When last we spoke to Mike Ferguson, CEO of Gensource Potash (V.GSP) back in August 2017, the company had just released a full feasibility on its modular approach to potash extraction and sale. The company was taking a radically different approach to potash mining and building modules which will produce a relatively tiny 250,000 tonnes per year. The great advantage of this approach, other than a significantly lower CAPEX, is that the entire production of a module may be bought by a single end user.
Gensource is in the process of securing the financing and off-take agreements for its first module, Vanguard One. However, yesterday, May 22, 2019, Gensource announced that it had entered into a non-binding Memorandum of Understanding to begin the process of bringing its second module to production. This module will be called Maverick.
In the release Ferguson states, “We are extremely pleased to see Maverick advance as quickly and decisively as it has. The fact that Maverick has received formal interest on offtake as well as equity investment as a “bundle” is significant; significant not only because it underscores the commitment to the project by Maverick’s offtaker and the third-party investor, but also because of the accelerating effect it will have on the completion of the senior financing package for Maverick. Further, Gensource is pleased to have formal commitment now for two of its small-scale, efficient and environmentally sustainable projects, a situation that speaks to the validity of the Company’s business model and overall approach to the required change in the potash industry.”
Gensource is trading at less than $0.10. Each module, when completed, will throw off free cash flow more or less immediately.
Worth a look.