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 Corporation’s Annual Information Form dated March 27, 2013, 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. Focused on near term sulphate of
potash (“SOP”) production at its
Blawn Mountain property in Utah
SOP 645,000 tons average per annum
40 year Project Life backed by reserves
3
4. EXPERIENCED AND PROVEN MANAGEMENT
Guy Bentinck President & CEO
Chartered Accountant;
20 years mining/resource experience
Sherritt: CFO and SVP Capital Projects
Jeff Hillis Chief Financial Officer
Ross Phillips Chief Operating Officer
Chartered Accountant;
10 years mining sector finance, including
CFO of several public mining companies
10 years experience in large resource and
energy sector projects
Sherritt, Capital Power
Iberian Minerals, Excellon, Falconbridge
Laura Nelson VP, Government and
Regulatory Affairs
Paul Hampton VP, Project
Management
Extensive experience in government relations,
permitting and power planning, including the
successful permitting a large mine in Utah
Geologist and Metallurgical Engineer;
Red Leaf Resources, Utah Government
~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
40 year mine life, with mineral reserves of 426 million tons of ore
Large mineral deposit containing premium-quality potash and alumina rich material
645,000 tons of SOP per annum over life of mine
Mining friendly jurisdiction, established infrastructure nearby, designated
development lands and efficient state permitting
PFS completed November 2013: $1.0 billion NPV at 10%; 20.5% after tax IRR;
excludes potential revenue from alumina rich material
Historical work expedites project development; proven production process
Lower risk surface mining deposit; expected low cost producer
5
7. 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
POTASH WORLD DEMAND +5% EXPECTED ANNUAL
DEMAND TO 2016; SOP HIGHER GROWTH POTENTIAL
7
8. SOP: PREMIUM FERTILIZER
Sulphate of Potash
(SOP)
Muriate of Potash
(MOP)
50% K2O Equivalent
60% K2O Equivalent
17% S
0% S
<1.0% Cl
45% Cl
4.8 million tonnes sold in 20131
50 million tonnes sold in 20131
Improves yield, quality, taste
and enhances shelf life1
Crop quality/yield diminish as
chloride builds up1
Consumption of
SOP restricted by
limited production
capacity, with little
expansion potential
SOP share of potash
market:
Current:
5 Mt
Potential: 10-12 Mt
Trend toward high
nutrient fertilizers
Trend towards pricing of
SOP based on
incremental revenue
through yield/quantity
improvements vs.
premiums over MOP
POTASSIUM AND SULPHUR ARE ESSENTIAL NUTRIENTS
8
1
CRU 2013
Chemical makeup assumes 92.5% K2SO4 and 95% KCl product
9. SOP – A DISTINCT & VALUABLE
POTASH PRODUCT
Especially valued for chloride sensitive crops,
SOP improves yields on high value crops such as:
Fruits
Tobacco
Vegetables
Tea
Nuts
Coffee
Horticultural Plants Dry/Salty soil
9
10. SOP MARKET DYNAMICS
Existing SOP Production by Process
Region
Process
Method
World
Process Inputs
Capacity
 MOP
China/
Europe
Mannheim
2.3Mt
43%
 Sulfuric Acid
Products
 SOP
 Hydrochloric
Acid
SOP Consumption by Region
Avg Cost Future
/ Ton1
Outlook
$453
 Energy
 MOP
Europe
MOP and
Kieserite
1.2Mt
22%
 Kieserite
 SOP
 Magnesium
Chloride
$440
 Energy
China/
USA/
Chile
 Lake Brines
Salt Lakes
1.9Mt
35%
 Energy
 SOP
 Magnesium
Chloride
 Sodium Chloride
$381
New sources of SOP from these existing
processes are unlikely due to lack of
primary sources and difficulties
surrounding secondary source production.
10
1CRU
2013
Africa
5%
RoW
9%
Europe
24%
High
Cost/byproduct
limits
growth
No
additional
deposits
No
additional
suitable
lakes
N.
America
7%
China
49%
C&S
America
6%
CRU predicts SOP consumption
of 9,500,000 tonnes per annum
by 2019 – where will this
production come from?
11. SOP PREMIUM PRICE TRENDS
1,200.0
1,000.0
Recent quotes from blenders in Uberaba, Brazil $1,110/tonne
800.0
Compass Q4/13 realized price $690/tonne1
600.0
400.0
Potash Corp Q4/13 realized price $282/tonne2
200.0
POT - North America (MOP)
U.S. $/tonne
CMP - (SOP)
-
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2007
2008
2009
2010
2011
2012
CURRENT PREMIUM 145% FOR SOP IN US
11
1
Compass Minerals Q4 2013 Report, 2 Potash Corp Q4 2013 Report
2013
12. SOP MARKET TARGETS
United States
SOP consumption: 385,000 tons1
Potential consumption: 920,000 tons2
Large scale production of chloride intolerant crops such as nuts in California
and citrus fruits in Florida drive a large part of US SOP demand. Consumption
of these crops continues – e.g. Almond crops have grown by 7% per year
since the mid 1990s.
Brazil
SOP consumption: 42,000 tons per year2 (0.4% of total potash
consumption)
Potential consumption: 2.1 million tons2
Brazil is the world’s largest grower of coffee, soybeans and citrus fruits, all
SOP crops. Low consumption is entirely due to lack of SOP availability.
China
SOP consumption 1.9 million tons per year1
Potential consumption: 4 million tons per year2
China produces close to half of the world’s fruits and vegetables, and nearly
one-third of the world’s tobacco and tea. SOP consumption almost doubled
between 2007 and 20121, with large untapped growth potential.
SIGNIFICANT GROWTH POTENTIAL
EASY ACCESS TO LOCAL MARKETS
12
1
2
CRU 2013
From PRK Study August 2013, based on crops that are best suited for SOP
14. PROJECT OVERVIEW
Large alunite deposit, which is expected to be
processed into SOP, and possible alumina rich
material
Average 645,000 tons of SOP per annum
Historical work expedites project development
Mineral deposit to be surface mined
Proven process backed by extensive metallurgical
testing
ANTICIPATED INITIAL PRODUCTION IN 2017
14
16. UTAH: AN ATTRACTIVE
MINING JURISDICTION
Major resource producer
Existing potash production
Best state for business1
Top quartile mining jurisdiction2
ALMOST 100 YEARS OF POTASH PRODUCTION
16
1Forbes
Magazine, December, 2012
2Fraser
Institute, April, 2013
17. OUR LAND ADVANTAGE
State-owned land designated for
development
Efficient permitting process
Leasehold and royalty agreements
negotiated
No known adverse environmental or
social issues
Sufficient water nearby – rights
application made
Roads, rail, transmission and natural gas
nearby
Construction materials, equipment
suppliers and skilled labour force
MUNICIPAL AND STATE SUPPORT OF PROJECT
17
18. EXTENSIVE DEVELOPMENT COMPLETED IN 1970’s
•
Approximately $25 million spent (~$100 million
in today’s dollars).
•
Programs included:
Drilling, Resource estimate, Feasibility
Study, mine plan, Engineering,
Permitting and 3-year operation of a
pilot plant processing up to 11 tons
per day.
•
Alumina originally primary product;
SOP was by-product
•
Project ultimately shelved due to poor
economic conditions in early 1980s
•
Potash Ridge owns all historical data
PREVIOUS WORK ACCELERATES PROJECT DEVELOPMENT
18
19. SIMPLE PROVEN FLOWSHEET
Alunite
•
•
Plant to process 10.4 million tons per annum
Metallurgical testing on-going for Feasibility Study
Crushing & Grinding
Calcination
SO2
Acid Plant
Sulphuric Acid
Water Leach
SOP Solution
Crystallizing Drying,
Compacting & Sizing
SOP
Alumina Rich Material
Flowsheet similar to commercial-scale production
processes historically used in US, Australia and Azerbaijan.
RECENT EXTENSIVE TEST WORK CONFIRMS FLOWSHEET
19
20. PREFEASIBILITY STUDY – SUMMARY
Economic Indicators
NPV (after tax, at 10%)
$1.0 billion
IRR (after tax)
20.5%
Payback period (from commencement of operations)
5 years
Average annual SOP production
645,000 tons
Average annual sulphuric acid production
1,440,000 tons
SOP price (average)
$649/ton
Sulphuric acid price (average)
$135/ton
Project life
40 years
Initial capital cost (including 15% contingency)
$1,124 million
Operating cost (excluding royalties)
$173/ton SOP
•
•
•
•
•
•
20
The economic evaluation is based on
the following assumptions:
•
•
•
•
Site construction commences late
2015;
Production ramp-up over 2 years
(2017-2018), reaching full
production in 2019;
SOP pricing from CRU forecast
below current North American
SOP prices;
Average tax rate of 35%.
Proven & Probable mineral reserves of 426 million tons;
Reserves support 40 year mine life, with potential to increase life of operations through
exploration of two additional zones of known mineralization;
Project after tax Net Present Value (“NPV”) of $1.0 billion using a 10% discount rate:
•
Total sales of 26 million tons of SOP over life of mine;
Unlevered after tax internal rate of return (“IRR”) of 20.5%; payback period of 5 years
after commencement of operations;
Strong cash flow generation with cash flow from operations of $234 million per annum
excluding the two year ramp up period;
Approximately 28% of direct capital costs are supported by packaged quotes
1Inclusive
of by-product acid revenues and exclusive of royalties; no credit assumed for potential
revenue from the sale of alumina rich material.
21. SOP CAPITAL COST BREAKDOWN 1
31%
Contingency,
Indirects and
Infrastructure
14%
SOP Leaching,
Crystallization
and Drying
CAPITAL COST: $1.124 billion
(15% contingency)
13%
Crushing &
Grinding
42%
Calcination
Expect to access government
funding programs
utilities and other infrastructure
not incurred by Potash Ridge ($641 million):
21
Acid Plant ($280 million)
Natural Gas Line ($83 million)
Water Treatment Plant ($60 million)
Rail Spur ($76 million)
Access road ($53 million)
To be incurred by Mine Contractor
1 Excludes
Mine Capital ($89 million)
Build-own-operate arrangements
under negotiation.
22. OPERATING COSTS: $173/TON OF SOP
7%
Total Cash Production Costs
Other
($14M) Production
Direct Plant and Mine Cash
14%
Cost Royalties
Credit for Value of Acid
($33M)
Subtotal of Direct Plant and Mine Cash
Production Cost
Site G&A, Property Taxes & Corporate
Overhead
Annual Average
Cost($)/Ton SOP
(Constant 2013 $US)
$453
Cash Production Costs
Avg Cost/Ton
$414
$440
$(302)
$381
$112
$27
3rd Party Facility Charges
$34
Total before royalty
$173
Royalties
$45
Total Cash Production Cost
$218
$173
Excludes credit for potential alumina rich material revenue.
Includes 15% contingency (excluding non-energy and labour costs).
Potash Ridge
Potash Ridge
Expected
22
1 CRU
2013
Salt Lakes1
MOP/ Sulphate
1
Salts
In Production
Mannheim
1
Process
23. PREFEASIBILITY STUDY –
RESERVES ESTABLISHED
Drilling to date has focused
only on two of the four areas
within the 15,400 acre land
parcel
Mineral Reserves by Category November 6, 2013
Reserve Category
Proven
('000
tons)
Probable
('000 tons)
Total
136,254
289,540
425,794
Ore (average K2O (%) grade)
3.56
3.49
3.51
Ore (average K2SO4 (%) grade)
6.59
6.46
6.49
SOP (tons)
8,457
17,970
26,427
Sulphuric Acid (tons) @ 98% Purity
18,888
40,136
59,024
Alunite Ore (ROM tons)
23
Supports 40 years of
operations
Reserves demonstrate the
economic and technical
viability of the Project
24. SULPHURIC ACID
Driven by local US Market – prices dependent on supply and proximity
Mountain West US market approximately 5.6 million tons per annum
Expected increase in this market from mine expansions and new mine development
Potash Ridge will provide stable supply to consumers
MOU in place for 20% of acid production
24
25. UPSIDE POTENTIAL FROM LEACH RESIDUE
•
Leaching process leaves alumina rich material which, with beneficiation, may be used as
a substitute to bauxite as a feedstock into a Bayer alumina production facility.
•
Metallurgical testing confirmed the alumina in this material is soluble in high temperature
caustic solutions
•
May also be acceptable as a raw material feed for low temperature refineries
•
Further testing is underway to determine whether the alumina rich material could meet
specifications for feed material in the production of ceramic proppants in North America.
•
PFS economics do not include revenue from the sale of alumina rich material
SOURCES OF SMELTER FEED TO CHINA
Blawn
Mountain,
Utah
Boke,
Guinea
Trombetas,
Brazil
Kingston,
Jamaica
Distance to Shandong Province, China (nm)
5,744
11,128
10,815
9,051
Long Beach
Conakry
Aratu
Jamaica
Port
25
26. MILESTONES
43-101 Measured and Indicated Resource to support 30-year mine life
Issue Preliminary Economics Assessment
Commence metallurgical test program
Commence Pilot Plant Test work & produce SOP from test work
Complete baseline environmental surveys
Issue Prefeasibility Study supporting 40-year mine live
Submit Large Mining Permit Application
EXPECTED
a
a
a
a
a
a
a
Complete metallurgical test program
Water Rights application approval
Q2 2014
Air Quality Permit filed
End 2014
Large Mining Permit approval
Q3 2014
Issue Feasibility Study
Early-Mid
2015
Receive final permits
End 2015
Construction start up
26
2014 to
End 2015
End 2015
Ramp up
Note: Timelines are based on obtaining sufficient financing to advance Feasibility Study
2017
27. CAPITAL STRUCTURE
Millions
Common Shares
81.7
Non-voting Common Shares
5.0
Total Shares Outstanding
86.7
Warrants – $ 0.50
10.7
Warrants – $1.00
5.0
Broker options/warrants
3.4
Stock options
7.0
Total Fully Diluted Shares
112.9
As at December 31, 2013
INSIDERS HOLD 5%, 10% FULLY DILUTED
27
28. COMPETITIVE ADVANTAGES
40 year mine life, with mineral reserves of 426 million tons of ore
Large mineral deposit containing premium-quality potash and alumina rich material
645,000 tons of SOP per annum over life of mine
Mining friendly jurisdiction, established infrastructure nearby, designated
development lands and efficient state permitting
PFS completed November 2013: $1.0 billion NPV at 10%; 20.5% after tax IRR;
excludes potential revenue from alumina rich material
Historical work expedites project development; proven production process
Lower risk surface mining deposit; expected low cost producer
28
29. CONTACT US
Toronto office:
3 Church Street, Suite 600
Toronto, Ontario
M5E 1M2
Salt Lake City office:
170 S. Main Street, Suite 500
Salt Lake City, UT
80101
Phone: 416-362-8640 ext 101
Phone: 801-433-6027
info@potashridge.com
www.potashridge.com
29