Gensource Potash Announces Intention to Increase Capacity at its Tugaske Project
June 21 2022 - 2:00AM
Business Wire
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OR DISSEMINATION IN THE UNITED STATES
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.
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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version on businesswire.com: https://www.businesswire.com/news/home/20220620005549/en/
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
gensource@camarco.co.uk Follow us on twitter
@GensourcePotash
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