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Page 1: Presentation   january 2014

Premium Potash Project Driven by a

Proven Management Team TSX  :  PRK  OTCQX  :  POTRF  January  2014  

Page 2: Presentation   january 2014

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 Corporation’s Annual Information Form dated March 27, 2013, 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.

Page 3: Presentation   january 2014

Focused on near term sulphate of potash (“SOP”) production at its Blawn Mountain property in Utah

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SOP 645,000 tons average per annum

40 year Project Life backed by reserves

Page 4: Presentation   january 2014

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 Chief Operating Officer 10 years experience in large resource and energy sector projects Sherritt, Capital Power  

Jeff Hillis Chief Financial Officer 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 a large mine in Utah Red Leaf Resources, Utah Government  

Page 5: Presentation   january 2014

COMPETITIVE ADVANTAGES

Large mineral deposit containing premium-quality potash and alumina rich material

Average of 770,000 tons SOP per annum during first 10 years, 645,000 tons per annum over life of mine  

40 year mine life, with mineral reserves of 426 million tons of ore

PFS completed November 2013: $1.0 billion NPV at 10%; 20.5% after tax IRR; excludes potential revenue from alumina rich material

Historical work expedites project development; proven production process

Mining friendly jurisdiction, established infrastructure nearby, designated development lands and efficient state permitting

Lower risk surface mining deposit; expected low cost producer

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Page 6: Presentation   january 2014

POTASH OVERVIEW

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Page 7: Presentation   january 2014

No known substitute

Increasing world population

Growing per capita income

Decreasing arable land

Increasing use of biofuels

POTASH WORLD DEMAND +5% EXPECTED ANNUAL DEMAND TO 2016; SOP HIGHER GROWTH POTENTIAL

POTASH: ESSENTIAL TO THE WORLD’S FOOD SUPPLY

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Page 8: Presentation   january 2014

POTASSIUM AND SULPHUR ARE ESSENTIAL NUTRIENTS

SOP: PREMIUM FERTILIZER

Sulphate of Potash (SOP) Muriate of Potash (MOP)

50% K2O Equivalent 60% K2O Equivalent

17% S 0% S

<1.0% Cl 45% Cl

5.4 million tons sold in 20111 50 million tons sold in 20112

Improves yield, quality, taste and enhances shelf life2

Crop quality/yield diminish as chloride builds up2

1Source: Fertecon 2Source: CRU 8 Chemical makeup assumes 92.5% K2SO4 and 95% KCl product

Page 9: Presentation   january 2014

SOP – A DISTINCT & VALUABLE POTASH PRODUCT

Fruits Vegetables Nuts Horticultural Plants

Tobacco Tea Dry soils Salty soil

Especially valued for chloride sensitive crops, SOP improves yields on high value crops such as:

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Page 10: Presentation   january 2014

 -­‐        

 200.0    

 400.0    

 600.0    

 800.0    

 1,000.0    

 1,200.0    

Q1   Q2   Q3   Q4   Q1   Q2   Q3   Q4   Q1   Q2   Q3   Q4   Q1   Q2   Q3   Q4   Q1   Q2   Q3   Q4   Q1   Q2   Q3   Q4   Q1   Q2   Q3  

2007   2008   2009   2010   2011   2012   2013  

Average  Realized  MOP  and  SOP  Price  in  North  America  

POT  -­‐  North  America  (MOP)   CMP  -­‐  (SOP)  

CURRENT PREMIUM 90% FOR SOP IN US

SOP PREMIUM PRICE TRENDS

U.S. $/ton

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1  From  Verde  Potash  PresentaRon,  November  2013,  2  From  Compass  Minerals  Q3  2013  Report,  3  From  Potash  Corp  Q3  2013  Report  

Compass Q3/13 realized price $712/ton2

Potash Corp Q3/13 realized price $360/ton3

Recent quotes from blenders in Uberaba, Brazil $1,110/ton1

Page 11: Presentation   january 2014

SOP MARKET CHARACTERISTICS

1Source: Fertecon, CRU 11

Global SOP Consumption and Commodity Price1  

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

0

2,000

4,000

6,000

8,000

10,000

12,000

2000 2004 2008 2012 2016 2020

(US

$/tonne)

Tonn

es (

000s

)

Global SOP Consumption

Historical Standard FOB NW Europe (US$/tonne SOP)

Estimated Standard FOB NW Europe (US$/tonne SOP)

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%

Page 12: Presentation   january 2014

SIGNIFICANT GROWTH POTENTIAL EASY ACCESS TO LOCAL MARKETS

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

Trend towards pricing of SOP based on incremental revenue through yield/quantity improvements vs. premiums over MOP

United States SOP consumption: 385,000 tons Potential consumption 920,000 tons2

China & India SOP consumption: China (pop. 1.3 billion): 1.9 million tons per year India: (pop. 1.2 billion) 50,000 tons per year (<1% of country’s potash consumption)

Brazil SOP consumption = 32,000 tons per year (0.4% of total potash consumption) Premium crops grown on 20% of planted land

12 1Based on crops that are best suited for SOP 2 From PRK Study August 2013

Page 13: Presentation   january 2014

THE BLAWN MOUNTAIN PROJECT

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Page 14: Presentation   january 2014

ANTICIPATED INITIAL PRODUCTION IN 2017

PROJECT OVERVIEW

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Large alunite deposit, which is expected to be processed into SOP, and possible alumina rich material

Average 645,000 SOP tons per annum

Historical work expedites project development

Mineral deposit to be surface mined

Proven process backed by extensive metallurgical testing

Page 15: Presentation   january 2014

ALMOST 100 YEARS OF POTASH PRODUCTION

UTAH: AN ATTRACTIVE MINING JURISDICTION

1Forbes Magazine, December, 2012 2Fraser Institute, April, 2013

Major resource producer

Existing potash production

Best state for business1

Top quartile mining jurisdiction2

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Page 16: Presentation   january 2014

OUR LAND ADVANTAGE State-owned land designated for development

Efficient permitting process

Leasehold and royalty agreements negotiated

No known adverse environmental or social issues

Sufficient water nearby – rights application made

Roads, rail, transmission and natural gas nearby

Construction materials, equipment suppliers and skilled labour force

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MUNICIPAL AND STATE SUPPORT OF PROJECT

Page 17: Presentation   january 2014

PREVIOUS WORK ACCELERATES PROJECT DEVELOPMENT

EXTENSIVE DEVELOPMENT ON BLAWN MOUNTAIN COMPLETED IN 1970’s

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Approx. $25 million spent (~ $100 million in today’s dollars)

Drilling

Resource estimate

Feasibility study

Mine plan

Engineering

Permitting

Pilot plant: 3-year operation processing up to 11 tons/day

•  Project ultimately shelved due to poor economic conditions in early 1980s •  Potash Ridge owns all historical data

Page 18: Presentation   january 2014

PREFEASIBILITY STUDY – KEY HIGHLIGHTS

•  Surface mine with conventional crushing, roasting, leaching and crystallization processes; •  Life of mine average of 645,000 tons of SOP per annum; •  Proven & Probable mineral reserves of 426 million tons; •  Reserves support 40 year mine life, with potential to increase life of operations through

exploration of two additional zones of known mineralization; •  Project after tax Net Present Value (“NPV”) of $1.0 billion using a 10% discount rate:

•  Total sales of 26 million tons of SOP over life of mine; •  Unlevered after tax internal rate of return (“IRR”) of 20.5%; payback period of 5 years

after commencement of operations; •  Installed SOP capital cost of $1.1 billion; •  Strong cash flow generation with cash flow from operations of $234 million per annum

excluding the two year ramp up period; •  Approximately 28% of direct capital costs are supported by packaged quotes; •  Expect to be a low cost producer: $173 per ton of SOP (inclusive of by-product acid

revenues and exclusive of royalties); no credit assumed for potential revenue from the sale of alumina rich material.

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Page 19: Presentation   january 2014

PREFEASIBILITY – ECONOMIC SUMMARY

Economic  Indicators NPV  (aUer  tax,  at  10%)   $1.0  billion  IRR  (aUer  tax)   20.5%  Payback  period  (from  commencement  of  operaRons)   5  years  Average  annual  SOP  producRon   645,000  tons  Average  annual  sulphuric  acid  producRon   1,440,000  tons  SOP  price  (average)   $649/ton  Sulphuric  acid  price  (average)   $135/ton  Project  life   40  years  IniRal  capital  cost  (including  15%  conRngency)   $1,124  million  OperaRng  cost  (excluding  royalRes)   $173/ton  SOP  

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The economic evaluation is based on the following assumptions: •  Site construction commences

late 2015; •  Production ramp-up over 2

years (2017-2018), reaching full production in 2019;

•  SOP pricing from CRU forecast below current North American SOP prices;

•  Average tax rate of 35%.

Page 20: Presentation   january 2014

SIMPLE PROVEN FLOWSHEET

Alunite

Calcination

Water Leach

Alumina Rich Material

SOP Solution Crystallizing Drying, Compacting & Sizing SOP

SO2 Acid Plant Sulphuric Acid

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Flowsheet similar to historical production processes

RECENT EXTENSIVE TEST WORK CONFIRMS FLOWSHEET

•  Plant to process 10.4 million tons per annum •  Metallurgical testing on-going for Feasibility Study

Crushing & Grinding

Page 21: Presentation   january 2014

ORE TEST PIT

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Page 22: Presentation   january 2014

PREFEASIBILITY STUDY – RESERVES ESTABLISHED

Drilling to date has focused only on two of the four areas within the 15,400 acre land parcel

Supports 40 years of operations

Reserves demonstrate the economic and technical viability of the Project

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Reserve Category

Total Proven

('000 tons) Probable

('000 tons)

Alunite Ore (ROM tons) 136,254 289,540 425,794

Ore (average K2O (%) grade) 3.56 3.49 3.51

Ore (average K2SO4 (%) grade) 6.59 6.46 6.49

SOP (tons) 8,457 17,970 26,427

Sulphuric Acid (tons) @ 98% Purity 18,888 40,136 59,024

Mineral Reserves by Category November 6, 2013  

Page 23: Presentation   january 2014

SOP CAPITAL COST BREAKDOWN1

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CAPITAL  COST:  $1.124  billion                      (15%  con@ngency)  

14%      SOP  Leaching,    CrystallizaRon    and  Drying  

42%    CalcinaRon  

13%    Crushing  &  Grinding  

31%      ConRngency,  Indirects  and  Infrastructure  

1 Excludes utilities and other infrastructure ($641 million): Acid Plant ($280 million) Mine Capital ($89 million)

Build-own-operate arrangements under negotiation. Natural Gas Line ($83 million) Rail Spur ($76 million) Water Treatment Plant ($60 million) Access road ($53 million)

 

Page 24: Presentation   january 2014

OPERATING COSTS: $173/TON OF SOP

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79%    Direct  Plant  and  Mine    ProducRon  Costs    

($188M)  

7%    Other    ($14M)  

14%  RoyalRes  ($33M)  

Excludes  potenRal  alumina  rich  material  credit.  Includes  15%  conRngency  (excluding  non-­‐energy  and  labour  costs).        

Total Cash Production Costs Annual Average Cost($)/Ton SOP (Constant 2013 $US)

Direct Plant and Mine Cash Production Cost $414

Credit for Value of Acid $(302)

Subtotal of Direct Plant and Mine Cash Production Cost $112

Site G&A, Property Taxes & Corporate Overhead $27

3rd Party Facility Charges $34

Total before royalty $173

Royalties $45

Total Cash Production Cost $218

Page 25: Presentation   january 2014

EXPECTED TO BE LOWEST COST SOP PRODUCER

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Alunite Leach Salt Lakes MOP/ Sulphate Salts

Mannheim Process

Process Method

World Capacity Process Inputs Products

Avg Cost / Ton

Mannheim 60% ! MOP ! Sulfuric Acid ! Energy

! SOP ! HCI

$495

MOP and Kieserite

25% ! MOP ! Kieserite ! Energy

! SOP ! Magnesium

Chloride

$347

Salt Lakes 15% ! Lake Brines ! Energy

! SOP ! Magnesium

Chloride ! NaCI

$340

Alunite Leach

– ! Alunite ! Energy

! SOP ! H2SO4

$173

Cash Cost by Production Method Avg Cost/Ton

Process Method and Cost Comparisons

POTASH RIDGE

Expected In Production

1 Includes acid by-product credit, excludes potential revenue from alumina rich material

$340 $347

$495

$1731

Page 26: Presentation   january 2014

BY-PRODUCT OVERVIEW

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Page 27: Presentation   january 2014

SULPHURIC ACID

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Driven by local US Market

Mountain West US market approximately 5.6 million tons per annum

Expected increase in this market from mine expansions and new mine development

Potash Ridge will provide stable supply to consumers

MOU in place for 20% of acid production

Page 28: Presentation   january 2014

•  Leaching process leaves alumina rich material which, with beneficiation, may be used as a substitute to bauxite as a feedstock into a Bayer alumina production facility.

•  Metallurgical testing confirmed the alumina in this material is soluble in high temperature caustic solutions

•  May also be acceptable as a raw material feed for low temperature refineries

•  Further testing is underway to determine whether the alumina rich material could meet specifications for feed material in the production of ceramic proppants in North America.

•  PFS economics do not include revenue from the sale of alumina rich material

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UPSIDE POTENTIAL FROM LEACH RESIDUE

SOURCES OF SMELTER FEED TO CHINA

Blawn Mountain,

Utah Boke,

Guinea Trombetas,

Brazil Kingston, Jamaica

Distance to Shandong Province, China (nm) 5,744 11,128 10,815 9,051

Port Long Beach Conakry Aratu Jamaica

Page 29: Presentation   january 2014

MILESTONES

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a43-101 Measured and Indicated Resource to support 30-year mine life

aIssue Preliminary Economics Assessment

aCommence metallurgical test program

aCommence Pilot Plant test work & produce SOP from test work

aComplete baseline environmental surveys

aIssue Prefeasibility Study supporting 40-year mine life (pending filing)

aSubmit Large Mining Permit Application

Complete metallurgical test program

Issue Feasibility Study

Final permits obtained

End 2015

Mid-2015

Mid-2014 to End 2015

EXPECTED

Construction Start up

Ramp up

End 2015

2017

Page 30: Presentation   january 2014

CAPITAL STRUCTURE

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Millions

Common Shares 81.7

Non-voting Common Shares 5.0

Total Shares Outstanding 86.7

Warrants – $ 0.50 10.7

Warrants – $1.00 5.0

Broker options/warrants 3.4

Stock options 6.3

Total Fully Diluted Shares 112.1 As at September 30, 2013

INSIDERS HOLD 5%, 10% FULLY DILUTED

Page 31: Presentation   january 2014

COMPETITIVE ADVANTAGES

Large mineral deposit containing premium-quality potash and alumina rich material

Average of 770,000 tons SOP per annum during first 10 years, 645,000 tons per annum life of mine  

40 year mine life, with mineral reserves of 426 million tons of ore

PFS completed November 2013: $1.0 billion NPV at 10%; 20.5% after tax IRR; excludes potential revenue from alumina rich material

Historical work expedites project development; proven production process

Mining friendly jurisdiction, established infrastructure nearby, state lands and efficient permitting

Lower risk surface mining deposit; expected low cost producer

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Page 32: Presentation   january 2014

CONTACT US

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Toronto office: 3 Church Street, Suite 600 Toronto, Ontario M5E 1M2 Phone: 416-362-8640 ext 101

Salt Lake City office: 170 S. Main Street, Suite 500 Salt Lake City, UT 80101 Phone: 801-433-6027

www.potashridge.com [email protected]