Slide 1: The leading developer of premium quality potash
Thee leading ead g developer de e ope o of p premium e u quality potash
Slide 2: Forward Looking Statements
Forward Looking Statements 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 the Corporation, or industry results, to be materia
Slide 3: Investment Highlights
Investment Highlights • Bankable feasibility study complete De-risked project • EIS approved profile • Strategic investor with off-take agreement (GSFC) Near-term plans to • Staged approach: 3 Phases: 625Ktpa, 1.375Mtpa and 2.125Mtpa initiate Phase I • Lower upfront CAPEX CAPEX, shorter time to prod
Slide 4: Mineral Resource: Carnallite
Mineral Resource: Carnallite What is Carnallite? (KCl + MgCl2 + 6H2O) • A potassium salt-bearing mineral • Dissolves faster than Sylvinite, making a solution mining process more efficient • The first mineral that was mined to produce potash (mid 1800’s in Germany) • Contains magnesium • Used as a tr
Slide 5: The World's Largest Potash-Producing Region
The World’s Largest Potash-Producing Region Property comprises a total of ~86,126 acres • Located 0.5 km south of Highway 16 near Wynyard, SK Existing infrastructure • Rail and roadways • Natural gas, power and water in close proximity SASKATCHEWAN Opportunity for resource expansion Canada Potash Co
Slide 6: Karnalyte's Competitive Advantage
Karnalyte’s Competitive Advantage Mineral Resource Characteristics Dissolves faster than other salts Lower solution mining OPEX than other potassium salts Amenable to solution mining g Lower CAPEX, shorter construction timeline than conventional mining Contains magnesium Opportunity for product expa
Slide 7: High Quality Potash Product
High Quality Potash Product Granular, uniformly sized-pellets are a significant competitive advantage Ideal for NPK bulk blending Better handling and storage characteristics Even distribution during application More uniform crop growth Superior flowability Reduced caking and segregation Product exce
Slide 8: Strategic Investor with Off-Take Agreement
Strategic Investor with Off-Take Agreement Gujarat State Fertilizers & Chemicals (GSFC) and Karnalyte entered into a strategic g p partnership p in Januaryy 2013* • $45MM investment for 19.98% ownership stake • Commitment for additional $15MM in future equity rounds • 20 year committed take-or-pay o
Slide 9: Attractive Project Economics
Attractive Project Economics* Bankable Feasibility Study (BFS) • Production targeted in early 2015 • Initial production of 625Ktpa with ramp-up to 2.125Mtpa in 5 to 6 years • Potash price of $480/tonne BFS Summary • Total Reserves and Resources (155Mt Proven and Probable reserves) support a 70 year
Slide 10: Key Milestones and Near-Term Catalysts
Key Milestones and Near-Term Catalysts Pursuing g debt and/or / equity q y financing g to obtain total Project j funding g Pursuing additional strategic partner for • Project financing; • Off-take arrangements; and/or • Marketing assistance W ki towards Working d obtaining b i i site i and d ffacili
Slide 11: Timeline to Production
Timeline to Production 2011 2012 2013 2014 2015 2016 2017 2018 2019 Bankable Study Feasibility Magnesium Pre-Feasibility Saskatoon Operations Office Strategic Partner(s) (Q1, 2013) EIS (Q1 2013) - Groundbreaking for Mine & Plant Construction (2013) - Phase I Construction Completion 625Ktpa
Slide 12: Global Marketing Strategy
Global Marketing Strategy Overseas North America • GSFC off-take agreement • Remaining production into N.A. market • Potential for another strategic partner • Central North American distribution location • Port locations • Among highest global pricing environments • Additional off-take • Premium pro
Slide 13: Transportation & Distribution Strategy
Transportation & Distribution Strategy Transload Rail Product will be transported by truck Canadian Pacific (CP) main rail line ~3 km ~3 km to CP rail line from plant site • Evaluating car supply, movement and rail options Port Other initiatives Significant progress made with various Evaluating Cana
Slide 14: Management Team Experienced in Building Potash Mines
Management Team Experienced in Building Potash Mines Robin L. Phinney, P.Eng., President, CEO and Ronald Love, CA, Executive VP, CFO and Director Director • More than 16 years of experience in progressively senior • Held various engineering positions with Potash Corp of financial roles Saskatchewan
Slide 15: Board of Directors
Board of Directors Bruce Townsend, Director and Chairman of the Paul Sharpe, B. Sc., Chemistry Director Board* • Partner with the law firm Perley – Robertson, Hill & McDougall • Director, Financial Analysis Nitrogen Operations with PCS LLP and practices primarily in the chemical, and biochemical fro
Slide 16: TSX:KRN Key Metrics
TSX:KRN Key Metrics* Recent share p price (3/ (3/28/2013) / 3) $8.25 $ 5 Shares O/S 27.4MM Fully diluted shares O/S 28.7MM C h ((12/31/2012) Cash / / ) $ $25.1MM MM Ownership (% of basic shares O/S) Top Institutions 19.6 Management & Directors 16.4 Analyst Coverage BMO Capital Markets Canaccord Genu
Slide 17: Near-Term, De-Risked Development of High Quality Potash
Near-Term, De-Risked Development of High g Qualityy Potash • Highest grade agriculture product • Mi i l environmental Minimal i t l iimpactt • De-risked project • Experienced management team and board: industry-specific expertise • Production expected in 2 years • After-tax Net Present Value (NPV) o
Slide 18: Appendix
=Karnalyte RESOURCES \ (h ee mM. a ( i <rrn—A=E “4 ~via aa Keaumeser s = RRO NE el ~sneneee™ =N
Slide 19: Solution Mining Overview
Solution Mining Overview Surface Facility Brinefield Brine Processing Ground Surface Cavern Patience i Lake k Member b ( (Predominantly d i l Carnallitite) C lli i ) Cavern Belle Plaine Member (Predominantly Carnallitite) Esterhazy Member (Sylvinite) Cavern Source: Bankable Feasibility Study 18
Slide 20: Brine Processing Overview
Brine Processing Overview Brine Processing Overview Simplified Flow Diagram Brine processing removes impurities from Cooling Proces Heat Brinefield th extracted the t t d mineral i l iin order d tto obtain bt i Water s Water Source saleable potassium chloride (KCl) • Evaporators remove water from pr
Slide 21: BFS Capital Cost Specifics
BFS Capital Cost Specifics 625Ktpa Operation (Phase I) C$626mm (C$1,002/tonne) US$mm US$ per tonne % of Total 5% Process Equipment and Facility $234 $374 36% 9% Process Equipment and Facility Solution Mining Facilities $118 $189 18% Solution Mining Facilities Other Direct Costs $94 $150 14% 36% Indi
Slide 22: BFS Operating Cost Specifics
BFS Operating Cost Specifics 625Ktpa Operation (Phase I) C$81mm (C$129/tonne) C$mm C$ per tonne % of Total 6% 8% Personnel $7 $11 8% 5% Personnel Natural Gas $27 $43 34% 10% Natural Gas Electricity $10 $16 12% Electricity Brine Field Expansion $21 $33 26% Maintenance & Spare Parts $8 $13 10% 34% Bri
Slide 23: Bankable Feasibility Study Economics
Bankable Feasibility Study Economics Economic Model Assumptions BFS Reserves & Resources BFS Assumptions Mineralized Average KCl Net KCl Reserves & Resources 2.125Mtpa Operation Tonnage (Mt) Grade (%) Tonnage (Mt) Production Start Up (year) 2015 Total Average Carnallitite 677.6 18.6% 126.0 Mine Prod
Slide 24: Magnesium Upside Potential
Magnesium Upside Potential • Positive Pre-Feasibility Study completed for Magnesium Pre-Feasibility Study Assumptions Production Facility in 2012 Magnesium PFS 191Ktpa Operation • 147Mt of probable MgCl2 reserves with a mine life 70 years Production Start Up (year) na Reserve can increase when add