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Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
Mbac investor presentation feb 2014
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Mbac investor presentation feb 2014

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  • 1. INVESTOR PRESENTATION FEBRUARY 2014 TSX: MBC; OTCQX:MBCFF WWW.MBACFERT.COM
  • 2. MBAC FERTILIZER CORP. SAFE HARBOUR Disclaimer: The contents are not to be reproduced or distributed to any third party, including the public or press. The information contained herein, while obtained from sources which we believe are reliable, is not guaranteed as to its accuracy or completeness. The company is a development stage mineral resource exploration company and many of its mineral projects have yet to be proven to be economic. Certain information set out herein in relation to the Company’s advanced projects is based on technical reports that are in compliance with NI 43-101 that are not yet final. The reader is cautioned that such information is subject to change, although management does not anticipate any material deviations. The contents of this presentation is for informational purposes only and does not constitute an offer to sell or a or a solicitation to purchase any securities referred to herein Forward looking statements This presentation includes certain forward-looking statements about future events and/or financial results which are forward looking in nature and subject to risks and uncertainties. Forward-looking statements include without limitation, statements regarding the company’s plans, goals or objectives and future completion of mine feasibility studies, mine development programs, capital and operating costs, production, potential mineralization, resources and reserves, exploration results and future plans and objectives of MBAC. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may," will," "expect," "intend," "estimate," "anticipate," "believe," or "continue" or the negative thereof or variations thereon or similar terminology. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from expectations include risks associated with mining generally and pre-development stage projects in particular. Potential investors should conduct their own investigations as to the suitability of investing in securities of MBAC Fertilizer Corp. 2
  • 3. MBAC FERTILIZER CORP. INVEST IN MBAC 3 To be a significant integrated producer of phosphate fertilizers and related products in the Brazilian and Latin American markets Our Focus  Optimize operations  Leverage Brazil’s agriculture sector  Organic growth opportunities
  • 4. MBAC FERTILIZER CORP.  Itafós – Project development  Santana – Pre-feasibility Study  Araxá – Prelim. Economic Assessment FOCUSED ON VALUE CREATION 4 2012 YEAR OF TRANSITION  Itafós – Construction completed  Itafós – First SSP deliveries  Santana – Definitive Feasibility Study  Itafós – 1st full year of commercial production  Advancement of Santana  Refinance Balance Sheet debt 2012 Year of progress 2013 Year of transition 2014 Year of value realization 2015+ Period of growth  Itafós – Ongoing production  Santana – Production launched  Integrated, multi-mine producer
  • 5. MBAC FERTILIZER CORP. MBAC OVERVIEW 5 SANTANA PHOSPHATE High grade phosphate deposit strategically located near the border of Para and Mato Grosso states. Meeting animal feed phosphate and fertilizer demand in the Center-West Brazil. DFS completed BRAZIL ITAFÓS OPERATIONS PHOSPHATE Itafόs Arraias SSP Operations - MBAC’s first phosphate operation located in the centre of Brazil’s largest agricultural region that will provide near-term cash flow Excellent logistical advantage. ARAXÁ PHOSPHATE /REE/Nb High grade Phosphate and Rare Earth Elements/Niobium deposit. PEA completed São Paulo Rio de Janeiro PA MA PI BA GO MT TO AM MG SP Brasilia NEW AGRICULTURE FRONTIER  MBAC is currently operating its Itafόs phosphate operations and has two growth projects in various stages of development
  • 6. MBAC FERTILIZER CORP. Peter Marrone * Chairman and Founder Cristiano Melcher President, CEO and Director Antenor Silva Founder and Director Denis Arsenault, CA Director Alexander Davidson * Director Brian Hayward Director David Nierenberg * Director Hon. David Peterson Director Leonardo Marques da Silva Director Carlos Braga VP, Technical Services Rodrigo Pinto, CA VP, Finance and CFO Steve Burleton VP, Corporate Development BMO Capital Markets Joel Jackson Canaccord Genuity Keith Carpenter GMP Securities Anoop Prihar National Bank Financial Greg Colman Paradigm Capital Spencer Churchill Raymond James Steve Hansen CORPORATE OVERVIEW 6 Directors & Management Research Coverage Current Capital Structure Symbol/Exchange TSX: MBC Management & Directors ~20% Current Share Price $1.12 52 wk High/Low $3.43-$0.90 Market Capitalization ($ millions) $170.3 170.32M * Member of the Executive Committee Basic Shares 152.03M Options 12.21M Warrants 6.08M Basic Shares Options Warrants 0.8 1.2 1.6 2.0 2.4 2.8 3.2 3.6 $/Share Stock Chart 52 Week (MBC.TO)
  • 7. MBAC FERTILIZER CORP. FROM PURCHASE TO PRODUCTION 7 Beginning of Construction October 2011 Purchase of Itafós RNP Operations October 2008 Resource estimate & PFS March 2010 Beginning of Operations August 2013 In less than 5 years
  • 8. MBAC FERTILIZER CORP. STRONG FUNDAMENTALS 8  Global food production must increase 50% by 2030 according to UN  Brazil is fast becoming the “bread basket” to the world  Agribusiness sector continues to be major driver of Brazilian economy  Brazil is 4th largest in Agribusiness exports globally  Grain prices remain at high levels relative to historical prices  Key driver of fertilizer prices  Cropping land area in Brazil has increased 3.2% per annum over the past 12 years Source: ANDA; Ministry of Agriculture; MBAC team analysis * Yearly average values used in calculating growth for last 12 years 0 100 200 300 400 500 600 700 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 US$/MetricTonne Historical Soybeans & Maize Prices Soybeans Maize (corn)
  • 9. MBAC FERTILIZER CORP.  Fertilizer demand in Brazil continues to grow at a faster pace than developed countries  Consumption has grown at CAGR 5.5% from 20 to 31 million tonnes between 2005 and 2013  Imports supply ~70% of the demand  New Agricultural Frontier (MaPiToBa) continues to lead the growth in agriculture in Brazil  Fertilizer consumption grew between 2005 and 2012 at CAGR of 10.4%  Transportation costs continue to rise in Brazil  Due to decreased fuel subsidies and increased regulations  Strengthens logistic advantage for our projects STRONG FUNDAMENTALS 9Source: ANDA; Ministry of Agriculture; MBAC team analysis 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 2005 2006 2007 2008 2009 2010 2011 2012MillionTonnes Fertilizer Delivered to Customers in MaPiToBa Region 0 5 10 15 20 25 30 35 2005 2006 2007 2008 2009 2010 2011 2012 2013 MillionTonnes Fertilizer Delivered to Customers in Brazil
  • 10. MBAC FERTILIZER CORP. LOGISTICS PROVIDES COST ADVANTAGE 10Source: ANDA; Ministry of Agriculture; MBAC team analysis SSP TARGET MARKET OVERVIEW (BRAZIL) Itaquí Port Fortaleza Port GO Paranaguá Port (Main fertilizer Port in BR) Santos Port Scale: in Kilometeres 1000 PI PA MT TO AM MA Aratu PortMG BA Legend Other Domestic Competitor Closest Competitor Domestic Supply Import Supply Araxá Project New Agriculture Frontier  Both MBAC phosphate operations and projects have a significant competitive advantage resulting from logistics  Closest competitor ( ) has to transport its rock from over 1,000 km to its industrial site  Other domestic competitors are located at minimum of 700 km away  Closest ports are more than 1,000 km away  Inland transportation costs of approx. 6 - 7 cents per tonne km  expected to increase – new regulations / decreased fuel subsidies Araxa 2000 Santana Itafos 500 Km 1000 Km 750 Km
  • 11. MBAC FERTILIZER CORP. PRICE TRENDS 11  Global phosphate fertilizer prices starting to recover after 3 year bear market  DAP prices up 39% since lows in Nov 2013  TSP prices up 32% since lows in Nov 2013 Source: Independent Fertilizer Sources  TSP can be used as a proxy for SSP price trends  Forecasts show TSP prices rebounding starting in 2014  Falling input prices to support margins  Company expects 2014 SSP prices to average $235 - $245 / tonne  Slightly below average price in 2013 300 310 320 330 340 350 360 370 380 390 400 2013 2014 E 2015 E 2016 E $/Tonne TSP Prices FOB North Africa - 100 200 300 400 500 600 700 800 Jan-2010 Jan-2011 Jan-2012 Jan-2013 Jan-2014 $/Tonne FOB Morocco Historical Phosphate Fertilizer and Phosphate Rock Trends DAP TSP
  • 12. MBAC FERTILIZER CORP. ITAFÓS ARRAIAS PHOSPHATE OPERATIONS
  • 13. MBAC FERTILIZER CORP. OPERATIONS UPDATE 13 World Class Scale
  • 14. MBAC FERTILIZER CORP. ITAFÓS – MINE & OPERATIONS 14Note: (1) Conventional contact process (2) KTPA – Thousand Tonnes Per Annum Resource Estimate (January 2012) : Measured & Indicated Resource Tonnes (Grade%) 75.8 M Tonnes (5.0% P2O5) Inferred Resource Tonnes (Grade%) 12.3 M Tonnes (3.9% P2O5) Reserves (Proven & Probable) (March 2013) 64.8 M Tonnes (5.1% P2O5) Recovery Rate (Target) 51% Average Beneficiated Rock Grade 28% Name Plate Capacity 500,000 TPA Sustaining Capex $6 M/Year Sulphur Yard Sulphuric Acid Plant Fertilizer Plant Beneficiation Plant Phosphate Yard
  • 15. MBAC FERTILIZER CORP. ITAFÓS SSP PRODUCTION 15 Acidulation Required: ~6 KTPA Annual Prod.: 500 KTPA Annual Prod.: 500 KTPA Mill Plant Mine Beneficiation Sulphur Sulphuric Acid Annual Prod.: 3,000 KTPA Av. Grade: 5.4% P2O5 Annual Prod.: 330 KTPA Av. Grade: 28% P2O5 Required: ~75 KTPA Annual Prod.: 220 KTPA (1) Sulphuric Acid Plant Generated: 6 MW Energy Granulated SSP “GSSP” Annual Prod.: 500 KTPA Granulation Ammonia Note: (1) Conventional contact process (2) KTPA – Thousand Tonnes Per Annum
  • 16. MBAC FERTILIZER CORP. ITAFÓS – CURRENT STATUS 16  The operations have started  Continue to refine the production processes and optimize efficiency  The mine is operating according to plan  Mined grade in Q3 was 6.7% which is a little higher than the average grade  Beneficiation plant has undergone modest mechanical and process modifications  Improved recoveries experienced  Expect to be able to meet 2014 demand within the region  The sulphuric acid plant and granulation plants are meeting expectations
  • 17. MBAC FERTILIZER CORP. ITAFÓS – MARKET 17  MBAC is focused on “industrial sales” (traders, blenders, distributors, large farm co-ops)  Focused on securing 2014 strategic sales agreements  Have signed a strategic sales agreement for 70 KTPA with a regional blender  Continuing to negotiate additional agreements Overview of Customers • Significant Potential Customers Yara, Heringer (2nd largest blender in Brazil) and Fertilizantes Tocantins (largest blender in TO State) • Customer Locations In negotiation with potential customers who have their blending plants and/or their warehouses located close to the Itafós site ( )
  • 18. MBAC FERTILIZER CORP. BALANCE SHEET 181818  Itafόs capital spending completed  Focus remains on managing working capital position  Additional working capital facilities received  Working capital raised through prepaid sales  Looking at monetizing receivables and tax credits  Company now exploring the restructuring of its debt  Better position to negotiate more beneficial terms as an operating company  Better align debt repayments and cash flows
  • 19. MBAC FERTILIZER CORP. DEVELOPMENT PROJECTS
  • 20. MBAC FERTILIZER CORP. SANTANA PROJECT OVERVIEW 20  Santana contains one of the highest grade phosphate resources in Brazil  Flexibility to produce higher value-added products (TSP, MAP and DCP)  Area is one of the largest agricultural markets in Brazil  Mato Grosso state is the largest fertilizer consumer in Brazil  The municipality of São Felix do Xingu (PA) has the largest number of cattle in Brazil Plan View of The Mineralized Domain
  • 21. MBAC FERTILIZER CORP. SANTANA - DFS 21  Robust project - NPV of US$396 million and IRR of 19.9%  Lessons learned from Itafós were incorporated into the Santana design and cost estimate • A more compact footprint - will reduce the use of materials; • Design improvements will also reduce the use of materials; • Will get its water supply directly from a river and will not require the a dam; and • The high grade of the deposit will allow for a smaller beneficiation plant.  EPCM contract will provide independent oversight and reduce cost risk Santana Itafós Reserves Million Tonnes 45.5 64.8 Grades % 12.9% 5.1% Mine Life Years 32 19 Production (SSP) Tonnes per year 500,000 500,000 Total Capex BRL Million 1,211.8 (1) 750.7 Total Capex US$ Million 426 (1) 340 (2) (1) Includes a contingency reserve of US$50 million (2) Converted at 2.2 BRL/US$
  • 22. MBAC FERTILIZER CORP. NEXT STEPS - SANTANA 22  Executive Committee continues to carry out a detailed review of the project  Will undertake detailed engineering prior to giving its formal approval of the project • Minimize scope changes • Provide greater certainty on capex and opex • Better evaluate funding options  Board will provide construction decision after detailed review  Discussions with lenders and financial institutions for project financing will be finalized  Company also in discussion with interested partied regarding a sale of minority stake  Company intends to rely on financing options that are least dilutive to shareholders
  • 23. MBAC FERTILIZER CORP. ARAXÁ PROJECT OVERVIEW 23  One of the highest grade REO deposits in the world  M&I of 6.3 Mt @ 5.0% TREO and 1.02% Nb2O5  Advantaged location  Area is surrounded by two large operations: • Vale fertilizer mine/plant • CBMM Niobium mine/plant  Developed infrastructure  PEA completed in October, 2012  Capex $406 million  NPV $967 million  IRR 30% CBMM MINE Araxá Project VALE Mine Araxá, MG Project Location REE Deposit Itafos Santana
  • 24. MBAC FERTILIZER CORP. NEXT STEPS - ARAXÁ 24  Phase 2 pilot plant tests for bulk concentrate have been completed  Have produced 200 kg’s of 98% REO bulk concentrate  Continued discussions with potential off-take partners  Will start Phase 3 pilot plant tests for REO separation Q4 2013  The asset has been determined to be “non-core”  Company is reviewing options to sell all or part of the asset
  • 25. MBAC FERTILIZER CORP. PILOT PLANT 25 Homogenization Milling and Classification Drying Process Filter Press REO Filter Cake Solvent Extraction
  • 26. MBAC FERTILIZER CORP. WWW.MBACFERT.COM
  • 27. MBAC FERTILIZER CORP. APPENDICES

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