TSX.V: NPKwww.verdepotash.com
DisclaimerThis presentation contains certain “forward looking statements”, which include but is not limited to, statements...
Verde PotashBrazilian fertilizer company•Founded and led by strong and successful Brazilian team•Listed on the Toronto Ven...
Capital Structure & Share PriceShares Issued                32,122,769    Share Price                                     ...
Management & DirectorsManagement                                                         Independent DirectorsCristiano Ve...
Brazil’s Agribusiness: Feeding the World •Brazil has almost 20% of world‟s                                                ...
Brazil’s Fertilizer Supply & Consumption                                 Dependency on Imported Potash                    ...
Location, Location, Location                               ~ 60% of Brazil’s                               fertilizer cons...
Transportation AdvantageFrom Saskatchewan to Brazil                $43.29 1                                      $30-35   ...
Potash at SurfaceGrowing Resource• Initial NI 43-101 Inferred Resource of 105.1Mt @   10.3% (7.5% cut-off)• Potassium rich...
Verde’s Advantage          Verde‟s                              Carnallite             Sylvinite          K RockDepth     ...
ThermoPotash Scoping StudyNI 43-101 Preliminary Economic                                              Production Rate     ...
ThermoPotash : BenefitsBenefits to farmers• Provides potash in a slow release form• Provides substantial doses of other   ...
Beyond ThermoPotash: Conventional KClNew Technology has potential to revolutionize Potash industry•   Method invented for ...
Brazilian Government CommitmentMemorandum of Understanding (“MOU”) Signedwith State of Minas Gerais(see April 7, 2011 rele...
Key Milestones                                                     2011             2012   2013      2014                 ...
Potash Rock vs. Oil Sands                                           Oil Sands                                  Potash Rock...
Why Potash is Important: Potash is Energy       Sugarcane                 Milling and Refining                Ethanol Prod...
Appendix           19
Process and Operating CostsThermoPotash Production Process                                                                ...
Pricing Estimates                                                                                    Marketing Study      ...
Pricing Estimates                Optimized Formulation vs. Standard Formulation in 4-20-20 Fertilizer1                    ...
ThermoPotash Agronomic ResultsNutrient Availability Tests                      Limestone Replacement Tests(See August 11, ...
Why It Hasn’t Been Done Before?                            1200                                                           ...
ThermoPotash Partnerships                                       ArcelorMittal to Fund Agronomic Trials (See Sept. 22, 2009...
Apatita Phosphate Project•   30km of mineralized phosphate with    widths between 1km and 5km (see    November 8, 2010 rel...
Phosphate in Brazil                                                                                                       ...
TSX-V:NPKwww.verdepotash.com
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Investor Presentation July 2011

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Investor Presentation July 2011

  1. 1. TSX.V: NPKwww.verdepotash.com
  2. 2. DisclaimerThis presentation contains certain “forward looking statements”, which include but is not limited to, statements withrespect to the future financial or operating performance of Verde Potash Plc (the “Company”), its subsidiaries andits projects, statements regarding use of proceeds, exploration prospects, identification of mineral reserves, costsof and capital for exploration projects, exploration expenditures, timing of future exploration and permitting,requirements for additional capital, government regulations of mining operations, environmental risks, reclamationexpenses, title disputes or claims, and limitations of insurance coverage. Forward looking statements cangenerally be identified by the use of words such as “plans”, “expects”, or “does not expect” or “is expected”,“anticipates” or “does not anticipate”, or “believes”, “intends”, “forecasts”, “budget”, “scheduled”, “estimates” orvariations of such words or phrases or state that certain actions, event, or results “may”, “could”, “would”, “might”,or “will be taken”, “occur” or “be achieved”. Forward looking statements involve known and unknown risks,uncertainties and other factors which may cause the actual results, performance or achievements of the Companyto be materially different from any future results, performance or achievements expressed or implied by saidstatements. There can be no assurances that forward-looking statements will prove to be accurate, as actualresults and future events could differ materially from those anticipated in said statements. Accordingly, readersshould not place undue reliance on forward-looking statements.Total resources include all categories unless otherwise stated. All currency are in Canadian $ unless otherwisestated. TSXv : NPK 2
  3. 3. Verde PotashBrazilian fertilizer company•Founded and led by strong and successful Brazilian team•Listed on the Toronto Venture Exchange (NPK : TSX-V)Cerrado Verde Potash Project•105.1Mt @ 10.3% K2O of Potash inferred resource•Phase 1 : ThermoPotash • Low Capex: US$196.8m • Strong Economics: NPV : US$445.5M•Phase 2: Conventional Potash - KCl • New technology under development • University of Cambridge partnershipInvestment Highlights•High grade potash at surface•Close proximity to fertilizer distribution and farms•Strong government support: tax advantages and potential financing Potash rock at surface grading 11% K2O TSXv : NPK 3
  4. 4. Capital Structure & Share PriceShares Issued 32,122,769 Share Price $10.00 0.9 $9.00 0.8Options 2,862,136 $8.00 0.7 $7.00 0.6 $6.00 0.5Warrants 208,686 $5.00 0.4 $4.00 $3.00 0.3 0.2Diluted 35,193,591 $2.00 $1.00 0.1 $0.00 052 week: Hi/Lo C$10.95/C$1.32 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Analyst CoverageMarket Cap (at $7.95) C$255 million Salman Partners Jaret AndersonAverage Volume (3 mo.) 90,040 Wellington West Robert Winslow Ocean Equities Natasha LiddellCash Position ~C$13.6 million Octagon Capital Max Vichniakov GMP Securities Kaiser Bottom Fish (John Kaiser) Anoop PriharDebt 0 Bottom Fish John Kaiser TSXv : NPK 4
  5. 5. Management & DirectorsManagement Independent DirectorsCristiano Veloso Founder, President, CEO Peter Gundy Chairman• 12 years experience; Brazilian entrepreneur ex Banco do • Former Chairman of Neo Materials Technologies Inc.; VP of Brasil S/A, CEMIG; LL.B, LL.M International Business Law Brascan Inc; Executive VP, Finance of Potash Corporation of Saskatchewan Limited.Maurício Sampaio VP Operations• 30 years experience; ex President of Brazilian Agribusiness Association, Operations and Marketing Director for Bunge Dr. Getulio Lamartine de Paula Fonseca Fertilizantes and Operations Director for Fertiza • Former General Director National Department of Power & Water Supply; Executive-Secretary Industry & CommercePedro Ladeira VP Engineering Ministry;• 17 years experience; ex Operations Director at Cementos Minetti; Process and Production Manager for Holcim Brazil Dr. Henrique Brandão Cavalcanti • Former Brazil‟s Minister of the Environment (1994), DeputyYsao Munemassa Exploration Manager Minister of Mines Energy (1967-69), Deputy Minister of Interior• 41 years experience; ex BP Minerals, VALE, Union Carbide, (1969-74). INCO, Teck Cominco, Newmont GoldDr Derek Fray Metallurgical Consultant Dr. Renato Gomes• 45 years experience; University of Cambridge Professor & • Director of the ABCI Institute (Brazilian International Trade Director of Research Scholars) Lawyer and member of Brazilian and Portuguese Bar AssociationsJed Richardson VP Corporate Development• 10 years experience; ex Mining Analyst with Sprott/Cormark and RBC Capital Markets, Mining engineer with Alcan Dr. Richard Garnett Aluminium • PhD. in Economic Geology (Royal School of Mines, UK), MBA (Cranfield University, UK); Mining Engineer. Has held senior positions with Rio Tinto, Anglo American, Hudson Bay Mining and Diamond Fields Resources TSXv : NPK 5
  6. 6. Brazil’s Agribusiness: Feeding the World •Brazil has almost 20% of world‟s •The great agricultural frontier is Brazil‟s undeveloped potential arable land Cerrado, or Savannah away from the Amazon forest Undeveloped Potential Arable Land 600 Amazon 500 Available BrazilMillions of Hectares 400 Planted 300 Cerrado 200 100 South 0 America Brazil US Russia China India Source: Food and Agriculture Organization, UN •Brazil has world‟s largest renewable fresh •Climate allows for multiple crops during water reserve the year TSXv : NPK 6
  7. 7. Brazil’s Fertilizer Supply & Consumption Dependency on Imported Potash •Potash ranks in the top ten of Brazilian imports by dollar value (2008 #6, 2009 #10) •Brazilian government targets 2020 to be fertilizer-independent •Brazil is to be ranked #1 globally for potash imports in 2020 at 7.2 million tonnes of K2O1 Source: FAO,UN Note 1Source: FERTECON report (FERTECON, 2009, /15/) TSXv : NPK 7
  8. 8. Location, Location, Location ~ 60% of Brazil’s fertilizer consumption takes place in Minas Gerais state where Verde’s projects are located and adjacent states TSXv : NPK 8
  9. 9. Transportation AdvantageFrom Saskatchewan to Brazil $43.29 1 $30-35 $80-115Saskatchewan /tonne Port of Vancouver /tonne Port of Santos /tonne NPK Blenders Total: $153-193/tonne Verde Potash Transportation Cost 2 Cerrado Verde to NPK Mixers (per tonne) Minas Gerais $22.27 Mato Grosso $59.72 Goias $29.66 Parana $67.33 Mato Grosso do Sul $57.27Cerrado Verde Bahia $47.63 NPK Blenders Sao Paulo $40.85 1Government of Canada, Ministry of Transportation 2 Agroconsult TSXv : NPK 9
  10. 10. Potash at SurfaceGrowing Resource• Initial NI 43-101 Inferred Resource of 105.1Mt @ 10.3% (7.5% cut-off)• Potassium rich rock (Muscovite and Microcline) distributed over an area approximately: 100km x 10km x 20m to 80m thick• 26,000m drilling program underway (see press release dated May 9, 2011)Low-Cost Mining• High Grade• Open Pit• Drilling Results include up to 64m @ 10.3% K2O from surface Potash rock at surface being drilled TSXv : NPK 10
  11. 11. Verde’s Advantage Verde‟s Carnallite Sylvinite K RockDepth 0m 500 - 1000m 1000 - 1500m Open Pit Mining Solution Mining Conventional UndergroundGrade 10-13% K2O 10-14% K2O 20-25% K2OTime 2 yrs 5-7 years 7-10 yearsCap-Ex $200 million $1-2 billion $2-3 billion Energy Costs Fluid and Boreholes Conventional MiningOp Cost Low mining costs Solution Separation Flotation SeparationProduct ThermoPotash KCl KCl TSXv : NPK 11
  12. 12. ThermoPotash Scoping StudyNI 43-101 Preliminary Economic Production Rate 1.1Mtpy2 2.2Mtpy2 (Brazil market share of (2%) (4%)Assessment Completed Potash “K2O”)•PEA completed by SRK Consulting(U.S.), Inc. studied open pit mining and NPV (10%) US$445.5m US$844.1mpyrometallurgy process to create theThermoPotash fertilizer NPV (12%) US$331.6m US$642.0m IRR 32.7% 40.0%Potential Cost Savings Operational Cost US$41.80/t US$36.36/t•Use of natural gas or eucalyptuscharcoal instead of pet coke as heating CapEx US$155.3m US$218.4mfuel source Contingency US$23.3m US$32.8m•Utilization of Verde‟s potential Pre-construction US$18.2m US$18.2m Total CapEx US$196.8m US$269.4mlimestone source•Reduction of ICMS1 value-added taxes Payback 2.38 years 1.87 years•Flow sheet Optimization NOTE 12 1 Tax on the Circulation of Goods, Interstate and intercity Transportation and Communication Services 2 These figures can be found on page IV of the Preliminary Economic Assessment available on SEDAR published on December 13, 2010 TSXv : NPK
  13. 13. ThermoPotash : BenefitsBenefits to farmers• Provides potash in a slow release form• Provides substantial doses of other macronutrients• Reduces limestone use for pH correction• No change to final fertilizer application quantities or techniquesBenefits to fertilizer blenders• Overseas imports price is set 2 months before it arrives at facility, plus possible port delays• 60% of fertilizer consumption occurs in 4 month window• Transport distance creates unusable powder from granules• Potential to replace 581,236 tonnes of imported KCl in the region Port of Santos TSXv : NPK 13
  14. 14. Beyond ThermoPotash: Conventional KClNew Technology has potential to revolutionize Potash industry• Method invented for reacting Verde‟s potassium rich rock with a simple mixture of salts to form water-soluble potash• Invented by Dr. Derek Fray, Professor and Director of Research at the University of Cambridge, UK, sponsored by Verde• Reactions occur at moderate temperatures of 800-1000°C• The route allows for the production of SOP and KCl• Verde has commissioned a leading commercial lab to scale up the current Potassium rich rock processing concept to industrial levels• If the process proves economic it could revolutionize the Potash market Dr Derek Fray, University of Cambridge, UK TSXv : NPK 14
  15. 15. Brazilian Government CommitmentMemorandum of Understanding (“MOU”) Signedwith State of Minas Gerais(see April 7, 2011 release)•Potential financing for working capital and fixedinvestment support; funds administered by theDevelopment Bank of Minas Gerais (BDMG)•Secretary of Finance‟s approval of special tax treatmentdefined as: • Suspension of “ICMS” tax payable on: a) imports of foreign goods; b) imports of foreign raw materials; c) purchases of domestic raw materials • Eeffective tax load of 4% payable on sales of fertilizer products • Tax benefit will reduce: • capital and operational expenditures for the Minas Gerais State Governor, Antonio Augusto, and Cristiano Veloso, Verde Potash‟s CEO proposed TK production • sales tax on TK 15
  16. 16. Key Milestones 2011 2012 2013 2014 Milestones Q2 Q3 Q4 Cerrado Verde Potash Updated Resource Calculation TK Pre-Feasibility TK Registration TK Feasibility Study TK Construction TK Commissioning Cambridge Technology Other Apatita Phosphate Resource Calculation Limestone Resource Calculation TSXv : NPK 16
  17. 17. Potash Rock vs. Oil Sands Oil Sands Potash Rock Commodity Crude oil Potash Potential Resource 170 billion barrels of oil equivalent 15 billion tonnes Cause for • Dependence on oil imports in the 1970s • Dependence on potash imports in development • Rising price of oil making the projects Brazil with growing agriculture economic industry Life Stage 45 companies developing 82 projects; Verde: market and product development 25 projects in operation stage Key Companies Major International Oil Companies Verde Potash Suncor, Nexen, Cenovus, Husky Sector Value C$120 billion C$200 millionOil sands• Oil sands now an accepted source of crude oil shows the potential our new source of potash• Oil sands deposits were developed because of increasing dependence on oil imports; Brazil‟s dependence on potash imports can be reduced by this development• In 30 years, oil sands emerged from a niche technology to a mainstream source of oil, supplying 6.6% of U.S. oil consumption. Our potash rock may follow suit, providing an answer for growing global potash need in the future 17
  18. 18. Why Potash is Important: Potash is Energy Sugarcane Milling and Refining Ethanol Production Ethanol replaces about• Uses 160kg/ha of potash • Once harvested, sugarcane • Ethanol is produced by 50% of the fuel per year, 55% of total is milled to collect the microbial fermentation of needed to nutrient required (In juice that contain 10-15% the sugar operate light comparison, corn uses sucrose • Water is removed by vehicles on 140kg/ha of potash, 31% • Juice is filtered and refined distillation and dehydration gasoline of req’d nutrient)• Sugarcane is grown in Bagasse power about 8 million hectares of Electricity Generation generation land, of which 55% of the represents harvest is used for ethanol •Bagasse is burned to generate 4.1% of total production electricity for production installed plant and grid capacity Ethanol Production Cost Sugarcane (Brazil): $0.83 Corn (US): $1.14 Ratio energy input to manufacture to energy output of ethanol Sugarcane (Brazil): 1:9.3 Corn (US): 1:1.4 TSXv : NPK 18
  19. 19. Appendix 19
  20. 20. Process and Operating CostsThermoPotash Production Process Estimated Operating Cost1. Mining (1.1mtpy) 1 • Potassium rich rock comes from open pit and •Energy the limestone comes from suppliers in the $18.45 •petroleum coke, electricity surrounding area or Verde‟s quarry •Raw Materials2. Grinding $2.35 •limestone • Potassium rock and limestone are ground by upright rod mill •Labour $8.913. Mixing • The ground rock and limestone are mixed •Maintenance and 4% moisture is added $1.804. Pelletization and Drying • Material is rolled into pellets by disc •Equipment Operation $5.50 pelletizers, and dried by exhaust gas from the rotary kiln •Marketing $1.765. Rotary Kiln and Quenching • After drying, pellets go into the rotary kiln to •Non-Operating Expenses be heated to 1250oC and rapidly cooled $3.04 •administration6. Packaging of ready ThermoPotash product US$41.80/tonne 1These figures can be found on pages 17-15 & 17-16 of the Preliminary Economic Assessment available on SEDAR published on December 13, 2010 TSXv : NPK 20
  21. 21. Pricing Estimates Marketing Study • Agroconsult conducted an Mato Grosso Bahia 325,18ty independent market study to 895,043t/y $189.85 $141.61 understand potential sale price and Goias $93.98 $130.13 495,68t/y market size of ThermoPotash $142.64 Minas $112.98 Gerais • Prices derived exclusively on how 896,051t/y $182.31 blenders can optimize NPK formulas Cerrado Verde $160.04 using ThermoPotash and keep rawMato Grosso material costs equal do Sul 246,621t/y Parana $179.47 778,17t/y Sao Paulo $122.20 $131.01 722,513t/y $63.68 $131.77 Highlighted Market $90.92 Annual Market Potential: 4,359,267 tonnes Potential Sale Price: US$179.47/t1 Delivery-adjusted Price: US$122.20/t1 NOTE 1 Weighted-average of the highlighted market TSXv : NPK 21
  22. 22. Pricing Estimates Optimized Formulation vs. Standard Formulation in 4-20-20 Fertilizer1 Standard - w/o TK Optimized Formulation - w/ TK Weight Price N P K Weight Price N P K (kg) (US$) (kg) (US$)Am. Sulphate 74.2 19.18 1.48% 0.00% 0.00% 5.6 1.45 0.11% 0.00% 0.00%(US$258.52/t)SSP 352.8 89.28 0.00% 7.06% 0.00% 0 0.00 0.00% 0.00% 0.00%(US$253.07/t)MAP 239.7 123.22 2.52% 12.94% 0.00% 370.4 190.41 3.89% 20.00% 0.00%(US$514.06/t)KCl 333.3 171.83 0.00% 0.00% 20.00% 288.6 148.79 0.00% 0.00% 17.32%(US$515.55/t)ThermoPotash 0 0 0.00% 0.00% 0.00% 335.5 61.16 0.00% 0.00% 2.68%($182.31/t)Total Weight 1000 403.53 4.00% 20.00% 20.00% 1000 401.81 4.00% 20.00% 20.00%NOTE1 Agroconsult (see press release dated October 26, 2010) TSXv : NPK 22
  23. 23. ThermoPotash Agronomic ResultsNutrient Availability Tests Limestone Replacement Tests(See August 11, 2010 release) (See October 14, 2010 release)• Tests showed that ThermoPotash • Every tonne of ThermoPotash used (TK) provided statistically equivalent reduces limestone required by 490 nutrients to plants as KCl kgSlow and Controlled Release(See October 15, 2010 release)• Resin tests confirmed slow release properties of ThermoPotash (best suited for Brazilian soils) Potassium Leaching Tests (See December 16, 2010 release) • TK suffers minimal nutrient loss as a result of leaching, whereas KCl loses 26% under the same conditions Carrot‟s planted at Sekita using TK & KCl: statistically inconclusive results TSXv : NPK 23
  24. 24. Why It Hasn’t Been Done Before? 1200 120 Potash Shipments (MMt) 1000 Shipments Brazil 100 Potash Price ($/t) 800 China 80 600 60 400 40 200 20 0 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2002 2003 2004 2005 2006 2007 2008 2009 2010EPotash price was too low Existing Production Gov’t Built• When Verdete was first tested KCl • Large conventional mines are was only $70/t privatized government assets• In 2007 KCl price was still $200/t • No new large mines since 1980‟s reaching $1100/t during 2008 • Now it would cost billions with long• Now $400/t FOB, $600/t in Brazil lead times to production TSXv : NPK 24
  25. 25. ThermoPotash Partnerships ArcelorMittal to Fund Agronomic Trials (See Sept. 22, 2009 release) • Agreement represents a first step in developing corporate demand for ThermoPotash. ArcelorMittal has 170,000ha of cultivated eucalyptus forests for charcoal production. Agrifirma to Undertake Agronomic Trials (See Nov. 24 & Dec. 9, 2009 release) • Agreement secures real world field trials of ThermoPotash for use in corn and soy plantation, also as part of process for conversion of Cerrado scrubland for commercial cultivation. Agrifirma is a Jersey- based land fund with 42,000ha of farmland in Brazil Sekita to Fund Agronomic Trials (See March 22, 2010 release) • Agreement establishes a relationship with one of the largest Brazilian vegetable producers. ThermoPotash to be tested in real world conditions for use with various vegetables. Its farms are located less than 10km from the Cerrado Verde Project Included in Sugarcane Fertilizer Taskforce (See August 4, 2009 release) • ROCKAPL („Rock‟ Arranjo Produtivo Local) is a collaborative effort between government and private enterprise focused on developing fertilizer alternatives for sugarcane destined for ethanol production University of Uberlandia Undertakes Agronomic Trials (See December 9, 2009 release) • Agreement with Dr. Gaspar Korndörfer, Professor of Agriculture at the Universidade Fedederal deUniversidade Fedederal de Uberlandia Uberlandia, secures initial agronomic studies used for the planning of Amazon‟s metallurgical test work and laboratory scale tests on the application of ThermoPotash University of Lavras Agreement (See August 31, 2010 release) • Agreement with the University of Lavras to complete a full slate of tests to register the ThermoPotash product as a fertilizer in Brazil TSXv : NPK 25
  26. 26. Apatita Phosphate Project• 30km of mineralized phosphate with widths between 1km and 5km (see November 8, 2010 release)• Average grade of 7.13% P2O5 from 435 surface grab samples• 12 hole, 1,022m drilling program provided encouraging results at two prospect regions: • Alto da Serra zone - high grade potential of 2m at 9.49% P2O5 • Nau de Guerra zone - high grade potential of 1m at 8.43% P2O5 and 3m at 6.35% P2O5• First concentration test result: 29.8% P2O5 with significant potential for improvement TSXv : NPK 26
  27. 27. Phosphate in Brazil Avg Production Resource 1 Reserve 2 Grade P2O5 Capacity4 Company Project Status Type (Mt) (Mt) P2O5 (%) Concentr.3 (ktpy) Fosfertil/Vale Tapira Operating Carbonatite 1,309.2 7.69 35.5 2,030Copebras/Anglo Ouvidor Operating Carbonatite 256.7 7.63 38.0 1,300 Vale Araxa Operating Carbonatite 88.7 11.12 35/33 910 Fosfertil/Vale Catalao Operating Carbonatite 223.6 8.96 36/34 1,209 Vale Cajati Operating Carbonatite 85.1 5.45 36.0 528 Fosfertil/Vale Patos Operating Metasediments 304.6 12.36 24.0 150 Fosfertil/Vale Salitre Implementati Carbonatite 852.0 10.74 - 1,600 forecast on Vale Anitapolis Implementati Carbonatite 54.0 9.01 - 300 forecast on MBAC5 Itafos Operating Metasediments 44.0 5.39 28/30 50 Notes 1 Resource and Grades: Salitre-DNPM 1975/Anitapolis:, DOU 1980 (DOU = Official Diary of Brazil) 2 Reserve and Grades: DNPM 2006 Mineral Annuary 3 Concentration/Production: ANDA Annuary 2008 4 Major Phosphate Rock Producer by Bete,Inc. for Cargill Fertilizer, inc 1998. Values updated to 2010 including exchange variation and inflation 5 BMO – MBAC report figures April 2010 and Website info September 2010 TSXv : NPK 27
  28. 28. TSX-V:NPKwww.verdepotash.com

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