REG - Gensource Potash - 2022 Year-end Update and Outlook for 2023

Gensource PotashAnnouncement

19/01/2023 07:00

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RNS Number : 1863N  Gensource Potash Corporation  19 January 2023

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Gensource Provides 2022 Year-end Update and Outlook for 2023

 

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

 

 

For further information on Gensource, please contact:

 

 Gensource Potash Corporation
 Mike Ferguson - President & CEO                             +1-306-974-6414

 info@gensource.ca

 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

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.

 

 

 

 

 

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