Junior producer Gensource Potash Corp., Saskatoon, said on May 12 that on May 6 it executed a definitive offtake agreement with Helm Ag, Hamburg, Germany. The company had previously announced that Helm – through its U.S. subsidiary, Helm Fertilizer Co., Tampa – had inked a ten-year renewable offtake deal for 100 percent, or 250,000 mt/y, of the Tugaske Project’s production (GM Jan. 31, 2020).
Helm will market that product to its customers in the U.S. in an open-book manner, providing the direct link Gensource seeks between a potash producing facility in Saskatchewan and a clearly identified market.
The project is planned to be executed through a special purpose vehicle (SPV) that will construct, own, and operate the project. Gensource has previously disclosed that Helm plans to make an equity investment in that SPV alongside Gensource at financial close.
The capital structure of the SPV is being determined currently. The company said the terms of the shareholder agreement between Helm and Gensource with regards to their ownership of the SPV has largely been agreed upon, but the final agreement has not yet been executed.
As previously reported, KfW IPEX-Bank and Societe Generale SA have been appointed as joint lead arrangers for the proposed debt facility. The process toward debt commitment involves using the German export credit agency to provide credit insurance to the banks.
The final debt package will not be binding until the project reaches financial close, at which time the company anticipates that the definitive debt facility agreement will be executed with the banks.
In the meantime, Gensource reported that the project has progressed past the feasibility study level, having completed a FEED (Front End Engineering and Design) study. The updated NI 43-101 Technical Report – disclosed on March 22, 2021, and filed on SEDAR – is based on the FEED study, which includes significant detailed procurement work with the company’s selected process and equipment vendors.
The project is permitted under the Saskatchewan Environmental Assessment process and does not require an Environmental Impact Study. It has also been issued a Development Permit through the Rural Municipality of Huron, where the project is located.
Further licensing is required as detailed engineering proceeds and construction starts, under the Saskatchewan Environmental Protection standards, as well as building code requirements. Surface land for the process plant is under Gensource control, and all well pad leases and pipeline rights of way have been obtained. No further land purchases or agreements are required for the project.