REG - Gensource Potash - Helm update and Intention to Increase Capacity

Gensource PotashAnnouncement

21/06/2022 07:00

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RNS Number : 5564P  Gensource Potash Corporation  21 June 2022

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Gensource Potash Announces  Intention to Increase Capacity at its Tugaske
Project

 

SASKATOON, Saskatchewan and London, U.K., June 21, 2022 - Gensource Potash
Corporation ("Gensource" or the "Company") (TSXV: GSP, AIM: GSP) announces
today that its strategic investor and offtake partner, HELM AG and its
subsidiary HELM Fertilizers (collectively, "HELM"), has furthered its
commitment to the Company's potash project located near Tugaske, Saskatchewan
(the "Tugaske Project").  In the context of soaring fertilizer prices and
constrained supply, particularly with respect to potash, the Company is
pleased to have a partner that has the strategic vision to see the value
proposition in Gensource's business model.  The specific points of additional
support, subject to final documentation,  are:

 

·          HELM and Gensource plan to double the overall potash
production capacity of the Tugaske Project, from 250,000 tonnes per year to
500,000 tonnes per year, under a second phase of the Tugaske Project ("Phase
2") by adding a second module to the Tugaske Project. It is expected that
Phase 2 will be implemented immediately following the completion of the first
phase of the Tugaske Project ("Phase 1"). With increased global demand for
potash in response to structural changes in the global agriculture and
fertilizer markets, HELM sees significant opportunity for the sale of
additional potash production through its existing market channels, including
demand for organic potash. Phase 2 is expected to be significantly accretive
to the overall returns of the Tugaske Project as it is expected to enjoy the
benefits of infrastructure investment from Phase 1, operational synergies and
provincial government incentives built into the potash production tax regime,
which encourage investment. From the beginning of project design of the
Tugaske Project, the on- and off-site infrastructure (water, gas, rail and
road access, etc.) was designed by the Company to accommodate two modules, an
approach taken to make the addition of a second module as efficient as
possible.

 

·          In addition to the above, HELM has committed to guarantee
a CAD $12,500,000 contingency account for the Tugaske Project, as is required
by the bank syndicate of KfW IPEX-Bank and Société Générale in connection
with the Company's anticipated and previously announced debt financing.  The
two senior lending banks, KfW IPEX-Bank and Société Générale, remain fully
supportive of the Project.

 

"These strategic commitments by HELM are a reflection of the strength and
availability of Gensource's modular technology to help meet immediate market
needs and of the strong demand for potash" said Chief Executive Officer, Mike
Ferguson. "The need for innovative solutions to bring new production to market
is imperative, and with HELM's continuing support, we are one step closer to
bringing the Tugaske Project into production. Providing incremental supply to
the market is part of the solution to the current market imbalances. We are
delighted that HELM has increased its commitment to the project and look
forward to next steps".

 

Olivier Saulnier, Executive Vice President Crop Nutrition for HELM AG adds
that "HELM is excited to take the next step in realizing the Tugaske project.
We are proud to be a partner in a project that will be a world leader in
sustainably producing potash. Our customers demand sustainable solutions and
our commitment to marketing the output from module 2 shows our confidence in
the demand for the product, the plan for developing the Tugaske project and
our partnership with Gensource. "

 

Gensource, together with HELM, continue to advance the Tugaske Project towards
full execution through the completion of project financing. Discussions with
third-party strategic equity investors are yielding positive results towards
proposed refinements to the final capital structure for the Project and for
KClean Potash Corporation.  As a reminder, KClean Potash Corporation is the
joint venture company that will own and deliver the Tugaske Project.

 

Within the global context of inflation and supply chain disruptions,
Gensource, HELM, KfW IPEX-Bank together with Société Générale and
third-party equity investors are looking forwards to the completion of the
currently underway bridge engineering (announced May 27, 2022).  The bridge
engineering phase is part of overall detailed project engineering and is a key
deliverable for confirming capital costs and operational costs of the project.
 

 

The Tugaske Project is designed as an efficient and environmentally
sustainable potash production facility and is expected to be a very near-term
new supplier to the marketplace - a key advantage for the Tugaske Project in
an industry dominated by mega projects that can take up to a decade to reach
first production.

 

Gensource is excited to provide further update details in the near future.

 

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

Follow us on twitter @GensourcePotash

 

About HELM

HELM is a Hamburg, Germany, based family-owned company established in 1900.
HELM is one of the world's largest chemicals marketing companies and committed
to providing solutions to its partners worldwide that support a successful
transformation to a sustainable economy and society. The company secures
access to the world's key markets through its specific regional knowledge and
its multinational presence. As a multifunctional marketing organization HELM
is active in the chemicals industry, in the crop protection industry, in
pharmaceuticals and in the fertilizer industry.

 

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 complete an offering of securities; failure to
finance the 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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