Lac à Paul Phosphate Projectarianne-inc.com/files/Website Corporate Presentation_2017... · 2017-09-12 · PHOSPHATE ROCK IGNEOUS VS SEDIMENTARY DEPOSITS IGNEOUS PHOSPHATE vs. SEDIMENTARY

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Lac à Paul Phosphate Project

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DISCLAIMER

Total resources only include the measured and indicated categories.

All currencies are in US$ unless otherwise stated.

This presentation contains forward-looking statements. All statements, other than

statements of historical fact, included herein, including, without limitation,

statements regarding potential mineralization and reserves, exploration results

and future plans and objectives of Arianne Phosphate Inc., are forward-looking

statements that involve various risks and uncertainties. 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 Arianne

Phosphate Inc.’s expectations are disclosed under the heading "Risk Factors" and

elsewhere in Arianne Phosphate Inc.’s documents filed from time-to-time with the

TSX Venture and other regulatory authorities.

May 2017

Copyright© 2017 Arianne Phosphate Inc. 2

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ARIANNE PHOSPHATE INC.

✓ On TSX-Venture: « DAN »

✓ On OTC: DRRSF

✓ Head office: Saguenay

✓ Project: Lac à Paul

✓ TSX-V: DAN OTC: DRRSF

Shares Outstanding 98 million

Options (C$1.09 avg.) 5 million

Warrants (C$ 1.12avg.) 16 million

Fully Diluted 119 million

May 2017


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PHOSPHORUS

ESSENTIAL TO GLOBAL FOOD SECURITY

87%

is used in the production of fertilizers

✓7% is used in animal feed

✓6% is used in food, metallurgy, water treatment,

toothpaste, cosmetics, ceramics and miscellaneous

1 of the 3 key components in fertilizer

✓ Alongside nitrogen (N) and potassium (K)

✓ Essential for root and stem

development in plants

87%

6%7%Other Uses

Animal Feed

Fertilizers

There are no substitutes for phosphorus in agriculture.May 2017


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PHOSPHATE ROCK

IGNEOUS VS SEDIMENTARY DEPOSITS

IGNEOUS PHOSPHATE vs.

SEDIMENTARY

➢ Only ~10% of global

phosphate is igneous

➢ Arianne’s Phosphate rock is

igneous

➢ Arianne’s recovery is 90%

➢ Arianne’s igneous ore will

produce phosphate rock

concentrate at 40% P2O5

➢ High ratio of P2O5/CaO

means low acid

consumption in MAP/DAP

production

➢ Heavy metal content in

Arianne product near or

below detection limits

Igneous Deposits Sedimentary Deposits

Grade of ore

(nutrient) 4-15% P2O5 10-30% P2O5

Crushing Consolidated rocks

Very easy if the rocks are

unconsolidated

Beneficiation

(recovery of

nutrient content)

Efficient processing

Recovery can be >90%

Less efficient processing

Recovery 75 to 85%

Nutrient Content

of Concentrate 37-41% P2O5

Average grade 29% P2O5

(can reach 35% P2O5)

Environmental

Impact

Contains few or no

contaminants

Usually contains some

contaminants (heavy

metals, uranium and

cadmium)

May 2017


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LAC À PAUL PROJECT HIGHLIGHTS

✓ World’s Largest Greenfield Phosphate Rock Project

✓830Mt of Measured & Indicated Resource

✓Drilling has Grown Inferred Resource (over 1 Billion tons)

✓ Produces A Very High Quality Phosphate Concentrate

✓40% P2O5 Concentrate (Providing Premium Pricing)

✓Minimal Deleterious Elements

✓ Very Long Mine Life

✓Currently At 26 Years With the Stated Goal of Demonstrating 50 Years

✓ Safe Geopolitical Environment

✓Mining Friendly

✓Mine permit in hand

✓North America has a Growing Reliance on Foreign Rock

✓Infrastructure in Place

✓Cooperation Agreement with the First Nations

✓ Strong Government Support

✓Largest Quebec Mining Project in a Decade

✓$12.5B in Economic Benefit to the Region

✓ Shovel ReadyMay 2017


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SUPPLY DEMAND & SECURITY OF PHOSPHATE ROCK

210 million tons are produced annually, of which 85% is integrated with downstream production

Of the 30 million tons traded, roughly 70% is sourced from Middle Eastern Countries and Northern Africa:

•Morocco (and Western Sahara): pressure on Companies that receive their rock from Bou Craa

•Tunisia: Jihadist activity since Arab Spring has led to a 75% reduction in production

•Syria: two phosphate mines no longer under government control

•Israel: ongoing regional conflict as well as uncertainty around permitting and tax

•Others: Egypt, Jordan, Algeria

•Russia: growing tensions with the West; the only 39% rock available

Major importers of phosphate rock: USA (3 million tons/yr)

Canada (1 Mt)

India (8 Mt)

Western Europe (8Mt)

Latin America (4Mt)

SE Asia (5Mt).

Fertilizer and agricultural commodity supplies are dependent on political stability in Middle East and Northern African countries

USA dependence on

imports will continue to

grow in the next 5 years!!

May 2017


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Phosphate Rock Demand is growing 2%, or roughly 4M tons/year

Mine Capacity (Million tons/yr) being developed through 2023* includes:

Saudi Arabia 8

Morocco 6

Canada - Arianne Phosphate 3

China** 3

Peru 3

Russia 1

Brazil 1

**China considers Phosphate Rock a Strategic Mineral, and restricts exports

*Source: Integer Research 2015

NEW PHOSPHATE MINE DEVELOPMENT

May 2017


Most new mine development continues to come from regions that lack

security of supply AND/OR integrate the output directly into fertilizer

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PHOSPHATE ROCK

NORTH AMERICAN MARKET

CF Phosphate 1

Integrated plant

Phosrock importer

J.R. Simplot Company

Groupo Fertinal

J.R. Simplot CompanyVernal, UTRock Springs, WY

Groupo FertinalLazaro Cardenas, Mexico

Innophos GeismarGeismar, LA

MosaicFaustina, Uncle Sam, LABartow, New Wales, Riverview, FL

Innophos CoatzacoalcosCoatzacoalcos, Mexico

Mississippi PhosphatePascagoula

CF PhosphateHardee County, FL

PCS PhosphateAurora, NCGeismar, LAWhite Springs, LA

PCS Phosphate

Mississippi Phosphate

Mosaic

Innophos Coatzacoalcos

Innophos Geismar

Agrium Redwater

Canada

United States

Mexico

May 2017


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GOOD ACCESS TO EXISTING POWER & TRANSPORTATION

INFRASTRUCTURE

Proposed New Port Infrastructure

Distance from mine to port: ~240 km

May 2017


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LAC À PAUL – BFS FROM OCTOBER 24, 2013

• 590 Mt M&I reserves @ 7.1 % P2O5,(cut-off

grade: 4.0 % P2O5)

• 472Mt P&P reserves @ 6.9% P2O5,(cut-off grade:

3.5 % P2O5)

• Premium market value for 3Mt/year of high-

quality phosphate concentrate (38.6% P2O5)

• 26 years mine life with 1:1,14 strip ratio

• Total capital costs (CAPEX): ~ $1.2B

• Cash operating cost (mine site): $80/t✓ Cash operating costs (FOB ship): $94/t

$1.9Bpre-tax NPV8%

21%pre-tax IRR

4.4year capital payback period

* As per BFS, assumed concentrate price $213/t May 2017


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WORKING TOWARDS 50 YEARS RESERVE

Drilling surrounding the Paul Zone has shown the potential

of an additional 260Mt to 390Mt

▪ Nicole Zone 78 Million tons Inferred (5.3% P2O5)

▪ Drilling on the Western extension of the Paul Zone extends

1.1 km West (holes showed intersections above 7% P2O5)

▪ TraMan Zone 146 Million tons Inferred (5.3% P2O5)

May 2017


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590 MT

702 MT (M+I) @ 7,16 %P2O5

(cut-off grade: 4,0 %P2O5)

PAUL ZONE AND ITS EXTENSIONS

May 2017


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Measured (M)(1) Indicated (I)(1) Total (M+I)(1) Inferred (I)(2)

Mt %P2O5 Mt %P2O5 Mt %P2O5 Mt %P2O5

Paul (cut-off grade: 4 %P2O5)

314,36 7,28 357,99 7,08 672,35 7,18 10,57 6,63

West Ext.(cut-off grade: 4 %P2O5)

3,19 8,06 14,68 6,96 17,87 7,16 2,92 6,88

Est Ext.(cut-off grade: 4 %P2O5)

0,09 5,30 12,39 6,32 12,48 6,31 12,52 6,46

Manouane(cut-off grade: 2,43 %P2O5)

136,90 5,93 26,90 5,64 163,80 5,9

Nicole(cut-off grade: 3,5 %P2O5)

78,20 5,34

Traverse(cut-off grade: 3,5 %P2O5)

17,00 5,98

TraMan Sud(cut-off grade: 3,5 %P2O5)

146,00 5,30

Zone 2(cut-off grade: 2,43 %P2O5)

64,00 4,55

(1) Cautionary Statements: Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

(2) Cautionary Statements: Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. That it is uncertain if further exploration will

result to upgrade this inferred resource at indicated and measured resource.

The resources provided in this table were published in press releases from February 18, 2015, July 16, 2014, May 15, 2014 and November 8, 2011.

DRILLING RESULTS

May 2017


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LONG TERM POTENTIAL – OTHER PROMISING AREA

Lise:7 drill holes totaling 1 401 m. were done. Mineralisation is observed over 1.1 km.

The best intersections along drill holes are 131.1 m. at 5.50% P2O5 and 124.15 m. at

4.92% P2O5 (May 8, 2012 press release).

Lucie:Lucie area is associated with one of the largest magnetic anomaly of the property

(over 2 km. long and 550 m. large). 6 drill holes totaling 1 247 m. have been done.

The best intersections along drill holes are 250 m. at 5.10% P2O5 including 141.8

m. at 6.13% P2O5 and 235.2 m. at 4.72% P2O5 (May 8, 2012 press release).

Naja Zone:An intersection of 131.9 m. at 6.58% P2O5 along a drill hole allows the interpretation

of a mineral zone ranging 40 to 50 m. in true thickness. Moreover, grab samples and

three trenches realised during 2014 exploration campaign show potential mineral

resources associated with a magnetic anomaly recognised over 2.4 km. (February 18,

2015 press release).

Mini-Paul:Grab samples with value up to 13% P2O5 have been collected (February 18, 2015

press release).

North TraMan:North TraMan is the continuity of the South TraMan area. During the 2013

exploration campaign 20 samples with value over 5% P2O5 were collected, with the

best sample at 9.17% P2O5.

Turc:Mineralisation is observed along 1.6 km. During the 2013 exploration campaign 17

samples with value over 5% P2O5 were collected, in which 5 with value over 8%

P2O5. The best results collected are 12.7 and 10.4% P2O5.

May 2017


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PROJECT DEVELOPMENT PROGRESS SINCE BFS2014

✓ Metallurgical optimization reduces operating costs

✓ Favorable power deal (L-rate) achieved with Hydro-Québec

✓ Québec Government joins financing of Lac à Paul project

✓ Formal collaboration with Port of Saguenay established

✓ Drilling extends Paul Zone to 3.8 km

2015

✓ Optimized mine plan saves 5% on production costs

✓ New 43-101 Resource estimates Paul Zone has 702 Mt @ 7.1% P2O5

✓ Metallurgical testing confirms concentrate quality at 40% P2O5 with MER of 0.036

✓ Collaboration Agreement with First Nations signed

✓ Arianne’s Lac à Paul receives Québec Ministerial Decree (Permit)

2016

✓ Québec grants Arianne 20% discount off L-rate for electrical power

✓ Port project description and Environmental Impact Assessment filed with regulators

✓ New additions to board and management

✓ Public hearings for Port completed… permit expected at the end of 2017

✓ Close to signing contracts with preferred engineering & key suppliers

✓ Financial Advisor appointed and Lac à Paul project finance now underway

➢ Information Memorandum being prepared for financial institutions

➢ Revised Economic analysis shows project is robust

➢ Currently discussing Off-take / Sales Agreements to support project revenue stream

✓ Options on land at the future site of the maritime terminal exercised

May 2017


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PROJECT DEVELOPMENT PROGRESS SINCE BFS (Cont’d)

2017

✓ Agreement with Rio Tinto

• Discussions centered around maritime transport synergies

• Provides both economic and environmental benefits

✓ MOU Agreement with Construction Proco

• Covers architectural & structural engineering and mill construction

✓ Agreement with the Ministry of Energy and Natural Resources

• Allotment of an additional 14MW of power for ore processing facility

• Provides both economic and environmental benefits

✓ MOU Agreement with ABB

• Provides for EPS of electrification and automated mining solutions

• Commitment to assist Arianne with financing strategies

✓Introduction into Swiss ECA SERV

✓ MOU Agreement with SNC-Lavalin and Cegertec

• Provides project management support, coordination and consulting

✓ MOU Agreement with FLSmidth

• Provides for work surrounding production equipment and engineering

• Commitment to assist Arianne with financing strategies

✓Introduction into Danish ECA EKF

✓ MOU Agreement with Groupe Alfred Boivin

• Provides ground transport of phosphate concentrate

✓ Finalized the purchase of land at the future site of the maritime terminal

May 2017


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Future Mine Site

N

May 2017


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ECONOMIC SPIN OFFS

✓ Job creation/Major employment source for local communities

• 2250 in construction

• 1000 in operation (for more than 26 years)

✓Economics spin offs over $12B for the region, Quebec and Canada

✓$4B in revenue for the provincial and federal governments

May 2017


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FIRST NATIONS

Three Innu communities are involved in the project:

✓ Pessamit

✓ Mashteuiatsh

✓ Essipit

➢ Collaboration agreement for the exploration and pre-construction phase signed on

June 12, 2015

This agreement contains the basis for the Impact

And Benefits Agreement (IBA) negotiations

which is the final step.

Picture taken at the signing of the pre-agreement. Saguenay, Quebec.

May 2017


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Agreement with :

✓Lake Neil residents

✓ZEC Martin-Valin

Committees :

✓Monitoring committee

for the project

✓MRC Development Consultation Table

SOCIAL ACCEPTABILITY

COMMUNITY RELATIONS

May 2017


➢ Finalized the purchase of

land on the Saguenay River

in 2017

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MARKET CAP PROGRESSION

TOTAL EQUITY RAISED:$27 Million

TOTAL CREDIT FACILITY:up to $22.85 Million

CURRENT MARKET CAP:$93 Million (basic)

May 2017


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LEADERSHIP TEAM

Management TeamBrian Ostroff – CEO: see below

J.S. David – COO: Geologist; formerly VP-Sustainable Development for Osisko, previously with Iamgold,

Cambior, Louisiana-Pacific

Jim Cowley – CFO: see below

Board of Directors

Jean Lamarre (Chairman): 40 years senior management & board positions; Lavalin Group, Semafo, Tele-

Quebec, Le Devoir

Dominique Bouchard (Vice-Chairman): 33-year veteran of Alcan and Rio Tinto, retired President of Rio

Tinto Iron & Titanium. A native of the Chicoutimi area and an expert in local community issues

Brian Ostroff: 25+ years experience in capital markets, RBC Dominion, Goodrich Capital, Partner at

Windermere Capital

Jim Cowley: 30+ years Metallurgical Engineer, MBA in Finance, held positions with major international mining

companies

Dave DeBiasio: 40+ year veteran (retired) of Agrium, responsible for Energy & Raw Materials, development

of Kapuskasing Mine

Steven Pinney: 30+ year veteran (retired) of Cargill and Mosaic, most recently as Senior Vice President

Phosphates

Marco Gagnon: 20+ years in Quebec mining exploration/development, former CEO of Adventure Gold,

current VP Probe Metals

Siva Pillay: 20+ years in accounting, law, trade project finance and development of product off-take

financing, CEO of Ocean Partners

May 2017


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STEPS ACCOMPLISHED FOR DEVELOPMENT

✓Quality of Resources Base

✓Exploration (proven & probable reserves)

✓Social Acceptability

✓Local Community Support

✓Sustainable Development Process

✓Permitting (mine to port)

✓Collaboration agreement with First Nations

✓Experienced Management Team

✓High-quality Board of Directors

✓Build-up of Owner’s team (greenfield & operations)

✓Execution Plan

✓Optimized OPEX (Value Engineering)

✓Well thought through CAPEX plan (BFS)

✓Construction driven (Cost & Schedule Certainty)

✓Shovel Ready (Definitive Feasibility Study)

May 2017


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PENDING CATALYSTS

➢Discussions Ongoing With Potential Strategic Partners

- Many companies are no longer fully vertically integrated

- Not a lot of options in safe geopolitical jurisdictions

- “Off-takers” looking for supply

- Continued strong support from the Quebec government

➢Discussions With Potential Financing Partners

- Engaged Endeavour Financial as advisor

- Major equipment financers

- Banking syndicate (including ECAs)

- Product prepayment (off-take)

- Minimize equity tranche

➢Project Execution Plan

- Concession discussions for Port Infrastructure

- Early Contractor Involvement

- Definitive Feasibility Study with Engineering/PMC firm

➢First Nations

- Cooperation Agreement signed

- Final step is the IBA

May 2017


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SUMMARY OF INVESTMENT HIGHLIGHTS

✓World’s Largest Greenfield Phosphate Rock Deposit✓830Mt of Measured & Indicated Resource

✓Drilling has Grown Inferred Resource (over 1 Billion tons)

✓Very Long Life of Mine✓Currently At 26 Years With the Stated Goal of Demonstrating 50 Years

✓Produces A Very High Quality Phosphate Concentrate✓40% P2O5 Concentrate (Providing Premium Pricing)

✓Minimal Deleterious Elements

✓ Safe Geopolitical Environment✓Mining Friendly with strong local community support

✓Mine permit in hand

✓North America has a Growing Reliance on Foreign Rock

✓Infrastructure in Place

✓Cooperation Agreement with the First Nations

✓ Strong Government Support ✓Largest Quebec Mining Project in a Decade

✓$12.5B in Economic Benefit to the Region

✓Cost Schedule Certainty Execution Plan (Shovel Ready)

May 2017


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Head Office

393 Racine St. E., Suite 200

Chicoutimi, QC G7H 1T2

Canada

Tel: (418) 549 7316

Fax: (418) 549 5750

Email: [email protected]

Web site: www.arianne-inc.com

Contacts

Jean-Sébastien David, COO

[email protected]

Brian Ostroff, CEO

[email protected]

Lac à Paul Phosphate Projectarianne-inc.com/files/Website Corporate Presentation_2017... · 2017-09-12 · PHOSPHATE ROCK IGNEOUS VS SEDIMENTARY DEPOSITS IGNEOUS PHOSPHATE vs. SEDIMENTARY

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