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Building the next Saskatchewan potash giant
- 1. INDUSTRIAL MINERALS & METALRESOURCES INVESTMENT FORUM Alan Cruickshank – CEO, Gensource IRONMONGERS’ HALL, CITY OF LONDON TUESDAY, 6 NOV 2012 www.ObjectiveCapitalConferences.com
- 2. Investing in ResourceDevelopment Investing in Saskatchewan
- 3. DISCLAIMER This presentation containscertain forward-looking statements relating, but not limited, to Gensource’s expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “intent”, “estimate”, “may” and “will” or similar words suggesting future outcomes or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information may include reserve and resource estimates, estimates of future production, costs of capital projects and timing of commencement of operations, and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish estimated resources and reserves, the recovery of resources varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from expected results. Shareholders and prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Shareholders are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Gensource undertakes no obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law. This caution is provided in accordance with the requirements of Parts 4A and 4B of National Instrument 51-102 Continuous Disclosure Obligations, respecting disclosure of forward looking information. 14
- 4. Gensource Capital Corporation Shares outstanding – 100 million Fully Diluted 127 million Directors/Management and closely held – 30% Cash on hand - $3 million Market Capitalization - $7 million
- 5. Feed the plantsthat feed the world A wholly owned subsidiary of Gensource Capital Corporation
- 6. Highlights – WhyGensource Potash? 1. Best Location - Saskatchewan is the world leader in Potash supply- massive deposits, low mining cost, stable Government 2. Growing demand – Major Potash consumers can acquire operations to hedge long term food production costs at less than 50% of wholesale 3. Strategic Land Position – select land package where next mine will be located 4. World Class Experienced Production Team - Steve Halabura – PGeo (Hons)– Geological – 30 years experience - Mike Ferguson PEng. Technical – 30 years experience - Alan Cruickshank CEO/Financial - 25 years experience
- 7. Objective 1. To acquireadditional prospective potash ground where the next potash mine is expected to be put into production 2. To partner with 1 or more Global companies that are capable of putting a potash mine into production 3. To attract strategic investors who want exposure to potash project development in Saskatchewan
- 8. Business Model forGensource Potash Acquire strategic land base Increase valuation with exploration and development Will receive land based mineral royalty on production Contract with large Global partner to develop property into a turn key mineable project For Joint Venture Partner Most cost effective process to production 50 + year mine life in best global potash basin For Gensource Clear project development timeline Substantial Value add
- 9. SASKATCHEWAN – WHERE? LOCATION • Mid-continent • Hot summers, cold winters • Rail to Pacific
- 10. “Wave 1” (1947 – 1955) : Unity (1951) Patience Lake (1959) Esterhazy (1962) “Wave 2” (1959 – 1971) : Belle Plaine (1964) Allan (1968) Lanigan (1968) Cory (1968) Vanscoy (1969) Colonsay (1969) Rocanville (1970) “Wave 3” (2005 – 20??) :
- 11. POTASH STRATIGRAPHY 3 MAINPOTASH – BEARING BEDS UPPERMOST BED IS THE PATIENCE LAKE MEMBER (Main mining zone in west of Sask) MIDDLE BED IS BELLE PLAINE MEMBER (Not mined) Proven Leaders in • Financing LOWERMOST BED IS ESTERHAZY MEMBER • Geology (Main mining zone in • Engineering east of Sask) • Banking INTERVENING BEDS ARE HALITE WITH CLAYS
- 12. MINING LIFE TOTAL RESOURCEREMAINING: 85 billion tonnes YEARS OF MINING @ 30MM TONNES PER YEAR 2,830 Years
- 13. LAND POSITIONS -2005 Proven Leaders in • Financing • Geology • Engineering • Banking
- 14. LAND POSITIONS -2011 Proven Leaders in • Financing • Geology • Engineering • Banking
- 15. CONVENTIONAL POTASH MINING •Long room and pillar or chevron mining methods • Mined with automated continuous miners (~650t/h) • Ore conveyed to load-out and hoisted up shafts for processing • ROCK MECHANICS CRUCIAL as natural support is provided by ore “in-place” pillars (40% mined & 60% left in place) • Thermal gradient at 1000m is ~27oC. • In summary an UNDERGROUND CITY
- 16. SOLUTION POTASH MINING •Mined by DISSOLVING ORE using heated brine o and in-situ temperature (>40 C in the cavern.) •A solution of KCl and halite pumped to surface •Cylindrical shape ~50m wide and ~40m tall •Thermal Gradient at 1600m is ~42oC. •In summary a HEAT and CHEMICAL ENGINE
- 17. YIELD Each square mile (mi2) = 5 to 7 MMt K2O (Slide courtesy of Potash One Inc.)
- 18. FATAL FLAWS TOMINING • Fatal Flaw 1: The nature of the potash deposit itself (grade, mineralogy, and deposition); • Fatal Flaw 2: Post-depositional alteration (dissolution, recrystallization, and reworking); • Fatal Flaw 3: Mining integrity (depth, temperature, rock mechanics, and hydrology); and • Fatal Flaw 4: Technology (mining and processing).
- 19. Keys to aSuccessful Potash Development Market Access The potash market is dominated by few major players New players want access to long term secure supply Financial Resources Cost of mining operations substantial Long term high quality production profile Technical Know How Requires team with direct project experience Requires local knowledge of where to mine Requires financial resources
- 20. President/ CEO GensourcePotash Project Management – Mine Engineer Mr. Michael Ferguson PEng. President/ CEO Gensource Potash mike@gensource.ca
- 21. Chairman Gensource Potash Geologyand GeoTechnical Stephen Halabura P.Geo. F.E.C. (Hon.) Chairman GensourcePotash steveh@gensource.ca Steve is a geologist and resource entrepreneur, since 1984. He began his potash career in 1989 by consulting to Saskatchewan producers in the field of mining operations and brine inflows. During this period Steve undertook some 80 separate evaluations and studies. In 2005 Steve undertook the initial geological work for Anglo Potash (now the BHP Billiton Jansen, Boulder, & Young projects). He was also co-founder of Invictus Minerals Corp. the private corporation that became the basis for Potash One’s (now K+S) “Legacy” solution mining project. Steve also has consulted to various other potash projects including Athabasca “Burrr” (now BHPB), Agrium’s “Triton”, Karnalyte’s “Wynyard”, and Alllana’s (danakhil (Ethiopia).
- 22. President /CEO –Gensource Capital Management and Finance Alan Cruickshank President and CEO Gensource Capital Corporation alan@gensource.ca Alan Cruickshank has been in the investment capital business for more than 25 years as an Investment Advisor, Branch Manager, and senior executive, with a national investment firm(s). During his career of building companies and agencies he has served as the President and CEO of many companies, usually early stage. He has been instrumental in providing leadership, vision and especially financing. He was responsible for the structuring and all the private capital pre-IPO for Athabasca Potash Corp. In addition early 2006 he financed Anglo Potash Ltd. Both companies were very successful as they purchased by BHP Billiton for a combined total of over $750 million and created well over $200 million new net worth for his clients many of which are from Saskatchewan. Since 1999, Alan has acted as agent for transactions topping $200 million, completing a number of initial public offerings. He has a number of industry designations and has been active in the industry, not only serving on the Investment Dealers Association district council but as an inaugural director of the Investment Industry Association of Canada.
- 23. Board of Directors- Gensource Capital Corporation Norman Brewster – Chairman - Has put mines into production - Former Chairman of Iberian Minerals Conor Bill – Director - President/CEO Artemis Funds Michael Newman - Director - Over 30 years experience in numerous public companies Stephen Halabura – PGeo Alan Cruickshank – President and CEO
- 24. Contact Alan Cruickshank President and CEO Gensource Capital Corporation Suite 1120 201 1st Ave S. Saskatoon, Saskatchewan alan@gensource.ca 306-974-6406 www.gensource.ca