Vanguard Area Projects

The Property

  • 100% owned Vanguard property in central Saskatchewan.
  • Comprises of two subsurface mineral leases, KL 244 and KL 245, surrounding the villages of Tugaske and Eyebrow
  • Two cored exploration wells completed in 2012, plus two additional cored wells completed early 2017
  • Over 100 km of 2D Seismic
  • 3D seismic program covering over 34 km2 within KL 245
  • Close proximity to essential utilities and services (rail, road, gas, etc.)
  • 170km South of Saskatoon, 150km North-West of Regina (Saskatchewan’s two largest cities) on provincial highway system
  • Mostly agricultural land, cultivated, with few environmentally sensitive areas
  • Strong local, community, and provincial support

Concept (Key Differentiators)

  • Small scale production facility with a target production rate of 250,000 tonnes per annum (t/a)
  • Solution mining using a proprietary selective mining technique, allowing for selective dissolution with enhanced crystallization recovery
  • Environmental impact will be minimal compared to typical potash mines, due to the lack of brine ponds and no salt tailings on surface.
  • No freshwater or surface water required for mining – lower quality brackish ground water is sufficient.  Processing and other water will be sourced from other ground water sources.
  • Facility is scalable, and several plant site “modules” can be constructed in a small area
  • Potash production is “pre-sold” under Gensource’s vertical integration business model.
  • Direct-ship transportation to pre-identified end user, either in bulk or bulk-in-container, via rail to tidewater (East or West), ocean freight
  • Lightning fast project development timelines as compared to traditional potash projects; Gensource can move a module from concept to production in less than 3 years

Gensource Small-Scale, Selective Solution Mining “Module”

Gensource is NOT a traditional/conventional Potash Mine. A Gensource module has the following advantages over other types of potash mines.

A Gensource module is: Small

  • Each module is an independent unit, economic on it’s own, and is designed to produce 250,000 tonnes per year of salable potash (this is approximately 1/10th of the annual production of a typical potash mine in Saskatchewan)
  • A module is “right-sized” for rural Saskatchewan: Smaller consumption of utilities, and lower impact on community infrastructure
  • Entire site footprint is only a few hundred metres across and can fit on just over 20 acres

A Gensource module is: Scalable

  • Layout can accommodate doubling of capacity, without a footprint increase
  • Existing layout can accommodate 2 weeks of production storage in shipping containers, and a second 250,000 t/a module if desired (bringing total annual production to 500,000 t/a)
  • Alternatively, the process can be scaled-up, and one larger 500,000 t/a module can be constructed
  • In either scenario, the overall CAPEX $/tonne and OPEX $/tonne are decreased; making for even better economics

A Gensource module is: Repeatable

  • Gensource’s Vanguard Area can support several projects or modules (i.e. Vanguard One, Two, Three, Etc.). As such, Gensource is advancing the development of several vertically integrated, small-scale, potash production “modules” in its “Vanguard Area”
  • Each module can be an independent Joint Venture (JV), or a JV may decide to own multiple modules
  • Gensource will have an equity stake in ALL JV’s, and will operate these modules
  • Multiple modules allow for operating synergies

A Gensource module is: Clean

A Gensource project will have a small footprint, due to:

  • No salt tailings or brine structures (i.e. ponds) on surface
  • Brackish groundwater compatible for mining
  • Self-generating power (Natural Gas Boiler/Steam Turbine Generator – cleaner than purchasing grid power, which is primarily coal-fired (net GHG reduction)
  • Layout can accommodate doubling of capacity, without a footprint increase
  • “Right-sized” for rural Saskatchewan
  • Smaller consumption of utilities, and lower impact on community infrastructure

Gensource’s Vanguard One Project has achieved a significant environmental assessment milestone, receiving a Ministerial Determination from the Saskatchewan Ministry of Environment of “not a development”.  This is the first potash project to ever receive this positive assessment, which means that:

  • Gensource is not required to complete a full Environmental Impact Assessment (EIA), since it has been recognized that the Project has a number of positive environmental attributes
  • the Project will not trigger the stringent criteria of the Saskatchewan Environmental Assessment Act
  • the Project is unlikely to have a significant impact on the environment
  • this notification officially confirms that the Project can now proceed to the next stage of the environmental regulatory process: detailed construction licensing

A Ministerial Determination of “not a development” is a fantastic outcome for Gensource and our Vanguard One project and is exactly what the team was working towards.  It not only confirms one of our core values as a company – to provide a cleaner source of potash production – but it is also a crucial element to our Project success, as it enables a much faster,  more efficient and cost-effective overall project development timeline.

Source: Google Earth, modified by Gensource

These features are all enabled by Gensource’s innovative selective solution mining and enhanced potash process & recovery technique.

Vanguard One Project

The Vanguard One Project (the Project), is the first module to be developed by Gensource in the Vanguard Area.

Work to date:

  • Completion of an NI43-101 Technical Report on Inferred Mineral Resource & Exploration Targets – April 2016 (View)
  • Publishing of a Preliminary Economic Assessment (PEA) – July 2016 (View)
  • Completion of two-well potash exploration & coring program – January 2017 (View)
  • Completion of an NI43-101 Technical Report on the Updated Resource – February 2017 (View)
  • Completion of 3D Seismic Program, covering approximately 35km2 of KL245 – March 2017 (View)
  • Completion of a full bankable Feasibility Study for the Vanguard One Project – May 2017 (View)
  • Completion of an NI43-101 Technical Report, Summarizing the Feasibility Study – July 2017 (View)
  • Re-filing of NI 43-101 Technical Report – February 2018 (View)
  • Environmental Assessment Milestone Achieved – August 2018 (View)

Vanguard One Feasibility Study Highlights:

Gensource completed the Vanguard One Feasibility Study, and announced the following highlights, in a news release. This was followed by a NI 43-101 Resource Report, complete with Mineral Reserves in the Proven and Probable categories.

Based on the guidelines established in the NI43-101 Technical Report the Vanguard Area has:

  • 9.79 million tonnes (Mt) of final potash product classified as Proven & Probable Reserves
  • 157 million tonnes (Mt) of final potash product in the Indicated & Measured Resource category
  • Over 313 million tonnes (Mt) of final potash product in the Inferred Resource category
  • All values final product potash (KCl), Muriate of Potash (MOP), Standard Grade, 60% K2O, White
  • All values are based on a base case of mining only one sub-member of the Patience Lake potash member, the Patience Lake 1 (PLM1)
  • The PLM1 averages 3.9m thick and 43% KCl grade across the Vanguard One area

The completion of the Feasibility Study and results obtained have confirmed:

  • The technical and economic viability of the Vanguard One Project, even in this time of low potash prices
  • The mining and processing methods continue to affirm that Gensource has selected the right approach to potash production
  • The Vanguard One Project offers a world-class potash resource, which is amenable to selective solution mining techniques
  • Even with the conservative assumptions included in the Study, the Project economics yield a strong return on investment, all while setting a new bar for environmental responsibility in the development of new potash production
  • The Project represents an innovative and relatively low risk approach to begin to change the existing structure of the global potash industry

Financial and economic highlights include:
  • CAPEX = $CAD 279M including contingency (~$US 210M)
  • OPEX = $CAD 53.23/t final product ($US 39.54/t)
  • Average annual sustaining capital of $CAD 3.29 million ($US 2.91 million) or $CAD 15.68/t ($US 11.65/t) per year, includes full cavern replacement every 14 years
  • At a potash price of US$ 300/t and 45-year economic model:
    • Pre-tax NPV@8% of US$ 329 M with 18.3% IRR
    • Post-tax NPV@8% of US$ 236 M with 16.3% IRR

Next Steps:

  • Confirming construction financing and moving the project to the next phase of development
  • Initiate detailed engineering
  • Initiate procurement for key long-lead items
  • Obtain construction licenses/permits
  • Initiate cavern drilling
  • Mobilize contractor for first construction activities (i.e. site civil and earthworks)