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Gensource Potash announces intention to increase capacity at its Tugaske project

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World Fertilizer,


Gensource Potash Corporation has announced that its strategic investor and offtake partner, HELM AG and its subsidiary HELM Fertilizers (collectively, ‘HELM’), has furthered its commitment to the company’s potash project located near Tugaske, Saskatchewan. In the context of soaring fertilizer prices and constrained supply, particularly with respect to potash, the company is pleased to have a partner that has the strategic vision to see the value proposition in Gensource’s business model. The specific points of additional support, subject to final documentation, are:

HELM and Gensource plan to double the overall potash production capacity of the Tugaske Project, from 250 000 tpy to 500 000 tpy, under a second phase of the Tugaske Project (Phase 2) by adding a second module to the Tugaske Project. It is expected that Phase 2 will be implemented immediately following the completion of the first phase of the Tugaske Project (Phase 1). With increased global demand for potash in response to structural changes in the global agriculture and fertilizer markets, HELM sees significant opportunity for the sale of additional potash production through its existing market channels, including demand for organic potash. Phase 2 is expected to be significantly accretive to the overall returns of the Tugaske Project as it is expected to enjoy the benefits of infrastructure investment from Phase 1, operational synergies and provincial government incentives built into the potash production tax regime, which encourage investment. From the beginning of project design of the Tugaske Project, the on- and off-site infrastructure (water, gas, rail and road access, etc.) was designed by the company to accommodate two modules, an approach taken to make the addition of a second module as efficient as possible.

In addition to the above, HELM has committed to guarantee a CA$12 500 000 contingency account for the Tugaske Project, as is required by the bank syndicate of KfW IPEX-Bank and Société Générale in connection with the Company’s anticipated and previously announced debt financing. The two senior lending banks, KfW IPEX-Bank and Société Générale, remain fully supportive of the Project.

“These strategic commitments by HELM are a reflection of the strength and availability of Gensource’s modular technology to help meet immediate market needs and of the strong demand for potash” said Chief Executive Officer, Mike Ferguson. “The need for innovative solutions to bring new production to market is imperative, and with HELM’s continuing support, we are one step closer to bringing the Tugaske Project into production. Providing incremental supply to the market is part of the solution to the current market imbalances. We are delighted that HELM has increased its commitment to the p Gensource Potash Announces Intention to Increase Capacity at its Tugaske Project roject and look forward to next steps.”

Olivier Saulnier, Executive Vice President Crop Nutrition for HELM AG adds that “HELM is excited to take the next step in realising the Tugaske project. We are proud to be a partner in a project that will be a world leader in sustainably producing potash. Our customers demand sustainable solutions and our commitment to marketing the output from module 2 shows our confidence in the demand for the product, the plan for developing the Tugaske project and our partnership with Gensource.”

Gensource, together with HELM, continue to advance the Tugaske Project towards full execution through the completion of project financing. Discussions with third-party strategic equity investors are yielding positive results towards proposed refinements to the final capital structure for the Project and for KClean Potash Corporation. As a reminder, KClean Potash Corporation is the joint venture company that will own and deliver the Tugaske Project.

Within the global context of inflation and supply chain disruptions, Gensource, HELM, KfW IPEX-Bank together with Société Générale and third-party equity investors are looking forwards to the completion of the currently underway bridge engineering (announced 27 May 2022). The bridge engineering phase is part of overall detailed project engineering and is a key deliverable for confirming capital costs and operational costs of the project.

The Tugaske Project is designed as an efficient and environmentally sustainable potash production facility and is expected to be a very near-term new supplier to the marketplace - a key advantage for the Tugaske Project in an industry dominated by mega projects that can take up to a decade to reach first production.

Gensource is excited to provide further update details in the near future.

Read the article online at: https://www.worldfertilizer.com/potash/21062022/gensource-potash-announces-intention-to-increase-capacity-at-its-tugaske-project/

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