SASKATOON,, March 17, 2016 /CNW/ - Gensource Potash
Corporation ("Gensource" or the "Company")
(TSX.V: GSP) is pleased to provide the following information
on its activities. The intent is to give a general update on
its business activities for the last quarter of 2015 and the first
quarter of 2016.
The last quarter of 2015 and first quarter of 2016 has been a
busy time at Gensource. In that period, we worked with our
Brazilian partner to identify additional end-user market partners –
agricultural groups in Brazil who
will be the future customers for our potash. We also advanced
similar business discussions with other geographically diverse
groups. Additionally, during that period, we raised over
$2M (split almost equally between
"hard" shares and "flow through" shares) to execute our immediate
business plan. The flow through investment will be used for
follow-on drilling and seismic work ("Canadian Exploration
Expenditures") and the "hard" dollars raised will be used for
advancing project development, including engineering work, initial
phase environmental assessment and general working capital (see
Gensource news releases dated 28Dec2015 and 04Nov2015).
Management continues to introduce and explain our vertical
integration strategy to other large agricultural producer groups
and/or retailers and, from that perspective, build the complement
of business partner relationships required for the supply of potash
fertilizers. These include businesses such as well-organized farmer
co-operatives and logistics groups with their essential
infrastructure for product storage and transport. We are working
with both new contacts as well as our existing partner.
Gensource's business plan is one that capitalizes on the flux in
price/supply/demand volatility that characterizes what's happening
in the world-wide potash business to directly connect potash
production to potash end-users and, thereby (i) reduce
supply/demand uncertainty - an annual dilemma for both producer and
consumer - through the business arrangements of shared financial
participation and off-take agreements, and (ii) facilitate profit
opportunity for market partners according to their level of
financial participation in building the 'mine - processing
facility' complex:
- With respect to our vertical integration strategy, it is
intended to provide potash end-users with an alternative approach
to their fertilizers needs through participation in a vertically
integrated scenario. Gensource's technical ability to create small
scale, economic potash plants is the foundation for the vertical
integration strategy. By developing Gensource's business in
small steps, one small operation for one vertically integrated
market partner, we substantially de-risk both the financial and
market sides for Gensource and its market partner. In the end, we
envision developing several small potash plants, each operating
independently and each serving its market partner.
To that end, Gensource's goal of having a broad and geographically
diverse set of market partners should provide Gensource with a
strong business.
As Gensource arrives at definitive stages with each of these
opportunities, those achievements will be communicated to our
investors.
- With respect to the advantages of Gensource's selective
solution mining techniques and its associated unique processing
technology, no longer are large - 3 or 4 million tonne per year -
mines the prerequisite for economic potash production. The
Gensource model is for small operations which can be just as
economic as the massive operations.
Further, of equal importance to economic benefit, is the reduced
environmental impact of Gensource's mining and processing
techniques:
- No salt tailings on surface. Visit a typical
Saskatchewan potash mine and
you'll be dwarfed by the mountain of salt tailings. The
decommissioning plan for a typical potash mine seems to involve
many centuries of "care and maintenance" while natural rainfall
slowly dissolves the salt tailings pile and pumps and injection
wells are kept in operation to dispose of the excess brine created
by the rainfall on the salt pile. Selective mining is just
that – selective. Using these methods, Gensource will bring no
salt tailings to surface so no salt pile, no brine ponds and
therefore no long-term decommissioning plan. With no brine
containment structures, Gensource's site will look more like an
extra large quonset in the field than a mine.
- No fresh surface water usage. Typical potash mining uses
millions of cubic metres (billions of litres) of precious fresh
surface water. In the dry southern part of the province, this level
of consumption is a major strain on the South Saskatchewan and Qu'Appelle systems,
particularly in a drought situation. Selective mining requires
no fresh water; it instead uses already-saline water from deep
formations. On top of that, the saline water is re-cycled
continuously.
- Reduced local impact Because the size of these facilities
can be very small (Gensource targets 250,000 t/y compared to a
typical 3,000,000 t/y potash project), local impacts are reduced
significantly. In these circumstances, small is good – the
construction impact is greatly reduced, the operational impact on
local roads and infrastructure will be minimal - all product is
transported by rail. In addition, the operating manpower required
will be approximately 50 people instead of the more typical 400.
That means a local small town and the Rural Municipality is not as
severely impacted and the jobs created remain local.
The potash market has seen a tough couple of years with prices
reaching lows that start to impact the high cost producers in the
industry. One thing is certain as the industry rebounds: that, no
matter what the benchmark price may be, those agricultural
producers who are vertically integrated will see an advantage to
their bottom line, because, to the extent that they are vertically
integrated, they will see cost-of-production product rather than
"world price" product. That is a fundamental of vertical
integration.
As a summary - with our vertical integration strategy and our
work to develop small scale, highly cost-efficient mining and
processing methods and technologies, we are attempting to provide
end users with alternatives to traditional potash supply channels
that have not been available up to now, and we plan to do so in a
way that has tremendous environmental improvements over legacy
methods.
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.
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 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