Gensource Potash, Essel Group to jointly develop small potash mine in Saskatchewan

Canada’s Gensource Potash (CVE:GSP) plans to expand operations in Saskatchewan after partnering with Dubai-based Essel Group Middle East, in a venture aimed at bringing one of the junior miner’s small-scale projects through to production.

The deal, said Gensource, defines a clear path to creating a joint operation, which brings together technical innovation, management expertise, international logistics and capital.

Gensource is also developing another small mine in the area, near Craik, called Vanguard.

Under the terms of the agreement, EGME will be the majority holder of the new venture, with a 70% stake, while Gensource will own the rest of the private corporation.

The agreement is EGME's second significant investment in the potash industry, it said in a separate statement. In August, 2015, the company acquired the exploration license for the Bada potash mine in Eritrea's Danakil Depression.

Gensource is also developing another small mine in the area, near Craik, called Vanguard. That project is expected to produce 250,000 tonnes of potash a year and employ 46 long-term staff.

A detailed feasibility study for that project is underway and expected to be complete by March or April 2017.

The Saskatoon-based firm’s business model revolves around pre-selling its product before it starts to develop a project. As part of that strategy, Gensource inked a deal in April with Yancoal Canada Resources to developed another small mine north-west of Regina.