REG - Gensource Potash - 2021 Year End Review and 2022 Outlook

Gensource PotashAnnouncement

27/01/2022 07:00

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RNS Number : 8266Z  Gensource Potash Corporation  27 January 2022

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Gensource Potash Provides 2021 Year End Review and 2022 Outlook

SASKATOON, Saskatchewan and London, U.K., 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.

 

 

 

 

 

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)       +44 (0) 20 7409 3494
 Ritchie Balmer / Rory Murphy / Charles Hammond

 Peel Hunt LLP (Broker)                                      +44 (0) 20 7418 8900
 Ross Allister / David McKeown / Georgia Langoulant

 Camarco (Financial PR)                                      +44 (0) 20 3757 4997
 Gordon Poole / Charlotte Hollinshead / Lily Pettifar

 

For any press enquiries please contact us on gensource@camarco.co.uk

 

Further information on Gensource Potash Corporation can be found at
www.gensourcepotash.ca (http://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.

 

 

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