Gensource Potash Releases Resource Estimate for Vanguard

Just a few weeks after inking an asset purchase agreement and term sheet for an offtake agreement with Yancoal Canada, Gensource Potash has released a resource estimate for the newly acquired Vanguard project.

Just a few weeks after inking an asset purchase agreement and term sheet for an offtake agreement with Yancoal Canada, Gensource Potash (TSXV:GSP) has released a resource estimate for the newly acquired Vanguard project.
Gensource gained 10.34 percent on Thursday’s news to close at $0.08 per share. Trading volumes came in at over twice the daily average for the potash company.
Vanguard consists of two mineral leases to be purchased from Yancoal Canada Resources, as announced April 6. Here’s a look at where inferred resources for the property are sitting now:
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To get a bit more insight into the news, the Investing News Network got in touch with Mike Ferguson, Gensource president and CEO, to talk about the resource estimate and about what’s next for Gensource. While Gensource was not specifically aiming to complete a resource estimate so quickly, Ferguson stated that with the robust data previously collected by Yancoal on the property, it was possible for the company to define a formal resource.
Furthermore, the geology of the area is consistent with that of Gensource’s adjacent Lazlo project, and the company hopes to complete a preliminary economic assessment (PEA) for Vanguard going forward.
Read on below for more of what Ferguson had to say:


INN: Congratulations on completing a resource estimate for the Vanguard project so quickly after your acquisition this month. What would you highlight for investors here?
MF: There are a few key take-aways from the completion of the 43-101 resource report. First, the geology in the area is consistent with what Gensource is familiar with in its Lazlo Area.  That make sense because the new Vanguard Project Area is just to the west of Lazlo and overlies the same Davidson Sub Basin region of the Prairie Evaporite Formation.
Furthermore, the resource is supportive of Gensource’s licensed selective mining and enhanced recovery mining and processing methods. These methods are a form of solution mining that work with horizontal caverns and use a Sodium chloride-rich brine as the mining solution rather than fresh water.
An “exploration target” quantity has been defined that provides a pathway, with further drilling and seismic, to a much larger resource.
Importantly, there is already a resource defined at Vanguard. As stated in the news release, Gensource was not out to specifically define a resource at this stage, but with the excellent geological work completed and data collected by Yancoal, it was possible to define a formal inferred resource.
Finally, an inferred resource can be used to support a PEA. The PEA is the first glimpse at what a project at Vanguard might look like and what its economics might be. On that basis, Gensource will now more ahead on publishing a PEA at Vanguard as its next step.
INN: How do results of this resource estimate compare to your expectations?
MF: As stated, our expectations were exceeded. The intention of the 43-101 was to provide insight that would support the valuation of the lease areas being acquired from Yancoal. The fact that it was possible to define a formal resource was a pleasant surprise, although not shocking, as Gensource is very familiar with the geology in this  area.
INN: You used a K2O cut off grade of 15 percent. How does that compare to other potash deposits?
MF: The cut–off grade of 15 percent K2O is very conservative. We purposely stayed conservative at this early stage of project development, not wanting or needing to overstate resource tonnages based on hopeful assumptions. By moving deliberately, step by step, we hope to see a steady and rational build-up of the resource after future geological investigations are complete.
INN: How have investors reacted to the news so far?
MF: So far, the reaction has been overwhelmingly positive, both to the acquisition plans for the Yancoal leases, and also to the completion of the 43-101 report. We are able to show a steady progression in project development which provides confidence to our shareholders and to de-risk the project one step at a time.

INN: Now that a resource estimate has been completed for Vanguard, what are the next steps for Gensource? More specifically, what catalysts can investors look forward to in the next six months?
MF: The next steps at Vanguard will be to:
  1. Complete a PEA on the property. This will provide the fist glimpse of what one of Gensource’s small projects could look like and what the economics might be. The fact that Yancoal Canada Resources is providing a 100 percent off take agreement for the full planned production of 250,000 tons per annum means that the ‘market risk’ is minimal and the marketing cost will be essentially nil.
  2. Complete and close the asset purchase agreement with Yancoal.
  3. Drill one or two new wells on the property and execute a 3D seismic program over the wells. This will  allow Gensource to firm up the resource, with our plan being to upgrade to a measured and indicated resource from the current inferred resource.
  4. Commence work on a feasibility study and start work on the required regulatory and environmental approvals.

INN: Is there anything else you would like to add?
MF: While recent focus has been on the Vanguard area and the associated plans there, we continue to move our off-take relationships forward in both Brazil and India with respect to the Lazlo project area. What Vanguard provides is schedule advance and cost savings in the resource definition phase while also attracting a full off take agreement. That is the same result we’re working towards at Lazlo – we now have two options for project areas that we are advancing together with different market partners.
Don’t forget to follow us @INN_Resource for real-time news updates!
 
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. 
Editorial Disclosure: Gensource Potash is a client of the Investing News Network. This article is part of the company’s paid advertising campaign.
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Catch up on some of the biggest news of the week for the cannabis investment world.

Three political parties have formed a coalition in Germany, leading to a new government, and it has promised cannabis reform in the European nation.

Meanwhile, a popular cannabis retailer confirmed consumers will now find its products available for delivery on the Uber Eats mobile application in Ontario.

Keep reading to find out more cannabis highlights from the past five days.


Coalition of parties promises forward-looking cannabis policy

Germany, a country with comprehensive and elaborate medicinal rules for cannabis, is in a time of transition as a new government is set to begin to take over after 16 years of Angela Merkel.

Olaf Scholz, the proposed next chancellor of Germany, leads a three party coalition that will become the country's governing body. As part of its promises, talk of adult-use cannabis regulation has now gained even more momentum. A report from MJBizDaily quotes a German policy document that shows the coalition's stance:

"We are introducing the controlled distribution of cannabis to adults for consumption purposes in licensed shops. This controls the quality, prevents the transfer of contaminated substances and guarantees the protection of minors."

However, despite the promise and excitement, it remains to be seen how these ideas will be applied since no formal regulations have been drafted or approved yet.

Canadian cannabis retailer partners with popular delivery app

Tokyo Smoke, a cannabis retail operator in Canada owned by Canopy Growth (NASDAQ:CGC,TSX:WEED), announced a collaboration agreement with Uber Canada (NYSE:UBER) whereby cannabis consumers will be able to use the Uber Eats app to order products before they visit stores.

While the app won't let consumers get cannabis delivered to them, this new method opens the doors to more dynamic ways of buying cannabis.

"As a market leader in innovation and a platform used by so many Canadians, we believe this is the ideal next offering that can be done safely and conveniently on the Uber Eats app," Mark Hillard, vice president of operations with Tokyo Smoke, said in a press release.

A report from the Canadian Press indicates Ontario is considering allowing dispensaries to have delivery and pickup options made available to consumers permanently. The province allowed some of these purchasing options at the outset of the COVID-19 pandemic, but then removed them.

Lola Kassim, general manager of Uber Eats Canada, said this new end-to-end experience will provide consumers with responsible access to legal cannabis products.

Cannabis company news

  • Organigram Holdings (NASDAQ:OGI,TSX:OGI) issued financial results for its Q4 2021 period. In its report, the company notes a net loss of C$26 million despite a 22 percent uptick in net revenue to C$24.9 million. Beena Goldenberg, the newly appointed CEO of the firm, is encouraged by the market share position earned by the company, which said it became the fourth biggest producer in Canada during the reporting period.
  • Halo Collective (NEO:HALO,OTCQB:HCANF) confirmed the decision for Akanda, its spinoff company focused on international cannabis opportunities, to begin trading on a US exchange. "The number of shares to be offered and the price range for the proposed offering have not yet been determined," the company told investors in a press release.
  • High Tide (NASDAQ:HITI,TSXV:HITI) announced the acquisition of 80 percent of NuLeaf Naturals, a CBD product wellness developer, for an estimated US$31.24 million. The deal includes a three year option clause for High Tide to complete a total acquisition. "As international markets open up and as export regulations evolve, NuLeaf's cGMP-certified facility positions us to take advantage of the global CBD business opportunity," Raj Grover, president and CEO of High Tide, said.
  • Humble & Fume (CSE:HMBL,OTC Pink:HUMBF) released the financial report for its first 2022 fiscal quarter to shareholders and the market. "As the legal cannabis market in North America continues to mature, Humble remains agile and focused on providing a leading solution for brands to scale quickly and retailers to focus on their customers," Joel Toguri, CEO of Humble, said.

Don't forget to follow us @INN_Cannabis for real-time updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

text saying "top stories this week"

Catch up and get informed with this week's content highlights from Charlotte McLeod, our editorial director.

Top Stories This Week: Powell Gets Fed Nomination, Using Gold in a Market Correction youtu.be

We're back after a break last week with quite a bit to cover in the gold space.

After running up past the US$1,860 per ounce mark midway through November, the yellow metal has taken a tumble. At the time of this writing on Friday (November 26) afternoon, it was sitting just under US$1,790.

Gold's losses this week have been attributed to elements like a stronger US dollar and better Treasury yields, although Jerome Powell's US Federal Reserve chair renomination has pulled other factors into play — some market watchers believe he may move to taper and raise interest rates faster than anticipated.


If the Fed follows its previously laid out timeline for tapering, it will wrap up in mid-2022; the central bank has said it won't raise rates until after that. It has also emphasized that its roadmap may change if necessary.

Looking at the larger picture for gold, I heard recently from Nick Barisheff of BMG Group, who believes the stock market is due for a major correction.

"The market is due for a major correction. What will cause it and when it will happen is anybody's guess — it could be tomorrow, it could be six months from now" — Nick Barisheff, BMG Group

It's impossible to know when this correction will happen, but Nick emphasized the importance of acting before it's too late. He pointed out that investors are typically slow to get out of the market once a crash actually begins — they wait for a turnaround, and by the time it's clear there won't be one, they've experienced big losses.

In his opinion, the solution is to get out of the stock market early and transfer money into gold.

Here's how Nick explained it:

"Instead of taking your money off the table and going into cash … you go to gold (because cash is devaluing daily). Gold will at least hold its own and probably appreciate … so by sitting it out in gold you can wait until the market finishes correcting and then buy back in" — Nick Barisheff, BMG Group

With gold's future in mind, we asked our Twitter followers this week what price they think the metal will be at the end of 2021. By the time the poll closed, most respondents had voted for the US$1,800 to US$1,900 range.

We'll be asking another question on Twitter next week, so make sure to follow us @INN_Resource or follow me @Charlotte_McL to share your thoughts.

Finally, in the cannabis space, INN's Bryan Mc Govern spoke with Dan Ahrens of AdvisorShares to get his thoughts on 2021 trends and what's ahead in 2022.

Dan was candid, and said if he had to choose one word to describe the cannabis market in 2021, it would be "painful." Like many others, he's been disappointed in the industry's performance — while positivity initially ran high due to excitement about potential federal changes in the US, ultimately progress has been slow.

"Cannabis started with a big run-up in January and February ... and things dragged from there" — Dan Ahrens, AdvisorShares

Still, Dan has hope for 2022 and said it will be a "huge year" for cannabis. He believes US reforms will come sooner rather than later, and in his opinion those widely anticipated changes will bring a wave of M&A activity.

Specifically, he expects to see alcohol, tobacco and other consumer packaged goods companies making deals with cannabis players, not just cannabis entities doing transactions with each other.

"Those big alcohol companies, tobacco companies, other consumer packaged goods product companies — they're waiting. They're waiting on the US" — Dan Ahrens, AdvisorShares

Want more YouTube content? Check out our YouTube playlist At Home With INN, which features interviews with experts in the resource space. If there's someone you'd like to see us interview, please send an email to cmcleod@investingnews.com.

And don't forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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