and
Bring key procurement contracts for the Tugaske Project to a ready-to-sign status.
Stephen Dyer, Chairman of Gensource Potash, says “Although 2022 was one of the most
challenging years in recent memory, we see a great opportunity with an appropriately balanced
capital structure for KClean Potash Corporation which will allow Gensource to proceed with the
required financing for the Tugaske Project.”
Looking forward into 2023, Gensource anticipates positive developments, including:
Completing financing with private equity and strategic investors to move the Tugaske
Project into construction;
A revised and updated ownership structure for the Tugaske Project;
Robust demand for reliable and sustainable potash supply, particularly from a tier-one
jurisdiction like Saskatchewan;
Enhanced focus on global food security, and Canada’s role in providing critical minerals.
Gensource anticipates 2023 will usher in a more stable backdrop which will begin to normalize
global business. “The potash industry remains strong and Gensource is determined to bring the
Tugaske Project into production, bringing the efficiencies of its modular approach to market.”
said Mike Ferguson, Chief Executive Officer of Gensource. “In addition, the moderation of
fertilizer prices to more sustainable levels is a positive sign for the agricultural producers, who
drive the need for new and sustainable fertilizer production.”
Further information on Gensource Potash Corporation can be found at www.gensourcepotash.ca
Follow us on twitter @GensourcePotash
This announcement contains inside information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR") and is disclosed in accordance with the Company's obligations
under Article 17 of MAR.
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 modular 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 modular 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 finance the
Tugaske Project or other projects on terms which are economic or at all; 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, please contact:
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 please contact us on [email protected]