Gensource Potash Corporation, a fertiliser development company focused on sustainable potash production, has announced the successful completion of the next major milestone for its Tugaske Project in Saskatchewan. Gensource has now received approval of its Development Permit Application for a potash mine from the Rural Municipality (RM) of Huron No. 223, whose offices are in the Village of Tugaske, SK.
The Tugaske Project will produce a minimum of 250,000 t of muriate of potash (MOP) per year. HELM Fertilizers Corp, a US-based subsidiary of HELM AG, has agreed to purchase 100% of the annual production from the Tugaske Project and market directly to its customers using its own infrastructure. The extraction method is selective solution mining, where brine is used to dissolve potash from underground caverns and is then brought to the surface -avoiding both the shaft-sinking costs and large environmental impact of tailings, created by traditional potash mining.
Gensource has worked closely with the RM over the past several years, spanning the initial exploration work on its potash lease covering the area, to the tangible development work on the project, a site being chosen and surface land being optioned – all making the project ready for construction. “Earlier this summer, Gensource completed an application for a Development Permit and submitted it to the RM for consideration. We are excited to report that the permit was approved by RM Council at its August meeting under existing RM Bylaws, opening the way to construct our first potash module within the boundaries of the municipality.”
Corey Doerksen, Reeve of the RM of Huron, commented: “Here at the RM of Huron, we are extremely excited at the issuing of an RM Development Permit to Gensource Potash for the Tugaske Project. Ever since our first contact with Paul [Gensource’s Project Manager], we have been very impressed with their operation and handling of the upcoming project. We are particularly excited about the fact that there will be some community and surrounding area involvement during the construction and operational phases. We look forward to many years of cooperation with Gensource in the area.”
The overall timeline leading to construction is now in the hands of Gensource’s senior lenders (KfW and Société Générale – and the process to have project financing coverage approved through the Euler Hermes process. As indicated in previous news releases, the senior debt financing is aided by the export insurance coverage provided by the German Export Credit Agency (ECA), Euler Hermes. The senior lenders’ due diligence investigations are now essentially complete as planned and discussions are underway on final terms of the debt package.
The final step now is to obtain ECA approval. Current plans are to have the project submitted to the November 5, 2020 meeting of the Euler Hermes’ governing committee and receive approval thereafter. The Euler Hermes approval represents the milestone for senior debt letters of commitment, which will then trigger equity investment in the project. As this process completes, Gensource will continue with the planned project development efforts to ensure that overall timelines are maintained.
Further to the procurement requirements, as driven by the Euler Hermes process, Gensource has also announced that it has engaged MAVEG Industrieausrüstungen GmbH to act as a general procurement agent for the company with respect to a significant package of equipment and services. “Maveg has great experience in the procurement of industrial equipment and services for the mining and industrial processing industries globally, and Gensource looks forward to working with Maveg to create cost-efficient and timely procurement packages that will fall under the Euler Hermes coverage.”
Gensource’s President & CEO, Mike Ferguson, commented: “We have worked tirelessly to get to this stage and receiving a Development Permit for a potash mine from the RM is one of our most significant permitting-related milestone to date. This Development Permit, coupled with the Saskatchewan Environment determination already received, means the project is truly shovel ready. Gensource takes pride in maintaining close contact and good communications with all stakeholders – and the linear and efficient manner in which the Development Permit was approved shows that cooperation and working towards a positive common goal represents the best way to get things done.”
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