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Premium Potash ProjectDriven by a ProvenManagement Team
FORWARD LOOKING STATEMENTS    Certain statements in this presentation may constitute "forward-looking" statements which in...
A potash company focused on its    Blawn Mountain property in Utah      SOP: 680,000 tonnes per annum      Bauxite: 3.3 mi...
EXPERIENCED AND PROVEN MANAGEMENT                              Guy Bentinck President & CEO                              C...
COMPETITIVE ADVANTAGES    Large mineral deposit containing premium-quality potash    Strategically located in a mining fri...
POTASH:    ESSENTIAL TO THE WORLD’S FOOD SUPPLY     No known substitute     Increasing world population     Growing per ca...
SULPHATE OF POTASH (SOP) IS A PREMIUM PRODUCT    Sulphate of Potash (SOP)                                          Muriate...
USES OF SOP    Fruits                 Tobacco    Vegetables             Tea    Nuts                   Dry soils    Horticu...
SOP PREMIUM PRICE TRENDS                    U.S. $/tonne      900	        800	        700	        600	        500	        ...
SOP MARKET CHARACTERISTICS     Global SOP Consumption and Commodity Price1     	                                          ...
SOP MARKET DYNAMICS                                                        SOP share of potash market:     Limited product...
THE BLAWN MOUNTAIN PROJECT12
PROJECT OVERVIEW     Large alunite deposit, which is expected to be     processed into SOP, by-product sulphuric acid and ...
SOP HOSTED IN ALUNITE     Volcanic rock mined for over 500 years     Contains alumina (Al2O3), potassium (K2O), and     su...
EXTENSIVE DEVELOPMENT COMPLETED IN     1970’s                          Drilling              Resource estimate      Approx...
SIMPLE PROVEN FLOWSHEET       Alunite     Beneficiation     Calcination            SO2                Acid Plant        Su...
HIGH	  GRADE	  BAUXITE	  BY-­‐PRODUCT	  	  	           Bauxite	  suitable	  for	  a	  Bayer	  Process	                    ...
UTAH: AN ATTRACTIVE     MINING JURISDICTION      Major resource producer      Existing potash production      Best state f...
OUR LAND ADVANTAGE                   State-owned land                   Simpler permitting process                   Lease...
ESTABLISHED INFRASTRUCTURE NEARBY                         Roads, rail and natural                         gas             ...
HISTORIC DRILLING                         320 holes drilled                         in 1970’s21
NI 43-101 CONFIRMATION DRILLING                                               Phase 1                                     ...
SIGNIFICANT RESOURCE IDENTIFIED                                            Measured + Indicated                           ...
EXPECTED TO BE LOWEST COST SOP     PRODUCER     Cash Cost by Production Method                                            ...
PRELIMINARY ECONOMIC ANALYSISRESULTS   PROJECT HIGHLIGHTS   Annual Production Rates:         SOP                          ...
SOP CAPITAL COST BREAKDOWN 1                                                                        24%	  	               ...
OPERATING COSTS: $101/TONNE 1                          7%	                                 7%	  	                         ...
CAPITAL STRUCTURE                                      Millions ($)         Common Shares                       81.3      ...
PROJECT TIMELINEStage          Activity                    2013   2014   2015   2016Confirmation               Areas 1 & 2...
STRONG BOARD WITH DIVERSE SKILLS     AND LOCAL EXPERIENCE     Rahoul Sharan, Chairman                              Stephen...
SKILLED SERVICE PROVIDERS                                  •  Pilot plant                Hazen Research:                  ...
COMPETITIVE ADVANTAGES     Large mineral deposit containing premium-quality potash     Strategically located in a mining f...
CONTACT USE-mail: info@potashridge.comPhone: 416.362.8640 ext 101Website: www.potashridge.comHead office:3 Church Street, ...
February 2013 - Presentation
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February 2013 - Presentation

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February 2013 - Presentation

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  1. 1. Premium Potash ProjectDriven by a ProvenManagement Team
  2. 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 Corporations 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 final prospectus of the Corporation dated November 27, 2012, 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. 3. A potash company focused on its Blawn Mountain property in Utah SOP: 680,000 tonnes per annum Bauxite: 3.3 million tonnes per annum3
  4. 4. EXPERIENCED AND PROVEN MANAGEMENT Guy Bentinck President & CEO Chartered Accountant; 20 years mining/resource experience Sherritt: CFO and SVP Capital ProjectsJeff Hillis CFO Ross Phillips COOChartered Accountant; 10 years experience in large resource10 years mining sector finance, including CFO and energy sector projectsof several public mining companies Sherritt, Capital Power  Iberian Minerals, Excellon, Falconbridge  Laura Nelson VP, Government and Paul Hampton VP, ProjectRegulatory Affairs ManagementExtensive experience in government relations, Geologist and Metallurgical Engineer;permitting and power planning, including the ~30 years experience in design, construction,successful permitting of the Red Leaf oil shale start-up and management of mineral processingproject facilities Red Leaf Resources, Utah Government   SNC, Washington Group, Outotec OVER 80 YEARS COMBINED EXPERIENCE4
  5. 5. COMPETITIVE ADVANTAGES Large mineral deposit containing premium-quality potash Strategically located in a mining friendly jurisdiction with established infrastructure nearby State-owned land allows for an efficient permitting process Historical work expedites project development Lower risk surface mining deposit; expected lowest cost producer 30 year mine life, with upside potential PEA completed: $1.3 billion NPV at 10%; 21.3% after tax IRR5
  6. 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 ~5% EXPECTED ANNUAL GROWTH IN DEMAND TO 20166
  7. 7. SULPHATE OF POTASH (SOP) IS A PREMIUM PRODUCT Sulphate of Potash (SOP) Muriate of Potash (MOP) Potassium Sulphate (K2SO4) Potassium Chloride (KCl) 6 million tonnes sold in 20111 55.8 million tonnes sold in 20112 Potassium and sulphur are essential nutrients2 Crop quality/yield diminish as chloride builds up2 Improves yield, quality, taste and enhances shelf life2 AVERAGE 47% PRICE PREMIUM OVER MOP37 1Source: Fertecon 2Source: CRU 3Based on historical data
  8. 8. USES OF SOP Fruits Tobacco Vegetables Tea Nuts Dry soils Horticultural Plants Salty soil8
  9. 9. SOP PREMIUM PRICE TRENDS U.S. $/tonne 900   800   700   600   500   400   300   200   SOP1 MOP2 100   0   2006   2007   2008   2009   2010   2011   2012   HISTORICAL PRICE PREMIUM FOR SOP HAS RANGED BETWEEN 30% AND 61%9 1SOP, standard grade cif NW Europe (Source: Fertilizer Week) 2MOP, all grades, fob Vancouver/Portland (Source: CRU)
  10. 10. SOP MARKET CHARACTERISTICS Global SOP Consumption and Commodity Price1   12,000 $1,000 $900 10,000 Rest of $800Africa the World Europe $7004.6% 14.9% 8,000 23.3% $600 (US$/tonne) Tonnes (000s) 6,000 $500 N. America 8.6% $400 China 4,000 44.3% $300 $200 2,000 $100 Central and 0 $0 South America 2000 2004 2008 2012 2016 2020 4.3% Global SOP Consumption Historical Standard FOB NW Europe (US$/tonne SOP) Estimated Standard FOB NW Europe (US$/tonne SOP)10 1Source: Fertecon, CRU
  11. 11. SOP MARKET DYNAMICS SOP share of potash market: Limited production and premium Current: ~10% price has restricted demand Potential: >28%1 Trend toward high Potential to use SOP in typical cereal crop fertilizer blends nutrient fertilizers instead of ammonium sulphate SOP consumption: China (pop. 1.3 billion): 1.9 million tpy India India: (pop. 1.2 billion) 50,000 tpy (<1% of country’s potash consumption) SOP consumption = 32,000 tpy (0.4% of total potash Brazil consumption) Premium crops grown on 20% of planted land SIGNIFICANT GROWTH POTENTIAL 1Based on crops that are best suited for SOP11
  12. 12. THE BLAWN MOUNTAIN PROJECT12
  13. 13. PROJECT OVERVIEW Large alunite deposit, which is expected to be processed into SOP, by-product sulphuric acid and bauxite Target 680,000 tonnes per year of SOP by mid-2016 Historical work expedites project development Mineral deposit to be surface mined Proven process ANTICIPATED PRODUCTION BY 201613
  14. 14. SOP HOSTED IN ALUNITE Volcanic rock mined for over 500 years Contains alumina (Al2O3), potassium (K2O), and sulphur (SO3) Historic source of SOP in U.S. and Australia Long-term SOP and alumina production in Azerbaijan14
  15. 15. EXTENSIVE DEVELOPMENT COMPLETED IN 1970’s Drilling Resource estimate Approx. $25 million spent Feasibility study (~ $100 million in today’s dollars) Mine plan Engineering All data owned by Potash Ridge Permitting Pilot plant: 3-year operation processing 11 tonnes/dayPREVIOUS WORK ACCELERATES PROJECT DEVELOPMENT15
  16. 16. SIMPLE PROVEN FLOWSHEET Alunite Beneficiation Calcination SO2 Acid Plant Sulphuric Acid Flowsheet mirrors historical production Water Leach Potash Sulphate Solution Crystalizer Compaction Drying Potash Sulphate processes 51% alumina Potash Ridge expects the processing plant to produce: content bauxite •  680,000 tonnes of SOP per annum •  3.3 million tonnes per annum of 51% alumina content bauxite •  1.6 million tonnes of concentrated sulphuric acid per annum RECENT TEST WORK CONFIRMS FLOWSHEET16
  17. 17. HIGH  GRADE  BAUXITE  BY-­‐PRODUCT       Bauxite  suitable  for  a  Bayer  Process   •  Non-­‐tradi@onal  high-­‐grade  alumina  (51%)  resource   •  Low  iron  /  @tanium  concentra@ons  compared  to  a  tradi@onal  bauxite   •  Avoids  the  produc@on  of  bauxite  residue  “red  mud”  waste     •  No  iden@fied  heavy  metals   •  Favorable  access  to  markets  via  exis@ng  rail  and  port  infrastructure   Typical  bauxite:   Potash  Ridge  bauxite:   •  THA  =  41.66  %    (Tri  -­‐hydrate  Alumina)   •  THA  =  50.9  %    (Tri  -­‐hydrate  Alumina)   •  Total  SiO2  =  7.32%  (Total  Silica)   •  Quartz  =  20.6  %  (Form  of  Silica)   •  Quartz  =  1.86  %  (Form  of  Silica)   •  Fe2O3  =  2.58  %  (Ferrous  Oxide  <Iron>)   •  Fe2O3  =  5.98  %  (Ferrous  Oxide  <Iron>)   •  TiO2  =  1.42  %  (Titanium  Oxide)   •  TiO2  =  2.43  %  (Titanium  Oxide)   •  P2O5  =  0.59  %  (Phosphorous  Pent-­‐oxide)   •  P2O5  =  0.06  %  (Phosphorous  Pent-­‐oxide)   •  TOC  =  0.19%  (Total  Organic  Carbon)  17  
  18. 18. UTAH: AN ATTRACTIVE MINING JURISDICTION Major resource producer Existing potash production Best state for business1 Top quartile mining jurisdiction2 ALMOST 100 YEARS OF POTASH PRODUCTION18 1Forbes Magazine, November, 2011 2Fraser Institute, February, 2012
  19. 19. OUR LAND ADVANTAGE State-owned land Simpler permitting process Leasehold and royalty agreements negotiated No known adverse environmental, social or aboriginal issues Sufficient water nearby – rights application made MUNICIPAL AND STATE SUPPORT OF PROJECT19
  20. 20. ESTABLISHED INFRASTRUCTURE NEARBY Roads, rail and natural gas Construction materials and equipment suppliers nearby Skilled labour force Access to ports of Los Angeles and Houston20
  21. 21. HISTORIC DRILLING 320 holes drilled in 1970’s21
  22. 22. NI 43-101 CONFIRMATION DRILLING Phase 1 Area 1 – 34 holes (19 core; 15 RC) Phase 2 Area 1 – 38 holes (12 core; 26 RC) Area 2 – 50 holes (6 core; 44 RC) Phase 3 Area 1 – 2 RC holes Area 2 – 16 RC holes 140 holes following completion of current drilling program  22
  23. 23. SIGNIFICANT RESOURCE IDENTIFIED Measured + Indicated Inferred Area SOP SOP Resource SOP tons Resource SOP tons Alunite grade Alunite grade tons (000s) (000s) tons (000s) (000s) grade1 grade1 NI-43-101 Compliant 2 1 156,285 37.6% 9,315 15.8% 392 46.5% 24 13.1% 2 4 464,442 35.6% 26,395 15.9% 250,769 34.7% 13,476 15.5% Total: 620,726 35.8% 35,710 15.9% 251,160 34.7% 13,500 15.5% Areas 1 & 2 Historic Resources 3 3 11,600 44.0% 987 19.3% 281,400 44.0% 19.3% 23,950 4 51,700 36.5% 3,667 19.4% 49,200 38.0% 19.5% 3,645 Total: 63,300 37.9% 4,654 19.4% 330,600 43.1% 27,595 19.3% Areas 3 & 4 Initial Mine Plan for 30 Years using NI 43-101 Compliant M&I Resources   1 Contained within alunite 2 Using 1.00% cut-off grade 3 The historic resources are not NI 43-101 compliant although reasonable methodologies were applied at the time. A qualified person has not done sufficient work to classify, and the Corporation is not treating the estimates as current mineral resources or mineral reserves.23
  24. 24. EXPECTED TO BE LOWEST COST SOP PRODUCER Cash Cost by Production Method $550 Process Method and Cost Comparisons Avg Cost/Tonne Avg Process World Cost / Method Capacity Process Inputs Products Tonne $386 Mannheim 60% ! MOP ! SOP $550 ! Sulfuric Acid ! HCI $300 ! Energy MOP and 25% ! MOP ! SOP $386 Kieserite ! Kieserite ! Magnesium ! Energy Chloride Salt Lakes 15% ! Lake Brines ! SOP $300 $162 ! Energy ! Magnesium Chloride ! NaCI $1011 Polyhalite – ! Polyhalite ! SOP $162 Leach ! Water ! Kieserite ! Energy Alunite – ! Alunite ! SOP $101 Leach ! Energy ! H2SO4 Alunite Polyhalite Salt Lakes MOP/ Mannheim ! Bauxite substitute Leach Leach Sulphate Process Salts POTASH RIDGE Includes expected Expected In Production and in-production data24 1 The cost is converted from $92 per short ton. Excludes bauxite credits  
  25. 25. PRELIMINARY ECONOMIC ANALYSISRESULTS PROJECT HIGHLIGHTS Annual Production Rates: SOP 680,000 tonnes Sulphuric Acid 1.6 million tonnes Initial Mine Plan1 30 years Capital Cost2 $1.075 billion FINANCIAL HIGHLIGHTS NPV @ 10% (after tax)3 $1,331 million Unlevered IRR (after tax)3 21.3% 1 Future planned work may expand resource base and extend life of project beyond 30 years 2 Excludes third party costs: power generation ($160 million), sulphuric acid plant ($180 million) and water treatment plant ($40 million) 3 Excludes potential credits related to sale of 3.3 million tonnes per annum of bauxite25  
  26. 26. SOP CAPITAL COST BREAKDOWN 1 24%      SOP  Leaching,     Crystalliza@on     and  Drying   41%       Con@ngency     and     Indirects   CAPITAL  COST:  $1.075  billion   18%     Calcina@on   17%     Beneficia@on   1 Excludes third party costs: power generation ($160 million), sulphuric acid plant ($180 million) and water treatment plant ($40 million)26    
  27. 27. OPERATING COSTS: $101/TONNE 1 7%   7%     Cost  Breakdown   Millions   Other     ($14M)   14%   Direct  Plant  and  Mine  Costs   $188   Royal@es   ($33M)   Royal@es   $33   Other   $14   TOTAL:   $235   Divided  by   2.55  tons2   79%     Cost  per  ton   $92   Direct  Plant  and  Mine     Produc@on  Costs     Cost  per  tonne   $101   ($188M)   1  The cost is converted from $92 per short ton. Excludes bauxite credits 2    750,000  tons  (SOP)  +  1.8M  tons  (sulphuric  acid)  =  2.55  million  tons  or  2.3  million  tonnes      27  
  28. 28. CAPITAL STRUCTURE Millions ($) Common Shares 81.3 Non-voting Common Shares 5.0 Total Shares Outstanding 86.3 Warrants – $ 0.50 10.7 Warrants – $1.00 5.0 Broker options/warrants 3.4 Stock options 6.8 Total Fully Diluted Shares 112.328  
  29. 29. PROJECT TIMELINEStage Activity 2013 2014 2015 2016Confirmation Areas 1 & 2Drilling Metallurgical Testing andProcess Pilot Plant (processDevelopment optimization)Permitting Project Permitting PrefeasibilityEngineeringStudies Feasibility/Mine Design Civil Works, etc.Construction Processing Plant MineProduction Commissioning29  
  30. 30. STRONG BOARD WITH DIVERSE SKILLS AND LOCAL EXPERIENCE Rahoul Sharan, Chairman Stephen Harapiak Chartered Accountant with over 30 years President and COO Victory Nickel Inc. diversified mining experience Former CEO, Potash Corp. Former Chairman and CEO of Uranium Power Corporation Rocco Rossi Navin Dave Experienced business strategist and public company director Chairman and CEO of Stat-Ops International Former President and COO of MGI Software Corp. Former Managing Partner, KPMG LLP Phil Williams Robert C. Gross Director, Investment Banking of Dundee Capital Markets Inc. Former Chief of Staff to Utah Governor Former VP, Business Development Pinetree Former Senior Advisor, Coalition Authority of Iraq Capital and Mega Uranium Ltd. Former Chairman and President of First Interstate Bank Guy Bentinck Former President and CEO of Blue Healthcare President & CEO Bank MANAGEMENT AND BOARD CURRENTLY OWN 4%30
  31. 31. SKILLED SERVICE PROVIDERS •  Pilot plant Hazen Research: •  Metallurgical testing •  Resource estimates •  Permitting Norwest: •  Prefeasibility study •  Feasibility study •  Water rights •  Permitting Stoel Rives: •  Water rights ICPE •  Engineering31
  32. 32. COMPETITIVE ADVANTAGES Large mineral deposit containing premium-quality potash Strategically located in a mining friendly jurisdiction with established infrastructure nearby State-owned land allows for an efficient permitting process Historical work expedites project development Lower risk surface mining deposit; expected lowest cost producer 30 year mine life, with upside potential PEA completed: $1.3 billion NPV at 10%; 21.3% after tax IRR32
  33. 33. CONTACT USE-mail: info@potashridge.comPhone: 416.362.8640 ext 101Website: www.potashridge.comHead office:3 Church Street, Suite 600Toronto, OntarioM5E 1M233  
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