Itafos Inc · TSXV:IFOS
Itafos — Investor Presentation (September 2024)
37 slides from Itafos's investor presentation, September 2024
Slide 1: Powering Growth, Nourishing the Planet
TSX-V: IFOS POWERING GROWTH, NOURISHING THE PLANET September 2024
Slide 2: Disclaimer
DISCLAIMER FORWARD-LOOKING INFORMATION (“FLI”) MINERAL RESERVES AND MINERAL RESOURCES This presentation contains FLI within the meaning of applicable Canadian securities legislation regarding future events or the future performance of Itafos Inc. This presentation uses Mineral Reserve and Mineral Re
Slide 3: Our Business
OUR BUSINESS Itafos is a pure-play phosphate and specialty fertilizer business with multiple asset locations across three continents. Our purpose is feed a growing world population, nourish planet Earth’s soil, and contribute to human nutrition. TSX-V: IFOS | 3
Slide 4: 2024 Key Objectives
2024 KEY 1 2 3 OBJECTIVES Continue financial Execute H1/NDR mine Progress and unlock value associated with and operational development project. performance execution Deliver it on time and our foreign asset Itafos continues to focus on and excellence budget for first ore in 2H portfolio the followin
Slide 5: Our Business & Assets
OUR BUSINESS & ASSETS a vertically-integrated phosphate fertilizer CONDA business in Idaho Conda • Received Notice to Proceed for Husky 1 / North Dry Ridge (“H1/NDR”) mine development project on May 8, 2023, initiating capital activities • Advancing capital activities for H1/NDR include earthworks,
Slide 6: Market Overview
MARKET OVERVIEW TSX-V: IFOS | 6
Slide 7: Market Update: Ag Fundamentals
MARKET UPDATE: AG FUNDAMENTALS Global grain and oilseed situation and outlook Global production • USDA WASDE projects a moderate decrease in grain and oilseed inventory (excluding China) is projected to 2023/24, but… increase 2.2% Stocks to use (excluding China) projected or 74mm Mt - USDA Brazil+Ar
Slide 8: Market Outlook: China and U.S.
MARKET OUTLOOK: CHINA AND U.S. Export restrictions from China and declining U.S. production reduce supply China DAP + MAP Exports (2015-2024 YTD)(1) U.S. Domestic Production of DAP + MAP + NPS (2010-2023)(2) Million Million Tonnes Tonnes 12.00 14.00 10.76 12.75 12.63 12.47 12.51 9.96 10.04 10.00 12.
Slide 9: Market Outlook: Global
MARKET OUTLOOK: GLOBAL Chinese exports have Moroccan exports have U.S. imports are declining (10% Brazil and India continued to grow declined/are declining (34% to increased, filling the gap of U.S. to 7% of global import demand imports to fulfill their growth 23% of global supply from 2018- exports
Slide 10: Market Outlook: Brazil
MARKET OUTLOOK: BRAZIL 4.6% Fertilizer shipments surged 11.6% to 45.83mm Mt in 2023 – Brazil Fertilizer Demand Growth Since 2020 GAGR Growth, since 2020 just slightly less than the 2021 record. Million Tonnes P2O5 50.00 45.86 45.83 45.00 40.56 41.08 40.00 35.51 36.24 34.08 34.44 35.00 32.21 30.70 30
Slide 11: Current Industry Capacity Additions Insufficient to Meet Global Demand Growth
CURRENT INDUSTRY CAPACITY ADDITIONS INSUFFICIENT TO MEET GLOBAL DEMAND GROWTH Global Capacity, Production and Operating Rate(1) (Millions of tonnes of P2O5) Operating Rate: >90% • In the medium-term, P2O5 supply is 60 95% expected to increase 4.6mm Mt(2) by 2027 55 90% • Based on third party estimat
Slide 12: Current Industry Capacity Additions Insufficient to Meet Global Demand Growth (cont.)
CURRENT INDUSTRY CAPACITY ADDITIONS INSUFFICIENT TO MEET GLOBAL DEMAND GROWTH (cont.) Projected and Required Capacity Additions(1) (Thousands of tonnes of P2O5) 20,000 Additional Unidentified Required Capital (2): $47bn • From 2027 through 2040, an additional 11mm Mt(1) of P2O5 capacity will be requ
Slide 13: Current Market Dynamics
CURRENT MARKET DYNAMICS North American Market Conditions Global Market Conditions • North America and global phosphate prices rebounded sharply in • Solid global import demand prospects in 2024 Q2 2024 on strong demand and global supply limitations • No sign of a large rebound in U.S. production or
Slide 14: Asset Overview
ASSET OVERVIEW TSX-V: IFOS | 14
Slide 15: Conda: Flagship Business
CONDA: FLAGSHIP BUSINESS Overview(1) Vertically integrated phosphate fertilizer business Location Idaho, U.S. Ownership 100% Status Operating Mineral Reserves(2) 33.7Mt at an average 25.0% P2O5 Measured & Indicated 44.9Mt at an average 24.81% P2O5 Mineral Resources(2) Inferred Mineral 1.5Mt at an av
Slide 16: Exploration Map
EXPLORATION MAP H1/NDR Mine Development Project Underway with Estimated Mineral Reserve Mine Life to 2037; Potential for Additional 1 Mineral Reserves Through Leases and Third-party Agreements 2 1 Rasmussen Valley Mine (“RVM”) end of life expected in mid-2025, with capability to supply ore to Conda
Slide 17: H1/NDR Infrastructure & Development
H1/NDR INFRASTRUCTURE & DEVELOPMENT The H1/NDR mine development project by Itafos ensures a stable ore supply for fertilizer production as the Rasmussen Valley Mine nears its end, supporting North American agriculture. Enhanced production capacities and infrastructure development, coupled with envir
Slide 18: Itafos Brazil
ITAFOS BRAZIL Generating cash flow with significant growth potential • Arraias Phosphate represents a low risk, high-growth cash flowing opportunity with several opportunities to add value – including optimized SSP production and the potential to develop multiple new products strategically located i
Slide 19: Unique Investment Opportunity in the High Growth Brazilian Phosphate Fertilizer Sector
UNIQUE INVESTMENT OPPORTUNITY IN THE HIGH GROWTH BRAZILIAN PHOSPHATE FERTILIZER SECTOR Arraias Investment Highlights Santana Investment Highlights Presence in high growth market One of the highest-grade phosphate resources in Brazil Operational: generating cash flow – and growing Located in
Slide 20: Araxá Strengths
ITAFOS ANNOUNCES SALE OF THE ARAXÁ STRENGTHS ARAXÁ PROJECT AUGUST 2024 Strategic position to supply new processing capability outside of China • Located outside of Araxá, Minas Gerais, Brazil’s primary mining state • Borders Mosaic’s phosphate and CBMM’s niobium mine (CBMM’s mine produces 75% of wor
Slide 21: Farim – World Class Undeveloped Global Resource
FARIM – WORLD CLASS UNDEVELOPED Updated NI 43-101 in May 2023: GLOBAL RESOURCE POSITIONED TO SERVE Resources and Reserves • 25-year life of mine and additional KEY FERTILIZER MARKETS resources • Measured Resources = 102.5Mt @ 28.5% P 2 O5 • Inferred Resources = 31.1Mt @ 28.1 P2O5 • One of the highes
Slide 22: Financial Highlights
FINANCIAL HIGHLIGHTS TSX-V: IFOS | 22
Slide 23: Financial Highlights
FINANCIAL HIGHLIGHTS Consolidated Operational & Financial Highlights H1 2024 Conda Sales Volumes by Product H1 2024 Conda Revenue by Product 2021A 2022A 2023A H1 2024 Total(3) Total 263kmt $225mm Sales Volume 9kmt $5mm 509kmt(1) 539kmt(1) 569kmt(1) 263kmt(1) (Conda 4% 2% Only) Revenues $413mm $593mm
Slide 24: 2021 - H1 2024 Cumulative EBITDA Generation of $576MM
2021 - H1 2024 CUMULATIVE EBITDA GENERATION OF $576MM Adjusted EBITDA(1) Free Cash-Flow(1) Net Debt • Cumulative EBITDA Generation of $576mm for • Increase primarily due to higher cash flows • Deleveraging strategy successfully complete the period 2021 - H1 2024 from operating activities, which were
Slide 25: Itafos Public Market Snapshot
ITAFOS PUBLIC MARKET SNAPSHOT EV / 2024E Adj. EBITDA Multiple vs. Peers (2) Trading Metrics Exchange TSX-V Difference from 1.7x (5.2x) Peer Median: Ticker IFOS Share Price C$1.60 / US$1.18 Average Daily Trading Volume (thousands)(1) 27.4 7.6x Market Capitalization (millions) C$307.2 / US$226.6 Share
Slide 26: Itafos Is a Pure-Play Phosphate Business Positioned to Benefit from Long-Term Market Tailwinds
ITAFOS IS A PURE-PLAY PHOSPHATE BUSINESS POSITIONED TO BENEFIT FROM LONG-TERM MARKET TAILWINDS 01 Mega-trends driving long-term phosphate demand 04 H1/NDR mine development project underway with estimated mineral reserve mine life to 2037(1); potential for additional mineral resources through leases
Slide 27: Itafos Guidance for 2024
ITAFOS GUIDANCE FOR 2024 (US$ in millions unless otherwise indicated) FY 2024 Guidance Sales Volumes (thousands of tonnes P2O5)(1) 320-340 Selling, general and administrative expenses(2) $17-$20 Maintenance Capex(3) $25-$35 Growth Capex(3) $35-$46 Source: Company management. 1. Sales volumes reflect
Slide 28: Appendix
APPENDIX TSX-V: IFOS | 28
Slide 29: Management Team with a Proven History of Delivering Stakeholder Value
MANAGEMENT TEAM WITH A PROVEN HISTORY OF DELIVERING STAKEHOLDER VALUE Name & Title Biography Significant Progression Under Management Team • Itafos CEO since November 2020 • Oversaw 16 sites as COO & EVP of PotashCorp High level of safety through behavior-based approach and other David Delaney Chief
Slide 30: EBITDA Reconciliation
EBITDA RECONCILIATION (US$ in thousands unless otherwise indicated) H1 2024 FY 2023 FY 2022 FY 2021 Net Income (Loss) $39,923 $3,092 $114,700 $51,439 (+) Finance Expense, Net 6,752 19,561 45,924 37,244 (+) Income Tax Expenses (Recovery) 9,378 1,142 32,154 22,106 (+) DD&A 16,134 36,057 33,705 25,844
Slide 31: Free Cash-Flow Reconciliation
FREE CASH-FLOW RECONCILIATION (US$ in thousands unless otherwise indicated) H1 2024 FY 2023 FY 2022 FY 2021 Cash-Flows from (Used By) Operating Activities $82,511 $94,723 $208,369 $94,499 Cash-Flow Used by Investing Activities (22,328) (53,329) (39,003) (34,076) Free Cash-Flow $60,183 $41,394 $169,3
Slide 32: Mineral Reserves and Mineral Resources Overview: Conda, U.S.
MINERAL RESERVES AND MINERAL RESOURCES OVERVIEW: CONDA, U.S. Rasmussen Valley Item Dry Tons (Mt) Grade (%) P2O5 (Mt) Mineral reserves 5.8 26.4 1.5 i Measured and indicated mineral resources (including mineral reserves) 5.9 25.9 1.5 Inferred mineral resources 0.02 26.7 0.01 H1/NDR Item Dry Tons (Mt)
Slide 33: Mineral Reserves and Mineral Resources Overview: Farim, Guinea Bissau
MINERAL RESERVES AND MINERAL RESOURCES OVERVIEW: FARIM, GUINEA BISSAU Total Item Dry Tons (Mt) Grade (%) P2O5 (Mt) Mineral Reserves 43.8 30.0 13.1 Measured and Indicated Mineral Resources 102.5 28.5 29.2 Inferred Mineral Resources 31.1 28.1 8.7 Construction of Farim Camp Farim Camp Source: Company m
Slide 34: Mineral Reserves and Mineral Resources Overview: Arraias, Brazil
MINERAL RESERVES AND MINERAL RESOURCES OVERVIEW: ARRAIAS, BRAZIL Near Mine Item Tons (Mt) Grade (%) P2O5 (Mt) Measured and Indicated Mineral Resources 24.6 4.3 1.1 Inferred Mineral Resources 3.8 4.0 0.2 Canabrava Item Tons (Mt) Grade (%) P2O5 (Mt) Measured and Indicated Mineral Resources 20.4 5.5 1.
Slide 35: Mineral Reserves and Mineral Resources Overview: Santana, Brazil
MINERAL RESERVES AND MINERAL RESOURCES OVERVIEW: SANTANA, BRAZIL Total Item Tons (Mt) Grade (%) P2O5 (Mt) Indicated Mineral Resources 60.4 12.0 7.2 Inferred Mineral Resources 26.6 5.6 1.5 Source: Company management. Note: The Santana Technical Report is filed under the Company’s profile on SEDAR+ an
Slide 36: Mineral Reserves and Mineral Resources Overview: Araxá, Brazil
MINERAL RESERVES AND MINERAL RESOURCES OVERVIEW: ARAXÁ, BRAZIL Total Tons (Mt) TREO Grade (%) TREO (kt) Nb2O5 Grade Nb2O5 (kt) Item (%) Measured and Indicated Mineral Resources 6.3 5.0 317.6 1.0 64.7 Inferred Mineral Resources 21.9 4.0 875.4 0.6 140.4 Source: Company management. Note: The Araxá Tech
Slide 37: Itafos Corporate Office / Investor Relations
ITAFOS CORPORATE OFFICE 5151 San Felipe Street, Suite 2015 Houston, TX 77056 United States of America TSX-V: IFOS INVESTOR RELATIONS investor@itafos.com itafos.com TSX-V: IFOS | 37