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Gensource Potash Corp V.GSP

Alternate Symbol(s):  AGCCF

Gensource Potash Corporation is a Canada-based fertilizer development company. The Company is focused on developing resource opportunities with a specific focus on potash development. The Company operates under a business plan that has two key components: vertical integration with the market to ensure that all production capacity built is directed, and pre-sold, to a specific market, eliminating market-side risk; and technical innovation, which allows for a modular and economic potash production facility, which demonstrates environmental leadership within the industry, producing no salt tailings, therefore eliminating decommissioning. Its projects include Tugaske Project, Vanguard Area and Lazlo Area. The Vanguard Area is 100% owned in central Saskatchewan, located 170 kilometers (km) South of Saskatoon, 150 km North-West of Regina on a provincial highway system. The Lazlo Area is located in central Saskatchewan.


TSXV:GSP - Post by User

Comment by bobbythebakeron Jun 29, 2024 8:53am
146 Views
Post# 36111927

RE:RE:Straight From The Horse's Mouth

RE:RE:Straight From The Horse's MouthHey, Stockwatcher.  I know you've been following this company as long as I have (since 2016) don't begrudge you, or anyone else, having given up somewhere along the way.

But, as it turns out, GSP's team never has.  Year in and and year out, they have kept sloughing ahead.  In the over the past three years, much of that sloughing has been funded by almost $3mm in loans from management's own pocket, a good chunk of it being non-convertible and paying zero interest.  In doing so, GSP has managed to only increase the share count from 414mm to 449mm shares over the past 3 years.  A mere 9% dilution for 3 years of operating costs.  Absolutely heroic for shareholders and unheard for a mine developer with little cash.

Now you can argue management's actions are not entirely altruistic, as they have been purchasers of GSP shares through options exercises and open market purchases through the years, along with around 25mm options still viable.  But I believe that is how good managements should align their own interests with shareholders.

As for how much dilution a potential financing might incur, I don't have much insight on actual numbers.  But from what we have seen in past proposed ownership structures, the lion's share of the funding would come from debt, and deals have always looked to be very accretive to shareholders, sometimes with equity being raised in a JV (ie KClean), sometimes at the parent (GSP).  When Mike says the deal will be accretive to all shareholders, I wonder if this implies the deal will be a hybrid of funding on both levels.  But based on their track record, I believe GSP will do whatever optimizes the upside for shareholders.  Not to mention anyone taking an equity stake would want the deal to be nicely accretive as well.

i would be remiss if I did not also point out the mention that this financing deal is setting up a structure for not only the Tugaske Project but also "other unrelated projects throughout the world".  This was a pleasant surprise to me, as it seems to imply the ball may be getting moved forward on multiple fronts.  United Nations sustainable development goals have been mentioned frequently lately, and I wonder if currently contemplated partners may have a mission / funding / tax benefit based on them.  Regardless, the idea of scalability would be very attractive to investors and would work in the opposite direction of the dilution you fear.
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