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Gensource enters potash offtake MoU

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World Fertilizer,

Gensource Potash Corp. has announced that it has entered into a non-binding memorandum of understanding (MoU) with a long-time leader in the North American agriculture industry.

According to the statement, the MoU formalises the offtaker’s interest in potentially purchasing 100% of the planned 250 000 tpy production from one of Gensource’s small scale potash facilities, which will be located in its Vanguard area in central Saskatchewan, Canada.

The MoU also proposes certain terms that will become key components of a definitive offtake 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. Whilst Gensource will provide the potash, the offtaker will utilise its transportation and logistics capabilities. Combined, both parties will create a complete and independent supply chain.

Highlights of the MoU include: the potential commitment to purchase 100% of the production from one 250 000 tpy module; an industry standard pricing structure for delivery of product to the US market; and employment of the offtaker’s existing transportation and logistics infrastructure to move product.

The MoU contemplates that the parties complete the definitive agreement by the end of April 2018, and efforts in that respect have already commenced.

Concurrently with the completion of the definitive offtake agreement, Gensource will define and assemble the required finance package that will support construction of the project on the currently planned schedule. Construction is scheduled to start later this year, with first production in 18 – 22 months.

Mike Ferguson, the President and CEO of Gensource, said: “Gensource is excited to discuss a long-term relationship with this offtaker. The offtaker’s strength in the industry, with its existing customer base and the infrastructure and expertise to move product to market, is significant. The offtaker 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 000009937-1.0 offtaker’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.”

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