REG - Gensource Potash - Potash Market / Company Update & 2021 Financials

Gensource PotashAnnouncement

28/03/2022 07:00

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RNS Number : 1550G  Gensource Potash Corporation  28 March 2022

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Potash Market / Company Update & 2021 Financials

SASKATOON, Saskatchewan and London, U.K., March 28, 2022 - Gensource Potash
Corporation ("Gensource" or the "Company") (TSXV: GSP, AIM: GSP), a fertilizer
development company focused on sustainable potash production, provides the
following commentary as of today's date:

 

"The Russian invasion of Ukraine is a human tragedy, immediately impacting the
lives of millions of peaceful civilians," said Chief Executive Officer, Mike
Ferguson.  "We believe the unfolding situation is likely to create grave
concerns that extend far beyond the region, including, amongst other things,
in respect of growing global food insecurity."

 

Brazil Seeking Strategic Fertilizer Solutions

In an effort to reduce its dependency on potash originating from Russia and
Belarus, Brazil's Minister of Agriculture, Livestock and Supply, met last week
with representatives of Canadian fertilizer companies, including Gensource, to
discuss the current situation in the sector.

 

Brazil is an agricultural powerhouse, responsible for 8% of global fertilizer
consumption and is the world's fourth-largest fertilizer importer, behind
China (24%), India (14.6%) and the U.S. (10.3%).  Brazil has recently
published its long-term strategic fertilizer plan (see
https://en.mercopress.com/2022/03/11/
brazil-outlines-30-year-plan-to-cut-fertilizer-overseas-dependency
(https://en.mercopress.com/2022/03/11/%20brazil-outlines-30-year-plan-to-cut-fertilizer-overseas-dependency)
) and the Company believes it can be an important part of achieving the plan's
identified goals.  Next steps between Gensource and the Brazilian delegation
are being discussed.

 

Wider Industry Situation

Spot potash prices in Brazil have hit all-time highs of US $1,065 per metric
tonne while average retail potash prices in the US have climbed to over US
$925 per metric tonne.  The current situation flows from several industry and
global drivers, starting in mid-2021 with the flooding of two of Mosaic's
Saskatchewan mines, K1 and K2, removing some 5 million tonnes per year of
capacity from the potash market. Later in 2021, the European Union and United
States placed sanctions on Belarus, restricting its potash exports, which
account for some 20% of world potash supply.  Potash prices continue to soar
today after economic sanctions were imposed against Russia because of its
invasion of Ukraine earlier this year, restricting an additional 20% of the
world's potash supply.

 

With up to 40% of the world's supply now restricted or in doubt, growers
around the world are uncertain about their ability to obtain the necessary
volumes of potash to support their crop production plans. Lack of balanced
agricultural fertilization ultimately leads to reduced yields, putting
pressure on global food supply.  The general market belief has been that the
potash industry is "well-supplied", if not "over-supplied", and that the
supply chain was secure.  However, recent events have proven that the potash
industry is neither well-supplied nor is the supply chain sufficiently
resilient.  Gensource's model has always been about creating new and
independent supply chains with simplified direct delivery of the product to
identified markets.  The Company believes this model will lead to a more
diverse and more resilient supply chain for potash in the future.

 

Financing Update

Company representatives are in London, UK this week as part of the financing
effort for the Company's potash development project located near Tugaske,
Saskatchewan (the "Tugaske Project"). As previously disclosed (see press
release dated September 23, 2021)
(https://gensourcepotash.ca/wp-content/uploads/2021/11/GSP-NR-Debt-Commitment-Letters-23Sept2021.pdf)
, the Company secured binding conditional commitment letters for a $280
million senior debt facility for the Tugaske Project from KfW IPEX-Bank and
Societe Generale.

 

The debt facility is intended to fund up to 60% of the construction and ramp
up of the Tugaske Project. The remaining 40% of the costs for the development
of the Tugaske Project will be funded by equity investment. HELM AG, the
project's off-taker, has committed to invest $50 million in equity capital.
The remaining $105 million of equity required for the Tugaske Project will be
required to be raised by Gensource in the capital markets.

 

Saskatchewan Opens Trade Office in London

Coinciding with the Company's visit to London, the Province of Saskatchewan is
opening a new International Trade office in London. We are delighted to have
been invited to the opening reception and are eager to network with export and
trade experts. The event will be a great opportunity for Gensource to meet
with investors and potential partners.

 

2021 Annual Results

Gensource also announces that it has released its audited financial statements
and management's discussion and analysis for the year ended December 31, 2021.
The reports will be available under the Company's profile on SEDAR
(www.sedar.com (http://www.sedar.com) ) and on the Company's website
(https://gensource potash.ca/financials-and-presentations/).

For further information on Gensource, 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 potash 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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