SASKATOON, July 18, 2016 /CNW/ - Gensource Potash
Corporation ("Gensource" or the "Company")
(TSX.V: GSP) is pleased to announce that it has engaged
Industrial Alliance Securities Inc. ("IA") as sole agent in
connection with a proposed best efforts marketed private placement
for gross proceeds of up to $4,000,000 (the "Offering"). The Offering
will consist of the sale of up to 27,777,777 common shares in the
capital stock of the Company (the "Common Shares") at a
price of $0.09 per Common Share and
up to 13,636,363 Common Shares issued on a flow-through basis (the
"Flow-Through Shares") at a price of $0.11 per Flow-Through Share. In addition, the
Company has also granted IA an option (the "Agent's
Option"), exercisable up to 48 hours prior to the closing of
the Offering, to cause the Company to issue up to an additional 15%
of the maximum of the Offering in Common Shares and/or Flow-Through
Shares.
The Company intends to use the proceeds from the Offering for
drilling, seismic and engineering related to pre-feasibility work
for the Lazlo Project, and for the Vanguard Project upon completion
of the acquisition with Yancoal Canada Resources Co. Ltd.
("YCR"), as well as for general working capital purposes.
The gross proceeds from the sale of the Flow-Through Share portion
of the Offering will be used to fund "Canadian exploration
expenses" ("CEE") (within the meaning of the Income Tax
Act (Canada) (the "Tax
Act")) related to the Company's projects in Saskatchewan, and the Company will use its
best efforts to ensure that such CEE qualify as a "flow-through
mining expenditure", for purposes of the Tax Act, related to the
exploration of the Company's exploration projects. The Company will
renounce such CEE with an effective date of no later than
December 31, 2016.
The Offering will take place by way of a private placement to
qualified investors in such provinces of Canada as IA may designate, and otherwise in
those jurisdictions where the Offering can lawfully be made. The
securities to be issued pursuant to Offering will be subject to a
statutory fourth month and one day hold period from the Closing
Date (as defined herein).
It is expected that the closing of the Offering will occur on or
about August 25, 2016 (the
"Closing Date") and is subject to the satisfaction of
certain conditions, including receipt of all applicable regulatory
approvals including the approval of the TSX Venture Exchange. In
consideration for their services, IA will receive a cash commission
equal to 8.0% of the gross proceeds of the Offering and
compensation warrants to purchase common shares equal to 8% of the
total number of Common Shares and Flow-Through Shares sold
exercisable for 24 months from the Closing Date at $0.09 per common share, including, in both
instances, any proceeds realized on exercise of the Agent's
Option.
Gensource's President and CEO, Mike
Ferguson commented, "With the second and last payment having
been made in trust for the two leases at Vanguard pursuant to the
terms of the asset purchase agreement with YCR and the off-take
agreement negotiations proceeding well, it is time to accelerate
efforts in anticipation of the acquisition and subsequent
development of Vanguard. This financing will accomplish that and
will take us one step closer to our company goal of becoming a new,
independent potash producer using our up-to-date, efficient and
environmentally friendly mining and processing techniques".
About Gensource
Gensource is based in Saskatoon,
Saskatchewan and is focused on developing the next potash
production facility in that province, using new and more efficient
mining and processing methods and employing a
new-to-the-potash-industry business model that connects the
consumer of potash (agricultural producers) as directly as possible
to the production of the product. Gensource's President and CEO,
Mike Ferguson, P.Eng., has assembled
a management and technical team with direct and specific expertise
and experience in potash development in Saskatchewan.
Gensource operates under a business plan that has two key
components: vertical integration with the market to ensure that all
production capacity built is directed to a specific market,
eliminating market-side risk, and technical innovation which will
allow for a small and economic potash production facility,
the output of which can then be directed to a single, specific
market.
The technical information presented in this new release has been
reviewed and approved by Mike
Ferguson, P.Eng., the President, CEO and a Director of the
Corporation, who is a qualified person according to NI 43-101
requirements.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
INFORMATION
This news release may contain forward looking information and
Gensource cautions readers that forward looking information is
based on certain assumptions and risk factors that could cause
actual results to differ materially from the expectations of
Gensource included in this news release. This news release includes
certain "forward-looking statements", which often, but not always,
can be identified by the use of words such as "believes",
"anticipates", "expects", "estimates", "may", "could", "would",
"will", or "plan". These statements are based on information
currently available to Gensource and Gensource provides no
assurance that actual results will meet management's expectations.
Forward-looking statements include estimates and statements with
respect to Gensource's future plans, objectives or goals, to the
effect that Gensource or management expects a stated condition or
result to occur, including completion of the Offering and the YCR
transaction, the expected timing for release of a resource estimate
and a preliminary economic assessment, as well as a feasibility
study, and the establishment of vertical integration partnerships
and the sourcing of end use potash purchasers. Since
forward-looking statements are based on assumptions and address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results relating to, among
other things, completion of the Offering and the YCR transaction, a
refund of lease conversion costs in the event that the YCR
transaction does not proceed, results of exploration, the economics
of processing methods, project development, reclamation and capital
costs of Gensource's mineral properties, Gensource's financial
condition and prospects, the ability to establish viable vertical
integration partnerships and the sourcing of end use potash
purchasers, could differ materially from those currently
anticipated in such statements for many reasons such as: an
inability to complete the YCR transaction or the Offering on the
terms as announced or at all, including the conditions for
regulatory approval and financing; denial by ministerial
authorities of a refund of lease conversion costs in the event that
the YCR transaction does not proceed; changes in general economic
conditions and conditions in the financial markets; the ability to
find distributors and source off-take agreements; changes in demand
and prices for potash; litigation, legislative, environmental and
other judicial, regulatory, political and competitive developments;
technological and operational difficulties encountered in
connection with Gensource's activities; and other matters discussed
in this news release and in filings made with securities
regulators. This list is not exhaustive of the factors that may
affect any of Gensource's forward-looking statements. These and
other factors should be considered carefully and readers should not
place undue reliance on Gensource's forward-looking statements.
Gensource does not undertake to update any forward-looking
statement that may be made from time to time by Gensource or on its
behalf, except in accordance with applicable securities
laws.
SOURCE Gensource Potash Corp