Junior producer Gensource Potash Corp., Saskatoon, on June 17 announced that it has become aware that a statement of claim has been filed against the company, its CEO, and Helm Ag (Project Developers) in the Saskatchewan Court of Queen’s Bench. The Claim was filed by Frank Eberhardt and Carl F. Peters GmbH & Co. (CFP), both of Hamburg, Germany, and 11664735 Canada Ltd. (116), a Canadian company beneficially owned by Frank Eberhardt.
The claim has not yet been served on the Project Developers; however, following the company’s policy of open and transparent communications, Gensource is disclosing the existence, together with some context. It said CFP is a shipping company operating in Hamburg, Germany, operated by Frank Eberhardt, while 116 is a Canadian company beneficially also owned by Eberhardt, which owns a royalty on the company’s Tugaske Potash Project located near Tugaske, Sask.
The claim alleges, among other things, that Gensource and Helm wrongfully excluded Eberhardt from investing in the Tugaske Project and seeks to confer upon the plaintiffs the right to invest in and be part of the Tugaske Project.
Gensource issued a news release on Nov. 26, 2020 (GM Dec. 4, 2020), wherein it announced a decision to replace a financial investor in the special purpose vehicle (SPV) that will own the Tugaske Project. At that time, Gensource and Helm made the joint decision to cease negotiations with Eberhardt when it became clear that the parties were not able to agree on the terms of the key required agreements – namely the offtake agreement for the Tugaske Project and the shareholder agreement that will govern the SPV. Since that time, Helm and Gensource have finalized and executed the offtake agreement (GM May 14, 2021) and have agreed on substantially all the terms of the shareholder agreement for the SPV, pending final equity capital structure of the SPV.
Gensource 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.
Gensource and Helm believe the allegations set out in the claim to be without merit. If the claim is served, the company and Helm will vigorously defend themselves against the claim and are presently considering all available actions they may take to protect their rights and reputations, including seeking damages against the plaintiffs.