INDUSTRIAL METALS, MINERALS
AND MINEABLE ENERGY
INVESTMENT SUMMIT 2010
LONDON CHAMBER OF COMMERCE & INDUSTRY ● WEDNESDAY, ...
BUILDING THE NEW POTASH POWERHOUSE
Objective Capital Investment Summit– 3 November 2010
SIRIUS MINERALS PLC
Important Notice
This document is produced for information only and not in connection with any specific or proposed offer ...
• Potash is highly valuable and strategic
• Sirius is the only globally diversified potash development
company and the onl...
Board of Directors
Comprehensive spread of skills and experience
Former Chief Financial Officer and Business
Development D...
• Boyd Petrosearch
– Global geophysics leaders specialising in Potash/Salt
exploration
– Seismic project management and da...
• Potash is of critical importance and value
• Sirius is developing a globally diversified portfolio of potash
projects
• ...
• Plants require three primary nutrients above all others:
– Nitrogen (N): promotes protein formation, growth and yield
– ...
Population Growth
• More People means
More Food
Less Land
• More Food from
Less Land
Decreasing Soil Quality
• More fertil...
CHINA
INDIA
1981 1985 1989 1993 1997 2001 2005 2009
0
1000
2000
3000
4000
5000
6000
7000
(USD) GNI per Capita Growth in As...
• Biofuels have emerged as a potential solution to climate change and
energy security
• Debate continues on lifecycle gree...
Rest of World
USA
China
India
Indonesia
Malaysia
Brazil
North America
Eastern Europe
Western Europe
Latin America
Middle E...
• Sirius and Sino-Agri signed an MOU in August
• This gives an extensible 180 days for the parties to
agree:
– An off take...
Saskatchewan/Williston Basin
• ~33% of the world’s Potash
comes from Williston Basin
• Estimates* of 50 billion tonnes
of ...
• Sirius has undertaken a detailed reinterpretation of the
existing seismic and analysis of the existing core
• Prairie ev...
Boree salt in the Adavale Basin
• 602km2 of claims
• 50km south of Blackall
• Rail and water available
• Data from prior e...
• Historical drilling and assay
results suggested 18% KCl in the
Boree
• Historical sampling and analysis
not focused on p...
Canning Basin
• 1,250km2 of claims
• 200km SE of Broome
• Close to energy projects
• Existing data from prior
Rio Tinto ex...
Barriers to Entry
Barriers shape corporate strategy
Globally diversified portfolio of projects in place
Sirius Strategic R...
• Sirius is developing key carbon and energy storage patents and technology
through its 100% acquisitions of:
– CO2 Energy...
Sirius’ Place in the Industry
Deeply undervalued with a big opportunity
Company Sector Focus Location Status ‘08 Prodn Mar...
• Acquired a portfolio of Potash projects in OECD countries
• Undertaken comprehensive seismic and drilling data review in...
• Globally diversified potash developer
• Committed to becoming a long-term,
low-cost, low risk supplier
• Quality project...
BUILDING THE NEW POTASH POWERHOUSE
Objective Capital Investment Summit– 3 November 2010
SIRIUS MINERALS PLC
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The Chinese agricultural revolution and building the new potash powerhouse

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Objective Capital's Industrial Metals, Minerals & Investment Summit 2010
London Chamber of Commerce and Industry
3 November 2010
Speaker: Richard Poulden, Sirius Minerals

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The Chinese agricultural revolution and building the new potash powerhouse

  1. 1. INDUSTRIAL METALS, MINERALS AND MINEABLE ENERGY INVESTMENT SUMMIT 2010 LONDON CHAMBER OF COMMERCE & INDUSTRY ● WEDNESDAY, 30 NOV 2010 www.ObjectiveCapitalConferences.com The Chinese agricultural revolution and building the new potash powerhouse Richard Poulden – Deputy Chairman, Sirius Minerals
  2. 2. BUILDING THE NEW POTASH POWERHOUSE Objective Capital Investment Summit– 3 November 2010 SIRIUS MINERALS PLC
  3. 3. Important Notice This document is produced for information only and not in connection with any specific or proposed offer (the “Offer”) of securities in Sirius Exploration Plc (the “Company”). The information and opinions contained in this presentation, all of which are in draft form, are provided as at the date hereof and are subject to amendment without notice) completeness This at investment professionals defined Article 5) of the Important Notice (notice), further verification and completeness. document is directed as in 19(Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and at organizations of a kind described in and to whom Article 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (High Net Worth Companies, Unincorporated Associations, etc.) applies (all such persons together being referred to as "relevant persons"). This document must not be acted on, or relied on by, or passed on to (directly or indirectly) persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons (save as set out below). This document is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on directly indirectly to an published hole in for an purpose document is being provided to redistributed on, directly or indirectly, any other person or published in whole or part any purpose. This document provided recipients on the basis that they keep confidential any information contained herein or otherwise made available, whether orally or in writing, in connection with the Company. This document does not constitute an offer to buy or to subscribe for, or the solicitation of an offer to buy or to subscribe for securities in the Company in any jurisdiction in which such an offer or solicitation is unlawful and is not for distribution in or into any of such jurisdictions. To the extent this document is received or used in jurisdictions outside the UK, any such recipient or user should inform themselves about and observe any applicable legal requirements. Neither this document nor any part of this document should be copied or distributed by recipients where such distribution may lead to a breach of any law or regulatory requirement. No securities in the Company have been or are expected to be registered under the US Securities Act, or under the securities laws of any other jurisdiction. The Company's shares are traded in the United States as American Depositary Receipts and comply with all current legislation relevant to such trading. This document does not constitute or form any part of any offer or invitation or other solicitation or recommendation to purchase any securities in the Company and does not constitute or form part of a prospectus. No reliance may be placed for any purpose whatsoever on the information, representation or opinions. Any decision to purchase or subscribe for securities in the Company in connection with any offer should be made solely on the basis of the information contained in a prospectus on the Company or such other subscription document which may be published in due course and any acquisition of securities in the Company should be made on the basis of the information contained in such document. Neither the issue of this document nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction and the right is reserved to terminate any discussions or negotiations with any prospective investors. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this document, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this document or to correct any inaccuracies in, or omissions from, this document which may become apparent. This document should not be considered as the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. Each party to whom this document is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relation to such matters. Information in this document must not be relied upon as having been authorized or approved by the Company. Neither the Company nor any other person makes any guarantee, representation or warranty, express or implied, as to the accuracy, completeness or fairness of the information and opinions contained in this document, the Company any or whatsoever any loss any use of its nor does accept responsibility liability for howsoever arising from this document or contents or otherwise arising in connection therewith.
  4. 4. • Potash is highly valuable and strategic • Sirius is the only globally diversified potash development company and the only potash company quoted in London • Multiple projects in OECD countries • Committed to becoming a major low cost and low risk producer of potash • 2nd value horizon in related environmental technology • Experienced development team Investment Overview Globally diversified portfolio of potash projects
  5. 5. Board of Directors Comprehensive spread of skills and experience Former Chief Financial Officer and Business Development Director of Fortescue Metals Group during its major growth phase from start-up to multi-billion dollar iron ore producer. Previously Director of Consolidated Rutile, CFO Iluka Resources. Christopher Catlow, Chairman Successful companies in natural resources, healthcare, technology, venture investment. MA Oxford, MBA London/Harvard, merchant banker, Barrister. Richard Poulden, Deputy Chairman Project evaluation for Rio Tinto, Senior Geologist Exploration North America. Experience in copper, lead, zinc, gold, diamonds, iron ore across Russia, Africa, and Europe. Derek Stonley, Director Chairman Z/Yen Group. Seismology, cartography for oil & gas, then financial services. Created global oil industry cartographic standard databases Geodat and Mundocart. Michael Mainelli, Non-Exec Director Photo Photo Photo Photo Intercontinental Hotels Africa and the Middle East. Management buy-in of 25 hotels from Queens Moat Houses plc with Duke Street Capital. Floatation of Top Notch Health Clubs on AIM. Jonathon Harrison, Finance Director Photo
  6. 6. • Boyd Petrosearch – Global geophysics leaders specialising in Potash/Salt exploration – Seismic project management and data interpretation experts • North Rim Exploration – Leading geoscience and engineering group specialising in Potash development – Assessment, verification and mine planning capabilities • Schlumberger – Global drilling expertise, subsurface engineering & project development Technical Partnerships World leading expertise
  7. 7. • Potash is of critical importance and value • Sirius is developing a globally diversified portfolio of potash projects • Committed to being a large-scale, low cost, reliable supplier • Focused on low risk countries with access to reliable infrastructure Strategy to Create Shareholder Value To become one of the world’s most important potash suppliers
  8. 8. • Plants require three primary nutrients above all others: – Nitrogen (N): promotes protein formation, growth and yield – Phosphorus (P): helps root development, photosynthesis, and drought resistance – Potassium (K): helps photosynthesis, strengthens cell, increases resistance, and importantly speeds the absorption of N and P • NPK fertilizers are vital to the global food supply • Potassium has no substitute in plant physiological function • Potash has no commercial substitute Potash 101 One of life’s basic building blocks
  9. 9. Population Growth • More People means More Food Less Land • More Food from Less Land Decreasing Soil Quality • More fertilisers needed to maintain crop yields = Potash Demand Growth Megatrend: Food Security Complex problem, simple equation, simple answer WORLD WORLD ASIA AFRICA WORLD ASIA AFRICA 1920 1940 1960 1980 2000 2020 2040 0 2000 4000 6000 8000 10000 pop. millions World Population Growth Projection 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 0 0.1 0.2 0.3 0.4 ha/p Arable Land per Person Source: United Nations Source: FAO Statistics Division 2009
  10. 10. CHINA INDIA 1981 1985 1989 1993 1997 2001 2005 2009 0 1000 2000 3000 4000 5000 6000 7000 (USD) GNI per Capita Growth in Asia • The global diet is changing • Increased demand for meat as affluence rises • Increased meat production requires increased productivity of animal feed Increased meat demand = Increased potash demand Added Demand Pressure: Protein Demand Making the problem worse, but still a simple solution 0 2 4 6 8 Poultry Pork Beef Common Feed Conversion Ratios Approximate kg Grain Required per kg Meat Source: FAO Statistics Division 1980 1985 1990 1995 2000 2005 2010 2015 2020 0 10 20 30 40 50 60 kg/p Global Meat Consumption Source: World Bank, World Development Indicators 2009 Source: FAO Statistics Division
  11. 11. • Biofuels have emerged as a potential solution to climate change and energy security • Debate continues on lifecycle greenhouse gas reduction • Forecasts vary but long-term targets of between 30% and 50% of transportation fuel being replaced would significantly boost demands on biofuel crops • Key biofuels crops – sugar cane, corn, rape seed, palm oil, and soybean are all major potash users • Increased biofuel demand diverts further arable land away from food production Increased biofuel demand = Increased potash demand Added Demand Pressure: Biofuels Making the problem worse, but still a simple solution
  12. 12. Rest of World USA China India Indonesia Malaysia Brazil North America Eastern Europe Western Europe Latin America Middle East East Asia Global Supply and Demand for Potash The browncharts show global percentage of supplyfromkeyexporters The blue charts show global percentage of demandfromkeyimporters • Asia represents a large growing demand market ~54% • Production is concentrated between Canada and Russia / Belarus • Three marketing groups control over 70% of supply Market Structure Asia and particularly China and India are key markets • The concentration of supply over large consumers provides opportunity for Sirius Source: PotashCorp DataTool Markets Estimates
  13. 13. • Sirius and Sino-Agri signed an MOU in August • This gives an extensible 180 days for the parties to agree: – An off take agreement for the Adavale potash – A joint development agreement for Adavale • Sino Agri is part of the second largest fertilizer distributor in China • They recently placed a potash mine in Laos into first phase production MOU Announced with Sino Agri
  14. 14. Saskatchewan/Williston Basin • ~33% of the world’s Potash comes from Williston Basin • Estimates* of 50 billion tonnes of Potash in North Dakota • Sirius holds 50km2 of claims • Close to rail, gas, and water • 250km northwest of Bismark • Known exploration targets – Historic data on all properties from previous exploration – High quality solution mining targets ready for drilling based on 2D seismic – New drilling programme underway North America Dakota Salts Project – Williston Basin, North Dakota * North Dakota State Government Geological Survey: https://www.dmr.nd.gov/ndgs/mineral/nd_saltnew.asp
  15. 15. • Sirius has undertaken a detailed reinterpretation of the existing seismic and analysis of the existing core • Prairie evaporate contains significant thicknesses of salts principally: – Halite (conventional salt) – Sylvite (potash) North America Dakota Salts Project – Williston Basin, North Dakota • Initial volumetric calculations based on preliminary core: – 6 to 10.7 metres thickness of Potash – 18 to 25 % grade K2O – Depending on grade: 2.1 to 5.2 million metric tonnes per km2 – 2,450m to 2,750m deep
  16. 16. Boree salt in the Adavale Basin • 602km2 of claims • 50km south of Blackall • Rail and water available • Data from prior exploration – Amoseas & Phillips-Kuny 1960’s – Esso Australia and AAR 1980’s – Poseidon 1983/84 – Denison Resources 1988/89 • Significant Potash known to exist in Boree from previous drillings • Drilling sites identified from recently completed seismic interpretation Australia Adavale Project, Queensland
  17. 17. • Historical drilling and assay results suggested 18% KCl in the Boree • Historical sampling and analysis not focused on potash • Photo’s of old core show good quality potash • Negotiations with Sino Agri progressing Australia Adavale Project, Queensland Historic Drilling Bonnie 1 Core sample from 2,244m. Sylvite matric in sylvinite interval
  18. 18. Canning Basin • 1,250km2 of claims • 200km SE of Broome • Close to energy projects • Existing data from prior Rio Tinto exploration • Mallowa salts underlay the claims approx 450 metres thick at a depth of 550 metres • Identified as prospective for economic Potash mineralisation (RTX Report No. 28456) • Seismic and drilling targets currently being generated Australia Derby Salt Project, Western Australia
  19. 19. Barriers to Entry Barriers shape corporate strategy Globally diversified portfolio of projects in place Sirius Strategic Response Limited reserves outside control of the existing producers Common Views on Barriers to Entry 1 1 Untapped reserves often in difficult locations 2 High development costs 3 Long lead times for greenfield mines 4 Environmental opposition 5 Assumption that operating costs of new supply will exceed existing 6 Projects in OECD countries and close to existing infrastructure2 Build direct partnerships with major customers that can assist financing – e.g. SinoAgri MOU3 Project pipeline, fast-track production, major long- term customer partnerships4 Sirius’ 2nd horizon environmental technologies potentially add value to potash5 Use low cost techniques and low cost finance where possible6
  20. 20. • Sirius is developing key carbon and energy storage patents and technology through its 100% acquisitions of: – CO2 Energy Storage Pty Ltd (QLD, Australia), – Bicarb Sequestration Pty Ltd, and – CO2 Energy Storage Ltd (Nevada, USA) • North Dakota is the most prospective of US states for wind power – The US Government has expressed broad support for wind power initiatives – The generation of wind power requires storage to conserve energy and smooth loads – Sirius and the Electrical Power Research Institute (EPRI) are conducting a cost-benefit analysis for a Bulk Energy Storage (BES) facility servicing a 134MW power plant – Multiple potential value streams including load levelling – may also capture CO2 credits • North Dakota Project is very close to significant hydrocarbon pipelines – Salt caverns are a relatively efficient form of storage for hydrocarbons • Queensland’s abundance of coal and emerging gasification industry also presents opportunities for Sirius’ technologies Environmental Technologies A valuable 2nd horizon of value for Sirius
  21. 21. Sirius’ Place in the Industry Deeply undervalued with a big opportunity Company Sector Focus Location Status ‘08 Prodn Market Cap Sirius (AIM:SXX) 2 potash Australia, USA Exploration, No resources N/A £51m Western Potash (TSX:WPX) 2 potash Canada 1 Exploration , 1 Resource N/A C$66m MagIndustries (TSX:MAA) 1 potash & Magnesium Republic of Congo Resource, EPC & Funding N/A C$140m Potash One (TSX:KCL) 1 potash Canada 2.5Mtpa PFS N/A C$306m Intrepid Potash (NYSE:IPI) 3 potash USA Production ~ 1Mt US$2bn Kali & Salz (XETRA:SDF) Multiple potash & Magnesium Europe Diversified ~ 3.6Mt €8.4bn ICL (TASE:ICL) Multiple potash & Phosphate Israel, Europe, N/S America & China Diversified ~ 5Mt US$67bn Mosaic Group (NYSE:MOS) Diversified N-P-K Canada, USA Diversified ~ 7.1Mt US$27bn PotashCorp (NYSE:POT) Diversified N-P-K Canada, USA Diversified ~ 8.7Mt US$43bn
  22. 22. • Acquired a portfolio of Potash projects in OECD countries • Undertaken comprehensive seismic and drilling data review in North Dakota and Queensland, with Western Australia underway • Advanced production protocols with Government and commenced drilling programme in North Dakota • Advanced commercial relationship with Sino Agri • Commenced investigations of complementary environmental value-adding technologies Building The New Potash Powerhouse Achievements to date
  23. 23. • Globally diversified potash developer • Committed to becoming a long-term, low-cost, low risk supplier • Quality projects in the best locations • Experienced Board Investment Proposition Building the New Potash Powerhouse
  24. 24. BUILDING THE NEW POTASH POWERHOUSE Objective Capital Investment Summit– 3 November 2010 SIRIUS MINERALS PLC

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