Upload
dokhanh
View
216
Download
3
Embed Size (px)
Citation preview
Specialtyfertilizers&plantnutritionforachangingworld
CorporatePresentation
Q12018TSXV:CPM
Forward-LookingInformation
2
This presentation is for informational purposes & does not constitute an offer or a solicitation of an offer to purchase securities. This presentation contains "forward-looking information" within themeaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements related to activities, events or developments that Crystal Peak MineralsInc. (“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 resource estimate; the permitting process; environmental assessments; business strategy; objectives & goals; & exploration of the Sevier Playa Project. Forward-looking information is oftenidentified 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 & phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" betaken, occur or be achieved.
Forward-looking information is based on a number of factors & assumptions made by management & considered reasonable at the time such information is provided. Forward-looking informationinvolves known & unknown risks, uncertainties & other factors that may cause the actual results, performance, or achievements to be materially different from those expressed or implied by theforward-looking information. The Company’s Preliminary Feasibility Study (the “PFS”) is, by definition, preliminary in nature & should be considered speculative. It is based upon a process flow sheetthat may change, which would impact all costs & estimates. Operating Costs for the Project were based upon assumptions including future energy costs, natural gas costs, water costs, labor, & othervariables that are likely to change. Capital Costs were based upon a list of equipment thought to be necessary for production. SOP price forecasts were based upon third-party estimates &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 werecalculated 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 adverselyimpact project economics. Among other factors, the Company’s inability to complete further mineral resource & mineral reserve estimates; the inability to complete a Feasibility Study; the inabilityto obtain sufficient recharge; 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 toexplore & develop the Sevier Playa Project; environmental issues or delays; inability to successfully complete additional drilling at the Sevier Playa Project; factors disclosed in the Company's currentManagement's Discussion & Analysis; as well as information contained in other public disclosure documents available on SEDAR at www.sedar.commay adversely impact the Project.
The information presented herein was approved by management of the Company on January 2, 2018. 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, orintended. 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 assistinginvestors in understanding the Company's plans, objectives, & goals & may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-lookinginformation. 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 titled “NI 43-101 Technical Report Preliminary Feasibility Study of the Sevier Lake Playa sulfate of PotashProject, Millard County, Utah,” filed on November 18, 2013 with an effective date of October 25, 2013 (“PFS”), available at the Company’s website and on its SEDAR profile at www.sedar.com.
Qualified Persons for that report include:• Michael Blois, MBL Pr. Eng., is the Qualified Person in accordance with Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) who has reviewed, &is
responsible for, the mineral processing &metallurgical testing, recovery methods, infrastructure, capital cost, &operating cost estimates described in this MD&A &has approved it. Mr. Blois is anindependent consultant contracted by the Company.
• Lawrence D. Henchel, P. Geo., Vice President Geological Services with Norwest Corporation, is the Qualified Person in accordance with NI 43-101 who has reviewed the resource estimate in thisMD&A &has approved it. Mr. Henchel is an independent consultant contracted by the Company.
• Michael Hardy, P. Eng., President with Agapito Associates, Inc., is the Qualified Person in accordance with NI 43-101 who has reviewed the mining methods described in this MD&A &hasapproved it. Mr. Hardy is an independent consultant contracted by the Company.
• Scott Effner, P.G., Principal Geochemist/Hydrogeologist with Whetstone Associates, is the Qualified Person in accordance with NI 43-101 who has reviewed the hydrogeological modeling contentin this MD&A &has approved it. Mr. Effner is an independent consultant contracted by the Company.
• David Waite, P.E., Senior Engineer with CH2M HILL is the Qualified Person in accordance with NI 43-101 who has reviewed the environmental &permitting content of this MD&A &has approvedit. Mr. Waite is an independent consultant contracted by the Company.
CPMHighlights– PremiumSpecialtyFertilizer• Potassiumsulfate(SOP)premiumpricedspecialtyfertilizerwithgrowingdemand&
strongpricing
• ProjectlocatedintheUS,adjacenttothehighestpricepointintheSOPmarket
• Accessiblerailinfrastructurewithdirectroutestomarket
• CPM’sbrineproduction&sustainablesolarevaporationSOPprocessingfacilitatethelowestquartileCapExandOpEx
• CPMintendstobeoneofthehighestmarginSOPoperationsglobally
• Advancedstageproject– BankableFeasibilityStudy(BFS)dueinQ12018
• C$90millionequityfinancingcommitmentfromEMRCapitalResources(EMR)
3
• Potassiumsulfate(K2SO4 or“SOP”)– Usedinfertilizers,providingboth
potassium&sulphur– SOPdoesnotcontainchloridelike
potassiumchloride(“KCl”)producedasmuriateofpotash(“MOP”),mostwidelyusedpotassiumbasedfertilizer
4
SOP– PremiumFertilizerforToday’sWorld
• Increasedcropyields:– Stimulatesgrowth– Improveddisease&droughtresistancewith
thickeroutercellwalls– Improvescolor,flavor&storingqualityof
fruit&vegetables• SOPmustbeusedforsensitivehighvaluecrops,
includingnuts,fruits&vegetablesaschloridefromMOPcanbeharmful
• Salineandaridsoilsrequireadditionalsulfatenutrients
• LesssensitivecropsmaystillrequireSOPforoptimalgrowthifsoilaccumulateschloridefromirrigationwater
• Subsurfaceirrigation– SOPissoluble&canbedelivereddirectlytoplantswithsubsurfacewaterdelivery
WhatisSOP? WhyUseSOP?
TypesofSOPProduction• BrineProcessing:turnsnaturalpotassium-rich
brinesintoSOP,usinglow-costsolarevaporation.Lowestcostsinindustry
• KCl+SulphateSalts: ConvertspotassiumbearingmineralstoSOPwiththeadditionofsulfatesalts
• MannheimProcess:ConvertsMOPtoSOPusingasulphuricacid&hightemperatureenergyintensiveprocess.Highestcostsinindustry
BrineProduction
ReactedSaltsProduction
MannheimProduction
0
100
200
300
400
500
600
0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 6000
Ope
ratin
gcost(U
S$/t)
Annualproduction
• Increasingpopulations+decliningarableland+changingdiets=needforhighercropyields
• Growingmoresensitivecropsasconsumptionpatternschange
• ResearchdrivingincreasedSOPconsumptionfornewmarketssuchaspotatoes
• ClimateChange&droughtinmajorgrowingregionsrequiretheuseofmoreSOP
5
CPMPFSOPEXUS$181/t
SOP– IncreasingPricing&SupportLevels
• Brineprocessing:– Keyproducers:CompassMinerals&SQM
• KCl+sulfatesalts:– Keyproducers:K+S,Rusal
• Mannheimprocess:– Keyproducers:TessenderloGroup,
Chinese
PriceGrowth
PriceSupport
IndustryCostCurve
1– Source:CompassMineralscompanyreports
6
SevierLakeProjectPrimaryDemand
MidTierDemand
• Globalpotassiumfertilizermarket:64milliontonnesperannum
• GlobalSOPmarket:6milliontonnesperannum• SOPCAGR: 4-6%through2020• AdditionalexpectedgrowthascertainMOP
usageareastransfertoSOP
SOP– MarketSizeMOP55mtpa
SOP6mtpa
NOP1.4mtpa
SOPM1.4mtpa
PotassiumFertilizerMarket
USMarket
• CurrentU.S.Market:550,000to600,000tonnesperannum
• California:1/3oftheU.S.Market(approx.)- Productionofhighvaluesensitivecrops,suchasalmonds,and
- Continuingwatershortages• Growth: Potentialuptoapprox.970,000tonnes
perannumoverthenext5years
Source:ParthenonStudy
7
SevierPlayaProjectOverview
Location CentralUtah
Size About124,200acres
Product SOP(Potassiumsulfate)
Resource:(K2SO4)
M&I: 31.486milliontonnesInferred:2.560milliontonnesOver30yearssupply@300,000tonnesperannum
DepositType: Terminallakesalt brine
Process: Solarevaporation
Stage: BFSunderwaytobecompletedinQ12018
1980’sDevelopment:
Evaporationponds&brinecollectiontrenchbuilt.Salt&magnesium chloridebrineswereproducedin1989&1990&testpondsoperatedtoproducepotashsalts
SevierPlayaataGlance
SevierPlaya
Source:PFS&Companyreports
• Utah,U.S.– Mining-friendlystatewithtrainedlocal
workforce– Welldocumentedpermittingprocesswith
manykeypermits,suchaswater,alreadyinplace
– CPMhasreceivepost-performancetaxrebate
• Provenpotassiumfertilizerproducingbasin– CompassMinerals(SOP)– IntrepidPotash(MOP)
• Regionisprovenevaporationenvironment– CompassMinerals’producingSOP
operationusingbrineextraction&evaporation
• Raillinedirectaccess– California,– MainU.S.growingregions– PortsonbothAtlantic&Pacificcoasts
8
SevierPlaya– ProjectLocation
IntrepidPotash(MOP)
CompassMinerals(SOP)
IntrepidPotash(MOP)
ApproximateOutlineofAncientLakeBonneville
CRYSTALPEAKMINERALSSevierPlaya
SALTLAKECITY
Utah
• AccessbyrailtoU.S.coremarkets– Lessthan500milestolargest
U.S.SOPmarket:California– EaseofaccesstoextensiveU.S.
widerailnetwork• Accessbyrail&porttointernational
markets– East&westcoastoceanports
9
SevierLakeProjectIntegratedRailLinePortAccesstoPacific/Atlantic
SevierPlaya– ProjectLocation
IntegratedU.S.RailSystem
ExcellentLocalInfrastructure
• Localinfrastructure:– Roadtoproposedplantsite– 15milestorailline– 35milestonaturalgaspipeline– 52milestopowersubstation
UnionPacificRailroad
Freeway
Legend:
LUMALeases
CPMLeases
ProposedPlant
ProposedRailLoadout
TownofDelta
AccessRoad
Powerline
GasPipeline
N
Source:PFS&Companyreports
• Projectdebt:– Expectedtobeintheregionof
65%projectfinance
• ConstructionequitycommitmentfromEMR:- LargerofC$60mor1/3ofproject
equity
• Alternativesourcesoffinancing:- Off-take- Infrastructure,sale&leaseback- Equipmentleasing
• CapEx:- PFSestimates:US$378million- 300,000tonneperannum
operationfor30-yearminelife- Lowlevelofinfrastructure
investmentrequired
10
CapEx&FinancingCapEx AchievableFinancing
US$mSource:PFS&Companyreports
11
Production Metrics(USD)
ProductionRate
Year1Year2Year3(Nameplate)
50,000tpy100,000tpy300,000tpy
MineLife 30years
ProjectEconomics(USD)SOPPrice(2020) $721/t
EBITDAatNameplateProduction $143million
Pre-tax NPV(8%Discount)Pre-taxIRR
$957million24%
After-tax NPV(8%Discount)After-taxIRR
$629 million20%
Payback 5.5years
EffectiveTaxRate 29%
ProductionRoyalty 5.61%
SevierPlayaProject– RobustPFSComplete
OperatingCostEstimates(USD)
UnitOperating Costs:LaborPowerNaturalGasReagents,Consumables&MaintSaltHarvest&HaultoRailG&A
$34.76/t$13.97/t$37.57/t$40.34/t$37.57/t$16.70/t
TotalCashCosts $180.91/t
CapitalCostEstimates(USD)Capital Costs:PlayaInfrastructurePlant FacilitiesUtility InfrastructureRail
$49million$167million$45million$31million
DirectCosts $292million
IndirectCostsContingency
$50million$36million
TotalCapitalCosts $378million
SustainingCapitalCosts(LoM) $199 million
Source:PreliminaryFeasibilityStudyFirstProductionupdatedto2020.PressRelease(Feb2016)
Source:PFS&Companyreports
FS– OpportunityforCapEx&OpExoptimization
• Optimizationopportunityofitemsincluding:– CapEx – acceleratingtimetomarket– CapEx – scalability– CapEx – capitaldeployment– OpEx – environmentalsustainability– OpEx – statetaxsupport– Revenue – increasedproductionandsaleofassociatedminerals
• BFSscheduledforcompletioninQ120178
• BFScatalystforfinalsubmissionofEISpermittingprocessdocuments
12
OptimizationsforBankableFeasibilityStudy
13
SevierPlayaProject– ResourceEstimateEstimatedMineralEquivalentCompoundsfromBrineResource
Resource
Classification
(Milliontonnes)
SOP Bitterns SaltCake Halite
K2SO4 MgCl2 MgSO4 Na2SO4 NaCl
Measured 11.344 12.464 15.746 34.432 243.666
Indicated 20.142 22.641 28.604 61.335 416.176
Measured+Indicated 31.486 35.104 44.350 95.768 659.841
Inferred 2.560 3.111 3.931 8.051 51.113
• Mineralresourceestimateisdelineatedfromsurfaceto30metersbelowsurface
• Additionalupsideasmineralizationcontinuestodepth
• PFSeconomicsexcluderevenuefromadditionalessentialminerals
Source:CPMPFS
Source:PFSandCompanyreports
AssociatedMinerals Usage
Salt Snowmelt,industrial
Magnesiumchloride Dustcontrol, snowmelt,erosioncontrol,fertilizer
Magnesiumsulfate Fertilizer, industrial,medical
Lithium Batteries,ceramics
Boron Fertilizer,water treatment
14
PotentialAdditionalRevenueStreams
PeerComparables
PotentialAdditionalRevenueStreams
Company AdditionalRevenueStreams Comment
Compass Minerals SaltMagnesiumchloride
1.4milliontonnesperannum700,000tonnesperannum
SQMLithiumPotassiumandsodiumpotassiumnitrate
40,000tonnesperannum500,000tonnesperannum
Source:CompassMinerals;SQM
15
CPM– KeyMilestones&Catalysts
EIS– EnvironmentalImpactStudyNTP– NoticetoProceedROW– RightofWayGrantsPSD– PreventionofSeriousDeterioration
YearQuarter Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
EngineeringScheduleFeasibilityStudy
DetailledEngineering
FinancingScheduleProjectFinancing
PermitingScheduleUSArmyCorpsofEngineers MinorSourceAirPermit
DraftEISBLMMiningPlan/DOGMLargeMinePermit
PlanofDevelopment(POD)RecordofDecision(ROD)
OtherConstruction&OperatingPermits
ConstructionSchedulePilotPond/Trench/InitialPumpingPondConstruction/BrinePumping
ProcessPlantConstruction SOPProduction
EvaporationSeason
Sept2017UpdatedTimeline(PilotPonds/TrenchesIncluded)2016 2017 2018 2019 2020 2021
0
20
40
60
80
100
120
140
160
180
EBITDAProgression
• ProjectNPV8:US$629million1
• FullproductionforCPMwouldgiveanEBITDAofUS$143million
• CapExtoreachfullproductionofUS$378million
16
FutureValuation
• CompassMinerals,themostdirectU.S.producingpeer,tradesata9.4xmultiple
• Recentindustryacquisitionsat9.9xto11.9xEBITDA
PeerGroupValuations
FutureCashFlow US$m
1- at$721/tonneSOP.Source:PFS&Companyreports
17
FinancialOverviewShareOwnershipCPM
Ticker– Canada: TSXV:CPM
Ticker– U.S.: OTCQX:CPMMF
SharePrice: (approx.) C$0.411
SharesOutstanding: (approx.) 196million2
MarketCapitalization:(approx.)
C$80million1
EMRInvestment
Initialcommitment:(June2015) C$10millionatC$0.30/share
Followoncommitment: (May2016) C$20millionatC$0.42/share
FollowonCommitment: (June2017) US$12millionloan(convertibleatC$0.55/share)
Futureinvestment:(atpointofconstructiondecision): C$60millionor upto1/3ofprojectequity
Valuationmethodology: “StairStep”investmentbasedonprojectvalue&achievingmilestones
1–Source:shareprice&marketcapasof2017-08-29(Canadiandollars)otherdetailssourcedfromPFSandCompanyreports.
2– issuedandoutstanding– doesnotincludeunexercisedwarrantsandoptions
EMR 44%
Tata 15% Knox 6%
Management9%
Float 27%
GovernmentandLocalSupportBroadsupportfromstate,county,andlocalofficials• Jobs• TaxRevenue• TaxCreditBillApproved
18
Federal Government BLMassistanceonpermittingthroughregularmeetinganddirectdialogue
StateGovernment SupportfromSenateBill216“UtahHighCostInfrastructureDevelopmentTaxCredits”– upto50%ofCapExinpostperformancetaxcredits
CountyGovernment SignificantsupportfromMillardCountyCommissionandDirectorofEconomicDevelopment. MillardCountytomaintain15-mileroadtoproject
LocalCommunity EngagementwithlocalcommunityandstakeholdershashelpedcultivatesupportfortheProject
PreliminaryFeasibilityStudyeconomicsshowgreatbenefittoStateofUtah
19
LeadershipManagement
JohnMansanti – President&CEO• Morethan35yearsexperienceinmining• HasworkedforIntrepidPotash,BarrickGold,PlacerDome,
NewmontMining,andFreeportMcMoRan.• CurrentlyservesasdirectorforRyePatchGold
BlakeMeasom– CFO• Financeexecutivewith25+yearsofexperience• FormerCFOofBarrickNorthAmerica• FormerCFOofKennecottEnergyCompany,asubsidiaryof
theRioTintoGroupDeanPekeski– VPProjectDevelopment• 20+yearsasprojectmanager• ManageddevelopmentofMilestonePotashProjectin
SaskatchewanforWesternPotashWoodsSilleroy– VPOperations&CorporateSecretary• Morethan25yearsofoperations&naturalresource
experience• FormerVP&ChiefOperatingOfficer
LeeAnnDiamond– EnvironmentalManager• Over30+yearsof westernU.S.basedtechnicaland
complianceexperience• FormerprojectmanagerforKleinfelder
HerbertScruggs– Non-ExecutiveChairman• FoundingpartnerofTheCynosureGroup.Formersenior
executiveatLeucadiaNationalCorporationDeLyleBloomquist– LeadIndependentDirector• FormerPresidentofGlobalChemicalsBusinessatTataChemicals
andformerCEOofGeneralChemicalIndustrialProductsDanBasse– Director• PresidentofAgResourceCompanywith40+yearsofexperience
incommodity-basedindustriesTedBotts– Director• FormerexecutiveatUBSGroup&GoldmanSachs&Presidentof
KensingtonGateCapitalDonaldCarroll– Director– EMRrepresentative• SeniorexecutivewithBHPBillitonfor30+yearsinBHPJapan,
BHPIndia,&BHPMarketingAsiaRobCurtis– Director– EMRrepresentative• Geologistwith19+yearsexperienceexecutinginvestmentsin
Sandfire,IMX,ToroEnergy,&othersAaronHood– Director– EMRrepresentative• Engineeringandfinanceexecutivewithbankingandmining
experienceJohnMulhall– Director– Tatarepresentative• CFOofTataChemicalsLimited
ThomasPladsen– Director• Financeexecutivewith35+yearsofexperience
BoardofDirectors
EMRInvestment• EMRcommitmentofnotlessthanC$90million
orone-thirdofprojectequityinthreetranches• Specialistresourcesprivateequitymanagerwith
deep linkagestoAsianmarkets- inparticular,commoditypurchasers&endusers,resourcescompanies,investors,&governments
• Focused onfourcommodities:potassiumfertilizer,gold,copper,&metallurgicalcoal
• Targetinvestmentsinprojectswith:– acompellingresourceopportunity,– bottomquartileCapEx&OpEx,– astablejurisdiction&proximitytoexistinginfrastructure,and– alocationwheretargetmarketsalreadyexist&wheremajoroperators
residewhomightpursuefutureM&A
20
EnvironmentalRelevanceProcessandproductswithpositiveimpactsonourenvironment’smostpreciousresources: Air,Water,Land
Environmentallyresponsibleproductionprocessharveststhepowerofthesun
• SolarevaporationprovidesCPMwithlow-carbonfootprintproductionprocess
• SolarpondsallowCPMtoharnessthesun’ssolarenergyforproductionprocess
• MostofCPM’senergyneedswillcomefromarenewablesource
21
SustainabilityProductssuitedfortoday’schallengingandchangingenvironment
• SOPislowinchlorideswhichispreferredinaworldfacingwaterscarcity
• SOPissolublesoitcanbeusedindripirrigation&fertigationsavingvaluablefreshwaterresources
• SOPreducesthetoxiceffectsofchloridebuildupinsoils,especiallyindryconditions,thatcanoccurwiththeuseofstandardMOP
• SOPisthebestfertilizertouseonmostfruits,vegetablesandnuttreesasconsumersrotatetoahealthierdiet
22
ContactDetails
23
CrystalPeakMineralsInc.2180South1300East
Suite200SaltLakeCity,UT84106
Phone:801-485-0223
e-mail:[email protected]:www.crystalpeakminerals.com