Canadian Potash explorer Gensource, has entered into a definitive, binding off-take agreement, with a senior North American agriculture industry leader. Gensource is hailing the move as another critical step in the company’s development of the next generation potash plant, one that is more environmentally-friendly and cost-effective.
Gensource Potash Corporation (TSXV: GSP) announced it signed a definitive, binding off-take agreement, with what the company describes as a senior North American agriculture industry leader. The deal will see Gensource produce and provide potash to the agricultural company from Gensource’s next generation potash plant it is developing.
As quoted in the press release:
The Agreement incorporates the essential elements identified in the non-binding MOU March 27 news release, highlights of which are:
- Purchase of 100 percent of the production from one “module” of 250,000 tonne/year capacity
- A preliminary marketing plan that facilitates Gensource’s goal of creating a direct link between a potash producing facility in Saskatchewan and the end user
- A 10-year term with an option to renew for the life of the project
- Right of first refusal for the off-taker to purchase any additional product that may be produced at the project either through de-bottlenecking or expansion of the productive capacity of the facility
- Right of first refusal to purchase the project should Gensource elect to sell any portion of it.
With the formal definitive off-take agreement now completed, Gensource is moving to complete its project financing plans which will allow for the construction of the first of a new breed of potash production plants. Certain financing institutions have already reviewed the agreement and have provided input to it in its draft form; comments from that review have been incorporated into the final Agreement with a goal to create a stronger, more financeable Agreement.
“This agreement represents a true milestone in the development of Gensource’s potash business strategy. We are so pleased that our off-take partner shares our confidence in striving towards this new approach to potash production – a confidence that is on display through the completion and execution of this definitive agreement. We are also pleased to bring our unique business model to the North American agriculture industry and specifically to the markets served by our off-take partner. As I indicated when announcing the MOU with the off-taker, by combining a modern production facility, with its efficiency and significantly reduced environmental footprint, with the vast resources of the off-taker, we believe the two groups together represent the new face of the potash supply chain in the ag industry,” Gensource’s president & CEO, Mike Ferguson said.