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C R Y S T A L P E A K M I N E R A L S
TSX-V: CPM | OTCQX: CPMMF | Investor Presentation | Q4 2019
Plant nutrition for a healthier world
C R Y S T A L P E A K M I N E R A L S
This presentation is for informational purposes and does not constitute an offer or a solicitation of an offer to purchase securities. This presentation contains "forward-looking information" within the meaning of applicable Canadian securities legislation.
Forward-looking information includes, but is not limited to, statements related to activities, events or developments that Crystal Peak Minerals Inc. (“CPM” or the “Company”) expects or anticipates will or may occur in the future, including, without
limitation; statements related to the economic analysis of the Project; the Feasibility Study; mineral reserves; mineral resource estimate; the permitting process; environmental assessments; business strategy; objectives and goals; and exploration of the
Sevier Playa Project. Forward-looking information is often identified by the use of words such as "plans", "planning", "planned", "expects" or "looking forward", "does not expect", "continues", "scheduled", "estimates", "forecasts", "intends", "potential",
"anticipates", "does not anticipate", or "belief", or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking information is based on factors and assumptions made by management and considered reasonable at the time such information is provided. Forward-looking information involves known and unknown risks, uncertainties and other factors
that may cause the actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking information. The Company’s Feasibility Study (the “FS”) should be considered incomplete. It is based upon
details that may change, which would impact costs and estimates. Operating costs for the Project were based upon assumptions including future energy costs, propane and natural gas costs, water costs, labor, and other variables that are likely to
change. Capital costs were based upon a list of equipment thought to be necessary for production. Potassium sulfate and other price forecasts were based upon third-party estimates and management assumptions that may change due to market
dynamics. The mineral resource estimates were based upon assumptions outlined in the “Resource Estimate” section. Some figures were calculated using a factor to convert short tons to metric tonnes. Changes in estimated costs to acquire, construct,
install, or operate the equipment, or changes in projected pricing, may adversely impact project economics. Among other factors, the Company’s inability to obtain sufficient recharge water; the inability to anticipate changes in brine volume or grade due
to recharge or other factors; changes to the economic analysis; the failure to obtain necessary permits to develop the Sevier Playa Project; environmental issues or delays; inability to successfully complete additional trenching and drilling at the Sevier
Playa Project; factors disclosed in the Company's current Management's Discussion and Analysis; as well as information contained in other public disclosure documents available on SEDAR at www.sedar.com may adversely impact the Project.
The information presented herein was approved by management of the Company on December 16, 2019. Although CPM has attempted to identify important factors that could cause actual actions, events, or results to differ materially from those
described in the forward-looking information, there may be other factors that cause actions, events, or results not to be as anticipated, estimated, or intended. There can be no assurance that forward-looking information will prove to be accurate. The
forward-looking information contained herein is presented for the purposes of assisting investors in understanding the Company's plans, objectives, and goals and may not be appropriate for other purposes. Accordingly, readers should not place undue
reliance on forward-looking information. CPM does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
This Investor Presentation should be read in conjunction with the Company’s technical report entitled “NI 43-101 Technical Report Feasibility Study of the Sevier Playa Sulfate of Potash Project, Millard County, Utah” dated effective January 11, 2018 (the
“Technical Report” or “FS”) prepared by Novopro Projects Inc. and Norwest Corporation (Norwest) available at the Company’s website and on its SEDAR profile at www.sedar.com.
The qualified persons for the FS are:
Mr. J. Brebner, P. Eng., QP, (Novopro) is the QP responsible for the infrastructure, market studies and contracts, Capital Cost, environmental studies, permitting, social or community impact portion of the Report, and the overall preparation of the Report.
Mr. A. Lefaivre, P. Eng., QP, (Novopro) is the QP responsible for the mineral processing and metallurgical testing and recovery methods portion of the Report.
Mr. D. Bairos, P. Eng., QP, (Novopro) is the QP responsible for the Capital Cost and Operating Cost estimates, and risk analysis portion of the Report.
Mr. C. Laxer, P. Eng., QP, (Novopro) is the QP responsible for the economic analysis portion of the Report.
Mr. L. Henchel, P. Geo., QP, (Norwest) is the QP responsible for the history, geology, exploration, drilling, sample preparation, analyses and security, data verification, and Mineral Resource estimate portion of the Report.
Mr. R. Reinke, P. Geo., QP, (Norwest) is the QP responsible for the Mineral Reserve estimate, groundwater modeling, and mining methods portion of the Report.
Mr. S. Ennis, P. Eng., QP, (Norwest) is the QP responsible for the geotechnical design and mining methods portion of the Report.
The content of this investor presentation has been read and approved by Dean Pekeski, P. Geo, Vice President - Project Development of the Company, a Qualified Person as defined by NI 43-101.
2
DISCLAIMER
C R Y S T A L P E A K M I N E R A L S
INVESTMENT HIGHLIGHTS
3
Only permitted greenfield brine SOP project in the large Americas market
C R Y S T A L P E A K M I N E R A L S 3*Source: FS and Company reports. Please review FS for details; available on the Company’s website and on sedar.com.
Feasibility Study demonstrates compelling economics*§ $730 million NPV§ 30-year mine life§ 6.8 million tons proven and probable reserves
Proximate to infrastructure and end markets
Strong market outlook for SOP driven by growing demand
Seasoned management team with track record of project development success
Returns upside through project optimisation initiatives underway
Catalysts for near-term value creation including offtake and mine construction
C R Y S T A L P E A K M I N E R A L S
COMPANY PROFILE
4*Source: FS and Company reports
v Crystal Peak Minerals is a development-stage potash company controlling over 124,000 acres on the Sevier Playa in Utah
v Developing the Americas next SOP project to supply a large and growing market
v Situated perfectly to supply SOP into multiple regional markets
v Significant Reserve & Resource underpinning a long mine life and compelling project economics
Intrepid Potash(MOP)
Compass Minerals(SOP)
Intrepid Potash(MOP)
Approximate Outline of Ancient Lake Bonneville
CRYSTAL PEAK MINERALSSevier Playa
SALT LAKE CITY
CPM completing test trench work on the Sevier Playa
`
C R Y S T A L P E A K M I N E R A L S
COMPELLING PROJECT ECONOMICS
5
ECONOMIC INDICATORS*
NPV (after tax, 8%) $730 M
IRR (after tax) 21%
Proven and Probable Reserves 6.802 M tons
Mine Life 30 years
EBITDA at Full Production Rate ~$150 M
Total Initial Capital Costs $398 M
Average Operating Cost (over LoM) $205/ton
SOP Price (ex-works) $575/ton
Production Royalties (% of gross revenues) 5.61%
After-Tax Payback (from initial production) 4.5 years
Feasibility Study (FS) announced January 11, 2018
Material upside potential identified
since completion of FS
(See slide 16)
KEY ASSUMPTIONS:
• 100% equity financing
• SOP production ramp-up over
three years;
from first production of 30,000
tons in 2022 to full capacity of
at least 372,000 tons in 2025
• Mineral resource at four times
reported reserve
*Source: FS and Company reports
C R Y S T A L P E A K M I N E R A L S
SULFATE OF POTASH (SOP): AN ESSENTIAL FERTILIZER
Specialty fertilizer essential for many high value crops
Superior quality, premium-priced potash
Offers important benefits over muriate of potash (MOP)
• increased yields
• improved color, flavor and shelf life
• favorable in arid climates
• preferable for chloride-sensitive crops
• higher drought resistance
Preferred for use in arid or chloride-sensitive soil
6
C R Y S T A L P E A K M I N E R A L S
THE SOP MARKET: A COMPELLING OPPORTUNITY
7
2018 2025
515k
610k*
Source: CRU, Parthenon, and Company reports
CornbeltMOP
Calif.SOP
$315
$615
SOP PRICING PREMIUM: 50-100%
AVG. PRICE PER TON, DECEMBER 2018
Calif.MOP
$440
Source: Green Markets
GLOBAL MARKETTONS PER ANNUM (T.P.A.)
2017 DATA
Potassium fertilizer: 85.8 million t.p.a.
SOP fertilizer: 7.6 million t.p.a.
SOP average growth: 2.2% per year
Source: CRU and Parthenon
NORTH AMERICAN SOP MARKET
(including Mexico - tons per annum)
DEMAND DRIVERS:• Healthier food choices• Organic crops• Increasing population• Reduced arable land• More frequent droughts
2.4%CAGR
* Extrapolated
Significant market opportunity in Americas with majority of supply coming from a single high-cost domestic producer with the balance imported primarily from Europe. Domestic supply is largely constrained leaving supply gap to widen as regional demand grows
C R Y S T A L P E A K M I N E R A L S
DOMESTIC PRICING ADVANTAGE
8
CPM is well positioned to supply the premium California market
300
350
400
450
500
550
600
650
700
750
800
Mar
/10
Sep
/10
Mar
/11
Sep
/11
Mar
/12
Sep
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Mar
/13
Sep
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Mar
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Mar
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Sep
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Mar
/17
Sep
/17
Mar
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/18
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/19
Sep
/19
California SOP Prices vs Northwest Europe SOP Prices (US$/t)
Ca lifornia SOP (midpoint) No rthwest Europ e SOP (midpo int)
Average premium of US$129/t to Europe benchmark
*Source: Greenmarkets
C R Y S T A L P E A K M I N E R A L S
SOP PRODUCTION METHODS
9
BRINE
Extract and harvest sulfate brines
REACTED SALTS
React MOP with high-sulfate salts
MANNHEIM
React MOP with sulfuric acid
Lowest cost
No unfavorable by-products
Medium cost
No unfavorable by-products
Highest cost
Produces CO2, hydrochloric acid
Global production:~ 2.1m tons per annum
Global production:~ 1.4m tons per annum
Global production:~ 3.2m tons per annum
Total Production Source: CRU
C R Y S T A L P E A K M I N E R A L S 10
USA: 57kg/ha
Latin America: 10kg/ha
Europe: 43kg/ha
Africa: 4kg/ha
Middle East:26kg/ha
India:2kg/ha
China:71kg/ha
Southeast Asia: 1kg/ha
Russia: 7kg/ha
Xkg/ha represents kilograms of SOP used
per hectare on SOP-favorable crops
Compass Minerals (Utah)
Crystal Peak Minerals(Utah)
SQM. S.A(Chile)
Colluli (Ethiopia/Eritrea)
Multiple development projects(Western Australia)
Luobupo Potash Co.
(China)
Project status (primary producers)
Producing
DevelopmentSource: Food & Agriculture Organization, CRUU.S. & Canada only
Domestic demand and freight to US limit low
margin Chinese coastal Mannheim producers competing in the US
Domestic demand and freight to US limit competitiveness/incentive for
European SOP to export to US
427*
SOP demand by region (kton) in 2018
349
223
4,648
1,253
306
Rest of World:
388
SITUATED IN LARGE ADDRESSABLE MARKET
Proximate to key US markets, Mexico and South America
Low import competition due to cost of freight
Other prospective development projects are distant from export markets
CPM will have great access to key markets in Central and
South America
Direction of SOP trade
61
Tessenderlo(Belgium)
Evergrow(Egypt)
C R Y S T A L P E A K M I N E R A L S
INFRASTRUCTURE ACCESS
11
Within 20 miles of key transport infrastructure
Rail access across US and into Canada & Mexico
Sevier Lake ProjectIntegrated Rail LinePort Access to Pacific / Atlantic
Rail Loadout Facility ~15 miles from plant Railroad used by
Compass for California SOP shipments
C R Y S T A L P E A K M I N E R A L S
UTAH: PROVEN LOCATION FOR SOLAR EVAPORATION
12
SaltSOPMagnesiumMOP
Five active solar evaporation operations within the ancient footprint of Lake Bonneville:• Two salt (halite) operations• One Sulfate of Potash (SOP) operation • One Muriate of Potash (MOP) operation• One magnesium operation
CPM’s Sevier Playa project will be the sixth mineral extraction operation within the Lake Bonneville footprint.
CRYSTAL PEAK MINERALS
Sevier Playa
C R Y S T A L P E A K M I N E R A L S
Surface brine extraction
Existing infrastructure: rail lines, roads, power and natural gas
Arid location supports solar evaporation
FAVORABLE COST STRUCTURE
13
Proximity to core markets<500 miles to California – largest U.S. SOP market
Stable local workforce
State-of-the-art processing facility
C R Y S T A L P E A K M I N E R A L S
RESULT: BOTTOM-QUARTILE OPEX*$205/ton (per FS) vs. industry average of ~$350/ton
*Source: FS and Company reports
C R Y S T A L P E A K M I N E R A L S
MINIMAL ENVIRONMENTAL IMPACT (AIR, LAND, WATER)
Playa has no groundwater, vegetation, or animal life• Brine not suitable for other
applications
Completed EIS permitting
• Record of Decision signed in 2019
• Construction anticipated to begin in 2020
Project characteristics: • Solar evaporation
• Reduced fuel consumption and air emissions by redesign
• Solar photovoltaic power for brine extraction well pumps
• Simple process methodology
• Certified organic potential
• Robust pond design: 12 feet of highly impermeable clay
14C R Y S T A L P E A K M I N E R A L S
C R Y S T A L P E A K M I N E R A L S
FAVORABLE GOVERNMENT RELATIONS AND LOCAL SUPPORT
15
Mining and agriculture are key drivers of the Utah economy• A top 3 U.S. state for mine operators (Fraser Institute)• Top 10 by % GNP from mining (USGS)
Regulatory developments:• One of the few permitted SOP projects globally, the only new brine
project in the Americas region• Utah Senate Bill 216 – post-performance tax credit of approximately
$112.5 million in support of Governor's rural initiatives
Crystal Peak: economic benefits for 30+ years• Direct employment of 150-200 (200-250 during construction)• Engagement with local communities and stakeholders has helped
cultivate support for the project
C R Y S T A L P E A K M I N E R A L S
PROJECT OPTIMISATIONS
Additional Revenue• Studying potential to produce
magnesium chloride in liquid and solid form
Optimization Strategies• Process improvements –
increasing sulfates for conversion• Capex reductions• Playa operational efficiencies
16C R Y S T A L P E A K M I N E R A L S
• Dust control, snow melt, erosion control, fertilizer
Liquid Magnesium Chloride
• Higher value magnesium product, snow melt, magnesium refining
Flake Magnesium Chloride
Reacted MOP ProductionReduced playa brine flow rate with the option
to maximize Reacted MOP production
CAPEXReduced evaporation pond sizes, initial capex
and sustaining capex
Operational FlexibilityReduce risk from poor evaporation seasons, lack of recharge water, start-up challenges, and provides opportunity to integrate more
flexibility into the Project
C R Y S T A L P E A K M I N E R A L S
NEAR-TERM CATALYSTS FOR VALUE CREATION
Q3 2020Secure Project
Finance
Q3 2019Record of Decision
Q1 2020Secure Offtake
Agreement
Q2 2020Optimised
Development
17C R Y S T A L P E A K M I N E R A L S
Q3 20 / Q1 21Early Works and
Construction
C R Y S T A L P E A K M I N E R A L S
CAPEX AND FINANCING
18
Initial Capital Costs: $398 million1
Direct: $288 million
Indirect: $70 million
Contingency & risk: $40 million
1. Initial CapEx. Source: FS and Company reports2. Numbers and percentages are approximate and rounded
Engaged BNP Paribas as project finance advisor
Project debt: expected to be ≈ 60% of project finance
EMR Capital:• Mining private equity group founded by highly experienced
industry executives with more than 25 years of experience working together across commodity cycles
• Owns 62.63% (on an undiluted basis) and has invested US$59 million to date2
• Highly supportive and committed long-term value investor supporting CPM across technical, financial, commercial, and strategic matters
Alternative sources of financing:• Export credit agencies• Off-take • Infrastructure sale and lease-back• Equipment leasing• Other private equity
C R Y S T A L P E A K M I N E R A L S
Management and Directors, 2.38%
EMR Capital, 62.63%Tata Chemicals,
9.93%
Knox Capital, 3.91%
Other, 21.25%
CAPITAL STRUCTURE
19
CRYSTAL PEAK MINERALS
Ticker – Canada: TSXV: CPM
Ticker – U.S.: OTCQX: CPMMF
Share Price: (approx.) C$0.061
Shares Outstanding:(approx.) 291 million2
Market Capitalization: (approx.)
C$16.0 million1
SHARE OWNERSHIP
1 Source: share price and market cap as of Dec 11, 2019 (Canadian dollars - rounded); other details sourced from FS and Company reports.2 issued and outstanding as of Dec. 11, 2019 – does not include unexercised warrants and options3 Numbers and percentages are approximate and rounded
EMR INVESTMENT (62.63%)3
Specialist resources private equity managerInvested to date: • US$37 million of equity• US$12 million loan (convertible at
C$0.55/share) – converted to equity effective Dec. 2018
• US$10 million loan (convertible at C$0.50/share)
Highly supportive and committed long term value investor, supporting CPM across technical, financial, commercial and strategic matters
C R Y S T A L P E A K M I N E R A L S
INVESTMENT HIGHLIGHTS
20
Only permitted greenfield brine SOP project in the large Americas market
C R Y S T A L P E A K M I N E R A L S 20*Source: FS and Company reports. Please review FS for details, available on the Company’s website and on sedar.com.
Feasibility Study demonstrates compelling economics§ $730m NPV§ 30-year mine life§ 6.8 million tons proven and probable reserves
Proximate to infrastructure and end markets
Strong market outlook for SOP driven by growing demand
Seasoned management team with track record of project development success
Returns upside through project optimisation initiatives underway
Catalysts for near-term value creation including offtake and mine construction
C R Y S T A L P E A K M I N E R A L S
APPENDIX
21C R Y S T A L P E A K M I N E R A L S
C R Y S T A L P E A K M I N E R A L S
PROJECTED CASH FLOWS
22
Project NPV8: US$730 million1
In first year of full production, CPM would have an EBITDA of US$147 million
US$398 million of CapEx to reach full production
1 At $572/ton SOP (inflated) after tax. Source: FS and Company reports2 Sales and costs inflated over mine life. Source: FS and Company reports
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
EBITDA2
Robust EBITDA reflective of strong profit margins
$US
thou
sand
s
C R Y S T A L P E A K M I N E R A L S
BELOW-AVERAGE OPERATING EXPENSES
SOP Industry Cost Curve
23
Brine Production
Reacted Salts Production
Mannheim Production
0
100
200
300
400
500
600
0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 6000
Oper
atin
g cos
t (US
$/t)
Annual production
CPM FS OPEX US$205/ton
* Source: CRU, FS, and company reports
Majority brine production (approximately 2/3 of total) and other cost advantages (see slide 11) expected to enable Crystal Peak to achieve operating expenses below SOP industry averages.
Source: FS and Company reports
C R Y S T A L P E A K M I N E R A L S
LEADERSHIP TEAM
24
MANAGEMENT
JOHN MANSANTI, PRESIDENT AND CEO
• More than 35 years experience in mining
• Senior operations and project roles for Intrepid Potash, Barrick Gold, Placer
Dome, Newmont Mining, and Freeport McMoRan
BLAKE MEASOM, CHIEF FINANCIAL OFFICER
• Finance executive with 25+ years of experience
• Former CFO of Barrick North America
• Former CFO of Kennecott Energy Company, a subsidiary of the Rio Tinto
Group
DEAN PEKESKI, VP PROJECT DEVELOPMENT
• 20+ years as project manager
• Managed development of Milestone Potash Project in Saskatchewan for
Western Potash
WOODS SILLEROY, VP OPERATIONS AND CORPORATE SECRETARY
• More than 30 years of operations and resource experience
• Former VP and Chief Operating Officer, Justice Design Group
DOUG HOADLEY, DIRECTOR OF MARKETING
• 25+ years of market analysis in the fertilizer industry,
5 years marketing and 3 years IR
• CF Industries, Mosaic Company, IMC Global and CRU
HERBERT SCRUGGS, NON-EXECUTIVE CHAIRMAN
• Founding partner of The Cynosure Group
• Former senior executive at Leucadia National Corporation
DE LYLE BLOOMQUIST, LEAD INDEPENDENT DIRECTOR
• Former President of Global Chemicals Business at Tata Chemicals
• Former CEO of General Chemical Industrial Products
DAN BASSE, DIRECTOR
• President of AgResource Company with 40+ years of experience in farming and
commodity industries
DONALD CARROLL, DIRECTOR – EMR REPRESENTATIVE
• Senior executive with BHP Billiton for 30+ years in BHP Japan, BHP India, and BHP
Marketing Asia
ROB CURTIS, DIRECTOR – EMR REPRESENTATIVE
• Geologist with 19+ years experience executing investments in Sandfire, IMX, Toro
Energy, and others
ROD LYLE, DIRECTOR – EMR REPRESENTATIVE
• Corporate lawyer with extensive board, finance, and M&A experience
JOHN MANSANTI, DIRECTOR – CPM PRESIDENT & CEO
• Currently serves as director for Alio Gold
BOARD OF DIRECTORS
C R Y S T A L P E A K M I N E R A L S
Crystal Peak Minerals Inc.
2150 South 1300 East, Suite 550Salt Lake City, UT 84106
Phone: 801-485-0223e-mail: [email protected]
website: www.crystalpeakminerals.com
Plant nutrition for a healthier world