The aim of the JV is to finance, build and operate a new potash production facility in Saskatchewan, British Columbia (B.C.), Canada, located on Gensource’s wholly owned subsurface mineral lease KL 245.
The shareholder agreement to create the JV was signed by both parties on 4 April 2017. It defined commitments for both parties, as well as conditions precedent to the JV. One condition precedent carried a specific deadline – that of initial capitalisation (termed the ‘initial contribution’ in the agreement) of the JV by EGME. Despite the fact that the deadline for the initial contribution was extended and that there have been recent planning meetings for the JV, Gensource claims that Vanguard has not received the initial contribution and, in fact, has received no funding whatsoever. With this in mind, Gensource, in the best interests of its shareholders, considers the JV and shareholder agreement to be null and void. EGME directors of Vanguard have been removed from their roles.
In the statement, Gensource states that it believes that many of its shareholders have anticipated this situation, and have already priced in the risk that EGME may not stick to its commitments. Gensource says that it still open to a JV with EGME at some point if acceptable terms and conditions can be agreed upon and carried out.
Gensource says that it is ready to advance the Vanguard One project – the initial project for which a detailed feasibility study has been completed. The opportunity to advance quickly with a low-risk, small scale and environmentally friendly project is attractive to many. The company says that, as disclosed previously, it is holding talks with a number of parties to create partnerships, and is excited by the idea of moving forwards with a partner who has a genuine interest in potash production. Gensource claims that the opportunity for such a party to step into a JV with an immediate implementation path is compelling.
On 31 May this year, the company announced that the feasibility study had been completed for one of its scalable selective solution mining projects. These projects are referred to as modules, with each module able to produce 250 000 tpy of final product. By design, Gensource claims that any production facility can be easily expanded by simply installing extra 250 000 tpy modules. The Vanguard One project is in the environmental assessment process with the Ministry of Environment of the Government of Saskatchewan.