Slide 1: Corporate Presentation: Pure-Play Phosphate Fertilizer Company
Corporate Presentation “Pure-Play” Phosphate Fertilizer Company June 2018
Slide 2: Cautionary statements and forward-looking information
Cautionary statements and forward-looking information FORWARD-LOOKING INFORMATION This presentation contains forward-looking information (“FLI”) regarding future events or the future performance of the company (“Itafos”). Generally, FLI can be identified by expressions of belief, expectation or inte
Slide 3: Table of contents
Table of contents 1 Executive summary 2 Investment highlights A Appendix A: Phosphate highlights B Appendix B: Portfolio highlights C Appendix C: Financial highlights 3
Slide 4: Executive summary
Executive summary ITAF@S
Slide 5: Company overview
Company overview Key highlights ▪ Itafos is a publicly traded (TSX-V: IFOS) vertically integrated phosphate fertilizers and specialty products company with an attractive portfolio of long-term strategic businesses located in key fertilizer markets worldwide ✓ The Itafos Conda phosphate operations, a
Slide 6: Strategy overview
Strategy overview Itafos’ mission is to be a leading pure-play, geographically diverse, and vertically integrated Mission phosphate fertilizer and specialty products company, creating value for all its stakeholders in a responsible and economically sustainable manner Itafos will achieve its mission
Slide 7: Investment highlights overview
Investment highlights overview Industry leading board of directors and experienced management team ▪ Industry leading board of directors with balanced mix of executive and board of directors level 1. Outstanding skillsets leadership ▪ Experienced management team with extensive operations and commerc
Slide 8: Investment highlights overview (cont'd)
Investment highlights overview (cont’d) Brazilian vertically integrated phosphate fertilizer business with 500kt per year of fertilizer production and sales capacity ▪ Vertically integrated producing asset base benefiting from consolidated operations and infrastructure and security of key raw materi
Slide 9: Investment highlights
[2] Investment highlights ITAF@S
Slide 10: Industry leading board of directors
1 Industry leading board of directors Key highlights Name Role Experience Partner at Castlelake, responsible for the firm’s investments in emerging markets; Over 20 years of Brent de Jong Director and Chairman investment and asset management experience; Previous experience includes CEO of Zaff Capit
Slide 11: Experienced management team
1 Experienced management team Key highlights Name Role Experience Senior executive with over 20 years of hands-on and diverse corporate and business development, mergers and acquisitions, capital raising and investment management experience; Previous Brian Zatarain CEO experience includes senior rol
Slide 12: Owner and operator of attractive long-term and strategic phosphate businesses
2 Owner and operator of attractive long-term and strategic phosphate businesses located in key fertilizer markets worldwide Key highlights ▪ Current fertilizer production capacity of approx. 1.1Mt per year and total phosphate rock resources of 870.1Mt with contained P2O5 resources of 119.7Mt (note:
Slide 13: Itafos Conda: A North American vertically integrated phosphate fertilizer business
3 Itafos Conda … A North American vertically integrated phosphate fertilizer business Key highlights ▪ Located in Conda, Idaho, near Soda Springs, Idaho, approx. 50 miles southeast of Pocatello, Idaho ▪ Production and sales capacity of approx. 550kt per year of MAP, SPA, MGA and APP serving the Nort
Slide 14: Strategic position in attractive North American fertilizer markets
3 Strategic position in attractive North American fertilizer markets Key highlights <500kt JR Simplot Itafos Pocatello Conda 500-1,000kt JR Simplot Rock Springs 1,000-1,500kt >1,500kt Nutrien Aurora Nutrien White Springs Mosaic Itafos Conda Bartow JR Simplot Nutrien Geismar Mosaic Uncle Sam Mosaic M
Slide 15: Operational flexibility offers multiple options to deliver P2O5 value to market
3 Operational flexibility offers multiple options to deliver P2O5 value to market Key highlights Sales by customer size (US$mm)1 ▪ Itafos Conda’s products sold into the North American fertilizer markets US$26 ▪ Itafos Conda partners with leading crop services companies that have the trust of the gro
Slide 16: Itafos Arraias: A Brazilian vertically integrated phosphate fertilizer business
4 Itafos Arraias … A Brazilian vertically integrated phosphate fertilizer business Key highlights ▪ Located in Arraias, Brazil, in close proximity to the border of Goias and Tocantins states ▪ Production and sales capacity of approx. 500kt per year of SSP serving the Brazilian fertilizer markets ▪ R
Slide 17: Strategic position in one of the fastest growing fertilizer markets in the world
4 Strategic position in one of the fastest growing fertilizer markets in the world SSP SSP domestic target region capacity andisdomestic in coastalcapacity /southern Phosphate fertilizer imports have less impact on SSP LEGEND Itafos Arraias 34% Yara 50% Timac Cibrafertill 89% 100% PA MA Galvani / Ya
Slide 18: Adds competitive domestic supply to SSP market with disciplined sales and marketing strategy
4 Adds competitive domestic supply to SSP market with disciplined sales and marketing strategy Target region Key highlights Upstream sales strategy LEGEND Itafos Arraias ▪ Strong relationship with main distributors ensures Blenders minimization of “seasonality” impact FOB Arraias 1 Low risks of cred
Slide 19: Itafos Farim: West African construction ready high-grade phosphate rock mining project
5 Itafos Farim … A West African construction ready high-grade and low cost phosphate rock mining project Key highlights Reserve and resources highlights1 ▪ Located near Farim, 120km northeast of Bissau Item Tons (Mt) Grade (%) P2O5 (Mt) ▪ Extensive geological deposit with potential to increase Reser
Slide 20: High quality phosphate rock is becoming more attractive
5 High quality phosphate rock is becoming more attractive Itafos Farim specification sheet Proposed changes to EU regulation on fertilizers Element Typical Range Maximum ▪ EU Parliament voted to reduce allowable Cadmium P2O5 34.0% +/- 0.5% - levels in fertilizers sold across the EU - Current level o
Slide 21: Compelling economic profile anchored by operating businesses and development pipeline
6 Compelling economic profile anchored by operating businesses and development pipeline Item 2018 2019 2020 Notes EBITDA Itafos Conda US$35-45mm US$20-30mm US$40-50mm Drop in 2019 due to sulfuric acid contract re-pricing Itafos Arraias US$5-10mm US$15-25mm US$20-30mm 2018 reflects ramp-up period Ita
Slide 22: Appendix A: Phosphate highlights
A Appendix A: Phosphate highlights
Slide 23: Phosphate is a critical nutrient
Phosphate is a critical nutrient Why phosphorus? Effect of phosphorus on plant and crop growth ▪ All life forms need the element Phosphorus (P), which is involved in photosynthesis, energy transfer, cell division and enlargement ▪ Important in root formation and growth that improves the quality of f
Slide 24: Phosphate supply/demand expected to stabilize in mid-term
Phosphate supply/demand expected to stabilize in mid-term Projected 5-year phosphate demand Global supply to be outpaced by demand growth Global Phosphate Capacity Additions and Demand India 2,000 Growth China (Mt P2O5) Europe & FSU 1,500 8% Saudi Arabia 0% Saudi Arabia 2% 1,000 North America 20% Mo
Slide 25: Traded phosphate rock market volumes have not grown significantly over last 20 years
“Traded” phosphate rock market volumes have not grown significantly over last 20 years Production per year Phosphate rock trade 1990 – 2019E 35 30 Other 25 52.9Mt 20Mt 20 traded in China the spot Russia 100Mt 15 market 10Mt 10 10Mt U.S. locked in Morocco 5 supply 27.1Mt 30Mt agreements 0 Increased s
Slide 26: Appendix B: Portfolio highlights
B Appendix B: Portfolio highlights
Slide 27: Portfolio highlights
Portfolio highlights Itafos Item Itafos Conda Itafos Arraias Itafos Farim Itafos Santana Itafos Araxá Itafos Mantaro Paris Hills Ownership ▪ 100% Itafos ▪ 96.8%(*) Itafos ▪ 100% Itafos ▪ 100% Itafos ▪ 99.4%(*) Itafos ▪ 100% Itafos ▪ 100% Itafos ▪ Tocantins, ▪ Farim, Guinea ▪ Minas Gerais, Location ▪
Slide 28: Itafos Conda
Itafos Conda Operations Key highlights Location highlights ▪ Itafos Conda is a vertically integrated phosphate fertilizer (MAP, SPA, MGA, APP) operating business owned 100% by Itafos - Produces MAP, SPA, MGA and APP to be sold to Conda, ID wholesale and retail customers - Located in Conda, Idaho, U.
Slide 29: Itafos Conda process overview
Itafos Conda process overview Operations M B Phosphate Rock Grade: Ore Rock Ammonia 29.5% Volume: 1,300kt G C ▪ Mined Volume: ▪ Volume: 47kt MAP ▪ Volume: 335kt 2,000kt 3.75 t/t ▪ Sourced from Nutrien Volume: 335kt ▪ Sell to Nutrien ▪ Purchased Volume: 1.00 t/t 0.533 200-300kt P P t/t FPA DPA P2O5 G
Slide 30: Itafos Arraias
Itafos Arraias Operations Key highlights Location highlights ▪ Itafos Arraias is a vertically integrated phosphate fertilizer (SSP) operating business owned 96.8% by Itafos - Produces SSP to be sold to blenders and farmers PA MA and excess sulfuric acid TO PI - Located in Tocantins, Brazil on a prop
Slide 31: Itafos Arraias process overview
Itafos Arraias process overview Operations M B Phosphate ▪ Volume: 6kt Rock Grade: Ore Rock Ammonia ▪ Sourced from 28% Volume: 320kt Petrobras, others ▪ Mined Volume: 3,100kt 1.7 t/t P2O5 Grade: 5.1% A 0.94 t/t G G C Strip Ratio: 2.5x Acidulation Granulation GSSP ▪ Volume: 500kt Volume: 540kt Volume
Slide 32: Itafos Paris Hills
Itafos Paris Hills Near-term pipeline Key highlights Location highlights ▪ Itafos Paris Hills is a phosphate rock mine development project owned 100% owned by Itafos - Produces phosphate rock to be integrated with Conda Itafos Conda - Located in Idaho, U.S. on a property consisting of approx. 1,010
Slide 33: Itafos Paris Hills process overview
Itafos Paris Hills process overview Near-term pipeline M C Phosphate Rock Grade: Ore Rock 29.5% Volume: 0.95kt ▪ Mined Volume: 0.95kt P2O5 Grade: 29.5% C Phosphate Rock ▪ Volume: 0.95kt Volume: 0.95kt ▪ Transport the phosphate rock to Itafos Conda (approx. 35 miles) Area Description M Mine ▪ Ore wil
Slide 34: Itafos Farim
Itafos Farim Near-term pipeline Key highlights Location highlights ▪ Itafos Farim is a phosphate rock mine development project owned 100% by Itafos - Produces phosphate rock to be sold to producers of phosphate based fertilizers - Located in Farim, Guinea Bissau on a property consisting of approx. 3
Slide 35: Itafos Farim process overview
Itafos Farim process overview Near-term pipeline M B Phosphate Rock Grade: Ore Rock 34% Volume: 1,348kt ▪ Mined Volume: 1,750kt P2O5 Grade: 30% T Strip Ratio: 9.6x Trucking Volume: 1,348kt D D C Diesel Drying Phosphate Rock ▪ Volume: 1,348kt Volume: 1,348kt Volume: 1,348t ▪ Sell to international pro
Slide 36: Itafos Santana
Itafos Santana Mid-term pipeline Key highlights Location highlights ▪ Itafos Santana is a integrated phosphate rock mine and SSP production facility development project owned 99.4% owned by Itafos - Produces SSP to be sold to blenders and farmers MA - Located in Pará, Brazil on a property consisting
Slide 37: Itafos Santana process overview
Itafos Santana process overview Mid-term pipeline M B Phosphate ▪ Volume: 6kt Rock Grade: Ore Rock Ammonia 34% Volume: 300kt ▪ Mined Volume: 1,500kt 1.7 t/t P2O5 Grade: 12.5% A 1.00 t/t G G C Strip Ratio: 2.8x Acidulation Granulation GSSP ▪ Volume: 500kt Volume: 500kt Volume: 500kt Volume: 500kt ▪ S
Slide 38: Itafos Araxá
Itafos Araxá Mid-term pipeline Key highlights Location highlights ▪ Itafos Araxá is a phosphate rock and rare earth oxide mine development project owned 100% owned by Itafos - Produces phosphate rock and rare earth oxides to PA MA be sold to producers of phosphate based fertilizers PI and rare earth
Slide 39: Itafos Araxá process overview
Itafos Araxá process overview Mid-term pipeline M Ore ▪ Mined Volume: 1,500kt P2O5 Grade: 12.5% O N C Strip Ratio: 2.8x Niobium Plant ▪ Volume: 0.7kt Volume: 0.7kt ▪ International markets 0.92 t/t Sulfuric Acid ROM ▪ Volume: TBD 0.22 t/t R C REE Solvent NaOH (25%) ROM Ore Cracking Plant ▪ Volume: 8.
Slide 40: Itafos Mantaro
Itafos Mantaro Mid-term pipeline Key highlights Location highlights ▪ Itafos Mantaro is a phosphate rock mine development project owned 100% owned by Itafos - Produces phosphate rock to be sold to producers of phosphate based fertilizers - Located in Junin, Peru on a property consisting of approx. 1
Slide 41: Itafos Mantaro process overview
Itafos Mantaro process overview Mid-term pipeline M B Phosphate Rock Grade: Ore Rock 28.8-32.5% Volume: TBD ▪ Mined Volume: TBD P2O5 Grade: 10.0% D D C Strip Ratio: TBD Drying Phosphate Rock ▪ Volume: TBD Volume: TBD Volume: TBD ▪ Sell to national and international producers and distributors of phos
Slide 42: Appendix C: Financial highlights
C Appendix C: Financial highlights
Slide 43: Income statement
Income statement Income Statement 1Q18 1Q17 ∆ US$ ∆% Income Statement (US$ 000’s) Revenues, Net 58,116 - - - Cost of Goods Sold 43,643 - - - Expenses Selling, General and Administrative Expenses 5,222 3,469 1,753 51% Operating Income (Loss) 9,251 (3,469) 12,720 -367% Unrealized Foreign Exchange Gain
Slide 44: Balance sheet
Balance sheet Balance Sheet 1Q18 4Q17 ∆ US$ ∆% Assets (US$ 000’s) Cash 10,795 63,677 (52,882) (83%) Accounts Receivable 28,815 116 28,699 24,741% Inventories 114,185 8,277 105,908 1,280% Other Current Assets 20,585 9,005 11,580 129% Total Current Assets 174,380 81,075 93,305 115% Property, Plant and
Slide 45: Cash flow statement
Cash flow statement Cash Flow Statement 1Q18 1Q17 ∆ US$ ∆% Operating Activities (US$ 000’s) Net Income (Loss) 10,843 (6,569) 17,412 (265%) Adj. for the Following Items: Depreciation and Depletion 39 - - - Share-Based Payment Expense 616 196 420 214% Current and Deferred Income Tax Expense 4,112 309