Gensource Potash Corp. has reached a significant milestone in the financing of its initial Project, one of Gensource’ small-scale potash production facilities within its wholly owned Vanguard Area in central Saskatchewan, Canada. Gensource has received letters of intent from KfW IPEX-Bank of Germany and Export Development Canada (EDC). Both parties are currently evaluating how they can support the project by providing senior debt. Gensource is also in discussions with a major global bank that may be engaged to round out the club.
KfW IPEX-Bank is planning to assume a role as the arranger of the senior debt financing and will work with EDC and other senior lenders to conduct customary due diligence and possibly utilize official export promotion schemes as credit enhancement. “We are excited to have reached this important milestone that our shareholders have been anticipating,” says Mike Ferguson, President & CEO of Gensource, adding that “as anyone who has been involved in bringing a major project to completion knows, there are a series of critical hurdles or milestones that must be attained. Obtaining debt financing – an indication by third party capital providers that the project is not only viable, but also attractive – is among the most important.”
Gensource’s President also said that “the selected institutions bring extensive experience in structured mining finance in Canada and internationally. Their support gives us strong confidence in our ability to advance the Project to a successful financing and confirms the attractiveness of Gensource’ small-scale, modular approach to potash mining.” On completion of the outstanding due diligence process, an agreed term sheet will be submitted for senior lender’s formal credit approval. Following this, Gensource and the Senior Lenders will prepare and execute definitive facility and security documentation.