Intrepid Potash, Inc · NYSE:IPI
Intrepid Potash — Investor Day (June 2010)
136 slides from Intrepid Potash's investor day presentation, Jun 16, 2010
Slide 1: 2010 Analyst Day
2010 Analyst Day June 16, 2010
Slide 2: Cautionary Statements Regarding Forward-Looking Information
Certain statements in this presentation, and other written or oral statements made by or on behalf of us, are “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management’s expect
Slide 3: Today's Corporate Participants
4 Today’s Corporate Participants Bob Jornayvaz – Executive Chairman of the Board Hugh Harvey – Executive Vice Chairman of the Board Dave Honeyfield – President, Chief Financial Officer & Treasurer R.L. Moore – Senior Vice President of Marketing & Sales John Mansanti – Vice President of Operations Ke
Slide 4: Company Overview
Company Overview Bob Jornayvaz, Executive Chairman of the Board ®
Slide 5: Intrepid Potash Strategically Located, Potash-Only Company
6 Intrepid Potash Strategically Located, Potash-Only Company Intrepid currently has an intense margin focus: Improve reliability and efficiency Capital investment to increase recoveries and productivity which is designed to lower per ton production cost Innovate production methods Strategic marketin
Slide 6: Strategy of Combining the Asset Base
7 Strategy of Combining the Asset Base Intrepid acquired its first domestic potash mine in February 2000 Recognition by Intrepid there were a number of potash facilities in the United States that had been under-appreciated and received minimal capital investment for many years Management developed a
Slide 7: Building Upon Our History of Value Creation Through Innovation
8 Building Upon Our History of Value Creation Through Innovation February 2004: Acquired Carlsbad facilities from Mississippi Chemical April 2004: Acquired Wendover facility from Reilly Chemical February 2000: Acquired Moab facility from Potash Corp. 2000 2005 2006 2008 2007 2004 2001: Doubled Moab
Slide 8: Company Overview
9 Company Overview The largest U.S. producer of potassium fertilizer Only western world producer created and dedicated solely to potash-related products Supplies ~1.6% of global demand and ~9.4% of U.S. demand 1 of 2 global producers of sulfate of potash magnesia, marketed as Trio™ 5 active producti
Slide 9: Supply and Demand Conditions Lead to the Current Pricing Environment
10 Supply and Demand Conditions Lead to the Current Pricing Environment Granular Muriate of Potash (MOP) Midwest Pricing Midwest Granular MOP ($/ton) Source: Green Markets, Fertecon, International Plant Nutrition Institute (IPNI). Example Prices ($ / ton) U.S. Midwest (fob warehouse) $400 spot Saska
Slide 10: Potash Compared to other Nutrients
Potash Compared to other Nutrients 11 Source: Green Markets Notes: (1) Price for Granular MOP Midwest (2) Net Realized Potash Price for April & May 2010 is based on preliminary data published on SEC Form 8-K on June 8, 2010 Since January 2008 Indexed Historical Granular MOP Midwest Prices Compared t
Slide 11: Intrepid Net Realized Sales Price Advantage
Intrepid Net Realized Sales Price Advantage 12 Producer Average Net Realized Potash Sales Price Per Ton ($/ton) Intrepid Average Net Realized Sales Price Per Ton Advantage ($/ton)
Slide 12: United States Potash Consumption
13 United States Potash Consumption Source : Fertecon, United States Department of Agriculture (USDA). Potash consumption is shown in fertilizer years (July – June). Grains stocks include: Barley, Corn, Oats, Sorghum, Wheat Potash fertilizer consumption has remained relatively constant, with an annu
Slide 13: Farmers Understand the Agronomic Benefits of Potash
Farmers Understand the Agronomic Benefits of Potash Potash application rates were down in 2008 and 2009 2009 presented good growing conditions for farmers A robust 2009 crop coupled with lower application rates means soils were being depleted of “banked” nutrients An equally strong 2010 crop should
Slide 14: Potash Market Trends
15 Potash Market Trends Worldwide recession Global buyer / dealer hesitation Producer inventories building Elective production curtailments / mine shutdowns Relatively full supply chain at the dealer and retail level Dealers unwilling to take price risk Slower sales into agricultural & industrial ma
Slide 15: Strong Returns for Corn Growers
16 Strong Returns for Corn Growers - Non-land fixed costs include: labor, opportunity cost of unpaid labor, taxes, insurance, general overhead, and machine and equipment expenses. - Other variable costs include: seed, chemicals, fuel, lube, electricity, repairs, water, interest, custom operations, a
Slide 16: Few Deposits, Fewer Global Producers
17 Few Deposits, Fewer Global Producers 2008 & 2009– MM KCL Equivalent Tons (2) (3) (2) (2,5) Source: Public filings and select country data from Fertecon (1) Mosaic’s fiscal year ends on May 31. (2) PCS has ownership stake. (3) PCS markets Intrepid Potash’s products exclusively outside North Americ
Slide 17: The Only Western World Potash Pure-Play
18 Potash Salt COMPO Fertiva Complementary Business Agrium Potash Phosphates Other The Only Western World Potash Pure-Play K+S Potash Potash Phosphates Nitrogen Potash Corp Mosaic Uralkali Potash Intrepid Comparables Revenue by Product - North America Comparables Revenue by Product - International I
Slide 18: Why Potash Only?
19 Why Potash Only? (1) Potash Corp. (2) Potash percentage represents 2007, nitrogen and phosphate percentages represent 2005 figures from Integer Research Ltd. (3) Estimated by Intrepid Potash based on publicly available historic production data. Operating capacity rates for nitrogen and phosphate
Slide 19: Low-Cost, Low-Sovereign Risk Expansions
20 19,033 Low-Cost, Low-Sovereign Risk Expansions Capital Cost Curve for Announced Potash Expansion Projects Capital Costs ($) / ton (1) Incremental Annual Production Capacity (2) MOS / PCS / Intrepid PCS CVRD (Argentina) MagMinerals (Congo) Greenfield Project Intrepid Greenfield (HB Solution Mine)
Slide 20: Average Potash Consumption Greater than 5x Our Average Production
21 Average Potash Consumption Greater than 5x Our Average Production in Our Markets Low High Source: Association of American Plant Food Control Officials (AAPFCO), The Fertilizer Institute (TFI), Intrepid Potash. (1) AAPFCO, Fertecon, USDA. New Mexico Texas Oklahoma Kansas Colorado Mississippi Arkan
Slide 21: Intrepid vs. North American Competitors
22 (2) Source: Green Markets and Fertecon Notes: (1) Based on Full Year 2009 for Intrepid Potash Inc., Potash Corp., Mosaic Co., Agrium Inc. (2) Total COGS include: Cash operating costs including all royalty, profit and capital taxes; Royalties of $20 per ton for Intrepid; Royalty, profit and capita
Slide 22: Depleted Conventional Mines
23 Depleted Conventional Mines Mines Currently With Less than 15 Years Reserve Life Theodore, Amelie, Marie Louis mines in France Pasquasi and San Cataldo mines in Italy Salzdetfurth, Friedrichshall, Bergmannssegen-Hugo, Siegfried-Giesen, and Niedersachen-Riedel German mines Trona, California Severa
Slide 23: Population growth continues
24 In spite of financial crisis, population growth continues Assuming a 1.1% growth rate in world population of 6.9 billion people: Each year – 75 million more people or approximately nine more New York Cities This would require an additional 40 million acres of arable land (1.2x the farmland in Iow
Slide 24: Fundamentals of Increasing Population Continue to Drive Grain Demand
25 Fundamentals of Increasing Population Continue to Drive Grain Demand Over the Long-Term Note: Grains include corn, wheat, barley, oats and sorghum. Stock to use ratio is average inventory / consumption for that year; data updated monthly. Source: United Nations Food and Agriculture Organization (
Slide 25: U.S. Corn Production Utilized for Ethanol
U.S. Corn Production Utilized for Ethanol 26 Source: USDA, Food and Agricultural Policy Research Institute (FAPRI). U.S. Corn (Million Bushels) Percent of U.S. Corn Production Utilized for Ethanol 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 0 2,000 4,000 6,000 8,000 10,000 12,000 14
Slide 26: Consumption of Crops for Ethanol Production
Consumption of Crops for Ethanol Production 27 Source: USDA, Food and Agricultural Policy Research Institute (FAPRI). Note: Ethanol consumption in the United States is based upon the mandates set forth in the U.S. Energy Independence and Security Act of 2007 Thousand Tons Sugarcane consumes one ton
Slide 27: Intrepid Company Overview
Intrepid Company Overview Strong Long-Term Industry Fundamentals The Only Western World Potash Pure-Play Strategically Located Assets Diversified Markets and Customer Base Well-Defined, Attractive Organic Growth Opportunities that Lower Per-Ton-Costs 29
Slide 28: Marketing & Sales
Marketing & Sales R.L. Moore, Senior Vice President of Marketing & Sales ®
Slide 29: Intrepid Products and By-Products
By-Products Salt Metal Recovery Salt Magnesium Chloride 31 Intrepid Products Langbeinite Ore Combination of SO3, MgO, and K2O Sylvite Ore Sylvite typically pure KCl
Slide 30: Diversified Markets and Customer Base
32 We sell potash into three different markets: Agricultural, Industrial and Animal Feed Agricultural represents ~70% of Intrepid sales compared to an industry average of 92%(1) Agricultural primarily consumes granular potash and Trio™, while industrial and animal feed primarily consume standard pot
Slide 31: Investments to Increase Granulation Capacity and Marketing Flexibility
Investments to Increase Granulation Capacity and Marketing Flexibility 33 Current Compaction / Granulation Capacity by Facility 2011 Estimated Compaction / Granulation Capacity by Facility Moab Compaction Trio Granulation Potash - Compaction Carlsbad, New Mexico West – 100 percent East – 40 percent
Slide 32: Sales of Potash & Trio in the United States
34 Sales of Potash & Trio™ in the United States Intrepid Sells Potash & Trio™ into Multiple Markets & Multiple End Users
Slide 33: Who Are Intrepid's Customers
Intrepid sells its products to national account distributors and independent dealers Intrepid does sell product to a limited number of regional cooperatives Intrepid does not sell directly to farmers 35 Who Are Intrepid’s Customers
Slide 34: What Are We Seeing In Today's Market
The agricultural demand cycle in the United States appears to have returned to normal Farmers recognize the need and value of potassium Spring planting moved at a fast pace given favorable weather and planting conditions Dealer inventory is relatively low and dealers are not buying product unless th
Slide 35: Operations
Operations John G. Mansanti, Vice President of Operations ®
Slide 36: Estimated Long-Life Reserves
38 Estimated Long-Life Reserves (1) Product / Operations Date Mine Opened Current Extraction Method Minimum Remaining Life (years) Current Annual Estimated Productive Capacity in Potash Product Tons Muriate of Potash Solar Moab 1965 Solution 126 130 Wendover 1932 Shallow Brine 30 100 HB Solution Min
Slide 37: Intrepid Production Volume History & Outlook
39 Intrepid Production Volume History & Outlook Tons (000’s) Intrepid’s Potash Potassium Production Volume Growth Estimated Productive Capacity Historical 0 200 400 600 800 1,000 1,200 1,400 1,600 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Potash Production Trio Production
Slide 38: Intrepid Mine & Processing Locations
40 Intrepid Mine & Processing Locations Location Facility / Mine Production Method Year Acquired Moab, Utah Moab Mine Solution / Solar Evaporation 2000 Wendover, Utah Wendover Mine Lake Brine / Evaporation 2004 Carlsbad, New Mexico East Mine Underground Extraction 2004 West Mine Underground Extracti
Slide 39: Intrepid Mine Process by Facility
41 Intrepid Mine Process by Facility (1) Granulation installation is a component of the approved Langbeinite Recovery Improvement Project investment. East Trio Mine Pump Shuttle Evaporate Convey Harvest Hoist Mag Salts Crush Crush Grind Grind Deslime Hot leach Cyclone Float Crystallize Rinse Float D
Slide 40: Moab, Utah Moab Mine
Mine began as a conventional underground mining operation in 1965 Converted in 1971 to a system combining solution mining and solar evaporation Intrepid acquired the Moab Mine in 2000 and doubled production via: Combination of the drilling of new vertical wells into previously untapped areas of the
Slide 41: Moab Solar Ponds
Moab Solar Ponds =_ Intrepid Potash MoabiSolar Po
Slide 42: Moab, Utah Capital Investment Since Acquisition in 2000
44 Moab, Utah Capital Investment Since Acquisition in 2000 Key capital investment projects in Moab include: Drilling and completing the first horizontal potash solution mining caverns validating the mining method and adding over 100 years of mine life to the facility based on proven and probable res
Slide 43: Wendover Mine
Wendover Mine Product Muriate of Potash Extraction Method Lake Brine Evaporation Process Method Flotation Current Estimated Productive Capacity 100,000 tons of Potash annually Minimum Remaining Reserve Life 30 Years 45 Wendover Mine, Wendover Utah Actively used for potash production from naturally o
Slide 44: Wendover, Utah
46 Wendover, Utah
Slide 45: Wendover, Utah Capital Investments Since Acquisition in 2004
47 Wendover, Utah Capital Investments Since Acquisition in 2004 Since 2004, approximately $13 million has been invested in the Wendover, Utah mine and facility Key capital investment projects in Wendover include: Drilling and completing long-lived deep brine wells to ensure a reliable supply of pota
Slide 46: West Mine, Carlsbad, New Mexico
48 West Mine, Carlsbad, New Mexico West Mine Product Muriate of Potash Extraction Method Underground Process Method Flotation Current Estimated Productive Capacity 430,000 tons of Potash annually Minimum Remaining Reserve Life 130 Years The West Mine consists of a mine and mill originally built in 1
Slide 47: West Mine
49 West Mine
Slide 48: East Mine, Carlsbad, New Mexico
50 East Mine, Carlsbad, New Mexico East Mine Product Muriate of Potash - White Extraction Method Underground Process Method Hot Leach Crystallization Current Estimated Productive Capacity 250,000 tons of Potash annually Minimum Remaining Reserve Life 57 Years Product Sulfate of Potash Magnesia (Trio
Slide 49: East Mine operations
The East Mine, which began operating in 1965, consists of a mine and a mill, as well as compaction, warehousing, and load-out facilities The main ore body of the East Mine is located approximately 900 to 1,100 feet below the surface and is a mixed ore body with two minerals sylvite langbeinite The E
Slide 50: North Facility, Carlsbad, New Mexico
52 North Facility, Carlsbad, New Mexico The North Facility is a granulation plant with storage, load out, and shipping facilities The finished product is transported by rail and truck to agricultural customers
Slide 51: Capital Investment in Carlsbad New Mexico Since Acquisition in 2004
Capital Investment in Carlsbad New Mexico Since Acquisition in 2004 53 Since 2004, approximately $250 million has been invested in the Carlsbad mines and facilities Key capital investment projects at the East mine include: Adding of a fifth underground mining panel Adding new wash thickeners to impr
Slide 52: Break
Break ®
Slide 53: Organic Growth Opportunities: HB Solution Mine and North Mine Asset
Organic Growth Opportunities: HB Solution Mine and North Mine Asset Hugh Harvey, Executive Vice Chairman of the Board and Kevin Ryan, Senior Project Engineer ®
Slide 54: Solution Mining & Intrepid Potash
56 Solution Mining & Intrepid Potash The Moab mine was the first property acquired by Intrepid The prior operator had seen consistent decline in production and was in the final years of operations Intrepid adapted methods from the oil and gas industry drilling the first horizontal potash mining cave
Slide 55: Evolution of Moab Mine
Mine Construction by Texas Gulf Sulfur; underground mechanical mining: 1964-1969 Solution mining of potash from flooded mine workings : 1970 – present Intrepid predecessor acquires the oil and gas leases on the Moab property in the late 1990’s Intrepid purchases mine: solution mining of potash from
Slide 56: Problems Encountered During Underground Mining at Moab Mine
Texas Gulf had misinterpreted the ore structure; undulating folded and faulted ore body which could not be mined efficiently Low extraction ratio: Only 25% of ore extracted; 75% left in non-minable areas Underground Mechanical Mining, 1964-1969: only five years of mine life vs. 25 year mine plan Pro
Slide 57: Pre-Mining Interpreted Ore Contours
#1 Shaft Smooth Contour Lines Pre-Mining Interpreted Ore Contours 59
Slide 58: Post Mining Actual Ore Contours
Post Mining Actual Ore Contours 60
Slide 59: 1970 Underground Mine Perimeter
1970 Underground Mine Perimeter 61
Slide 60: Potash Ore Cross Section Through 1st South Mains
Potash 5 Ore Cross Section Through 1st South Mains 62
Slide 61: Transition of Moab Mine from Underground Mine to Solution Mine
Underground Mechanical Mining 1962-1969; unsuccessful New technology saves the mine: Solution Mining of potash from flooded mine workings: 1970 – present Mining equipment removed; 13 injection/ extraction wells drilled; mine flooded with fresh water 420 acres of PVC lined Solar Ponds constructed 3 ½
Slide 62: Evaporation Pond Construction
Evaporation Pond Construction 64
Slide 63: Evaporation Pond Construction
Evaporation Pond Construction 65
Slide 64: Moab Mine Process Flow
Moab Mine Process Flow INTREPID,
Slide 65: Brine Extraction Pump
Brine Extraction Pump 67
Slide 66: View of injection well #24 in Moab, Utah
View of injection well #24 in Moab, Utah, approximately 2,000 gpm 68
Slide 67: Potash Brine Extraction Well
Potash Brine Extraction Well 69
Slide 68: Harvesting Product from Ponds
Harvesting Product from Ponds 70
Slide 69: Product Unloaded Into Slurry Pit and Sent to Plant Via Pipeline
Product Unloaded Into Slurry Pit and Sent to Plant Via Pipeline
Slide 70: Flotation Cells Separate Potash from Salt
Flotation Cells Separate Potash from Salt 73
Slide 71: Intrepid Design Criteria for Horizontal Caverns
Inject salt saturated brine to selectively mine potash while minimizing the use of fresh water Create as much surface area as possible for each well drilled Make the target well easy to intersect Consider using brine heated to a level above the rock temperature Intrepid Design Criteria for Horizonta
Slide 72: Horizontal Model
Horizontal Model 75 Ore To date, the mine has recovered 5.5 million tons of potash from about 520 acres of oil mine workings in Potash #5. Additional, deeper, mineable reserves are present in Potash #9 and Potash #19. After the Cane Creek Mine is expanded, ore reserves are sufficient to operate the
Slide 73: Moab Well Drilling
Moab Well Drilling 76
Slide 74: Horizontal Cavern System
Horizontal Cavern System 77
Slide 75: Horizontal Cavern System
Horizontal Cavern System 79
Slide 76: Horizontal Cavern System
Horizontal Cavern System 80
Slide 77: Horizontal Cavern System
Horizontal Cavern System We = 7 epamens
Slide 78: Well 27H and 28H Cavern System
Well 27H, Target Cavern Well 28H Multilaterals Cavern System Well 27H and 28H 82
Slide 79: HB Solution Mine Capex and Cost per Ton
83 $700 per ton Capex to reopen an existing mine compared to an estimated cost of ~$1,400 per ton for greenfield projects HB solution mine expected to be among the lower-cost potash mines in North America Same proven solar evaporation and solution mining technology as used in Moab Will share infrast
Slide 80: HB Solution Mine Project Background
HB Solution Mine Project Background 84 HB Solution mine is the inactive Potash Company of America mine, also known as the Eddy Potash mine, located in Carlsbad, New Mexico Mine has been inactive since 1997, when conventional mining had depleted the ore body Room-and-pillar mining method used a combi
Slide 81: Land Ownership and Acreage
Land Ownership and Acreage 85 Surface Ownership 82% federal 13% state 5% private Relevant Project Acreage Total project area = 38,453 acres Targeted open mine workings = 11,100 acres Flooded areas with mine workings = 4,330 acres Total surface area for evaporation ponds 800 acres, 20% on public land
Slide 82: HB Solution Mine Project Overview
Geology Project Description Project Components Solution Mining Target Wells and Pipelines Solar Ponds New HB Flotation Plant Permitting Requirements Project Benefits/Environmental Protection HB Solution Mine Project Overview 86
Slide 83: HB Solution Mine: Project Timeline & EIS Process
HB Solution Mine: Project Timeline & EIS Process 87 Sixteen months into the EIS process with the BLM and we continue to remain on schedule BLM has issued its scoping summary report for the EIS and is moving forward on preparation of the draft EIS Working with the New Mexico Environment Department on
Slide 84: BLM Permitting Process
BLM Permitting Process 88 In Process
Slide 85: HB Solution Mine Project Description
Solution mining and solar evaporation are proven technologies around the world and are used by Intrepid at our Utah facilities HB solution mine will leverage expertise and experience from Moab HB solution mine will apply similar solution mining and processing techniques Major facilities to be constr
Slide 86: HB Solution Mine Injection Area
90 HB Solution Mine Injection Area
Slide 87: HB Solution Mine Operational Overview
HB Solution Mine Operational Overview 91
Slide 88: PCA Miner Solution Mining Ore Target
PCA Miner Solution Mining Ore Target 92
Slide 89: HB Solution Mine Potash Pillars
HB Solution Mine Potash Pillars 93
Slide 90: Pillar After Mining Complete
Pillar After Mining Complete 94
Slide 91: Pillar after Days
Pillar after 120 Days 95
Slide 92: HB Solution Mine Injection
97 Pump water from four wells in the Rustler Formation (<500 feet below surface) Average projected water extraction: 1,100 gpm everyday for the life of the project; approximately 1,774 acre-feet Rustler water for this project is high in NaCl (sodium chloride as in table salt) and is not usable for d
Slide 93: HB Solution Mine Brine Extraction
98 Extraction of potassium-rich solution by pumping to the surface via extraction wells The pregnant brine would then be recovered through the five extraction wells positioned at the lower portions of the former workings Extraction wells would also be used to monitor fill elevations for injection co
Slide 94: HB Solution Mine – Minimal Surface Disturbance
HB Solution Mine – Minimal Surface Disturbance 99
Slide 95: HB Solution Mine Evaporation
HB Solution Mine Evaporation 100 Evaporation ponds to be constructed as a system of about 25 ponds, 20-25 acres each for total of approximately 520 acres Cascading pond layout facilitates pond management of varying stages of salt concentrations This is the same method we use at our Moab Facility Wat
Slide 96: Cascading solar ponds
Cascading solar ponds 101
Slide 97: Cascading solar ponds
Cascading solar ponds 102
Slide 98: Scraper – Harvesting Potash From Solar Ponds
Scraper – Harvesting Potash From Solar Ponds 103
Slide 99: HB Solution Mine Potash Ore Processing
Ore harvested from the solar ponds will be pumped through a pipeline as a slurry to the new HB mill Potassium and sodium chloride are separated in the flotation mill using an amine flotation process. Product is transported from the new HB mill to the North mine facility for drying, grading and prepa
Slide 100: Flotation cells
Flotation cells 105
Slide 101: HB Solution Mine Mill
HB Solution Mine Mill 106
Slide 102: HB Solution Mine - Expected Benefits
Low cost extraction of 5MM tons potash Cash operating cost of approximately $65 - $75 per ton Royalties of over $90MM generated for state and federal government Additional workforce of 30 - 40 employees drawn from local area First year construction phase will employ 150 - 200 contract workers HB Sol
Slide 103: Environmental Protection
Designed to minimize environmental impacts and utilize green technologies Designed to minimize surface disturbance Designed to use abundant salty, non-potable groundwater for makeup water to inject into underground workings Not usable for drinking water Not usable for irrigation Not usable for lives
Slide 104: North Mine Opportunity
North Mine Opportunity Opportunity to expand potash production by over 400,000 tons annually The idle North Mine can be reopened with less capital spending and shorter lead time than greenfield projects: Two high capacity operating mine shafts Existing utilities and mine permits Known geology and re
Slide 105: Financial Review & Capital Projects
Financial Review & Capital Projects Dave Honeyfield, President, Chief Financial Officer & Treasurer ®
Slide 106: Solid Financial Performance
111 Solid Financial Performance EBITDA(1) (In millions) Balance Sheet as of March 31, 2010 (1) This is a financial measurement not calculated based on U.S. Generally Accepted Accounting Principles (Non GAAP). Non-GAAP reconciliation available in the appendix to this presentation. Net Income (In mill
Slide 107: Selected Operating Data
112 Selected Operating Data Potash Average Net Realized Sales Price (Per short ton) Trio™ Average Net Realized Sales Price (Per short ton) (1) Unaudited results. Intrepid expects to release its second quarter 2010 financial results on August 3, 2010, and expects to file its Quarterly Report on Form
Slide 108: Q1 2010 Was Strong For Intrepid
Q1 2010 Was Strong For Intrepid Aggregate sales of potash in the first quarter of 2010 were 243,000 tons and reflected a more typical agricultural cycle spring fill and application season Red Granular product inventory and production was fully committed through mid-May 2010 The Intrepid list price i
Slide 109: Q2 2010 to Date
Q2 2010 to Date Spring buying in the agricultural market is essentially complete, following a normal demand pattern June & July historically slower period in agricultural sales cycle Dealers are purchasing when they have specific demand requirements from farmers Industrial sales in the Rocky Mountai
Slide 110: Potash Debottlenecking and Expansion Projects at Existing Facilities
115 Facility Estimated Key Benefits Estimated Capex Range for Future Projects (1) Estimated in service date Potash Debottlenecking and Expansion Projects at Existing Facilities Storage and Hoisting Capacity Upgrade West H2 2009 Decouple underground and surface operations Improve potash recoveries at
Slide 111: Underground Stacker Reclaim
116 Underground Stacker Reclaim
Slide 112: Underground Stacker Reclaim
Underground Stacker Reclaim 117
Slide 113: East Wash Thickener
East Wash Thickener 118
Slide 114: Moab Compaction
$15.5 million capital investment in 2010 Ability to granulate up to 100 percent of annual production from Moab facility Project allows flexibility in production mixes to meet market demand Current compaction capacity at Moab is approximately 40 percent of annual production capacity All long lead tim
Slide 115: Growing Langbeinite Business Presents a Key Opportunity
Intrepid believes the market is beginning to recognize the combined value of the nutrients in Trio™, potassium, magnesium and sulfur, and, as a result, we expect our pricing opportunity in the premium market to strengthen Growing Langbeinite Business Presents a Key Opportunity for Intrepid In 2005,
Slide 116: Current Langbeinite Recovery Plant Built in 2005
Current Langbeinite Recovery Plant Built in 2005 121
Slide 117: Current Langbeinite Recovery Circuit
122 Current Langbeinite Recovery Circuit
Slide 118: Langbeinite Recovery Improvement Project
Langbeinite Recovery Improvement Project Expected to increase langbeinite recoveries from 35 percent to 50 percent thereby reducing cash costs per ton Expected to reduce process water consumption Allows for production flexibility through the ability to granulate 100 percent of standard production Ut
Slide 119: Current Trio Market and Growth Potential
The current market for Trio™ consists mainly of granular sales, with significant growth possible in the granular market Intrepid is investing in education and marketing programs intended to increase awareness of the benefits of magnesium and sulfur The majority of the growth should be in the interna
Slide 120: Langbeinite Recovery Improvement Project Timeline
Langbeinite Recovery Improvement Project Timeline 125 January – April 2009 July – December 2009 May 2010 October 2010 Late 2011 Feasibility Study Pilot testing with Dense Media Separation (“DMS”) circuit Lab flotation and pilot test-work on site Langbeinite granulation test-work Visit to site to vie
Slide 121: Final Thoughts
126 Final Thoughts Strong Long-Term Industry Fundamentals The Only Western World Potash Pure-Play Strategically Located Assets Diversified Markets and Customer Base Well-Defined, Attractive Organic Growth Opportunities that Lower Per-Ton-Costs
Slide 122: Questions & Answers
Questions & Answers Intrepid Potash Moab)Solar Ponds:
Slide 123: Appendix
POTASH Appendix
Slide 124: Conversion Rates
129 Conversion Rates 1 metric tonne = 1.102 short tons 1 product ton of potash (KCL or KCL Equivalent) = 61% K20 1 product ton of langbeinite = 22% K20 1 product ton of SOP = 50% K20
Slide 125: Calculation of EBITDA Non-GAAP Reconciliation
Calculation of EBITDA 130 Non-GAAP Reconciliation Earnings before income taxes, interest, depreciation and amortization (“EBITDA”) is computed as net income adjusted for the add back of income tax expense, interest expense including derivatives, depreciation, depletion, amortization, asset retiremen
Slide 126: Calculation of Adjusted Net Income Non-GAAP Reconciliation
Calculation of Adjusted Net Income 131 Non-GAAP Reconciliation Adjusted net income is calculated as net income adjusted for significant non-cash and unusual items. Examples of non-cash and unusual charges include insurance settlements in excess of property losses, non-cash gains or losses associated
Slide 127: Selected Financial Data
132 Selected Financial Data Adjusted Net Income (1,2) (In millions) EBITDA (1,2) (In millions, except gross margin percentage) Net Sales(2) (In millions) Earnings Per Share (2) (Diluted) (1) This is a financial measurement not calculated based on U.S. Generally Accepted Accounting Principles (Non GA
Slide 128: Historical Quarterly Production and Sales Summary
133 Historical Quarterly Production and Sales Summary 2010 March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, March 31, Production volume (in thousands of short tons): Potash 224 210 200 201 137 131 112 124 172 Langbeinite 56 58 50 34 42 45 60 45 57 Sales vol
Slide 129: Carlsbad Potash Area
134 Carlsbad Potash Area
Slide 130: Potash Production and North American Inventory Levels
135 Potash Production and North American Inventory Levels N. American Inventory (000s Tons KCL Equivalent) Source: IPNI, Fertecon, Intrepid Potash. Potash Production (000s Tons KCL Equivalent) Global Production North American Production 5,000 15,000 25,000 35,000 45,000 55,000 65,000 75,000 500 1,00
Slide 131: Demand Growth from Brazil, India & China
136 Demand Growth from Brazil, India & China Reaching Recommended Application Levels China Brazil India Source: IPNI, Potash Corp. (MM Tons KCL) Goal to attain self-sufficiency of food supply History of under-application of potash Need to increase yields Increasing land use for agricultural purposes
Slide 132: Fertilizer Use Below Recommended Rates
137 Fertilizer Use Below Recommended Rates Source: Morgan Stanley, Agricultural Products Research, September 4, 2008. 146% Shortfall 86% Shortfall 288% Shortfall Global Application Rates (lb/acre) 60 112 24 59 17 66 0 20 40 60 80 100 120 Nitrogen Phosphate Potash Current Application Rate Scientifica
Slide 133: Yield Response at Varying Soil Test Levels
138 Yield Response at Varying Soil Test Levels Average Yield Response to Potash Fertilization - No data for medium alfalfa yields. Response shown is an average of low and high yield responses. - Avg. relative yield assumes all other factors are non-limiting, yields approach 100% after fertilization,
Slide 134: Return on Potash Investment for Corn & Soybeans
Return on Potash Investment for Corn & Soybeans 139 ROI assumes 163.5 bu/acre and $3.40/bu for corn, 44.0 bu/acre yield and $8.80 for soybeans, $525/ton KCL Input Costs for Corn ($/bu) Input Costs for Corn ($/acre) Return on Potash Investment Source: USDA, IPNI, & Intrepid Potash. Corn Soybeans Inpu
Slide 135: Intrepid Potash Management Structure
Intrepid Potash Management Structure 140
Slide 136: Management Ownership Benchmarking
Management Ownership Benchmarking 141 (1) Market data as of 5/7/2010 Source: CapIQ Insider Ownership Benchmarking Analysis (1) $USMM Company Industry Market Capitalization ($MM) % Owned by Insiders Fertilizer Intrepid Potash, Inc. Fertilizer 1,891 40.8% Compass Minerals International Inc. Fertilizer