Gensource Potash Corp., a Saskatchewan-based fertilizer development company, received commitment letters from its two mandated joint lead debt arrangers, KfW IPEX-Bank and Societe Generale. They will provide a senior secured debt facility for a total of up to $C280 million (US$221 million) to fund the construction and ramp up of the Tugaske potash development project.

“We are delighted to achieve yet another significant milestone toward making Tugaske the first potash project of its kind: efficient, scalable and sustainable,” Gensource Potash President and CEO Mike Ferguson said. “Designed purposefully to be different from a conventional potash mine, Tugaske will use innovative, sustainable production methods that are environmentally sound and socially responsible.

“It will have a decreased physical footprint, resulting in less impact on air, water, and land with no salt tailings or brine ponds. We envision Tugaske to be the new standard for potash production.”

The debt facility is divided into two $C140 million tranches. The first tranche will be used for key equipment purchases and service provider contracts with German suppliers. The second tranche will fund the remaining capital spend as identified in the detailed capital cost estimate.

Located in south-central Saskatchewan, the Tugaske project will employ selective solution mining and processing methods. The absence of tailings eliminates decommissioning risks, while eliminating brine ponds removes the single-largest negative environmental impact associated with conventional potash mining. Additionally, power at Tugaske would be self-generated using natural gas rather than drawing from the region’s electrical grid.