2
Disclaimer:
The contents are not to be reproduced or distributed to any third party, including the public or press. The
...
3
To be a significant integrated producer of phosphate and potash fertilizers
and related products in the Brazilian and La...
4
2013
Year of transition
2015+
Period of growth
 Lessons learned & applied
 Itafós – Construction completed
 Itafós – ...
5
Current Capital Structure
Research Coverage
Symbol/Exchange TSX: MBC
Shares Outstanding 152.0M
Options 9.2M
Fully Dilute...
6
 Brazil is fast becoming the “bread basket” to the world
 Agribusiness sector continues to be major driver of Brazilia...
7
 Fertilizer demand in Brazil continues to grow at a faster pace than developed countries
 Consumption has grown at CAG...
SSP TARGET
MARKET
OVERVIEW
(BRAZIL)
8
Itaquí Port
Fortaleza Port
GO
Paranaguá Port
(Main fertilizer Port in BR)
Santos Por...
4,702,201
4,234,959
5,033,885 5,363,485 5,067,000
300,753
225,391
312,533
612,072
671,000
3,000,000
4,000,000
5,000,000
6,...
11
 Mine construction and preparation have been completed and is
operational
 Ore extraction has started with ~225,000 t...
12
 Updated technical report dated March 27, 2013
 47% increase in proven and probable reserves
 Proven and probable re...
13
 Current capital cost estimate is $323.1 million (25% increase from September 2012 estimate)
 Renegotiation with the ...
14
Project Risk Mitigation
 A number of important measures have been taken to de-risk the project
 All detailed engineer...
 $10 million - sale of interest in non-core exploration ground
in Para state
Asset Sale
 $52 million bought deal financi...
16
 Roberto Busato Belger will dedicate 100% of his time to work with the sales team
 MBAC is focused on “industrial sal...
17
 Negotiations with large potential customers are well advanced.
 The Company has received commitments for 35,000 tonn...
18
 Completion of electro mechanical erection
 Ramp up mineral processing plant (processing/beneficiating ore)
 Obtain ...
19
Primary Crusher
Floatation Cells
Ball Mill
Thickener
20
Sulphuric Acid Plant Electric Substation
Water Dam Granulation Unit
22
 Santana contains one of the highest grade phosphate resources in Brazil
 Flexibility to produce higher value-added p...
23
 Completion of Definitive Feasibility Study in mid-2013
 Executive Committee will carry out a detailed review of the ...
24
CBMM
MINE
Araxá Project
VALE
Mine
Araxá,
MG
Project Location
REE Deposit
Itafos
Santana
 A high grade REE/Niobium/Phos...
25
 Phase 2 pilot plant tests for bulk concentrate expected to be completed by mid-2013
 Have produced a 98% REO bulk co...
26
Homogenization Milling and Classification
Drying Process Filter Press REO Filter Cake
Solvent Extraction
Mining
3 Mt @
5.4% P2O5
Mill Plant
Sulphuric Acid Plant
Beneficiation
P2O5 Concentrate
330,000 t @ 28% P2O5
P2O5 Recovery:...
30Note: (1) Neutral Ammonium Citrate
Al3+  Aluminum Toxicity
Source: (*) Sinprifert/ANDA
 SSP is the most applied fertil...
31
Source: UN Population Division http://esa.un.org/unpp/index.aspl
Source: Looking ahead in world food and agriculture pe...
0
100
200
300
400
500
600
700
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
20...
33
Arable Land Per Capita
Source: FAOSTAT
Developing Countries With The Highest Land Balance
Source: FAO- Looking ahead in...
0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000
USA
Netherlands
Germany
Brazil
France
Be...
0
1,000
2,000
3,000
4,000
5,000
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
...
36
 Current capital cost estimate is $323.1 million (25% increase from June 2012 estimate)
 Renegotiation with the prima...
37
 High grade ore results in a greater quantity of LREE’s and HREE’s comparable to leading
global REE producers
Category...
38
Mineral Resource Grade Tonnage Report – June 1, 2012
Cut-Off
(% TREO)
Tonnes
(Mt)
TREO
%
LREO
% *
HREO
% **
P2O5
%
Nb2O...
SN
Soil Colluvial/alluvial
39
 Cross section showing ore types and grades of REO reaching over 20%
Saprolite
Lateritic Ha...
Investor presentation  May 2013
Investor presentation  May 2013
Investor presentation  May 2013
Investor presentation  May 2013
Investor presentation  May 2013
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Investor presentation May 2013

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Investor presentation May 2013

  1. 1. 2 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 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. 2. 3 To be a significant integrated producer of phosphate and potash fertilizers and related products in the Brazilian and Latin American markets BRAZIL 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. PFS completed ITAFÓS PHOSPHATE Itafόs Arraias SSP Project is a unique project located in the centre of Brazil’s largest agricultural region that will provide near-term cash flow Excellent logistical advantage. Construction 94% complete 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 Agricultural Frontier
  3. 3. 4 2013 Year of transition 2015+ Period of growth  Lessons learned & applied  Itafós – Construction completed  Itafós – First SSP deliveries  Santana – Definitive Feasibility Study  Itafós – 1st full year of commercial production  Itafós – Capacity reached  Itafós – Ongoing production  Santana – Production launched  Integrated, multi-mine producer 2014 Year of value realization 2012 Year of progress  Itafós – Project advancement  Santana – Pre-feasibility Study  Araxá – Prelim Economic Assessment
  4. 4. 5 Current Capital Structure Research Coverage Symbol/Exchange TSX: MBC Shares Outstanding 152.0M Options 9.2M Fully Diluted 161.2M Management & Directors ~13% Current Share Price $2.15 52 wk High/Low $3.94-$1.90 Market Capitalization ($ millions) $326.8 BMO Capital Markets Joel Jackson Canaccord Genuity Keith Carpenter Paradigm Capital Spencer Churchill Raymond James Steve Hansen GMP Securities Anoop Prihar Salman Partners Andrea Rubakovic National Bank Financial Robert Winslow Peter Marrone Chairman and Founder Denis Arsenault, CA Director Alexander Davidson Director Brian Hayward Director Eduardo Ledsham Director David Nierenberg Director Hon. David Peterson Director Leonardo Marques da Silva Director Antenor Silva CEO, Vice-Chairman and Founder Roberto Busato Belger President and Chief Operating Officer Carlos Braga VP, Technical Services Rodrigo Pinto, CA VP, Finance and CFO Steve Burleton VP, Corporate Development Antônio Nagle VP, Administration Directors & Management 1.8 2.2 2.6 3.0 3.4 3.8 4.2 Stock Chart 52 Week (MBC.TO)
  5. 5. 6  Brazil is fast becoming the “bread basket” to the world  Agribusiness sector continues to be major driver of Brazilian economy  Brazil is 4th largest in Agribusiness exports globally  Grain prices remain at high levels relative to historical prices  Key driver of fertilizer prices Source: ANDA; Ministry of Agriculture; MBAC team analysis 0 100 200 300 400 500 600 700 90 92 94 96 98 00 02 04 06 08 10 12 US$/MetricTonne Historical Soybeans & Maize Prices Soybeans Maize (corn)  Land used for cropping in Brazil has increased 2.6% per annum over the past 7 years
  6. 6. 7  Fertilizer demand in Brazil continues to grow at a faster pace than developed countries  Consumption has grown at CAGR 5.6% from 20 to 29.5 million tonnes between 2005 and 2012  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 Source: ANDA; Ministry of Agriculture; MBAC team analysis 0 5 10 15 20 25 30 35 2005 2006 2007 2008 2009 2010 2011 2012 MillionTonnes 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 2005 2006 2007 2008 2009 2010 2011 2012 MillionTonnes Fertilizer Delivered to Customers in Brazil Fertilizer Delivered to Customers in MaPiToBa Region
  7. 7. SSP TARGET MARKET OVERVIEW (BRAZIL) 8 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 Source: MBAgro  Both MBAC phosphate 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
  8. 8. 4,702,201 4,234,959 5,033,885 5,363,485 5,067,000 300,753 225,391 312,533 612,072 671,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 2008 2009 2010 2011 2012 Tonnes SSP Consumption in Brazil Production Imports 9Source: ANDA; MBAC team analysis  Brazil consumes approximately 5 – 6 million tonnes of SSP per annum  It is estimated that the MBAC target region consumed approx. 1.2 million tonnes in 2012  This is expected to grow to 1.8 million tonnes by 2020 representing a CAGR of over 4% per year  Fertilizer product deliveries in the Company’s target region have lagged year to date  Unusually dry conditions experienced in the first quarter of 2013  SSP prices have weakened in line with global decline in phosphate fertilizer prices  Brazilian soybean production is still forecasted to hit record levels in 2013  Fertilizer will continue to strengthen over the next several months
  9. 9. 11  Mine construction and preparation have been completed and is operational  Ore extraction has started with ~225,000 tonnes stockpiled (average grade of 8% P2O5)  Beneficiation plant has been commissioned and operations have commenced  Operating licenses for the mine, water dam, tailings dam, pipelines and beneficiation plant received  Powerline has been completed and is operational  Water dam has reached the water level necessary for water supply to the plants  Water/tailings dams have been completed and are operational  All major equipment has been delivered to site  All key personnel needed to operate plants are in place  Physical progress of the construction to date is approximately 94% completed Work Completed To Date
  10. 10. 12  Updated technical report dated March 27, 2013  47% increase in proven and probable reserves  Proven and probable reserves of 64.8 million tonnes  Average reserve grade of 5.1% P2O5  Revised project economics  Annual production of over 500,000 tonnes per year of SSP  19 year mine life  Capex cost of $323 million  After-tax NPV10% of $254.2 million − Based on an SSP price of US$280/tonne in 2013, US$325/tonne in 2014 and adjusted for 2% inflation thereafter  After-tax IRR of 21%  After-tax Payback period of 4.5 years After-Tax NPV10% of $254 million 64.8 million tonnes of reserves at 5.1% P2O5 Over 500,000 tonnes of SSP annually 19 years life
  11. 11. 13  Current capital cost estimate is $323.1 million (25% increase from September 2012 estimate)  Renegotiation with the primary electro-mechanical erection contractor  Poor engineering work and planning deficiencies  Unexpected transportation costs  Replacement of civil works contractor  Brazil is a developing country and faces significant cost pressures and skill shortages Project Capex Escalation (%) Delay (months) Serra Sul (Vale, Iron ore) 72 54 Onça Puma (Vale, Nickel) 158 27 Salobo (Vale, Copper) 179 30 Minas Rio (Anglo, Iron Ore) 52 12+ Source: Company information, Anglo American, Broker notes  Cost for civil works, labor, and availability of labor has led to capex escalation  Most projects have been plagued by severe delays to cope with the strains of the Brazilian economy  Itafós Project is toward the lower end of the increases experienced in Brazil • Cost overrun ~ 50% • Delay ~ 10 months
  12. 12. 14 Project Risk Mitigation  A number of important measures have been taken to de-risk the project  All detailed engineering including scope changes has now been completed  All equipment has been delivered to site  Since the renegotiation significant improvements in the pace of the electro-mechanical erection works  Firm quotes and delivery dates in place for the parts and supplies required for completion of construction (such as pipes, cables, hoists and steel platforms) Corporate Risk Mitigation  Executive Committee of Independent Directors has been formed and will have direct oversight on all aspects of the Project  Antenor Silva will dedicate all his time and efforts to the completion of the Itafós Project and ramp-up  Two new Directors have been added to the board who add a depth of experience in project development, strategic oversight and the Brazilian fertilizer markets  Risk is also mitigated given the project is 94% complete
  13. 13.  $10 million - sale of interest in non-core exploration ground in Para state Asset Sale  $52 million bought deal financing  Board, management and founders committed $10 million Private Placement  $10 million - working capital loan received from Banco Itaú BBA Bank Loan 15  Reviewing “non-dilutive” alternatives to provide additional cash cushion:  MBAC is actively pursuing additional debt financing alternatives  MBAC is looking for sale of non-core assets
  14. 14. 16  Roberto Busato Belger will dedicate 100% of his time to work with the sales team  MBAC is focused on “industrial sales” (traders, blenders, distributors, large farm co-ops) Source: ANDA; MBAC team analysis Note: (1) States of PA, MA, PI, BA, TO, MT and GO (2) Western BA; Northern GO; Southern PI and MA; and TO State Industrial Sales Philosophy - Advantages Upstream Sales Strategy Mid-to-long term contracts will guarantee maximization of production capacity and minimization of “seasonality“ impact Low Risk of Credit Focus on few large customers, providing easier access and ability to pay cash for products Lean Sales Team Required Negotiation will be held by top managers and will be conducted on specific dates during the year, increasing product margins
  15. 15. 17  Negotiations with large potential customers are well advanced.  The Company has received commitments for 35,000 tonnes of SSP for July/Aug delivery from two buyers (both include option to increase) • Received payment for 15,000 tonnes  The Company has received non-binding LOI’s for up to 200,000 tonnes Overview of Customers • Significant Potential Customers Yara, Bunge, 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 ( )
  16. 16. 18  Completion of electro mechanical erection  Ramp up mineral processing plant (processing/beneficiating ore)  Obtain final operating licenses for chemical plants  Commissioning of chemical plants  Start of operations  Focus on operations management with an objective of efficient use of working capital  Focus on sales – specifically 2014
  17. 17. 19 Primary Crusher Floatation Cells Ball Mill Thickener
  18. 18. 20 Sulphuric Acid Plant Electric Substation Water Dam Granulation Unit
  19. 19. 22  Santana contains one of the highest grade phosphate resources in Brazil  Flexibility to produce higher value-added products (TSP, MAP and DCP)  Project target area is one of the largest agricultural markets in the country  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  Prefeasibility Study completed in June 2012:  Reserves: 44.9 Mt (12.1% P2O5)  Production: 500,000 t SSP  Capex $393 million  NPV: $407 million  IRR: 22% Project Location PA MA MT TO GO Brasilia
  20. 20. 23  Completion of Definitive Feasibility Study in mid-2013  Executive Committee will carry out a detailed review of the project  Will undertake detailed engineering prior to giving its formal approval of the project • Reduce scope changes • Provide greater certainty on capex • Better evaluate funding options  Board will provide construction decision after detailed review  Discussions with lenders and financial institutions for project financing will be finalized
  21. 21. 24 CBMM MINE Araxá Project VALE Mine Araxá, MG Project Location REE Deposit Itafos Santana  A high grade REE/Niobium/Phosphate project  M&I of 6.3 Mt @ 5.0% TREO and 1.02% Nb2O5  One of the highest grade REO deposits in the world  Advantaged location  Area is surrounded by two large operations: • Vale fertilizer mine/plant • CBMM Niobium mine/plant  Developed infrastructure  PEA completed in October, 2012  Production Phase I 8,500 tonnes per year Phase II 17,500 tonnes per year  Capex $406 million  NPV $967 million  IRR 30%
  22. 22. 25  Phase 2 pilot plant tests for bulk concentrate expected to be completed by mid-2013  Have produced a 98% REO bulk concentrate  Continued discussions with potential off-take partners  Will start Phase 3 pilot plant tests for REO separation H2 2013  DFS is expected to be completed in H1 2014  The asset has been determined to be “non-core”  Company is reviewing options to sell all or part of the asset
  23. 23. 26 Homogenization Milling and Classification Drying Process Filter Press REO Filter Cake Solvent Extraction
  24. 24. Mining 3 Mt @ 5.4% P2O5 Mill Plant Sulphuric Acid Plant Beneficiation P2O5 Concentrate 330,000 t @ 28% P2O5 P2O5 Recovery: 55-58% Sulphur 74,400 t P2O5 Reactive Phosphate 94 kt @ 15% P2O5 P2O5 Recovery: 8.4% Sulphuric Acid 170,000 t Sulphuric Acid Surplus 50,000 t Electricity 6 MW SSP Powder 500,000 t Market To be used in the process + Water Tailing Ore Waste Imported Ammonia 6 kt 5% of Revenues 92% of Revenues Market 3% of Revenues Granulated SSP 500,000 t DCDA(1) Note: (1) Conventional contact process 29
  25. 25. 30Note: (1) Neutral Ammonium Citrate Al3+  Aluminum Toxicity Source: (*) Sinprifert/ANDA  SSP is the most applied fertilizer for the Brazilian soil, especially in the Cerrado region, MBAC’s target area: IMPROVED ROOT DEPTH Because of the lack of Ca and the presence of Al3+ in Brazilian soils, the development of roots is compromised, affecting crops productivity, especially, in a dry season (common in the Cerrado). The Calcium Sulphate in the SSP solves these soil concerns, improving root depth REDUCES COSTS Calcium Sulphate is the component required for the supplement of S deficiency in the soil and it is presented in the gypsum and SSP formulas (1 tonne of SSP = 500 kg of Calcium Sulphate) Using a other sources of P, farmers will incur in extra costs due to the purchase and application of gypsum $$$ FORMULA COMPOSITION Most of Brazilian soils, especially those located in the Cerrado region, are very poor in P, Ca and S. SSP formula contains Calcium Sulphate (Ca and S) and P Ca(H2PO4)2.H2O + S PHOSPHATE SOLUBILITY The agronomic efficiency of phosphate products is associated with the solubility of P in NAC(1) + H2O From the total P contained in SSP formula, approximately, 90% is soluble making it very efficient NAC+H2O P PP P P P
  26. 26. 31 Source: UN Population Division http://esa.un.org/unpp/index.aspl Source: Looking ahead in world food and agriculture perspective to 2050 Population Expansion: History And Projection Source: UN Population Division http://esa.un.org/unpp/index.aspl Source: FAO- Looking ahead in world food and agriculture perspective to 2050 GDP Growth Scenario 0 1,000 2,000 3,000 4,000 2003-2005 2015 2030 2050 Kcal/person/day Per Capita Food Consumption Industrial countries Developing countries World Source: FAO- Looking ahead in world food and agriculture perspective to 2050Source: FAO, OECD World Cereal Consumption And Future Projection
  27. 27. 0 100 200 300 400 500 600 700 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 US$/MetricTonne Historical Soybeans & Maize Prices Soybeans Maize (corn) 0 100 200 300 400 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 Index Commodity price indices Energy Agriculture Fertilizer Metal & Minerals 32 Source: http://statistics.amis-outlook.org/data 0 500 1,000 1,500 2,000 2,500 0% 10% 20% 30% 40% UtilizationMillionTonnes Cereals, Grain Utlilization & Stock to Use Coarse grain (Million Tonnes) Cereals (Million Tonnes) Coarse grain Stock to Use % Cereals Stock to Use % 0.0 50.0 100.0 150.0 200.0 250.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 FAO Monthly food price indices (2002-2004=100) Source: FAO Source: World Bank Commodity Index Source: FAO, Indexmundi
  28. 28. 33 Arable Land Per Capita Source: FAOSTAT Developing Countries With The Highest Land Balance Source: FAO- Looking ahead in world food and agriculture perspective to 2050 Developing Countries Using More Than 10 Million Ha. Of Arable Land Source: FAO- Looking ahead in world food and agriculture perspective to 2050 Accounts for 75% of all arable land in developing countries 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 BillionCu.M/Yr Top 10 Countries With Renewable Water Resources Source: FAOSTAT
  29. 29. 0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000 USA Netherlands Germany Brazil France Belgium China Italy Spain Canada US$ Millions Export Value (2010) Brazil is a leading producer of agricultural commodities: coffee (#1), oranges (#1), sugarcane (#1), beef (#2) and soya (#2)  Agribusiness is a significant part (~25%) of the Brazilian economy 0% 5% 10% 15% 20% 25% 30% 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 MillionsR$ Agribusiness % of GDP Agribusiness GDP Brazil % Source: CEPEA 34 Source: FAOSTAT  Brazil Agribusiness is the Fourth Largest in the World Source: FAOSTAT  Brazil’s is a leading exporter of agriculture goods and commodities 0 100,000 200,000 300,000 400,000 500,000 600,000 China USA India Brazil Japan Nigeria Turkey France Russia Indonesia US$ Millions Gross Production Value (2011)
  30. 30. 0 1,000 2,000 3,000 4,000 5,000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Nutirentsin000Tonnes(P2O5) Historic Brazil Phosphate Data Production Imports Consumption 35 Source: ANDA, IFA Source: ANDA 0% 50% 100% 150% 200% 250% 300% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Historic Global vs Brazil Phosphate Consumption Global BrazilSource: ANDA, IFA 15,000,000 17,000,000 19,000,000 21,000,000 23,000,000 25,000,000 27,000,000 29,000,000 31,000,000 2001 2003 2005 2007 2009 2011 Tonnes Fertilizer Consumption in Brazil Fertilizer Consumption Source: ANDA  Currently imports 70% of its NPK fertilizers, Phosphate> 50% 0% 20% 40% 60% 80% 100% 120% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Phosphate Fertilizer Imports Production % Imports %
  31. 31. 36  Current capital cost estimate is $323.1 million (25% increase from June 2012 estimate)  Renegotiation with the primary electro-mechanical erection contractor  Poor engineering work and planning deficiencies  Unexpected transportation costs  Replacement of civil works contractor $225 $258 $276 $323 $33 $3 $5 $10 $4 $8 $15 $20 CAPEX (Feb-2011) Construction Labour/ Inflation CAPEX (June-2012) Owner Cost Pre-operating Cost Erection Labour CAPEX (Jan-2013) Logistics of moving Equipment to site Termination of Civil Contract Renegotiation with Erection Contractor Additional Parts and Supplies CAPEX (Apr-2013) Itafós Arraias SSP Project CAPEX Escalation
  32. 32. 37  High grade ore results in a greater quantity of LREE’s and HREE’s comparable to leading global REE producers Category Measured Indicated Cut-Off % TREO 2% 2% La2O3 1.5% 1.4% Ce2O3 2.8% 2.4% Pr2O3 0.3% 0.2% Nd2O3 0.8% 0.7% Sm2O3 0.1% 0.1% LREO 5.5% 4.7% Category Measured Indicated Cut-Off %TREO 2 2 ppm Eu2O3 182 158 Gd2O3 371 322 Tb4O7 38 33 Dy2O3 153 129 Ho2O3 22 18 Er2O3 44 36 Tm2O3 3 2 Yb2O3 23 18 Lu2O3 1 1 Y2O3 622 502 HREO (ppm) 1463 1217 REO La2O3 CeO2 Pr6O11 Nd2O3 Sm2O3 Eu2O3 Gd2O3 Tb4O7 Dy2O3 Y2O3 Araxá REO Basket Value Nb2O5 $/Kg FOB China (Sep 2012) $19 $19 $105 $100 $53 $2,020 $92 $1,800 $920 $75 $45 % 27.80% 49.80% 4.60% 13.90% 1.40% 0.30% 0.70% 0.10% 0.30% 1.10% US$/Kg $5.28 $9.46 $4.83 $13.90 $0.74 $6.06 $0.64 $1.80 $2.76 $0.83 $46.31
  33. 33. 38 Mineral Resource Grade Tonnage Report – June 1, 2012 Cut-Off (% TREO) Tonnes (Mt) TREO % LREO % * HREO % ** P2O5 % Nb2O5 % Al2O3 % Fe2O3 % Measured Resource Category 0 1.33 5.62 5.48 0.15 7.89 1.25 3.31 34.23 2 1.33 5.62 5.48 0.15 7.89 1.25 3.31 34.23 4 1.10 6.05 5.89 0.16 7.84 1.32 3.42 34.57 6 0.37 8.46 8.23 0.23 9.13 1.72 5.18 33.97 Indicated Resource Category 0 5.02 4.85 4.73 0.12 8.54 0.96 5.68 32.76 2 5.02 4.85 4.73 0.12 8.54 0.96 5.68 32.76 4 3.29 5.58 5.44 0.14 8.69 1.07 5.69 32.36 6 0.88 7.75 7.57 0.19 10.25 1.35 8.17 29.32 Measured and Indicated Mineral Resource (2% Cut-Off TREO) 2 6.34 5.01 4.88 0.13 8.40 1.02 5.19 33.06 TREO includes La2O3, Ce2O3, Pr2O3, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3 and Y2O3 *LREO (97.6% of TREO) includes La2O3, Ce2O3, Pr2O3, Nd2O3 and Sm2O3 **HREO + Y2O3 (2.4% of TREO) includes Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3 and Y2O3.
  34. 34. SN Soil Colluvial/alluvial 39  Cross section showing ore types and grades of REO reaching over 20% Saprolite Lateritic Halo (Fe)

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