Gensource Potash Corporation
TSX VENTURE : GSP

Gensource Potash Corporation

July 28, 2015 17:00 ET

Gensource Provides Update on Its Vertically Integrated Business Plan and Next Steps

SASKATOON, SASKATCHEWAN--(Marketwired - July 28, 2015) - Gensource Potash Corporation ("Gensource" or the "Company") (TSX VENTURE:GSP) is pleased to provide an update on its vertically integrated business plan and the development of the Lazlo Project.

As announced March 17, 2014, Gensource has been working with a market partner, Arizona Agropecuaria ("Arizona"), to create a vertically integrated business structure to allow the direct manufacture and shipment of potash fertilizer from a scalable, dedicated mine in Saskatchewan to a specific market in Brazil. Following preliminary business negotiations, work began in January, 2015, to identify the specific end users in Brazil interested in participating in this approach to potash supply - a novel approach within the potash industry.

From that work, Gensource is pleased to announce that it has signed a follow-on non-binding letter of intent (LOI) with Arizona, including a form of definitive offtake agreement. The LOI defines the high-level relationships of the parties and the intended business structures that will allow for the most direct and efficient delivery of product to end-users. The LOI also identifies opportunities for capital market participants and/or Arizona, to fund the Saskatchewan operation.

Arizona is now in the process of signing interested end users. If this proceeds satisfactorily, definitive agreements will be settled with customary terms and conditions, including funding budgets.

As a precaution, Gensource notes that there can be no assurance that the arrangements with Arizona can be completed on mutually satisfactory terms or at all. None of the agreements are yet binding and definitive terms have not been settled.

Lazlo Project:

As part of the development of the Lazlo Project, Gensource hosted a public open house in Craik on July 15th, 2015 to communicate to the local residents information about the project to provide a solid understanding amoungst all stakeholders of the extent and potential impacts of the project. Key project information was provided and a general question and answer period ensued, where local residents posed many informed and insightful questions. Gensource's full management team and board of directors were in attendance to respond and discuss the project. Gensource management left the meeting with a sound understanding of the concerns of the community and a clear view that the selective mining and enhanced recovery processes to be used at Lazlo provide a significant advantage over traditional technologies with respect to the size of the project and its impact on both the local community and the environment.

Financing:

Gensource will begin a new financing effort in September, both in Canada and Brazil. In order to complete the development of the Lazlo Project, Gensource will require two further tranches of development financing: 1) Resource Confirmation and Preliminary Economic Assessment: approximately $3M of Canadian Exploration Expenses ("CEE") flow through financing will be required to fund drilling and 3D seismic work, as well as approximately $1M in additional financing to fund activities not classified as CEE; and, subject to a satisfactory preliminary economic assessment, 2) Feasibility Study: approximately $5-7M to complete the environmental and regulatory process, complete a detailed feasibility study and complete the required land control and leasing work. Gensource estimates that this work can be completed within a 6-8 month time span and, when complete, will allow for a construction decision to be made.

The Lazlo Project is an early stage development, so no commercial operations exist at this time. The determination of the prospects for commercial operations at the Lazlo Project is dependent upon a feasibility study demonstrating economic and technical viability.

About Gensource

Gensource is based in Saskatoon, Saskatchewan and is focused on developing the next potash production facility in that province. Gensource's President and CEO, Mike Ferguson, P.Eng., has assembled a management and technical team with direct and specific expertise and experience in potash development in Saskatchewan.

Gensource operates under a business plan that has two key components - vertical integration with the market to ensure that all production capacity built is directed to a specific market, eliminating market-side risk; and, technical innovation which will allow for a small and economic potash production facility, the output of which can then be directed to a single, specific market.

The scientific and technical information contained in this news release was prepared by or under the supervision of Mike Ferguson, P.Eng., who is the President and Chief Executive Officer of Gensource and a "qualified person" under National Instrument 43-101.

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.

Caution Regarding Forward-Looking Statements

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 the expected timing for release of a resource estimate and a preliminary economic assessment, as well as a feasibility study, and the establishment of vertical integration partnerships and the sourcing of end use potash purchasers. 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 relating to, among other things, results of exploration, the economics of processing methods, project development, reclamation and capital costs of Gensource's mineral properties, Gensource's financial condition and prospects, the ability to establish viable vertical integration partnerships and the sourcing of end use potash purchasers, could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; the ability to find distributors and source offtake 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; 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.

Contact Information

  • Gensource Potash Corporation
    Mike Ferguson
    President & CEO
    (306) 974-6414
    mike@gensource.ca