Intrepid Potash New Capital Investments Support Future Opportunities MMSA Colorado Section September 7, 2012
Presentation Overview Company Overview Capital Investment Overview Presentation of Select Capital Investment Projects HB Solar Solution Mine (Carlsbad) Langbeinite Recovery Improvement Project (Carlsbad) Compactor Upgrades Moab Wendover Carlsbad North Plant 2
Intrepid Potash, Inc. Overview The largest U.S. producer of potash Only western world producer created and dedicated solely to potassiumrelated products Supplies ~1.5 percent of global demand and ~9.4 percent of U.S. demand One of only two global producers of sulfate of potash magnesia, marketed as Trio Five active production facilities growing to six with the construction of the HB Solar Solution mine Balance sheet strength provides ability to execute on robust capital investment program and disciplined business development activity 3
Intrepid Potash Geographically Advantaged, Potash-Only Company Washington Oregon Nevada California Idaho Utah Arizona Montana Wyoming Colorado New Mexico North Dakota South Dakota Nebraska Texas Kansas Oklahoma Minnesota Iowa Wisconsin Missouri Arkansas Louisiana Illinois Mississippi Michigan Indiana Kentucky Tennessee Alabama Ohio West Virginia Georgia Florida Vermont New York Pennsylvania Virginia North Carolina South Carolina Maine New Hampshire Operating Solar Evaporation Solution Mine Operating Conventional Mine HB Solar Solution Mine Development Property Carlsbad Reserve Development Assets Highest margin North American potash producer Strategic marketing and production flexibility Capital investment is focused on production growth through incremental low cost tons 4
Capital Investment for Diversified Markets and Flexible Product Mix Potash Sales for 2011 Agricultural Includes: Barley Citrus Corn Cotton Hay Nuts Potatoes Rice Soybeans Tobacco Vegetables Wheat Industrial Includes: Oil & Gas Flux Animal Feed Includes: Cattle Pet Food Pork Poultry Trio markets further diversify crops and customers Industrial market primarily consists of oil and gas drillers Potash used as a nutritional supplement in animal feed Ability to granulate ~80% of current production, providing flexibility to meet end market demand Product Size 2011 2012 YTD Agricultural Granular 79% 79% Industrial Standard 14% 14% Animal Feed Standard 7% 7% 5
Major Capital Projects Project Benefits Capital Projects are Focused on Growth, Flexibility & Margin 6 Growth Flexibility Margin Incremental low cost tons Capability to respond to changing market and customer demands Increased recoveries from langbeinite ore HB will represent an estimated 25 percent increase in potash production volumes Produce products with best margin profile HB Solar Solution Mine Langbeinite granulation Langbeinite Recovery Improvement Project Moab compaction North compaction Lower per ton operating costs Langbeinite dense media separation plant Modernization of plant assets Expansion and creation Wendover compaction Focus on cash cost of Moab horizontal component of production potash caverns Our 2012 Capital Investment Budget of $225 - $300 million Represents the Highest Level of Capital Investment in Our History
Since Inception Intrepid has Invested Over Half a Billion Dollars into its Mines and Facilities Major 2012 Capital Investments HB Solar Solution Mine North Compaction Moab Cavern System Annual Capital Investment in $mm $300 $225 - $300 $250 $200 $150 $136 $100 $94 $104 $93 $50 $22 $31 $12 $0 2005 2006 2007 2008 2009 2010 2011 2012E 7
Select Capital Investment Projects to be Presented HB Solar Solution Mine (Carlsbad) Langbeinite Recovery Improvement Project (Carlsbad) Compactor Upgrades (Utah and Carlsbad) 8
HB Solar Solution Mine Why Invest in Solution Mining? Project Overview Benefits of Capital Investment Production Growth Incremental Reduction in Overall Cost per Ton at Carlsbad Operations 9
Why Invest in Solution Mining? A proven, effective and safe mining technique Maximizes recovery of a potash deposit after conventional mining is completed Used successfully around the world including Intrepid s facilities in Utah 10
Understanding How Solution Mining Works Step 1: Recover potash from existing mine works Pumps inject a salt-saturated brine underground to dissolve and recover potash in previously mined areas Potash is preferentially dissolved and extracted from existing pillars and surrounding floors and walls Existing salt and rock is left largely undisturbed reducing the level of potential surface disturbance 11
Understanding How Solution Mining Works Step 2: Transport brine to solar evaporation ponds Once saturated with potash, the brine is pumped out of the mine works through extraction wells Pipelines transport and deposit the saturated brine into lined solar evaporation ponds located on Intrepid s property The brine evaporates and leaves behind salt and potash on top of the liner s protective salt layer 12
Understanding How Solution Mining Works Step 3: Separate and refine potash Precipitated salt and potash are harvested from the evaporation ponds Then transported for processing to a flotation plant Potash is separated from the salt and refined for sale 13
HB Solar Solution Mine - Project Components Uses solution mining and solar evaporation to extract potash from previously conventionally mined areas Environmentally friendly 12 to 18-month construction phase including: Water supply wells and associated piping 6 injection wells and 5 extraction wells with 37 miles of pipeline (primarily on public land) 572 acres of evaporation ponds (on Intrepid property) A new flotation plant 14
HB Solar Solution Mine Key Facts Five million tons of proven and probable reserves (28 year mine life) Capital investment of $200-$230 million Production cost per ton estimated to be $60 to $80 per ton, making HB one of the low cost potash mines in North America Estimated annual production 150,000-200,000 tons with higher volumes in earlier years 15
HB Solar Solution Mine Production Growth through Incremental Low-Cost Tons Construction commenced in March 2012 Potash Pillar Invested $60.5 million through June 30, 2012 Engineering, design and procurement Pond construction Pipeline construction Wells for water, injection and extraction Leverages our solution mining and solar evaporation expertise HB Solar Solution Mine Pond Liner Installation Improves our overall cost profile and margin opportunity Anticipated production timeline: First production to begin fall of 2013 Ramp up of production expected in 2014 Production levels increasing into 2015 16
Langbeinite Recovery Improvement Project (LRIP) Project Overview Benefits of Capital Investment Improved Recovery Production Growth 17
LRIP Project Overview Replaces existing East langbeinite plant New langbeinite recovery plant Dense media separation (DMS) De-brining and drying (D&D) Pellitization Commissioning DMS and D&D commenced in Dec 2011 Pelletizing commenced in April 2012 18
LRIP Benefits of Capital Investment Designed to increase Trio recoveries to approximately 50 percent, resulting in: Production growth of 100,000 120,000 additional tons per year representing an annual ~75 percent increase in Trio production Reduced per ton cash production cost Capacity to granulate 100 percent of standard Trio production, effectively tripling our granular capacity Total project investment on budget, at $85mm - $90mm 19
Compaction Upgrade Projects Purpose Project Overview Benefits of Capital Investment Production Growth Improved Flexibility and Marketability 20
Purpose - Additional Granulation Capacity is Key to Marketing and Production Flexibility Focus on Increasing Granulation Capacity at all Facilities Facility Product Anticipated Granulation Capacity Estimated In-Service Date Moab, Utah Potash 100 percent of annual production In service Wendover, Utah Potash 100 percent of annual production In service Carlsbad, New Mexico North Facility Potash 100 percent of annual production from West Mine and anticipated HB Solar Solution Mine production Commenced construction in Q2 2012; estimated in service date in the first half of 2013 21
Utah Compaction Facilities Moab Compaction Project Upgrade of existing granulation facility to provide capacity to granulate all mill concentrates Commissioned in December 2010 Total capital investment - $10 million Excellent product quality 22
Utah Compaction Facilities Wendover Compaction Project Upgrade of existing granulation facility to improve compaction quality and provide capacity to granulate all mill concentrates Commissioned in December 2011 Total capital investment - $13.1 million Excellent product quality 23
Additional Granulation Capacity is Key to Marketing and Production Flexibility North Compaction Project Upgrade of our existing granulation facility designed to increase capacity and further improve product quality New production from HB Solar Solution Mine Increased production capacity from our West mine Total capital investment for the project is expected to be approximately $95 to $100 million 24
Summary Capital Investment Program Targeting: Growth of Incremental Low Cost Tons Increased Flexibility and Product Marketability Improved Margins 25