Potash Basics - proactiveinvestors.co.uk · All data in this presentation are the intellectual ... Where Potash? PCS 2014 Proactive Investor Forum -July 16th. 13 ... ICL/Allana :

Potash Basics

Mark ArundellIMEx Consulting

All data in this presentation are the intellectual property of IMEx Consulting (except where obtained from public domain) and must not be reproduced, copied, shared or forwarded in any form without the express permission of IMEx Consulting

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Potash

What is Potash?What is it used for & why its important Supply demand metricsCurrent operations globallyKnown projects coming on streamKey Project metricswhat grade is good/bad, capex etc

Proactive Investor Forum ‐ July 16th

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The IMEx Group - ExperienceExploration Projects and Regional Studies

Congo

Danakil

Nagaur (India & Pakistan)Carlsbad

MichiganElk Point BasinParadox Basin

Neuquen

Udon Thani

CanningCarnarvon Adavale

Oman

Afghanistan

Sicily

Khemiset

North CaspianCatalonia

Maritimes

Atacama

Sergipe

ZechsteinBelarus

Uralian

IMEx Office

AmazonGabon

Timaru

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Lake Auld

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What’s Potash?

The mineral (K) is one of the three main macro nutrients required by plants, along with nitrogen (N) & phosphate (P)

Potash helps improve a plant's disease resistance crop quality increases yields

Only potassium fertilizer source No practical substitutes


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Why Potash?

It’s a Growth Story!!


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Why Potash?


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Why Potash?

Rio Tinto 2015


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Why Potash? Potash Corp

2008 US$4.9Billion

Jul 15US$29.18

2010 : BHP

US$43.33

2011 US$2.7Billion 2011 9.3 MMT2013 US$2.8 Billion 2013 7.8 MMT

18.1 MMT

Proactive Investor Forum - July 16th PCS 2007, 2014

$US

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Supply Demand Metrics

DemandGlobal DevelopmentRising income better diets; demand for

high quality fruit, vegetables & meatIncrease productionFertiliser has a key role


PCS 2014


Shift to Urban in Dev countries+80M people per year

Asia & Africa2014 : ½; 2050 : 2/3

Econ Grow, inc FoodFruit, veg + protein

Brazil, China, Indo - nowIndia, Africa - begin

Proactive Investor Forum - July 16th 10

PCS 2014


Pressure to inc. prod on existing landLess arable land

Fertiliser essential to crop yieldYield growth


PCS 2014

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Supply - Where Potash?

PCS 2014Proactive Investor Forum - July 16th

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Production and Demand

PCS 2014Proactive Investor Forum - July 16th

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PCS offer for K+S

BHP poison pill? Gain control over undisciplined tonnes Regulators will prevent Volume over price is inevitable

Market : K&S Brazil PCS – New Brunswick (non Canpotex) Brazil


ScotiaBank 2015

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PCS offer for K+S

Largest export marketBrazil USA China India

An aside…. Producers are “Industrials” on NYSE not “Miners”PCS, IPI, MOSDividend Yield

Proactive Investor Forum - July 16thBloomberg + Capital IQ

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Supply

Only 12 countries produce potash. Canada, Russia, Belarus & Germany - +75%

Seven companies control >80% of global supply: Potash Corp of Saskatchewan, Mosaic Co, Agrium Inc,

K+S, Uralkali, Belaruskali & Israel ChemicalsTwo marketing conglomerates did control >68%

exports. Canpotex - Potash Corp, Mosaic and AgriumBelarussian Potash Co - Uralkali and Belaruskali.


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Supply/Demand Balance

Proactive Investor Forum - July 16thFertecon, CRU, IFA, PCS

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Potash Mining

Solar : Dead Sea, Utah, ChinaUnderground : Conventional & SolutionConventional : Room & Pillar <1200m Saskatoon, SK, Canada

Solution: 300 - ~2,000m Regina, SK, Canada


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Southern SaskatchewanPotash Mines & Depth to Potash

Solution

ConventionalSaskatoon

Regina

Proactive Investor Forum - July 16thBHPB

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Conventional Mining

Depth : 300m - 1200mThick Salt : 120m - >150mRoom & Pillar - 5-12m high; 10-20m wide; 70% recovery (30% pillar)Drill & Blast, road headers or continuous miners Salt : 30cm bottom; 1-2m roof Prairie EvaporiteStrong impermeable rock 10-15m aboveNot shale, sand, etc.


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ConventionalMining


Room & Pillar


Natural Sciences Grade 9, SA

Conventional Mining


Vanscoy, Sk

Room & Pillar

Agrium

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Solution Mining

Steam or Hot water injectedSalt saturate inc. Potash recovery Single well (concentric casing)150-1500m deep (Barradeel, NL : 2800m)One well - 100,000 tonnes


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Solution Mining

Major costEvaporation Pondsplastic liner

Drying Kilns - CanadaProduction Sol : 4.5Mt, Belle Plaine, SK (Mosaic)Con : 3.0Mt, Colonsay, SK (Mosaic)


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Solution Mining


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Solution Mining

100m


Zechstein Style

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Belle Plaine - Mosaic

Cluster House

Salt Tailings

Plant – Crystalliser, Compactor

Cooling Ponds

3 km


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Belle Plain Potash


Potash Milling

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Known New Projects

2015 : Prod 60Mt; Capacity 70MtCommitted new projects +10MtEurochem (Russia) – 4.6-8.3Mt Rocanville (NA) – 3.0Mt (2015)Legacy (NA) – 2.0Mt (2017); 2.9Mt (2023)Esterhazy K3 (NA) – 1.0Mt (2017); +$1.7B


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Known New Projects

Potential new projects ~20MtBHP : Jansen (NA) 8-10MtSirius : York (E) 2.0-5.0Mt PHAm Potash : Holbrook (NA) – 2.5MtROC (A) Elemental 0.4-1.2Mt; MagInd – 1.2MtVale : Carnalita (SA) 0.5-1.7MtHFR : Muga (E) 1.1Mt ICL/Allana : Ethiopia (A) 1.0MtSBM : Eritrea (A) 0.4Mt; SO4


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Key Project Metrics

MarketMineralisation inc. GradeCapexOpex“Realised price”


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Key Project Metrics

“Success in potash is about Capex & Margin (not grade & scale)”MarketPotash is an industrial mineralWhere are the buyers? Contracts not spotTransport can be a killer SK : US$50-60/ton AU : US$80/ton


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Key Project Metrics

MineralisationGrade, Product, Depth, InsolublesMining method Resource recoveryK2SO4 > KCl

CrystallisationDrying Kilns - CanadaEvaporation Ponds Intrepid : solar >$110 less than conventional


US$ Dom

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Key Metrics - Minerals

• Mineral Formula % K2OSylvite KCl 63Carnallite MgCl2.KCl.6H2O 17Kainite MgSO4.KCl.3H2O 19“Sylvinite” KCl.NaCl ~20

Polyhalite 2CaSO4.K2SO4.MgSO4.2H2O 16Langbeinite MgSO4.K2SO4 23Anhydrite CaSO4 0

Chlo

rides

Sulp

hate

s


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Key Project Metrics

CapexWhy spend US$4B?Mine life - +50 yrsOld mines dying –

K+S


PCS, K+S

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Summary

Potash is necessary to increased crop production – no practical substitutePotash is an industrial not a metalMarket is the important key metricSupply/demand balance – excess supply The old way is dying – volume will

overtake price control


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Interested in Potash?

Potash Investing Newshttp://www.potashinvestingnews.com/

Potash Newshttp://www.mining.com/potash/

Potash | Industrial Mineralshttp://www.indm.in/tag/potash/

Potash Workshttp://www.potashworks.com/


Potash Basics - proactiveinvestors.co.uk · All data in this presentation are the intellectual ... Where Potash? PCS 2014 Proactive Investor Forum -July 16th. 13 ... ICL/Allana :

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