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Canadian company Gensource Potash reports it raised US$7 million from a royalty sale on its Tugaske potash project in Saskatchewan.
Canadian company Gensource Potash (TSXV:GSP) reports it raised US$7 million from a royalty sale on its Tugaske potash project in Saskatchewan.
As quoted from the press release:
The Strategic Investor and the Project Off-taker for the Tugaske Potash Project (see Gensource’ news release dated May 22, 2019) have executed royalty agreements (the “Royalty Agreement”), pursuant to which Gensource has granted a royalty (the “Royalty”) to the purchasers (the “Royalty Owners”) in consideration of US$6.0 Million paid by the Royalty Owners to Gensource. In relation to the Royalty Agreement, the company paid a cash commission of $US 120,000.00. Pertinent details of the Royalty Agreement are:
• Gensource grants to the Royalty Owners the Royalty at the rate of 2 percent of gross revenue from the sale of commercial minerals (calculated and paid quarterly on the terms set out in the Royalty Agreement) extracted from the Company’s mineral dispositions with respect to the project and for the life of the project;
• The Royalty will run with the Mineral Dispositions, and will be a registered interest on the mineral leases; and
• The Royalty Owners shall have the right to the Royalty on minerals produced and sold by the first module of production to be constructed on the leases. In the May 22nd news release, it was disclosed that the Strategic Investor and the Project Off-taker have signed Letters of Intent to provide 33 percent and 25 percent, respectively, of the project equity required as part of the project finance package.
Mike Ferguson, president & CEO of Gensource, said, “We are very pleased to welcome our project partners – both the Strategic Investor and the Off-taker – to the Tugaske Potash Project as Royalty Owners. We appreciate their trust in Gensource’ approach to potash production. We also appreciate their unique foresight, which allows them to see the tremendous opportunities ahead under the Gensource model. We see the equity investment as a further validation of the Gensource “Potash 2.0” concept.”