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Potash Open House Spurs Interest

An open house event hosted by the Gensource Potash Corporation was held recently in order to update the public on the happenings of a new potash mine project that has been developing near the Lake Diefenbaker region.

An open house event hosted by the Gensource Potash Corporation was held recently in order to update the public on the happenings of a new potash mine project that has been developing near the Lake Diefenbaker region.

On Wednesday night, February 1, well over 100 people packed the community hall in the small village of Tugaske for the informational meeting, located approximately 20 minutes southeast of Elbow.  On hand were a number of representatives from the Saskatoon-based group, including Gensource’s President & CEO, Mike Ferguson, who led the presentation on what the company’s plans are for the Vanguard One project, a 250,000-tonne per year potash mine in the Tugaske & Eyebrow area.

The company’s mission is to create a small scale potash mining facility, one that uses a “vertically-integrated” business model; a strategy that involves swapping massive underground mines and sprawling distribution structures for small-scale extraction operations, which are funded by agreements to sell potash directly to the people and groups that use it.  Essentially, the product is pre-sold through negotiated take-or-pay off-take agreements.

As well, Gensource says their environmentally-friendly mining method known as “selective dissolution” leaves a minimal carbon footprint; it’s a method being used down in the United States and is being brought to the potash industry in Saskatchewan by Gensource.  Instead of massive salt tailings and a large consumption of fresh water, the selective method promises no salt tailings or brine ponds and uses brackish groundwater for mining and processing.

The smaller scale of the entire operation also lends itself to utilizing lower power consumption, as the plant site and structures would fit within a 300 m x 300 m parcel (9 hectares or 22 acres).

Ferguson believes the potash resource in the province is “second to none”, and says Gensource wants to be the company that offers an alternative on a smaller scale to meet the more direct demand.

“Our goal is to become a new and independent producer,” he said.  “We want to be a producing entity and provide a new choice to the market scale.”

The company’s goal is to keep things small and scalable, which means the dollar figure to start the Vanguard One project rolling is more attainable, or at least that’s the hope.  As opposed to a typical mining operation, which might require in the neighborhood of approximately $4 billion, Gensource’s project costs amount to $250 million, being raised by pre-selling their potash product.  As well, they also signed an agreement with Yancoal Canada Resources Co. Ltd., a Chinese company that will be buying 250,000 tonnes of product per year for a term of five years.

Gensource essentially reduces the risk of not being able to sell volume by pre-selling the product at the cap of 250,000 tonnes.

Ferguson recognizes that their low numbers don’t put the company in contention with the potash industry’s bigger players, but that actually may give them an advantage in the burgeoning marketplace.

“250,000 tonnes out of the 60 million that’s out there is just a blip, but it’s a *new* amount for a specific market,” he said.  “The markets we want to get into are not being well-served, and we want to be that alternative to them.”

Those in attendance at the open house in Tugaske were provided with information packets and business cards, and they also spoke with Gensource reps on any concerns or questions they had.  During Ferguson’s presentation, a few questions came up surrounding the specifics on the selective dissolution technique, as well as what kind of testing would be done prior to the start of any construction.

People leaving the hall after the event’s conclusion seemed to be interested in seeing the facility come together, particularly if it results in any positive economic impact for the area.

Right now, the project is in the midst of a feasibility study, which could be done sometime in April or possibly May.  Gensource is also set to submit its environmental assessment report, and water well testing is scheduled to be taking place soon, as well as surveyors visiting the area.  Environmental assessors will also be in the region to characterize what the wildlife and vegetation is to determine the impact on local lands.

The potash product will be going out by rail, with a CP line being present in Tugaske.  It’s said that around 45 full-time operational staff are being planned for the facility.

If all the right pieces come together to form the company’s big picture vision, Gensource hopes to begin the initial site prep and construction this year, and begin commissioning in 2018, with a first production target date of early 2019.

With its innovative mining methods that lessen the carbon impact and a goal of being an ‘alternative’ in the marketplace, Ferguson believes Gensource is in a great position to become a 21st century leader in the provincial potash sector.

“This is the beginning of a change as we see it, that the old way of doing things is starting to change,” he was quoted last fall.  “And we see ourselves as the leading edge of that change.”