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December 2012 - Presentation
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Premium Potash Project Driven by a Proven Management Team
FORWARD LOOKING STATEMENTS
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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 Corporation's 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.
A potash company focused on its Blawn Mountain property in Utah
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EXPERIENCED AND PROVEN MANAGEMENT
OVER 80 YEARS COMBINED EXPERIENCE
Guy Bentinck President & CEO Chartered Accountant; 20 years mining/resource experience Sherritt: CFO and SVP Capital Projects
Ross Phillips VP, Development 10 years experience in large resource and energy sector projects Sherritt, Capital Power
Jeff Hillis CFO Chartered Accountant; 10 years mining sector finance, including CFO of several public mining companies Iberian Minerals, Excellon, Falconbridge
Paul Hampton VP, Project Management Geologist and Metallurgical Engineer; ~30 years experience in design, construction, start-up and management of mineral processing facilities SNC, Washington Group, Outotec
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Laura Nelson VP, Government and Regulatory Affairs Extensive experience in government relations, permitting and power planning, including the successful permitting of the Red Leaf oil shale project Red Leaf Resources, Utah Government
INVESTMENT HIGHLIGHTS
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 low-cost producer
30 year mine life, with upside potential
PEA completed: $1.3 billion NPV at 10%; 21.3% after tax IRR
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No known substitute
Increasing world population
Growing per capita income
Decreasing arable land
Increasing use of biofuels
~5% EXPECTED ANNUAL GROWTH IN DEMAND TO 2016
POTASH: ESSENTIAL TO THE WORLD’S FOOD SUPPLY
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AVERAGE 47% PRICE PREMIUM OVER MOP3
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
1Source: Fertecon 2Source: CRU 3Based on historical data 7
USES OF SOP
Fruits Vegetables Nuts Horticultural Plants
Tobacco Tea Dry soils Salty soil
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HISTORICAL PRICE PREMIUM FOR SOP HAS RANGED BETWEEN 30% AND 61%
SOP PREMIUM PRICE TRENDS
1SOP, standard grade cif NW Europe (Source: Fertilizer Week) 2MOP, all grades, fob Vancouver/Portland (Source: CRU)
U.S. $/tonne
0
100
200
300
400
500
600
700
800
900
2006 2007 2008 2009 2010 2011
SOP1 MOP2
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SOP MARKET CHARACTERISTICS
1Source: Fertecon, CRU 10
Global SOP Consumption and Commodity Price1
Europe 23.3%
N. America 8.6%
China 44.3%
Rest of the World
14.9% Africa 4.6%
Central and South America
4.3%
SIGNIFICANT GROWTH POTENTIAL
SOP MARKET DYNAMICS
Limited production and premium price has restricted demand
SOP share of potash market: Current: ~10% Potential: >28%1
Trend toward high nutrient fertilizers
Potential to use SOP in typical cereal crop fertilizer blends instead of ammonium sulphate
India SOP consumption: China (pop. 1.3 billion): 1.9 million tpy India: (pop. 1.2 billion) 50,000 tpy (<1% of country’s potash consumption)
Brazil SOP consumption = 32,000 tpy (0.4% of total potash consumption) Premium crops grown on 20% of planted land
11 1Based on crops that are best suited for SOP
THE BLAWN MOUNTAIN PROJECT
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ANTICIPATED PRODUCTION BY 2016
PROJECT OVERVIEW
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Large alunite deposit, which is expected to be processed into SOP, by-product sulphuric acid and a bauxite substitute
Target 680,000 tonnes per year of SOP by mid-2016
Historical work expedites project development
Mineral deposit to be surface mined
Proven process
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 Azerbaijan
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PREVIOUS WORK ACCELERATES PROJECT DEVELOPMENT
EXTENSIVE DEVELOPMENT COMPLETED IN 1970’s
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Approx. $25 million spent (~ $100 million in today’s dollars)
All data owned by Potash Ridge
Drilling
Resource estimate
Feasibility study
Mine plan
Engineering
Permitting
Pilot plant: 3-year operation
processing 11 tonnes/day
SIMPLE PROVEN FLOWSHEET
Potash Ridge expects the processing plant to produce: • 680,000 tonnes of SOP per annum • 1.6 million tonnes of concentrated sulphuric acid per annum
Residue from water leach process is estimated to be 3.3 million tonnes per annum of 51% alumina content bauxite substitute, suitable for a Bayer Process
Alunite
Beneficiation
Calcination
Water Leach
51% alumina content bauxite
substitute
Potash Sulphate Solution
Crystalizer Compaction Drying Potash Sulphate
SO2 Acid Plant Sulphuric Acid
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Flowsheet mirrors historical production processes
ALMOST 100 YEARS OF POTASH PRODUCTION
UTAH: AN ATTRACTIVE MINING JURISDICTION
1Forbes Magazine, November, 2011 2Fraser Institute, February, 2012
Major resource producer
Existing potash production
Best state for business1
Top quartile mining jurisdiction2
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OUR LAND ADVANTAGE
State-owned land
Simpler permitting process
Leasehold and royalty agreements negotiated
No known adverse environmental, social or aboriginal issues
Sufficient water nearby1 – rights application made
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MUNICIPAL AND STATE SUPPORT OF PROJECT
1Based on historic data; confirmation drilling underway
ESTABLISHED INFRASTRUCTURE NEARBY
Roads, rail and natural gas
Construction materials and equipment suppliers nearby
Skilled labour force
Access to ports of Los Angeles and Houston
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HISTORIC DRILLING
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320 holes drilled in 1970’s
AREA 1 DRILLING CONFIRMED HISTORIC RESOURCE
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NI 43-101 compliant drilling – 14,817 feet over 34 drill holes
Samples show potassium grades of up to 19.2% higher than historical results – to be confirmed in Phase 2 drilling
PHASE 2 CONFIRMATION DRILLING
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Area 2 Completed
• 6 core holes; 44 reverse circulation holes
• Total depth drilled – 17,067 feet
Area 1 Underway
• 12 core holes; 26 reverse circulation holes
• Focus on exploring SW portion of Area 1 and confirming potentially higher grades
Initial Mine Plan for 30 Years using NI 43-101 Compliant M&I Resources
SIGNIFICANT RESOURCE IDENTIFIED
1 Contained within alunite 2 Using 1.00% cut-off grade 3 Based on current assays, Norwest believes SOP grade could be up to 19.2% higher – to be confirmed 4 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.
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Area
Measured + Indicated Inferred
Resource tons (000's) Alunite grade SOP tons
(000's)
SOP Resource tons (000's) Alunite grade SOP tons
(000's)
SOP
grade1 grade1
NI-43-101 Compliant 2
1 156,285 37.6% 9,315 15.8% 3 392 46.5% 24 13.1%
2 464,442 35.6% 26,395 15.9% 250,769 34.7% 13,476 15.5%
Total: Areas 1 & 2 620,726 35.8% 35,710 15.9% 251,160 34.7% 13,500 15.5%
Historic Resources 4
3 11,600 44.0% 987 19.3% 281,400 44.0% 23,950 19.3%
4 51,700 36.5% 3,667 19.4% 49,200 38.0% 3,645 19.5%
Total: Areas 3 & 4 63,300 37.9% 4,654 19.4% 330,600 43.1% 27,595 19.3%
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EXPECTED TO BE LOW-COST SOP PRODUCER
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Potash Ridge Salt Lakes MOP/ Sulphate Salts
Mannheim Process
Process Method
World Capacity Process Inputs Products
Avg Cost / Tonne
Mannheim 60% ! MOP ! Sulfuric Acid ! Energy
! SOP ! HCI
$550
MOP and Kieserite
25% ! MOP ! Kieserite ! Energy
! SOP ! Magnesium
Chloride
$386
Salt Lakes 15% ! Lake Brines ! Energy
! SOP ! Magnesium
Chloride ! NaCI
$300
Cash Cost by Production Method Avg Cost/Tonne
Process Method and Cost Comparisons
Expected In Production
1 The cost is converted from $92 per short ton. Excludes sulphuric acid and bauxite-substitute credits
$300
$386
$550
$1011
PRELIMINARY ECONOMIC ANALYSIS RESULTS
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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 Cash Cost of Production (before acid credits)3,4 $101 per tonne
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 The cost is converted from $92 per short ton
4 Excludes potential credits related to sale of 3.3 million tonnes per annum of bauxite-substitute
FINANCIAL HIGHLIGHTS
NPV @ 10% (after tax)4 $1,331 million Unlevered IRR (after tax)4 21.3%
SOP CAPITAL COST BREAKDOWN1
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CAPITAL COST: $1.075 billion
24% SOP Leaching, Crystalliza:on and Drying
18% Calcina:on
17% Beneficia:on
41% Con:ngency
and Indirects
1 Excludes third party costs: power generation ($160 million), sulphuric acid plant ($180 million) and water treatment plant ($40 million)
OPERATING COSTS: $101/TONNE1
79%
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7%
79% Direct Plant and Mine Produc:on Costs
7% Other
14% Royal:es
1 Excludes sulphuric acid and bauxite-‐subs:tute credits
25% Calcina:on
20% Labor and Benefits
14% Beneficia:on
14% Con:ngency and Other
12% Powerhouse
11% Materials & Consumables
4% SOP Leaching, Crystalliza:on and Drying
PROJECT TIMELINE
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Stage Activity 2012 2013 2014 2015 2016
Confirmation Drilling Areas 1 & 2
Resource Definition
Updated NI 43-101 and PEA
Process Development
Metallurgical Testing and Pilot Plant (process optimization)
Permitting Project Permitting
Engineering Studies
Prefeasibility
Feasibility/Mine Design1
Construction
Civil Works, etc.
Processing Plant2
Mine2
Production Commissioning2
1. Subject to receiving a positive pre-feasibility study 2. Subject to receiving a positive feasibility study
MANAGEMENT AND BOARD CURRENTLY OWN 6% PRE-IPO
STRONG BOARD WITH DIVERSE SKILLS AND LOCAL EXPERIENCE Rahoul Sharan, Chairman Chartered Accountant with over 30 years diversified mining experience Former Chairman and CEO of Uranium Power Corporation
Navin Dave Chairman and CEO of Stat-Ops International Former Managing Partner, KPMG LLP
Robert C. Gross Former Chief of Staff to Utah Governor Former Senior Advisor, Coalition Authority of Iraq Former Chairman and President of First Interstate Bank Former President and CEO of Blue Healthcare Bank
Rocco Rossi Experienced business strategist and public company director Former President and COO of MGI Software Corp.
Phil Williams Director, Investment Banking of Dundee Capital Markets Inc. Former VP, Business Development Pinetree Capital and Mega Uranium Ltd.
Stephen Harapiak President and COO Victory Nickel Inc. Former CEO, Potash Corp.
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Guy Bentinck President & CEO
INVESTMENT HIGHLIGHTS
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 low-cost producer
30 year mine life, with upside potential
PEA completed: $1.3 billion NPV at 10%; 21.3% after tax IRR
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Premium Potash Project Driven by a Proven Management Team