Premium Potash Project Driven by a Proven Management Team

Transcription

1 Premium Potash Project Driven by a Proven Management Team

2 FORWARD LOOKING STATEMENTS Certain statements in this presentation may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Potash Ridge Corporation (the "Corporation"), or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this presentation, such statements use such words as "may", "would", "could", "will", "intend", "expect", "believe", "plan", "anticipate", "estimate" and other similar terminology. These statements reflect the Corporation's current expectations regarding future events and operating performance and speak only as of the date of this presentation. Forward-looking statements involve significant risks and uncertainties, which include, but are not limited to the factors discussed under A Cautionary Note Regarding Forward Looking Statements and "Risk Factors" in the final prospectus of the Corporation dated November 27, 2012, and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. Although the forward-looking statements contained in this presentation are based upon what management of the Corporation believes are reasonable assumptions, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this presentation and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the Corporation assumes no obligation to update or revise them to reflect new events or circumstances. 2

3 A potash company focused on its Blawn Mountain property in Utah SOP: 680,000 tonnes per annum Bauxite: 3.3 million tonnes per annum 3

4 EXPERIENCED AND PROVEN MANAGEMENT Jeff Hillis CFO Chartered Accountant; 10 years mining sector finance, including CFO of several public mining companies Iberian Minerals, Excellon, Falconbridge Guy Bentinck President & CEO Chartered Accountant; 20 years mining/resource experience Sherritt: CFO and SVP Capital Projects Ross Phillips COO 10 years experience in large resource and energy sector projects Sherritt, Capital Power Laura Nelson VP, Government and Regulatory Affairs Extensive experience in government relations, permitting and power planning, including the successful permitting of the Red Leaf oil shale project Red Leaf Resources, Utah Government Paul Hampton VP, Project Management Geologist and Metallurgical Engineer; ~30 years experience in design, construction, start-up and management of mineral processing facilities SNC, Washington Group, Outotec OVER 80 YEARS COMBINED EXPERIENCE 4

5 COMPETITIVE ADVANTAGES Large mineral deposit containing premium-quality potash Strategically located in a mining friendly jurisdiction with established infrastructure nearby State-owned land allows for an efficient permitting process Historical work expedites project development Lower risk surface mining deposit; expected low-cost producer 30 year mine life, with upside potential PEA completed: $1.3 billion NPV at 10%; 21.3% after tax IRR 5

6 POTASH: ESSENTIAL TO THE WORLD S FOOD SUPPLY No known substitute Increasing world population Growing per capita income Decreasing arable land Increasing use of biofuels ~5% EXPECTED ANNUAL GROWTH IN DEMAND TO

7 SULPHATE OF POTASH (SOP) IS A PREMIUM PRODUCT Sulphate of Potash (SOP) Potassium Sulphate (K 2 SO 4 ) Muriate of Potash (MOP) Potassium Chloride (KCl) 6 million tonnes sold in million tonnes sold in Potassium and sulphur are essential nutrients 2 Crop quality/yield diminish as chloride builds up 2 Improves yield, quality, taste and enhances shelf life 2 AVERAGE 47% PRICE PREMIUM OVER MOP Source: Fertecon 2 Source: CRU 3 Based on historical data

8 USES OF SOP Fruits Vegetables Nuts Horticultural Plants Tobacco Tea Dry soils Salty soil 8

9 SOP PREMIUM PRICE TRENDS 900 U.S. $/tonne SOP 1 MOP HISTORICAL PRICE PREMIUM FOR SOP HAS RANGED BETWEEN 30% AND 61% 9 1 SOP, standard grade cif NW Europe (Source: Fertilizer Week) 2 MOP, all grades, fob Vancouver/Portland (Source: CRU)

10 SOP MARKET CHARACTERISTICS Global SOP Consumption and Commodity Price 1 12,000 $1,000 Africa 4.6% Rest of the World 14.9% Europe 23.3% 10,000 8,000 $900 $800 $700 $600 China 44.3% N. America 8.6% Central and South America 4.3% Tonnes (000s) 6,000 4,000 2, $500 $400 $300 $200 $100 $0 (US$/tonne) Global SOP Consumption Historical Standard FOB NW Europe (US$/tonne SOP) Estimated Standard FOB NW Europe (US$/tonne SOP) 10 1 Source: Fertecon, CRU

11 SOP MARKET DYNAMICS Limited production and premium price has restricted demand SOP share of potash market: Current: ~10% Potential: >28% 1 Trend toward high nutrient fertilizers India Brazil Potential to use SOP in typical cereal crop fertilizer blends instead of ammonium sulphate SOP consumption: China (pop. 1.3 billion): 1.9 million tpy India: (pop. 1.2 billion) 50,000 tpy (<1% of country s potash consumption) SOP consumption = 32,000 tpy (0.4% of total potash consumption) Premium crops grown on 20% of planted land SIGNIFICANT GROWTH POTENTIAL 11 1 Based on crops that are best suited for SOP

12 12 THE BLAWN MOUNTAIN PROJECT

13 PROJECT OVERVIEW Large alunite deposit, which is expected to be processed into SOP, by-product sulphuric acid and bauxite Target 680,000 tonnes per year of SOP by mid-2016 Historical work expedites project development Mineral deposit to be surface mined Proven process ANTICIPATED PRODUCTION BY

14 SOP HOSTED IN ALUNITE Volcanic rock mined for over 500 years Contains alumina (Al 2 O 3 ), potassium (K 2 O), and sulphur (SO 3 ) Historic source of SOP in U.S. and Australia Long-term SOP and alumina production in Azerbaijan 14

15 EXTENSIVE DEVELOPMENT COMPLETED IN 1970 s Drilling Resource estimate Feasibility study Mine plan Engineering Permitting Approx. $25 million spent (~ $100 million in today s dollars) All data owned by Potash Ridge Pilot plant: 3-year operation processing 11 tonnes/day PREVIOUS WORK ACCELERATES PROJECT DEVELOPMENT 15

16 SIMPLE PROVEN FLOWSHEET Alunite Beneficiation Calcination Water Leach SO 2 Acid Plant Sulphuric Acid Potash Sulphate Solution Crystalizer Compaction Drying Potash Sulphate Flowsheet mirrors historical production processes 51% alumina content bauxite Potash Ridge expects the processing plant to produce: 680,000 tonnes of SOP per annum 1.6 million tonnes of concentrated sulphuric acid per annum Residue from water leach process is estimated to be 3.3 million tonnes per annum of 51% alumina content bauxite, suitable for a Bayer Process 16

17 HIGH GRADE BAUXITE BY- PRODUCT Bauxite suitable for a Bayer Process Non- tradi@onal high- grade alumina (51%) resource Low iron concentra@ons compared to a tradi@onal bauxite Avoids the produc@on of bauxite residue red mud waste No iden@fied heavy metals Favorable access to markets via exis@ng rail and port infrastructure Typical bauxite: THA = % (Tri - hydrate Alumina) Total SiO 2 = 7.32% (Total Silica) Quartz = 1.86 % (Form of Silica) Fe2O3 = 5.98 % (Ferrous Oxide <Iron>) TiO2 = 2.43 % (Titanium Oxide) P2O5 = 0.06 % (Phosphorous Pent- oxide) Potash Ridge bauxite: THA = 50.9 % (Tri - hydrate Alumina) Quartz = 20.6 % (Form of Silica) Fe2O3 = 2.58 % (Ferrous Oxide <Iron>) TiO2 = 1.42 % (Titanium Oxide) P2O5 = 0.59 % (Phosphorous Pent- oxide) TOC = 0.19% (Total Organic Carbon) 17

18 UTAH: AN ATTRACTIVE MINING JURISDICTION Major resource producer Existing potash production Best state for business 1 Top quartile mining jurisdiction 2 ALMOST 100 YEARS OF POTASH PRODUCTION 18 1 Forbes Magazine, November, Fraser Institute, February, 2012

19 OUR LAND ADVANTAGE State-owned land Simpler permitting process Leasehold and royalty agreements negotiated No known adverse environmental, social or aboriginal issues Sufficient water nearby rights application made MUNICIPAL AND STATE SUPPORT OF PROJECT 19

20 ESTABLISHED INFRASTRUCTURE NEARBY Roads, rail and natural gas Construction materials and equipment suppliers nearby Skilled labour force Access to ports of Los Angeles and Houston 20

21 HISTORIC DRILLING 320 holes drilled in 1970 s 21

22 NI CONFIRMATION DRILLING Phase 1 Area 1 34 holes (19 core; 15 RC) Phase 2 Area 1 38 holes (12 core; 26 RC) Area 2 50 holes (6 core; 44 RC) Phase 3 Area 1 2 RC holes Area 2 16 RC holes 140 holes following completion of current drilling program 22

23 SIGNIFICANT RESOURCE IDENTIFIED Measured + Indicated Inferred Area Resource tons (000's) Alunite grade SOP tons (000's) SOP SOP Resource SOP tons Alunite grade tons (000's) (000's) grade 1 grade 1 NI Compliant , % 9, % % % , % 26, % 250, % 13, % Total: Areas 1 & 2 620, % 35, % 251, % 13, % Total: Areas 3 & 4 Historic Resources , % % 281, % 4 51, % 3, % 49, % 23,950 3, % 19.5% 63, % 4, % 330, % 27, % Initial Mine Plan for 30 Years using NI Compliant M&I Resources 23 1 Contained within alunite 2 Using 1.00% cut-off grade 3 The historic resources are not NI compliant although reasonable methodologies were applied at the time. A qualified person has not done sufficient work to classify, and the Corporation is not treating the estimates as current mineral resources or mineral reserves.

24 EXPECTED TO BE LOWEST COST SOP PRODUCER Cash Cost by Production Method Avg Cost/Tonne $550 Process Method and Cost Comparisons $101 1 Alunite Leach $162 Polyhalite Leach $300 Salt Lakes $386 MOP/ Sulphate Salts Mannheim Process Process Method World Capacity Process Inputs Products Mannheim 60%! MOP! Sulfuric Acid! Energy MOP and Kieserite 25%! MOP! Kieserite! Energy Salt Lakes 15%! Lake Brines! Energy Polyhalite Leach Alunite Leach! Polyhalite! Water! Energy! Alunite! Energy! SOP! HCI! SOP! Magnesium Chloride! SOP! Magnesium Chloride! NaCI! SOP! Kieserite! SOP! H 2 SO 4! Bauxite substitute Avg Cost / Tonne $550 $386 $300 $162 $101 POTASH RIDGE Expected In Production Includes expected and in-production data 24 1 The cost is converted from $92 per short ton. Excludes sulphuric acid and bauxite credits

25 PRELIMINARY ECONOMIC ANALYSIS RESULTS PROJECT HIGHLIGHTS Annual Production Rates: SOP Sulphuric Acid Initial Mine Plan 1 Capital Cost 2 Cash Cost of Production (before acid credits) 3,4 680,000 tonnes 1.6 million tonnes 30 years $1.075 billion $101 per tonne FINANCIAL HIGHLIGHTS 10% (after tax) 4 $1,331 million Unlevered IRR (after tax) % 25 1 Future planned work may expand resource base and extend life of project beyond 30 years 2 Excludes third party costs: power generation ($160 million), sulphuric acid plant ($180 million) and water treatment plant ($40 million) 3 The cost is converted from $92 per short ton 4 Excludes potential credits related to sale of 3.3 million tonnes per annum of bauxite

26 SOP CAPITAL COST BREAKDOWN 1 41% Con@ngency and Indirects 24% SOP Leaching, Crystalliza@on and Drying 18% Calcina@on CAPITAL COST: $1.075 billion 17% Beneficia@on 1 Excludes third party costs: power generation ($160 million), sulphuric acid plant ($180 million) and water treatment plant ($40 million) 26

27 OPERATING COSTS: $101/TONNE 1 7% 14% Royal@es 7% Other 79% 12% Powerhouse 11% Materials & Consumables 4% SOP Leaching, Crystalliza@on and Drying 25% Calcina@on 79% Direct Plant and Mine Produc@on Costs 14% Con@ngency and Other 14% Beneficia@on 20% Labor and Benefits 1 Excludes sulphuric acid and bauxite credits 27

28 CAPITAL STRUCTURE Millions ($) Common Shares 81.3 Non-voting Common Shares 5.0 Total Shares Outstanding 86.3 Warrants $ Warrants $ Broker options/warrants 3.4 Stock options 6.8 Total Fully Diluted Shares

29 PROJECT TIMELINE Stage Activity Confirmation Drilling Process Development Permitting Engineering Studies Areas 1 & 2 Metallurgical Testing and Pilot Plant (process optimization) Project Permitting Prefeasibility Feasibility/Mine Design Civil Works, etc. Construction Processing Plant Mine Production Commissioning 29

30 STRONG BOARD WITH DIVERSE SKILLS AND LOCAL EXPERIENCE Rahoul Sharan, Chairman Chartered Accountant with over 30 years diversified mining experience Former Chairman and CEO of Uranium Power Corporation Navin Dave Chairman and CEO of Stat-Ops International Former Managing Partner, KPMG LLP Robert C. Gross Former Chief of Staff to Utah Governor Former Senior Advisor, Coalition Authority of Iraq Former Chairman and President of First Interstate Bank Former President and CEO of Blue Healthcare Bank Stephen Harapiak President and COO Victory Nickel Inc. Former CEO, Potash Corp. Rocco Rossi Experienced business strategist and public company director Former President and COO of MGI Software Corp. Phil Williams Director, Investment Banking of Dundee Capital Markets Inc. Former VP, Business Development Pinetree Capital and Mega Uranium Ltd. Guy Bentinck President & CEO MANAGEMENT AND BOARD CURRENTLY OWN 4% 30

31 SKILLED SERVICE PROVIDERS Hazen Research: Pilot plant Metallurgical testing Norwest: Resource estimates Permitting Prefeasibility study Feasibility study Water rights Stoel Rives: Permitting Water rights ICPE Engineering 31

32 COMPETITIVE ADVANTAGES Large mineral deposit containing premium-quality potash Strategically located in a mining friendly jurisdiction with established infrastructure nearby State-owned land allows for an efficient permitting process Historical work expedites project development Lower risk surface mining deposit; expected low-cost producer 30 year mine life, with upside potential PEA completed: $1.3 billion NPV at 10%; 21.3% after tax IRR 32

33 CONTACT US Phone: ext 101 Website: Head office: 3 Church Street, Suite 600 Toronto, Ontario M5E 1M2 33

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