Gensource Hits Major Milestone – Initiation of Senior Debt Financing

Gensource Potash Corporation announced today that it has reached a significant milestone in the financing of its initial Project (the “Project”). As previously disclosed in a news release dated May 22, 2019, the Project is one of Gensource’ small-scale potash production facilities within its wholly owned Vanguard Area, defined by mineral leases KL-244 and KL-245.

Gensource is pleased to report that it has received Letters of Intent from KfW IPEX-Bank of Germany and Export Development Canada (“EDC”) Both parties are currently evaluating how they can support the project by providing senior debt. Gensource is also in discussions with a major global bank that may be engaged to round out the club.

KfW IPEX-Bank is planning to assume a role as the arranger of the senior debt financing and will work with EDC and other senior lenders to conduct customary due diligence and possibly utilize official export promotion schemes as credit enhancement.

KfW IPEX-Bank is an affiliate of KfW Bank Group. It is responsible for over € 66 billion in assets, completed € 17.7 billion in new financings in 2018 and is AA+ rated. It is in charge of international project and export finance within the larger KfW Bank Group. For more than 60 years, KfW IPEX-Bank has been providing medium to long term financing solutions as its core product supporting German and European exporters and investors. It has in-depth resource industry experience and supports economically viable businesses and projects – specifically, environmentally responsible projects.

EDC, the second major participant in the senior debt financing club pending successful completion of its due diligence process, is a highly regarded institution on the global stage, with significant project and structured finance expertise in resource development projects worldwide.

As is customary, final, definitive, terms have not yet been agreed upon and the financing remains conditional upon the successful completion of the detailed due diligence process.

Mike Ferguson, President & CEO of Gensource, commented “We are excited to have reached this important milestone that our shareholders have been anticipating. As anyone who has been involved in bringing a major project to completion knows, there are a series of critical hurdles or milestones that must be attained. Obtaining debt financing – an indication by third party capital providers that the project is not only viable, but also attractive – is among the most important. We are gratified to have attracted major, globally-recognized and experienced lenders to the Gensource team for this project.

“Together with KfW IPEX-Bank and EDC, both world-class institutions in the resource industry, we now want to take the next steps. Today’s announcement, together with the May 22nd news release announcing the creation of the Project through commitments from the off-taker and a third-party equity investor, makes it plain that the Project is on a clear path to financing. The selected institutions bring extensive experience in structured mining finance in Canada and internationally. Their support gives us strong confidence in our ability to advance the Project to a successful financing and confirms the attractiveness of Gensource’ small-scale, modular approach to potash mining.”

On completion of the outstanding due diligence process, an agreed term sheet will be submitted for senior lender’s formal credit approval. Following this, Gensource and the Senior Lenders will prepare and execute definitive facility and security documentation.

Gensource is working with Roc Global LLC of New York as its exclusive financial advisor.

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