IC Potash — Investor Presentation (2015)
30 slides from IC Potash's investor presentation, 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 Q3 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: ICP will serve a worldwide market
ICP will serve a worldwide market 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 potassium fertilizer that is in high demand worldwi
Slide 4: ICP is on the forefront: The Ochoa Project
ICP is on the forefront The Ochoa Project • Located in southeast New Mexico, the commercial hub for U.S. potash production. • The only visible new source of SOP globally. 4
Slide 5: Sulfate of potash is a specialty fertilizer
Sulfate of potash is a specialty fertilizer 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 soil
Slide 6: Muriate of potash is a common fertilizer
Muriate of potash is a common fertilizer MOP (KCl) • Common potash • Global market 55 million tonnes per year • Contains chloride • Primarily for carbohydrate crops, robust enough to withstand chloride 6
Slide 7: SOP price is strong
SOP price is strong 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 7 Sources: Green Markets, IFA, Corporate Reports, Analyst Reports
Slide 8: SOP market is strong
SOP market is strong Current Market • SOP demand continues at all time high • SOP supply continues to be short • SOP price averages $650/MT worldwide • SOP premium in China is $200+/MT – all is consumed • Production problems at K+S, Tessenderlo, Compass • Mannheim supply restricted due to: – High ga
Slide 9: Ochoa to produce low cost SOP
Ochoa to produce low cost SOP Primary Producers Secondary Producers The Ochoa Project Advantage: ICP expected to be world’s Brine Lakes MOP & Mannheim (Outside China) Kieserite Process lowest cost SOP producer $214 $350 $500 $500 % O F C U R R E NT P R O D U C T I ON ( O U T S I D E C H I N A ) 10%
Slide 10: Ochoa located in the US potash hub
Ochoa located in the US potash hub 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 ga
Slide 11: Ochoa has the advantage
Ochoa has the advantage Significant economic advantages Low cost, low energy process • Pilot plant tested 50+ year mine life in Feasibility Study • 100+ years with all resources Bottom quartile SOP producer High profit margins – 65% 11
Slide 12: Ochoa has federal and state approval
Ochoa has federal and state approval Favorable Record of Decision from the U.S. BLM allows construction to commence as planned All potassium mining leases secured for the 50-year plan Full right to use non-potable water from the Capitan Reef aquifer; little-to-no impact on the area’s fresh wat
Slide 13: Ochoa resource grade is high
Ochoa resource grade is high 13
Slide 14: Ochoa mineral resources
Ochoa 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 3.30 8.61 Tot
Slide 15: Ochoa mineral reserves
Ochoa 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 Probable 5.9
Slide 16: Ochoa resource accessibility is good
Ochoa resource accessibility is good Mine Highlights • 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 lease
Slide 17: A 90-year old process, revitalized
A 90-year old process, revitalized … 17
Slide 18: ... and optimized: Pilot Plant Highlights
… and optimized 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 • Validated SOP and Leo
Slide 19: High recovery, low cost per ton
High recovery, low cost per ton 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 in
Slide 20: Feasibility study overview
Feasibility study overview 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 $612.0 MM
Slide 21: Capital cost overview
Capital cost overview 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 21 Contingency
Slide 22: Operating cost overview
Operating cost overview 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 22
Slide 23: ICP snapshot · July 14, 2015
ICP snapshot · July 14, 2015 TSX: ICP (Canadian Dollars) Recent Share Price $0.22 Shares Issued & Outstanding (MM) 172.8 Market Capitalization (MM) $38.0 Options (MM) 9.7 Warrants (MM) 10.0 Cash Balance – June 30, 2015 (MM) $4.9 90 Day Volume (average) 75,181 23
Slide 24: World-class partner: Yara International ASA
World-class partner Yara International ASA 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 24
Slide 25: World-class feasibility team
World-class feasibility team 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 Developme
Slide 26: World-class board of directors
World-class board of directors George Poling, PhD Chairman, Independent Director Ernest Angelo, Jr Independent Director João Paulo Simões Carrêlo Independent Director Leiv Mikael Erdal Independent Director Anthony Grey Independent Director Knute Lee, Jr Independent Director Pierre Pettigrew Independ
Slide 27: World-class development team
World-class development team Randy Foote President & CEO Ken Kramer Chief Financial Officer Kevin Burford Ochoa Project Manager, Finance Graham Wheelock Ochoa Project Manager, Operations Patrick Okita, PhD Ochoa Project Manager, Technology Tom Cope Executive Vice President 27
Slide 28: Development team bios
Development team bios Randy Foote President and CEO Mr. Foote was promoted in July 2015 to the position of President and Chief Executive Officer of IC Potash Corp., after serving as the Chief Operating Officer of Intercontinental Potash Corp. (USA) and a Director of the Board of IC Potash Corp. sinc
Slide 29: Development team bios
Development team bios Kevin Burford Ochoa Project Manager, Finance Mr. Burford is a Chartered Accountant with 28 years of experience in the mining industry. His leadership roles covered capital and debt markets, shareholder relations, finance, treasury, business strategy, risk management, governance
Slide 30: Seeking more information?
Seeking more information? Mr. Mehdi Azodi Director of Investor Relations 416-779-3268 mazodi@icpotash.com www.icpotash.com 30