Gensource Potash Corp. entered into a nonbinding memorandum of understanding with a North American agricultural industry player for a potential off-take agreement, with a definitive agreement anticipated by the end of April.

The MOU covers the purchase of 100% of the 250,000 tonnes per year of potash expected to be produced from Gensource's Vanguard operations in central Saskatchewan.

The preliminary agreement includes an industry-standard pricing structure for the delivery of product to the U.S. market, with the off-taker to use its existing transportation and logistical infrastructure to move product to market.

Gensource plans to concurrently work on securing a financing package to support the construction of the project. The company aims to start construction later this year, with initial production anticipated within 18 to 22 months.

A mid-2017 feasibility study on Vanguard defined construction costs of C$279 million, with sustaining CapEx expected to average C$3.3 million per year.