IC Potash — Investor Presentation (April 2015)
33 slides from IC Potash's investor presentation, Apr 17, 2015
Slide 1: The Ochoa Project: World's Most Advanced Sulfate of Potash Project
The Ochoa Project World’s Most Advanced Sulfate of Potash Project Investor Overview Q2 2015
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained in or incorporated by reference into this presentation constitute “forward-looking statements.” Officers and representatives of IC Potash Corp. (the “Company”) may, in their remarks or in response to questions regarding this presentation, make certa
Slide 3: IC Potash Corp. (ICP-TSX)
IC Potash Corp · The Ochoa Project IC Potash Corp. (ICP-TSX) • ICP intends to become a primary producer of Sulfate of Potash (SOP) by mining its 100%-owned Ochoa property in southeast New Mexico, a polyhalite mineral deposit. • SOP is a non-chloride potash fertilizer that sells at a substantial prem
Slide 4: Sulfate of Potash (SOP)
Potash Fertilizer · Sulfate of Potash SOP (K2SO4) • Premium potash • Global market of 5.5 million tonnes per year • No chloride • Ideal for fruits, vegetables, coffee beans, nuts, potatoes, and tobacco • Priced 30% - 60%+ over MOP • Ideal for use in arid regions • Ideal for salty or sandy soils • Im
Slide 5: Muriate of Potash (MOP)
Potash Fertilizer · Muriate of Potash MOP (KCl) • Common potash • Global market 55 million tonnes per year • Contains chloride • Primarily for carbohydrate crops, robust enough to withstand chloride 5
Slide 6: Price History: SOP & MOP
Price History · SOP & MOP 900 800 AVERAGE PRICE/METRIC TONNE 700 600 500 SOP 400 MOP 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 6 Sources: Green Markets, IFA, Corporate Reports, Analyst Reports
Slide 7: SOP Per Metric Tonne: The IC Potash Advantage
Ochoa Project · SOP Per Metric Tonne Primary Producers Secondary Producers The IC Potash Advantage: ICP expected to be world’s Brine Lakes MOP & Mannheim (Outside China) Kieserite Process lowest cost SOP producer $214 $350 $500 $500 % OF CURRENT PRODUCTION (OUTSIDE CHINA) 10% 30% 60% 7
Slide 8: Advantages
Ochoa Project · Advantages IC Potash is the only visible new source of SOP supply globally Significant economic advantages • Game-changing new process ̶ Pilot Plant tested • Bottom quartile SOP producer • 50+ year mine life in Feasibility Study ̶ 100+ years with all resources • High profit margins ̶
Slide 9: Location: Southeast New Mexico
Ochoa Project · Location Southeast New Mexico • Ideal climate • Supportive community • Highly industrial region • Secured water resource Potash Producing Region • 90-year potash history ̶ The Mosaic Company ̶ Intrepid Potash Established Infrastructure • Roads, rail, electricity, natural gas • Skille
Slide 10: Technical Consultants
Ochoa Project · Technical Consultants SNC-Lavalin Inc. Project Management and Primary Engineering Agapito Associates Inc. Mine Design and Engineering Veolia Water Solutions & Technologies Evaporation and Crystallization Circuits Novopro Projects Inc. Owner’s Engineer and Project Management Resource
Slide 11: Feasibility Study Financial Highlights
Ochoa Project · Feasibility Study Financial Highlights • Capital cost of the Project is estimated to be $1.018 billion, with an accuracy of +/-15% • After-tax Net Present Value (NPV) is $612 million using an after tax discount rate of 10% and no debt • After-tax Internal Rate of Return is 16% • Afte
Slide 12: Feasibility Study Environmental Highlights
Ochoa Project · Feasibility Study Environmental Highlights • On April 10, 2014, ICP received a favorable Record of Decision from the U.S. Bureau of Land Management on its Environmental Impact Statement, which will allow construction to commence as planned • On November 1, 2014, ICP was granted Prefe
Slide 13: Feasibility Study Production Highlights
Ochoa Project · Feasibility Study Production Highlights • Financial model covers +/-3 years of construction and commissioning (Q2 2014 through Q2 2017) followed by 50 years of operation • Sulfate of Potash (SOP) production in 2017 is estimated at 48% of annual capacity, with full capacity expected i
Slide 14: Feasibility Study Pilot Plant Highlights
Ochoa Project · Feasibility Study Pilot Plant Highlights • Five-stage Pilot Plant completed • Joint operation between Veolia, Gundlach, Hazen, Metso, FEECO and ICP Optimizations achieved: • Increased SOP brine concentrations to 7.5 grams K2SO4 per 100 grams of water, a 15% improvement over PFS • Val
Slide 15: Feasibility Study Facility Highlights
Ochoa Project · Feasibility Study Facility Highlights • The ore bed will be accessed via a 25-foot diameter, two compartment mine ventilation/service shaft, and a 12,000-foot long slope • Room-and-pillar mining and dual split super section mining methods are expected to be used to extract ore from t
Slide 16: Feasibility Study
Ochoa Project · Feasibility Study Full Equity Basis (i.e. No Debt) Before Tax After Tax Capital Cost $1.018 B $1.018 B Operating Cost Per Ton SOP $195 $195 Internal Rate of Return 17.8% 16.0% Net Present Value, 8% Discount Factor $1.502 B $1.019 B Net Present Value, 10% Discount Factor $942.7 MM $61
Slide 17: NPV Sensitivity
Ochoa Project · NPV Sensitivity Input Variable to Base -20% -10% +10% +20% Financial Model Case Capital Cost 19.3% 17.5% 16.0% 14.7% 13.6% Revenue 11.3% 13.8% 16.0% 18.1% 20.1% Operating Cost 17.8% 16.8% 16.0% 15.1% 14.2% 17
Slide 18: Capital Cost
Ochoa Project · Capital Cost 7% Corporate Costs 4% Storage & Transport 10% 5% EPCM Indirect Costs Services 52% 11% Process Plant • Crushing Mine • Washing • Calcination • Leaching • Crystallization • Drying 11% • Granulation 18 Contingency
Slide 19: Operating Cost
Ochoa Project · Operating Cost 5% G&A 20.7% ($9/ton) Natural Gas 30% Other 40% Mine ($78/ton) 55% 24.8% Process Plant Electricity ($108/ton) 24.5% Labor 19
Slide 20: Operating Cost
Ochoa Project · Operating Cost Estimated Operating Cost Per Ton of SOP Steady State Production 714,400 Tons Per Year Mining Cost Per Ton $78 Processing Cost Per Ton $108 G&A Cost Per Ton $9 Total Operating Cost Per Ton $195 % of Operating Cost – Labor 24.8% % of Operating Cost – Electricity 24.5% %
Slide 21: Mineral Resources
Ochoa Project · Mineral Resources1 Average Resource In-Situ Equivalent Thickness Area Tons2,3,4 Polyhalite K2SO4 Anhydrite Halite Magnesite (feet) (acres) (millions) (wt %) (wt %)5 (wt %) (wt %) (wt %) Measured6 5.2 26,166 511.7 84.5 24.4 4.02 3.27 7.94 Indicated7 5.0 26,698 506.0 83.3 24.1 4.00 3.3
Slide 22: Mineral Reserves
Ochoa Project · Mineral Reserves1,2 Average Mined 50 Year Mine ROM Mine Mining Equivalent Thickness3 Plan Area Tons4,5 Recovery6 Polyhalite K2SO4 Anhydrite Halite Magnesite (ft) (million sq ft) (million) (%) (wt %) (wt %)7 (wt %) (wt %) (wt %) Proven 5.9 246 125.0 47.1 78.42 22.66 11.29 3.66 7.79 Pr
Slide 23: Mine Overview
Ochoa Project · Mine Mine Overview • 5.2 to 6.5 feet ore body thickness • 1,500 feet below ground surface • 83.9% average in-situ grade polyhalite • 78% average diluted mine grade polyhalite • <1% dip • 50+ years of proven and probable reserves • 55% federal leases; 45% state leases • 3.7 million sh
Slide 24: Mine Design
Ochoa Project · Mine Mine Design • EPC for slope and shaft • Utilize both slope and shaft to maximize benefits of both • “Super Section” operating philosophy ̶ Concept used in coal industry ̶ Reduces capital and labor costs • Hard rock continuous miners will effectively mine the ore • Staged ventila
Slide 25: Process Plant
Ochoa Project · Process Plant 25
Slide 26: Process Plant Design and Operation
Ochoa Project · Process Plant Design and Operation Stage Recovery Source Crushing/Washing 96.5% Crushing/Washing Tests Calcination 99.8% Test Work and Air Quality Limits Leaching 95.0% Pilot Plant Crystallization/Evaporation 90.8% Test Work Granulation 99.0% Vendors Overall Recovery 82.24% Pilot Pla
Slide 27: Markets
Ochoa Project · Markets EUROPE USA JAPAN NORTH AFRICA MEXICO CENTRAL AMERICA MALAYSIA SOUTH AMERICA SOUTH AFRICA 27
Slide 28: ICP Partner: Yara International
ICP Partner · Yara International Revenue US$14.0 billion EBITDA US$3.2 billion Market Cap US$11.6 billion Operations > 50 countries Sales Worldwide Owns 16% ICP equity Off-take 30% ICP production 28
Slide 29: ICP Partner: Yara International Advantages
ICP Partner · Yara International Financial Advantages • $40 million investment • 30% off-take (take or pay) • ICP retains 100% project equity Strategic Advantages • Top tier global distributor • Joint marketing opportunities • Affirms leading SOP position 29
Slide 30: ICP Ochoa Project Team
ICP · Ochoa Project Team Sidney Himmel President & CEO, Director Kevin Strong CFO Randy Foote COO, Director Patrick Okita, PhD Chief Development Officer Tommy Cope Executive Vice President Richard Beauchamp Chief Mine Engineer Deepak Malhotra Process Advisor Arthur Roth Director of Marketing 30
Slide 31: ICP Board of Directors
ICP · Board of Directors George Poling, PhD ICP Chairman, ICP(USA) Independent Director Sidney Himmel Director, ICP and ICP(USA) Ernest Angelo, Jr Independent Director, ICP and ICP(USA) Randy Foote ICP(USA) Chairman, ICP Director Anthony Grey Independent Director, ICP and ICP(USA) Knute Lee, Jr ICP(
Slide 32: ICP Analyst Coverage
ICP · Analyst Coverage Alta Corp Capital John Chu Laurentian Bank Securities Nelson Mah Paradigm Capital Spencer Churchill 32
Slide 33: ICP Investor Inquiries
ICP · Investor Inquiries Jennifer Ito VP, Communications 416-779-3268 jito@icpotash.com www.icpotash.com 33