SASKATOON, July 11, 2016 /CNW/ - Gensource Potash
Corporation ("Gensource" or the "Company")
(TSX.V: GSP) is pleased to announce that it has completed
its final payment associated with the Asset Purchase Agreement
("APA") and off-take term sheet ("Term Sheet")
(announced in a news release dated 06Apr2016).
Gensource submitted the second payment on July 8, 2016 in the amount of CAD$ 1.24M. This final payment completes the
financial requirements under the APA, for a total purchase price of
CAD$ 2.48M, which funds are being
held in trust pending closing. The remaining items required to
fully close the transaction are the issuance of the final leases by
the Government of Saskatchewan and
the completion and execution of the definitive off take agreement
between Yancoal Canada Resources Co. Ltd. ("YCR") and
Gensource.
When closed, the transaction will result in Gensource owning
100% of two high quality potash production leases as well as a
definitive off take agreement for 100% of the planned 250,000 t/y
production from one of its new-style environmentally friendly
potash production facilities. The off take agreement being
negotiated creates a buyer-seller relationship between the parties
and Gensource is pleased to be part of this business
relationship.
As a summary of recent events for Gensource:
- On April 6, 2016, Gensource
announced the execution of the APA with YCR for the purchase of two
potash leases.
- On April 28, 2016, Gensource
announced the completion of an NI 43-101 compliant resource report
for the two leases being purchased under the APA, defining an
inferred resource on the properties based on the geological work
(drilling and seismic) recently completed by YCR.
- On May 31, 2016, Gensource
announced the completion of a PEA (Preliminary Economic Assessment)
on the two new leases, now named "Vanguard". The PEA showed
that Gensource's small, efficient, scalable and environmentally
friendly approach to potash production has the potential to set a
new standard for low initial capital costs and low operating costs,
while at the same time, showing that the new facility potentially
has the following environmental and community benefits:
- No salt tailings are brought to surface; therefore there is no
salt tailings pile. No salt tailings means less expensive
construction as there will be no tailings area to construct and no
environmental liability that is associated with salt tailings left
on surface.
- No brine ponds. With no brine ponds, there are no brine control
structures or ongoing monitoring facilities or programs to track
and control brine migration into the surrounding soil.
- No use of fresh surface water. Because Gensource's methods use
no fresh water (instead, Gensource will use deep aquifers of
brackish water), the new facility will have no impact on local or
regional fresh water systems. A significant impact from old-style
potash mining is the consumption of millions of cubic metres of
fresh surface water each and every year: in dry southern
Saskatchewan, this concern
surfaces with every proposed potash development.
- Small scale (1/10th the size of a typical potash
project) but easily scalable production, resulting in significantly
smaller impact on the community around the new facility – less
impact on roads and businesses during the construction period and a
positive impact in long term production where just fewer than 50
people will be required to operate the new facility.
Gensource's President & CEO, Mike
Ferguson, said, "Having made the second cash payment for the
two leases being acquired under the APA is a significant milestone
for Gensource. The remaining items required to fully close the
transaction, the leases being issued by the Government of
Saskatchewan and the completion of
the definitive off take agreement, are on schedule and progressing
well, as expected. We are very excited at the prospect of closing
this transaction shortly and moving ahead quickly with the final
development of the first Vanguard project. We firmly believe
that Gensource's approach to potash production will set the bar
higher in the industry – both in terms of the modern methods and
technologies used to produce potash, as well as the business model
employed to ensure that Saskatchewan potash moves from our Province to
the areas around the world that need it, in the most direct and
efficient manner possible."
About Gensource
Gensource is based in Saskatoon,
Saskatchewan and is focused on developing the next potash
production facility in that province, using new and more efficient
mining and processing methods and employing a
new-to-the-potash-industry business model that connects the
consumer of potash (agricultural producers) as directly as possible
to the production of the product. 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 technical information presented in this new release has been
reviewed and approved by Mike
Ferguson, P.Eng., the President, CEO and a Director of the
Corporation, who is a qualified person according to NI 43-101
requirements.
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 completion of the YCR transaction, the
expected timing for release of 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, completion of the
YCR transaction, a refund of lease conversion costs in the event
that the YCR transaction does not proceed, 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:
an inability to complete the YCR transaction on the terms as
announced or at all; denial by ministerial authorities of a refund
of lease conversion costs in the event that the YCR transaction
does not proceed; changes in general economic conditions and
conditions in the financial markets; the ability to find
distributors 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; 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.
SOURCE Gensource Potash Corp