Rev. January 2014
Cautionary Note Regarding forward-looking Statements and the Sale and Delivery of Securities This presentation contains forward-looking information and forward-looking statements within the meaning of applicable Canadian securities laws. Some of the specific forward-looking statements in this presentation include statements regarding the potash, fertilizers and other key minerals industries, our acquisition, strategy and development plans, project schedules and statements regarding economic analysis of certain assets to be acquired. When used in this presentation, such statements use words, including but not limited, may, will, expect, believe, plan, intend, anticipate, future and other similar terminology. The expected closing of our proposed acquisition of a Chilean mining property, our ability to develop that property and to commence supplying potash, other fertilizers and other key minerals, any economic analysis regarding that mining property, any statements regarding the potential for other minerals or the exploration and exploitation of other properties, and other forward-looking statements reflect management s current expectations regarding future events and operating performance, but involve known and unknown risks, uncertainties and other factors which may cause the outcome of the proposed acquisition or the actual results, performance or achievements of Potash Dragon and/or its affiliates (the Company ) to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual events could differ materially from those projected herein and depend on a number of factors. These factors include, but are not limited to, actual future market conditions being different than anticipated by the Company s management; material changes to government and environmental regulations affecting the Company s operations; the ability of the Company to obtain the necessary permitting to develop the target properties or the proposed marine terminal; material shifts in demographic trends. Material factors or assumption that were applied to drawing a conclusion or making an estimate set out in the forward-looking information include, among others: the views of management of the Company regarding current and anticipated market conditions and the successful attainment of certain goals as discussed in this presentation. Readers are cautioned that the preceding list of material factors or assumptions is not exhaustive. Although forward-looking information contained in this presentation is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Forwardlooking statements speak only as of the date the statements are made. Readers should not put undue reliance on any forward-looking statements. Any references to a potential resource for potash, other fertilizers and other key minerals and any economic analysis related thereto are not currently compliant with NI 43-101. The Company intends to commission a technical report in respect of the potash, other fertilizers and other key minerals in 2013.
Corporate Overview Toronto Stock Exchange ISM Frankfurt Stock Exchange OI8 Experienced and successful technical management team Principal Asset: -Langmuir (Nickel) Property, Northern Ontario, Canada Other Interests and Investments: -Llamara, Chile, Potash resource -Dry Fork, Utah, Gold property -Desrosiers, Timmins, ON -Cleaver, Northern Ontario Gold property
Executive Management D. Randall Miller Chief Executive Officer & President Carmelo Marelli Chief Financial Officer Board of Directors D. Randall Miller Chairman of the Board James E. Davis Director Herbert M. Brugh Director Victor Cantore Director John Robertson Director
Capital Structure Issued & Outstanding: 81,982,770 Options Outstanding: 7,000,055-1,200,000 expire in March -750,000 expire in June Warrants: 3,619,500 Fully Diluted: 92,602,325
Investment Highlights 100% owner of Langmuir Nickel Property which is an advanced stage exploration project, in the Timmins Nickel Belt Relatively low risk nickel exploration play located in Canada with low capital cost due to existing infrastructure Langmuir Property is sulphide deposits with relatively low extraction costs Includes past producing Langmuir No.1 and No. 2 mines, which were actively producing up to being closed in 1992 Recent drilling produces up to 15% nickel Drilling program has completed in excess of 350 core holes totaling over 100,000 metres of drilling Spent $23 million during this time
Property Portfolio Canada & U.S.A Project Locations Dry Fork Property (Salt Lake City, Utah) Langmuir One Langmuir North Desrosier Cleaver (all near Timmins, Ontario)
Langmuir No.1 Project (Proposed Restart Underground Mine) Inspiration Mining Corporation (TSX:ISM) has completed a strategic review of its nickel assets and the possibility of restarting Langmuir No.1 underground mine. Since the mine was shut down in 1992 there has been an extensive drill program that has shown a substantially better resource model. Certain higher grade resource blocks were excluded from the Micon report and the resource estimate due to these blocks falling outside of the optimal open pit shell. Inspiration Mining Corporation is currently in the process of re-opening Langmuir 1 as an underground development.
Plans going forward for proposed re-start We received Ministry approval for bringing the property to lease which is the first step in our plan going forward We have engaged Exp Geomatics to do the land surveying which is the final step in taking the Langmuir Property to lease Once achieved we will de water and refurbish the ramp on Langmuir #1 that leads to the 3 deposits of high grade ore Then we will commence taking out the bulk sample that will consist of 60, 000 tonnes at an average grade of 2.25 % Ni The cost of the refurbishment and re opening of the ramp will be between approx. $3-5 million, which could be debt financed with no dilution to shareholders Recent development have put strategic partners in control of a nearby mill that would be beneficial for both parties Recent studies that Inspiration Mining has carried out has confirmed that the economics of the project are quite feasible and profit margins are very substantial Grades have ranged from 1.75% to 15.5% Ni at Langmuir #1
Timmins Nickel previously mined over 100,000 tonnes at an average grade of 2.25%, this constitutes an excellent bulk sample. Grades ranging from 1.75% to 15.5% Ni.
Nickel The New Gold!
Desrosiers Property - Exploration Consists of 261 claim units covering 3504 hectares (10,440 acres), located 150 km SW of Timmins, Ontario, Canada Desrosiers is an exploration property with prospective for molybdenum. plus other elements such as tantalum, rhenium, tungsten, lithium, bismuth, silver and rare earth elements Surface trenching and sampling during historical work has demonstrated molybdenum values from 0.03 to 10.64% across widths from 2 cm to 2 metres. Historic bulk sampling from property in NI 43-101 report dated 2008 returned a 1% MoS2 from 50 ton sample and 2.25% MoS2 from a 165 ton bulk sample
Location of the Property Inspiration Mining s Dry Fork property consists of 31 contiguous claims covering 246.44 hectares. Property is located approx. 35 kilometers southwest of Salt Lake City, Utah and 6.4 kilometers northnorthwest of Kennecott Corporation s Bingham Canyon copper-goldmolybdenite mine. Dry Fork, Utah, USA Kennecott Corporation s Bingham Canyon is the world s largest manmade excavation, and 600 metres southwest of Kennecott s pastproducing Melco gold mine.
Dry Fork, Utah Gold Property
Our Neighbours Kennecott s Bingham Canyon Mine: -Largest excavation open pit on the planet and can be seen from outer space -Produced more than 23 million ounces of gold since open in 1906 -In 2003 produces 0.29 grams of gold per tonne Kennecott s Barneys Canyon: -Open pit gold mine started production in 1988 -Mineable pre-production oxide reserves calculated 8.6 million tonnes grading 1.64 grams of gold per tonne at cut off grade of 0.55 grams of gold per tonne Kennecott s Melco Mine: -600 metres northeast of Dry fork property and mined 1988 2001 -Production turned out 900,000 ounces of gold -Pre-production mineable oxide reserves calculated at 2.8 million tonnes grading 2.4 grams of gold per tonne at a cut off grade of 0.65 grams of gold per tonne.
Potash Dragon Llamara Project Project Location Atacama Desert in Llamara, Chile
Investment Highlights Premium Quality Natural Resource Inferred brine resource Other key by-products include magnesium as MgO, and sulphate as SO4. Shallow resource. Brine chemistry similar to evaporation plants operated by Sociedad Química y Minera de Chile S.A. (SQM), Compass Minerals and Intrepid Potash Chile is a resource friendly jurisdiction, with major exporters of industrial minerals including potash nitrates and salt.
Investment Highlights Strategic Cost Advantage Deposits and aquifers located near surface: shallow solution mining Ocean in close proximity: sea water to be used as a lixiviant or hydrology buffer; sea water is abundant and inexpensive Benefits from very high solar evaporation rates at low altitude compared to other solars (3.3m/yr vs 1.2m/yr in Utah) Simple evaporation ponds easy to construct due to flat topography Tried and tested recovery methods as demonstrated by nearby SQM evaporation plant
Investment Highlights Continued Experienced Management Team Seasoned miners, each with 30 years + experience (Placer Dome, First Uranium, JCI) Team members with core competencies in the fields of solution chemistry and geochemistry 4 senior executives sharing business development (Canada) and operating (Chile) responsibilities Deep knowledge of the geology of the northern Atacama desert of Chile Low Start-Up Costs and Staged Investment Phase 1 - $2.0m - 6 months - NI 43-101 Brine resource estimate Done Phase 2 - $3.0m - 6 months - NI 43-101 Brine and solid resource estimate - In Process Simpler and cheaper than other conventional potash mines Significant Upside Expanding the resource by including the soluble solid potash minerals that are the source of the minerals in the brine Potential to increase the throughout currently using 50% of the resource. Sale of by products including MgCl2, Na2SO4, Li and B
Gold Dragon Team Gordon T. Miller, PrEng, President and CEO Registered professional mining engineer who has 30 years of mining experience. Recently provided salt mining consulting to a North American salt company President and CEO of TSX listed First Uranium from December 2006 to March 2010. Led First Uranium s $220M IPO in 2006 CEO of Simmer and Jack Mines from November 2004 to January 2010 Spent four years with Placer Dome group in executive roles in South Africa, Canada and Australia Started his underground mining career with the JCI Group of companies in 1981 James P.W. Fisher BSc (Hons), Executive VP Chartered Engineer with over 35 years experience in the Southern African mining industry, including nine years on the Zambian copper belt and the rest in South Africa, covering the metallurgy of Gold, Uranium, PGM s and Copper. Recently worked as a salt mining consultant a North American salt company to improve plant operations of a subsidiary Acted as Executive Vice President, Corporate Development of TSX listed First Uranium and also acted as Chief Executive Officer of First Uranium South Africa Served as the Business Manager for the Placer Dome Western Areas JV and spent many years with John A Gould, BSc (Hons), Executive VP Registered Natural Scientist who has 35 years of mining experience. Chief Operating Officer of TSX listed First Uranium Corporation Headed up the South African operations for TSX listed Platinum Group Metals and was responsible for the development, market position and technical performance of the company. Spent many years working for the JCI Group of companies in the Gold, Uranium and Platinum divisions Began his career with Gold Fields of South Africa.
LOOKING TOWARDS THE SW COASTAL CORDILLERA IN BACKGROUND Puquio de Huatacondo Huatacondo Puquio and doline containing saturated brine
Llamara Project Brines Actual brine sample results* - January 2012 Element Assay Distribution Potassium (mg /L) 9,674 3.62% Lithium (mg/l) 94 0.04% Boron (mg/l) 151 0.06% Chlorine (mg/l) 104,257 39.02% Sodium (mg/l) 95,170 35.62% Calcium (mg/l) 295 0.11% Magnesium (mg/l) 5,689 2.13% Sulphates (mg/l) 51,857 19.41% Total (mg/l) 267,187 100% * An average of six peripheral samples
Solida Section 3D TEM Model TEM model identifying the location of the highly conductive brine <2.5Ω-m situated from 120 m below surface The dark section lines are the contour showing the Soledad Mountain
Project Economics Estimated Economic Measures NPV at 8% $149 million IRR 29% EBITDA/yr $35 million Peak Funding $98 million Revenue $/yr steady state $50 million Cost $/yr steady state $15 million Payback 3 years Operating Margin 74% The above economic analysis is based on inferred resources, and is preliminary in nature. Inferred resources are considered too geologically speculative to have mining and economic considerations applied to them and to be categorized as Mineral Reserves. There is no certainty that the reserves development, production and economic forecasts on which this preliminary assessment is based, will be realized.
Project Upside To improve confidence the following activities will be carried out in the next phases of the project. Drilling and core sampling Process test work Engineering Design Environmental assessments Interaction with the regulators and affected parties. There a number of upside opportunities that include: The potassium resource brine concentration estimate is 5,191 mg/l K. With solution mining of a solid formation and drawing brine from a greater depth the potassium concentration could increase to nearer its solubility limit of 20,000 mg/l K Revenue from potential by-products that are available namely Magnesium Chloride, Lithium Chloride, Sodium Sulphate and Boron Process optimization including recirculation of flotation tails to improve the potassium recovery The resource size is based solely on the brine, with the exploration adding resource from the solids this could significantly increase the resource Now that we have an understanding of the regional potential, there is an opportunity to expand the resource through acquisitions
Inspiration Mining Corporation TSX:ISM Frankfurt:0I8 Inspiration Mining Corporation HSBC Building 70 York Street, Suite 1710 Toronto, ON, Canada M5J 1S9 Tel: +1 416-842- 9000 Fax: +1 416-865 -3368 Randy Miller Chief Executive Officer & President randy@inspirationmining.com www.inspirationmining.com