SASKATOON, Saskatchewan--(BUSINESS WIRE)--Gensource Potash Corporation (“Gensource” or the “Company”) (TSX.V: GSP) is extremely pleased to announce that it has entered into a non-binding Memorandum of Understanding (MOU) with a long-time leader in the North American agriculture industry (the “Off-taker”). The MOU formalizes the interests of the Off-taker to potentially purchase 100% of the planned 250,000 tonne/year production from one of Gensource’s small-scale potash facilities to be located in its Vanguard area in central Saskatchewan.
The MOU proposes certain terms that will become the key components of a definitive off-take agreement (“Off-take” or “Agreement”). The definitive Agreement may create a relationship that will establish the vertical integration structure that Gensource holds as a key pillar in its business plan – a structure that will supply potash from Gensource’s production facility in Saskatchewan directly to end-users who require it. The Off-taker brings its transportation and logistics capabilities and, when combined with the efficient, environmentally friendly production from a Gensource production “module”, the parties will create a complete and independent supply chain, directly from mine to farm gate.
The highlights of the MOU include the potential commitment to purchase 100% of the production from one “module” of 250,000 tonne/year capacity, an industry-standard pricing structure for delivery of product to the US market, employment of the Off-taker’s existing transportation and logistics infrastructure to move product to market.
The MOU contemplates that the parties complete the definitive Agreement by the end of April, 2018, and efforts in that respect have already begun.
Concurrently with the completion of the definitive off-take agreement, Gensource will define and assemble the required finance package that will support construction of the project on the currently planned schedule (targeting construction start later this year, which should result in first production within 18-22 months).
Gensource’s President & CEO, Mike Ferguson, said, “Gensource is excited to discuss a long-term relationship with this Off-taker. The Off-taker’s strength in the industry, with its existing customer base and the infrastructure and expertise to move product to market, is significant. The Off-taker company has a long tradition of direct customer relationship building combined with innovation within the industry to bring new and improved products and services to its customers. The Off-taker’s dedication to innovation - not relying on how things have been done before - is a key area of alignment with Gensource. That alignment of perspective and values between the two groups augers well for a long term and productive relationship. This MOU represents a significant step forward in Gensource’s efforts to bring its unique business model to the US agriculture industry. It has been Gensource’s corporate goal to create a direct link between a producing facility in Saskatchewan and the actual end-user of potash and the relationship announced today represents a significant step towards successfully achieving that goal. Together, the parties have the expertise, focus and resources to execute on the much-needed drive for innovation in the potash world.”
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.
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 definitive offtake agreement on terms as announced or at all, securing project financing on terms which are economic or at all, 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 Gensource’s financial condition and prospects, completion of the definitive offtake agreement on terms as announced or at all, securing project financing on terms which are economic or at all, 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: failure to settle a definitive joint venture agreement with a party and advance and finance the project; changes in general economic conditions and conditions in the financial markets; the ability to complete the offtake agreement on terms as announced or at all or to find and source other off-take agreements; the ability to secure project financing on terms which are economic or at all; 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.