Gensource Announces Kick-off of a Feasibility Study for Vanguard Project

Gensource Potash (TSXV:GSP) is pleased to announce the initiation of a feasibility study (the “Study”) for its first proposed small scale project on the Vanguard property. The Vanguard area comprises two Saskatchewan subsurface mineral leases, KL 244 and KL 245, which are subject to closing pursuant to the Asset Purchase Agreement announced April 6, 2016. Previously (May 31, 2016), Gensource completed a Preliminary Economic Assessment (“PEA”) for a project at Vanguard, in compliance with NI 43-101 Standards of Disclosure for Mineral Projects (“43-101”, or “Technical Report”) which is filed on www.sedar.comunder the Company’s profile.

Gensource is seeking to develop a small scale and sustainable production model – the first of its kind in the potash industry. The small size is of key importance:

• It allows for vertical integration of the operation with an identified market partner, who will purchase all of the production,
• Resource projects are much more likely to successfully arrange financing at a smaller scale in the current challenging capital markets,
• Based on the results of the PEA, the Gensource model shows potential for very attractive operating costs (OPEX) that allow the project to be economically attractive even in today’s low-potash-price environment,
• It has, as its premise, a significantly reduced environmental footprint – with no salt tailings on surface, no brine ponds or other brine control structures, and no requirement for fresh surface water consumption, and
• Combined with the significant mineral holdings that make up the Vanguard area, several small-scale and low CAPEX production modules may be assembled with expanding market demand

The Feasibility Study is being initiated as the next step in developing the Vanguard potash area. The general parameters for the Study are:

• Production rate: 250,000 tonnes/year of standard product
  • This production rate will be viewed as a “module”, allowing for one or more modules to be implemented together, either initially or sequentially as an expansion plan over time.
• This production rate will be viewed as a “module”, allowing for one or more modules to be implemented together, either initially or sequentially as an expansion plan over time.
• Mining method: Selective dissolution using horizontal caverns.
• Processing: Cooling crystallization incorporating innovative energy efficiency measures.
• Logistics and transportation to move the product to an overseas port (the sales location).

Gensource’s President & CEO, Mike Ferguson, said, “We are excited to be kicking off this critical next phase of development for the Vanguard project. The integrated team approach for the Study will help ensure validated design and production expectations and provide for construction cost estimates that exceed confidence levels provided by traditional engineering-only feasibility studies. Further, the integrated team will significantly contribute to execution efficiency going forward because of the inclusion of the construction general contractor at this early stage. The logical expectation is that this team will affect efficiencies every step along the way, particularly throughout the design-procurement-construction process.”
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