SASKATOON, Sept. 19, 2016 /CNW/ - Further to its news
releases dated July 18, and
August 29, 2016, Gensource Potash
Corporation ("Gensource" or the "Company")(TSX.V:
GSP) announces today it has completed tranche one of the up to
$4 million private placement
financing (the "Offering"). The Offering consisted of the
sale of 16,825,558 units of the Company (the "Units") at a
price of $0.09 per Unit and
13,592,731 flow-through shares (the "Flow-Through Shares",
and together with the Units, the "Offered Securities") at a
price of $0.11 per Flow-Through
Share, for aggregate gross proceeds of $3,009,500. Each Unit consisted of one common
share in the capital stock of the Company and one common share
purchase warrant ("Warrant"). Each Warrant is exercisable at
a price of $0.15 per share beginning
on the date that is 12 months following the closing date of the
Offering (the "Closing Date") and expiring on the date that
is 24 months following the Closing Date. The Flow-Through Shares
are "flow-through shares" as defined in subsection 66(15) of the
Income Tax Act (Canada)
(the "Tax Act"). Tranche two of the Offering is expected to
close on or about the week of October 12,
2016.
The Offering was completed by Industrial Alliance Securities
Inc. (the "Agent"). A cash commission of $222,998 was paid to the Agent, including the
issuance to the Agent (and members of the Agent's selling group)
of: (i) 991,055 agent's options exercisable into common shares of
the Company at $0.11 per agent's
option for a period of 24 months following the Closing Date; and
(ii) 1,266,467 agent's units exercisable into Units at a price of
$0.09 per agent's unit for a period
of 24 months following the Closing Date.
As part of the Offering, certain directors and officers of
Gensource (the "Insiders") purchased an aggregate of
1,666,667 Units and 454,546 Flow-Through Shares. Participation by
the Insiders in the Offering was considered a "related party
transaction" pursuant to Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special
Transactions ("MI 61-101"). Gensource was exempt from
the requirements to obtain a formal valuation or minority
shareholder approval in connection with the Insiders' participation
in the Offering in reliance of sections 5.5(b) and 5.7(a) of MI
61-101. The Company was not in a position to file a material change
report more than 21 days in advance of the closing of the Offering
as the details of participation by the Insiders was not known at
such time.
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" within the meaning of the Tax Act related to the
Company's projects in Saskatchewan.
The securities issued pursuant to the Offering are subject to a
four month and one day statutory hold period.
Mike Ferguson, President &
CEO of Gensource, commented: "We are very pleased to be closing the
first tranche of the private placement. The financial markets
remain tough, particularly for potash companies. In spite of that,
our unique business plan and technical capabilities have garnered
the interest of the investment community. We look forward to
completing the second tranche of the financing in the coming weeks.
The proceeds raised in first tranche will support planned drilling
and seismic work in the Vanguard area and will allow us to kick off
the feasibility study for our first small scale, efficient potash
production facility."
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.
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 second tranche 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 second
tranche 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