Gensource Capital Corporation
TSX VENTURE : GSP

Gensource Capital Corporation

May 31, 2013 15:44 ET

Gensource Files Technical Reports for Its "Lothar" and "Lazlo" Potash Projects

SASKATOON, SASKATCHEWAN--(Marketwired - May 31, 2013) - Gensource Capital Corporation ("Gensource" or the "Company") (TSX VENTURE:GSP) announces that it has filed on SEDAR two technical reports in respect the Company's Lothar Project Potash Leases (the "Lothar Project") and its Lazlo Project Potash Leases (the "Lazlo Project"), located in Saskatchewan.

As disclosed in the Company's press release dated March 18, 2013, following the Company's acquisition of Nexxt Potash Inc. (renamed Gensource Potash Corporation ("GSP")) in August 2012, the Company determined that potash development will be the Company's primary focus going forward.

GSP engaged Agapito Associates, Inc. to prepare technical reports for its "Lothar" and "Lazlo" potash prospects upon a request from the TSX Venture Exchange following the acquisition of Nexxt Potash. These reports discuss the potential for potash mineralization and resources within the bounds of these leases and the broader prospect areas. The lease areas are considered prospective for the Patience Lake, Belle Plaine, and Esterhazy Members of the Middle Devonian Prairie Evaporite Formation, a proven host to potash resources and reserves in the Elk Point Basin portion of Saskatchewan.

The Lothar Project

The Lothar Project is located in south-central Saskatchewan, approximately 100 kilometers northeast of Regina, Saskatchewan and 90 km and 150 km west of the PotashCorp Rocanville and Mosaic Esterhazy underground potash mines, respectively. GSP currently holds 54 potash leases covering 8,634.5 acres of freehold subsurface mineral rights in the vicinity of the town of Lemberg, Saskatchewan. These leases were concluded with individuals beginning in November 2012 by GSP's predecessor company, Nexxt Potash Inc. with leasing operations currently ongoing.

The geologic formations underlying and surrounding the Lothar Project are penetrated by 7 surface drill holes, of which 5 penetrate to the Prairie Evaporite and, for which data is available from public record sources. The project area and the area of the freehold leases taken by GSP have been surveyed by a number of historical reflection seismic programs. Evaluation of borehole geophysical drillhole logs, assays of cores cut through the Prairie Evaporite, examination of existing core from the Central Del Rio (CDR) Pheasant Creek 1-11-21-10 (DH1) historical assay and geological well site reports show that the potash mineralization occurs within the Patience Lake and Belle Plaine Members. The historical assay results show that the thickness of the Patience Lake Member is 5.03m grading 15.07% K2O, 1.48% Carnallite and 9.83% insolubles. The Belle Plaine Member is 4.42m thick and grades 24.03% K2O, 0.65% Carnallite and 3.26% insolubles. For the overall interval from the top of the Patience Lake Member to the bottom of the Belle Plaine Member is 14.02m grading 14.76% K2O, 1.07% Carnallite and 6.96% insolubles if the intervening "First Halite Interbed" is included in the calculation and 9.45m grading 19.26% K2O, 1.09% Carnallite, and 6.76% insolubles if the "First Halite Interbed" is not included in the calculation. In general, the potash-bearing beds consist of a mineralogically simple mixture of Sylvite and Halite named sylvinite, and minor clay, dolomite, anhydrite and Carnallite and are thus consistent with the potash-bearing beds throughout the potash mining belt of Saskatchewan. No inferred or indicated mineral resources can be estimated at present, because there are no drill holes with currently verifiable assay data located on the Lothar Project lands.

The Lazlo Project

The Lazlo Project is located in south-central Saskatchewan, approximately 115 kilometers northwest of Regina, Saskatchewan and 140 km southeast of Saskatoon, Saskatchewan. The project is approximately 50 km northwest from the K + S "Legacy" potash solution mining development project near Findlater, Saskatchewan and approximately 110km northwest of the Mosaic Belle Plaine solution potash mine. GSP currently has signed lease agreements covering 2,569 acres of freehold subsurface mineral rights in the vicinity of the town of Craik, Saskatchewan. These leases were concluded with individuals beginning in June 2012 with leasing operations currently ongoing.

The geologic formations underlying and surrounding the Lazlo Project are penetrated by 3 surface drill holes which 3 penetrate to the Prairie Evaporite and, for which, data is available from public record sources. The project area and the area of the freehold leases obtained by GSP have been surveyed by a number of historical reflection seismic programs. Evaluation of borehole geophysical drillhole logs, assays of cores cut through the Prairie Evaporite, examination of existing core from the United Comstock (UC) Craik 13-18-25-27 W2M historical assay and geological well site reports show that the potash mineralization occurs within the Patience Lake, Belle Plaine, and Esterhazy Members. The historical assay results show that the thickness of the Patience Lake Member is 16.16m grading 22.35% K2O, 1.49% Carnallite and 0.51% insolubles. The Belle Plaine Member is 10.12m thick and grades 19.46% K2O, 0.59% Carnallite and 0.20% insolubles. The Esterhazy Member is 2,74m thick and grades 24.57% K2O, 0.36% Carnallite and 0.12% insolubles. For the overall interval from the top of the Patience Lake Member to the bottom of the Belle Plaine Member is 26.28m grading 21.24% K2O, 1.14% Carnallite and 0.39% insolubles if the intervening "First Halite Interbed" is not included in the calculation. The "First Halite Interbed" is not included in this calculation because it was not analyzed in the historical assay. In general, the potash-bearing beds consist of a mineralogically simple mixture of Sylvite and Halite named sylvinite, and minor clay, dolomite, anhydrite and Carnallite and are thus consistent with the potash-bearing beds throughout the potash mining belt of Saskatchewan. No inferred or indicated mineral resources can be estimated at present, because there are no drill holes with currently verifiable assay data located on the Lazlo Project lands.

Mining Considerations

Because the depth to the uppermost sylvinite bed of the Patience Lake member is more than 1,275 m in the case of the Lothar Project and 1,375 m in the case of the Lazlo Project, recovery of the sylvinite would be by solution mining techniques similar to those used by The Mosaic Company at the Belle Plaine mine at Belle Plaine, Saskatchewan and the process contemplated by K+S Potash Canada for its "Legacy" Project at Findlater, Saskatchewan. Solution mining involves the aqueous dissolution of selected beds of potash to form a cavern.

It is the opinion of the authors of the technical reports that the grade, thickness and distribution of potash mineralization is sufficient to justify the expenditure of funds to undertake further work designed to assess the quality, quantity and extent of the potash mineral resource within the bounds of the Lothar Project and Lazlo Project lease acquisition areas.

Recommendations For Future Work

The general recommendation of the technical reports is that further investment is justified and that land acquisition activities continue. Specific recommendations for a phased development for both the Lothar and Lazlo Projects are (costs in $CAN):

Phase 1

  1. Acquire data for seismic lines within the lease area from commercial sources and evaluate it for usefulness, and also acquire new two dimensional (2D) seismic;

  2. Select locations for and drill and core surface drill holes within the proposed resource / lease areas. Drill holes should be continuously cored from several meters above the top of the First Red Beds immediately overlying the Dawson Bay Formation to 20 m below the deepest sylvinite layer of the lowermost Esterhazy Member, with the cores submitted to a laboratory for assay. The estimated cost per drill hole is approximately $1.3 million; and

  3. When the sample assay results from the drilling program are available, prepare updated National Instrument 43-101 technical reports containing an estimate of the inferred and indicated mineral resources covering each proposed resource / lease area.

Phase 2

Conditional upon favorable outcomes from Phase 1, continue studies to confirm and expand the resource base and initiate a Preliminary Feasibility Study including:

  1. Drill and core additional drill holes as required to permit expansion of the resource base;

  2. Complete Preliminary Economic Assessments (Scoping Studies) regarding the potential economic viability of the projects. The Preliminary Assessment should include a preliminary mine plan, assessment of permitting issues, environmental impact, plant location, infrastructure, capital and operating costs, a preliminary marketing study and risk assessment;

  3. Perform 3D seismic surveys covering the areas around the drill holes from Phases 1 and Phases 2;

  4. Upon completion of the drilling, sampling and assaying of the samples from the drilling program and the 3D seismic surveys, prepare updated NI 43-101 technical reports containing an estimate of the mineral resources covering the lease areas; and

  5. Complete geotechnical and solubility testing of core.

Conditional upon a favorable outcome from Phase 2, GSP should complete Baseline Environmental Assessments and Environmental Impact Statements (EIS); initiate permitting, process design and marketing studies; and prepare Prefeasibility Studies to support definition of Measured Mineral Resources and Mineral Reserves. Costs for this work cannot be estimated at this time.

Total estimated cost for Phases 1 and 2 for the Lothar and Lazlo Projects ranges from approximately $3.8 million for Phase 1 to $12.4 million to $13.4 million for Phase 2.

A copy of each report can be found under the Company's profile on the SEDAR website at www.sedar.com.

About Gensource

Gensource Capital Corporation is based in Saskatoon, Saskatchewan and is focused on developing resource opportunities with a specific focus on potash development. The Company's primary project is its wholly-owned subsidiary, Gensource Potash Corporation, also based in Saskatoon Saskatchewan. Gensource Potash Corporation is led by Mike Ferguson P.Eng., President and CEO. Mr. Ferguson has assembled a world class management team with direct and specific interest in potash development.

Stephen P. Halabura P.Geo. FEC (Hon.), a qualified person pursuant to National Instrument 43-101 has reviewed and approved the technical disclosure in this press release.

Neither 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.

Contact Information

  • Gensource Capital Corporation
    Alan Cruickshank
    President & CEO
    (306) 974-6406
    alan@gensource.ca