Gensource Potash Corp. · TSXV:GSP
Gensource Potash — Investor Presentation (April 2017)
30 slides from Gensource Potash's investor presentation, Apr 26, 2017
Slide 1: Gensource Potash Corp. Presentation, April 26, 2017
www.gensource.ca (TSX.V: GSP) April 26, 2017
Slide 2: Disclaimer
Disclaimer This presentation does not constitute and offer to sell, or the solicitation for the offer to buy, the securities of Gensource. The scientific and technical information contained in this presentation has been reviewed and approved by Mike Ferguson, P.Eng., who is the President and Chief E
Slide 3: How do you make $$ in Potash?
How do you make $$ in Potash? Disrupt the highly controlled potash market Vertical Integration Technical Innovation Small & Scalable • Economic small scale • Creating an integrated • Selective dissolution using extraction operations business model with key directional drilling and (250,000 t/a) are
Slide 4: Why Nutrients? Why Potash?
Why Nutrients? Why Potash? Farmers face continued margin compression and have zero potash supply choice Index of Crop price divided by potash price Source: World Bank data statistics, IMF International Fin. Stats., Gensource Potash www.gensource.ca (TSX.V: GSP) 4
Slide 5: What are we solving?
What are we solving? Users seek additional potash sources to reduce dependency from the few large group of suppliers Choice: ▪ Provides a dedicated supply to consumers from a new and independent producer direct from the mine gate Cheaper: ▪ Direct-to-consumer sales result in significant savings by a
Slide 6: Vertical Integration – Why Now?
Vertical Integration – Why Now? Vertical integration was impossible due to high barriers of entry. New extraction methods have changed that. End-user Benefits - improved pricing coupled with improved Direct-ship to end-users access to potash fertilizer Small & scalable potash facility (250,000 t/a)
Slide 7: Market Opportunity
Market Opportunity How do you be vertically integrated in an industry that lives as an Oligopoly? 1. Start with a senior team of industry leading experts in cavern design, potash processing and project management 2. Assemble a massive resource. Gensource has three (3) project areas with +100,000 acr
Slide 8: 1) Technical Team
The recipe 1) Technical Team These individuals, together with Mike Ferguson, comprised the core Potash One team responsible for the project’s success Max Ramey, P. Eng. - Solution Mining Solution mining lead for the Potash One - Legacy Project (as well as the Rio Tinto - Potasio Rio Colorado Project
Slide 9: Management & Board Strength
The recipe Management & Board Strength Experienced Leadership - Management Mike Ferguson, P. Eng. - President & CEO Led the world-class team that developed Potash One’s Legacy Project, the only Saskatchewan greenfield potash development in 40 yrs to proceed to construction. Sold to K+S for $434 mill
Slide 10: 2) Assemble Resource - Vanguard Project
The recipe 2) Assemble Resource - Vanguard Project • Vanguard project situated outside Craik South Central Saskatchewan along Provincial Highway 11 between Saskatoon (140 km) and Regina (120 km) • Central to infrastructure including roads, rail, water, and power • Strong local and provincial support
Slide 11: 3) First JV - Vanguard Potash Corp.
The recipe 3) First JV - Vanguard Potash Corp. Key Joint Venture Terms ▪ EGME to contribute capital to Vanguard Potash Corp. (“VPC”): (i) First tranche of $US 5M will be used to fund the feasibility study (ii) Second tranche of $US 200M, representing 100% of the Essel Group (Middle East) Limited est
Slide 12: 4) The enabler - Selective Dissolution
The recipe 4) The enabler - Selective Dissolution Cost effective and efficient recovery method Step 1 • Horizontal drilling techniques create horizontal Selective Dissolution caverns Step 2 • Brackish formation water is used is made into an extraction brine by saturating it in NaCl (salt) Step 3 • T
Slide 13: Simple Mining Schematic
Simple Mining Schematic Conceptual Horizontal Well Pattern Conceptual Horizontal Cavern for Selective Dissolution www.gensource.ca (TSX.V: GSP) 13
Slide 14: Vanguard Plant Design
Vanguard Plant Design Advancing the engineering and design for the first module to be constructed in the Vanguard Area - Simple and Repeatable www.gensource.ca (TSX.V: GSP) 14
Slide 15: Environmental Problem with Existing Technology
Environmental Problem with Existing Technology Gensource is NOT a Conventional Potash Mine Gensource facility - 300 Meters by 300 Meters Conventional = HUGE environmental footprint • Massive salt tailings stored on surface for indefinite period • Large fresh water consumption • Large demand on utili
Slide 16: The result - Vanguard PEA Results
The result -Vanguard PEA Results Compelling Project NPV and IRR Project capacity: 250,000 t/a final product, standard Pre Sask. Profit Post Sask. Profit grade Indicator Tax Tax Mine life: >100 years, 64 Mt of inferred NPV8 $322,594,953 $212,671,723 resource (NI 43-101Resource IRR 19.55% 16.86% Estim
Slide 17: Comparative Project Economics
Comparative Project Economics Vanguard’s cash costs are the lowest in North America and on par with Russia Source: BMO Capital Market Sept 2016, Gensource Potash www.gensource.ca (TSX.V: GSP) Gensource PEA 2016 There is no certainty that the reserves development, 17 production, and economic forecast
Slide 18: Comparative Mining Methods
Comparative Mining Methods Conventional Conventional Solution Selective Dissolution Mining (Vanguard) Min. viable production 2.5+ Mt/a 2.0 Mt/a 250 kt/a rate Capex per tonne ($US) $1,990 * $1,620 * $761 ** Operating costs ($US) $80 /t * $118/t * 40.3/t** Development Time 7-10 years 6-8 years 3 years
Slide 19: 5) Repeat – Current financing details
5) Repeat – Current financing details Proposed offering to launch second project area (Vanguard #2) Offering: $2,000,000 in Common Shares and $4,000,000 in Flow-Through Shares Over-allotment option will be granted to the Agent entitling the Agent to call upon the Corporation to issue up to an additi
Slide 20: Development Timelines
Development Timelines Proposed production horizon less than 3 years 2016 2017 2018 2019 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 PEA / Scoping Study Completed Market Partner JV Vanguard Potash Corp. Announced Exploration Drilling Completed NI 43-101 Resource Update Completed 3D Seismic Completed Feasibil
Slide 21: Share Structure
Share Structure As of April 26, 2017 GSP-V Stock Price Market Capitalization $49.3 Million Recent Share Price $0.175 52 Week Range $0.06 - $0.24 Basic Shares Outstanding 281.9 M Options 15.8 M Warrants 63.8 M Cash Position $600 K Debt $0 Management, Directors & ~38% Business Associates www.gensource
Slide 22: Contact
Contact Mike Ferguson, P.Eng. Rob Theoret, B.Comm., CIM President & CEO CFO mike@gensource.ca rob@gensource.ca 306-974-6414 306-974-6406 Gensource Potash Corp. Suite 1100, 201 1st Ave. South Saskatoon, Saskatchewan S7K 1J5 www.gensource.ca (TSX.V: GSP) 22
Slide 23: Drilling & Geology
Drilling & Geology Technical NI 43-101 Resource Report 145 million tons Indicated – 328 million tons Inferred INDICATED RESOURCE Total Sylvinite Sylvite Tonnage Sylvite Tonnage Sylvite Tonnage Sub- Total KCl Carnallite Insolube Average Member Sylvinite Tonnage with (KCl), 30% (KCl), 40% (KCl), 50% M
Slide 24: Drilling & Geology
Drilling & Geology Well #2 Well #1 (Drilled 1-18 (Drilled Resource is early (Drilled late thick, rich and 2017) 2012) 2016) Average Grade consistent Patience Lake (wt% KCl) 36.9 34.2 33.9 Member Thickness (meters) 12.7 11.1 14.4 Average Grade Belle Plaine (wt% KCl) 34.6 33.8 35.7 Member Thickness (m
Slide 25: Management & Board Strength
The recipe Management & Board Strength Experienced Leadership - Directors Mike Ferguson, P. Eng. - President & CEO Led the world-class team that developed Potash One’s Legacy Project, the only Saskatchewan greenfield potash development in 40 yrs. to proceed to construction. Sold to K+S for $434 mill
Slide 26: Project Development
Project Development Current Status & Next Steps Initial Exploration PEA Land / Mineral Status FS Initial Resource www.gensource.ca (TSX.V: GSP) 26
Slide 27: Lazlo Project
Lazlo Project • Second project area, total of 123,000 acres and ideal candidate for a selective dissolution operation • Lazlo Project is located in the “Davidson Sub-Basin” region of the Prairie Evaporite underlying central Saskatchewan, with combined thicknesses of about 30m of high-grade, mineable
Slide 28: Lazlo Project
Lazlo Project The resource in the Lazlo area is rich and widespread • Updated NI 43-101 report completed in December 2014 • Defines an “exploration target” complete with ranges of expected resource grades and tonnages www.gensource.ca (TSX.V: GSP) 28
Slide 29: Subscriber Rights
Subscriber Rights The below rights are in addition to and do not derogate from any other right that the purchaser may have at law. Further, the below serves as a summary of the purchaser’s rights as an investor in the event of a misrepresentation. The purchaser should refer to the provisions of the
Slide 30: Subscriber Rights Continued
Subscriber Rights Continued Furthermore, if there is a misrepresentation in any verbal statement made to a purchaser relating to the securities purchased and the verbal statement was made either before or contemporaneously with the purchase of the securities, the purchaser has a statutory right to s
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