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Gensource takes Tugaske to engineering phase

Gensource Potash Corporation is taking the Tugaske project in Saskatchewan, part of the larger Vangaurd project package, to the engineering phase.
Gensource takes Tugaske to engineering phase Gensource takes Tugaske to engineering phase Gensource takes Tugaske to engineering phase Gensource takes Tugaske to engineering phase Gensource takes Tugaske to engineering phase

The future Tugaske potash project site in Saskatchewan, for which proponent Gensource has started engineering work

The company has engaged a consortium of German potash process design and equipment companies to work together to produce a turnkey design-supply-commission package for the entire process plant.

Gensource has been making strides behind the scenes, advancing development and financing for the phase one project. Joint lead arrangers for the project debt, KfW IPEX-Bank and Société Générale, are said to be nearing completion of due diligence.

The senior debt facility is expected to be supported by export insurance coverage by German export credit agency, Euler Hermes, hence the choice of three German contractors to design and deliver the project.

Gensource will rely on K-Utec AG Salt Technologies in areas of chemistry, process development and engineering up to bench-scale testing; Koeppern GmbH & Co for drying, compaction and screening process design and manufacture; and Ebner GmbH & Co for cooling crystallisation equipment.

Gensource is targeting production from Tugaske in late 2022.

CEO Mike Ferguson recently told Mining Journal the COVID-19 pandemic had not impacted the company's development plans. He argued smaller projects such as Tugaske offered the opportunity to serve a retail market the majors had overlooked.

"While the supply-side-controlled market of the majors has resulted in a cumulative 30% drop in potash prices last year, retail prices to farmers are either up or steady to date at about US$370/t," he said in April.

Gensource is counting on a modular construction approach to support a three-year development timeline. With a 250,000-300,000 tonne operation, Ferguson expects the company to be small enough to "sneak into all kinds of market niche areas".

Gensource shares (TSXV:GSP) have gained about 78% over the past 12 months, adding another 1c Monday to C16c, after ranging between 7-17c in the period. The company has a market capitalisation of $61 million (US$45 million).