Gensource Potash Corp. · TSXV:GSP
Gensource Potash — Investor Presentation (June 2021)
40 slides from Gensource Potash's investor presentation, June 2021
Slide 1: Potash With Purpose
TSXV: GSP Potash With Purpose Leading The Way To Sustainable Food Security TSXV:GSP June 2021 gensourcepotash.ca
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements TSXV: GSP The information contained in this confidential presentation (this “Presentation”) is considered current as of the date hereof. There is no representation or warranty by Gensource Potash Corporation (the “Company” or “Gensource”) as to the accura
Slide 3: Sections
Click to edit Master title style TSXV: GSP 1 Overview 2 Gensource Method & Tugaske Project Sections 3 ESG Leader 4 Appendix 2021-06-23 gensourcepotash.ca 3
Slide 4: Management team
Management team TSXV: GSP The core project team (technical team) within Gensource is the same team that led Potash One Inc. in developing the Legacy Project in Saskatchewan. Potash One was subsequently acquired by K+S AG in 2011 for $CAD 434M. The project started producing potash as the Bethune Mine
Slide 5: Investment summary
Investment summary TSXV: GSP Tugaske is a “shovel ready” Attractive Global KCl dynamics 10-Year off-take agreement with proven development partners Growing global population, growing secured ready to begin construction, start- food needs and close proximity (with A renewable take-or-pay off- up and
Slide 6: The world needs potash, the planet needs Gensource
The world needs potash, the planet needs Gensource TSXV: GSP 10 BILLION POTASH SUSTAINABLE Estimated global population in 2050 Necessary component in fertilizer Unlike traditional potash companies, will make food security an ongoing that helps farmers produce healthier Gensource utilizes innovative,
Slide 7: Gensource's business model stands on 2 pillars
Gensource's business model stands on 2 pillars TSXV: GSP TECHNICAL INNOVATION VERTICAL INTEGRATION (Size-appropriate, scalable, efficient and (Pre-sell the product to a well known environmentally sustainable) and strong partner) Selective solution mining technology contrasts Partnering with the end-
Slide 8: Vertical integration? We call it common sense
Vertical integration? We call it common sense TSXV: GSP • We believe that vertical integration with the end-user, the agricultural producer, allows us to achieve optimal efficiency of planned Tugaske and value for all stakeholders. Project production is • More direct access to the product for the gr
Slide 9: Potash market overview
Potash market overview TSXV: GSP Our Target Market Right in Our Backyard Global Market Size Five core regions account for 60% of total US muriate Global KCl demand expected to grow at a 2% CAGR, of potash (“MOP”) consumption resulting in total demand of 88.7 million tonnes by 2035 MOP usage is most
Slide 10: Section – Gensource Method & The Tugaske Project
Click to edit Master title Section 2 – Gensource Method style TSXV: GSP & The Tugaske Project A smaller carbon footprint was always part of our bigger plan. - Gensource 2021-06-23 gensourcepotash.ca 10
Slide 11: Our approach is modular. Our goals are big.
Technical innovation will allow Click to edit Gensource Master to create a seriestitle of style TSXV: GSP independent, scalable and environmentally sustainable potash Our approach is modular. production facilities in Saskatchewan Our goals are big. and other jurisdictions in the world. Producing 250
Slide 12: Tugaske Project highlights
Tugaske Project highlights TSXV: GSP Minimum 250,000 metric tonne per annum of saleable MOP using the proven selective solution extraction method Low capital, low operating costs Critical infrastructure already in place • Combining tested extraction methods • Located on or very close to Key governme
Slide 13: Strategic location
Strategic location Click to edit Master title style Gensource HQ, Saskatoon TSXV: GSP Vancouver • Located in south-central Saskatchewan, a potash-rich area, only 360 km north Tugaske Project, of the US-Canada border 170 KM SOUTH OF SASKATOON • Over 70,000 acres of Crown Toronto Mineral Lands availab
Slide 14: A closed loop method with little environmental impact
A closed loop method with little environmental impact TSXV: GSP Our selective extraction method injects a hot salt (NaCl) brine into horizontal caverns in the ore body, which selectively dissolves KCl leaving salt in place. The KCI-rich brine is then processed (KCI ‘drops out’ through cooling crysta
Slide 15: A clean, efficient extraction and processing method
A clean, efficient extraction and processing method TSXV: GSP 2021-06-23 gensourcepotash.ca 15
Slide 16: Tugaske anticipated to be a low-cost supplier
Tugaske anticipated to be a low-cost supplier TSXV: GSP Tugaske All-In Operating Costs US$ 79.87 /Tonne Average Retail Cornbelt Price (April 26, 2021) - $US477/tonne Tugaske potash is (During Sask PPT Holiday) expected to be delivered within the Total delivered cost ($US/tonne) OpEx lowest quartile
Slide 17: Impressive projected financial returns on Tugaske, our first project
Impressive projected financial returns on Tugaske, our first project TSXV: GSP Economic Before Sask. After Sask. Final Indicator* PPT ($M) PPT ($M)** After-Tax ($M)*** NPV8 (US$) $478 $309 $268 IRR 21.34% 18.48% 17.59% This discounted cash flow (“DCF”) analysis for the Tugaske Project uses input par
Slide 18: Tugaske Project planned funding, sources and uses
Tugaske Project planned funding, sources and uses TSXV: GSP Sources US$M US$M % Uses US$M % Project Equity (Cash and In-Kind) $140 39.7% Capex $238 67.4% Paid in Capital (Project Value) $30 Project Contingency $24 6.7% Cash Required $110 Cost Overrun Account $30 8.5% Helm Cash $40 Paid-In Capital (n
Slide 19: EBITDA margin of ~$333/tonne
Retail potash (MOP) prices ($US per tonne) TSXV: GSP June 21, 2021 Potash prices have rebounded from recent lows after a global rally in food prices boosted demand. Gensource $500 believes that the price increase is an indicator of a EBITDA margin of ~$333/tonne tightening global potash market. At c
Slide 20: Joint Venture organizational structure
Joint Venture organizational structure TSXV: GSP EQUITY EQUITY ~ 71% ~ 29% Paid in capital and new equity SPECIAL PURPOSE VEHICLE TUGASKE PROJECT JOINT VENTURECANADIAN, SASKATCHEWANBASED A CANADIAN, SASKATCHEWAN-BASED JV A CANADIAN, SASKATCHWAN-BASED CORPORATION OWNS AND OPERATES SENIOR Tugaske POTA
Slide 21: Upcoming Milestones
Upcoming Milestones TSXV: GSP 2021-06-23 gensourcepotash.ca 21
Slide 22: Section – ESG Leader
Section 3 – ESG Leader Click to edit Master title style TSXV: GSP Environmental, Social and Governance (ESG)? We call it business as usual. Conventional potash mining methods are not capital efficient and take a toll on both the environment and local communities. There’s also much room for improveme
Slide 23: ESG is in our DNA
ESG is in our DNA TSXV: GSP ENVIRONMENTAL SOCIAL GOVERNANCE Smaller physical footprint for less Collaboration with communities Accurate and ethical in all business impact on air, water, and land with to create long-term employment practices to create transparency no salt tailings or brine ponds. wit
Slide 24: Our goal is net zero
Our goal is net zero TSXV: GSP OFF-GRID LOW WATER USAGE NO HUB & SPOKE Self-generating, natural gas power produces Up to 75% less water usage Distribution model ensures half as much carbon dioxide per tonne than conventional customers receive products direct and an even smaller fraction of other sol
Slide 25: Intent to seek organic potash certification
Intent to seek organic potash certification TSXV: GSP Organic certification opens premium markets that demand environmentally friendly inputs Organic Agriculture combines tradition, innovation and science to benefit the shared environment and promote fair relationships and a good quality of life for
Slide 26: The opportunity summarized
The opportunity summarized TSXV: GSP Tugaske is a “shovel ready” Attractive Global KCl dynamics 10-Year off-take agreement with proven development partners Growing global population, growing secured ready to begin construction, start- food needs and close proximity (with A renewable take-or-pay off-
Slide 27: Contact Information
Click to edit Master title style TSXV: GSP Contact Information Mike Ferguson, President & CEO mike@gensource.ca m. +1.306.291.8221 Rob Theoret, VP Finance & Business Development rob@gensource.ca m. +1.306.290.7325 gensourcepotash.ca 2021-06-23 gensourcepotash.ca 27
Slide 28: Section - Appendix
Click to edit Master Section 4 - Appendix title style TSXV: GSP This widespread availability and use of fertilizers was arguably the industrial revolution’s single most important innovation for feeding the growing population. Today, the fertilizer industry is still recognized as an indispensable com
Slide 29: Public market overview
TSXV: GSP Public market overview Capitalization (C$ millions, except per share amounts) Share Price Performance (52 Weeks) Share Price (as at May 6, 2021) $0.25 $0.30 4,000 Fully Diluted Shares Outstanding (mm) 430 3,500 $0.25 Market Capitalization $107 3,000 Add: Leases 0 $0.20 Share Price (C$) Vol
Slide 30: Scalable, sustainable model delivers enhanced economics as we grow
TSXV: GSP Scalable, sustainable model delivers enhanced economics as we grow The Tugaske Project is the first potash development project of its kind – an efficient and modular potash manufacturing plant. After the Tugaske Project, we intend to develop additional potash projects with new partners, bu
Slide 31: Past milestones
Past milestones TSXV: GSP JUNE MAY JULY FEB AUG OCT MAY OCT DEC JAN FEB MAY AUG MARCH 2016 2017 2018 2019 2020 2021 German Financing Updated NI Tugaske Initial NI 43- Plant Site Joint Design due diligence Société Updated 43-101 Project Area 101 Report Selection Venture Supply underway Générale NI 43
Slide 32: Partnering with Saskatchewan potash experts
Partnering with Saskatchewan potash experts TSXV: GSP Engineering & Design: Engcomp Engineering & Construction: South East Construction (SECON) Computing Professionals Inc. (Engcomp) • South East Construction is part of the SECON Group, which is a multi- discipline construction organization consisti
Slide 33: Technical experts
Technical experts TSXV: GSP Ensuring project success through specialized knowledge & solutions Brent Cherkas, P.Eng, – Project Advisor Max Ramey, P.Eng. – Solution Mining Brent excelled in a number of roles ranging from design engineering through to operations, Solution mining lead for the Potash On
Slide 34: Board of directors
Board of directors TSXV: GSP We strive to be a leader in corporate governance and ethical business conduct by maintaining best practices, transparency and accountability to our stakeholders, shareholders and partners. Our Board of Directors believes that good corporate governance practices are essen
Slide 35: Potash with purpose starts with Gensource
Potash with purpose starts with Gensource TSXV: GSP OUR VISION OUR MISSION OUR VALUES Achieve food security by supplying Create a series of independent, The core priorities for Gensource are the world with a key macronutrient scalable, and environmentally integrity, openness and at an affordable cos
Slide 36: Helping support the UN's sustainable development goals
Helping support the UN’s sustainable development goals TSXV: GSP Our potash is used in Our innovative, modular Vertically integrated We’re reducing our We partner with like- fertilizer to help farmers facilities are sustainable business operations are carbon footprint and minded people who produce b
Slide 37: Unprecedented environmental approval
Unprecedented environmental approval TSXV: GSP ‘NOT A DEVELOPMENT’ FIRST OF ITS KIND NEWS LINKS • The Saskatchewan Ministry of • Tugaske will be the first of its kind Article: The Little Potash Mine That Environment designated the – a potash production facility Could Clear A Key Environmental Tugask
Slide 38: Conventional potash mining vs. the Gensource way
Conventional potash mining vs. the Gensource way TSXV: GSP Conventional Underground Mining Solution Mining Selective Extraction Method • Involves sinking shafts, and using • Involves pumping a fluid into the • Involves injecting a hot NcCl brine people, equipment, and materials underground ore body,
Slide 39: Click to edit Master title style The Saskatchewan Ministry of Environment ruled that Gensource
Click to edit Master title style TSXV: GSP The Saskatchewan Ministry of Environment ruled that Gensource Potash small scale module project development doesn’t need an environmental assessment. – CBC News 2021-06-23 gensourcepotash.ca 39
Slide 40: Click to edit Master title style
Click to edit Master title style TSXV: GSP The essence of strategy is choosing to perform activities differently than rivals do. - Dr. Michael Porter Monte Kali, 300 metre tall salt tailings pile in Heringen, Germany 2021-06-23 gensourcepotash.ca 40