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Driven by a
Proven Management Team
TSX : PRK
OTCQX : POTRF
March 2014
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
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
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
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
POTASH OVERVIEW

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

POTASH WORLD DEMAND +5% EXPECTED ANNUAL
DEMAND TO 2016; SOP HIGHER GROWTH POTENTIAL
7
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
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
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?
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
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
THE BLAWN MOUNTAIN PROJECT

13
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
ORE TEST PIT

15
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
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
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
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
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.
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.
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
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
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
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
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
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
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
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

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Premium Potash Project Driven by Proven Team

  • 1. Premium Potash Project Driven by a Proven Management Team TSX : PRK OTCQX : POTRF March 2014
  • 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
  • 13. THE BLAWN MOUNTAIN PROJECT 13
  • 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