Slide 1: Q2 2021 Update
Q2 2021 Update “VERDE
Slide 2: Disclaimer
DISCLAIMER If you are risk averse don’t buy our stock. Don’t rely on anything on this presentation. We are not good enough for you to invest if you: This presentation contains certain forward-looking information, which includes but is not limited to, statements with Are risk averse. respect to Verde
Slide 3: Highlights
Highlights 04 Q2 2021 Financial Statements 05 Operational Summary 06 Key Metrics 07 SG&A Expenses 08 Other Highlights 09 Financial Summary 10 Brazilian Economic Scenario 12 Sales Growth and Guidance 14 Appendix 16
Slide 4: Highlights Summary
HIGHLIGHTS SUMMAR Y Verde had another strong second quarter, with a triple-digit C a sh Ability to generate significant free cash flow in the long term. revenue growth in local currency. Credit facilities totaling R$ 22M approved by financial institutions in Brazil, to be used if needed. Average int
Slide 5: Q2 2021 Financial Statements
Q2 2021 FINANCIAL STATEMENTS All amounts in CAD $’000, except percentages Q2 2021 Q2 2020 YoY 2021 YTD 2020 YTD YoY Revenue 5.376 2.492 116% 6.207 3.001 107% Production costs (1.498) (955) 57% (1.988) (1.286) 55% Gross Profit 3.878 1.537 152% 4.219 1.715 146% Gross Margin 72% 62% N/A 68% 57% N/A Sal
Slide 6: Operational Summary
OPERATIONAL SUMMARY All amounts in CAD $’000, except percentages Q2 2021 Q2 2020 YoY 2021 YTD 2020 YTD YoY Tonnes sold ‘000 96 71 35% 113 81 39% Revenue per tonne sold $ 56 35 60% 55 37 49% Production cost per tonne sold $ (16) (13) 16% (18) (16) 11% Gross Profit per tonne sold $ 40 22 87% 37 21 77%
Slide 7: Key Metrics Quarterly
KEY METRICS QUARTERLY S a l e s ( To n n e s ) Reve nue ( ‘ 000 CAD) 350.000 350000 14.005 14000 300000 12000 250000 243.707 10000 9.167 200000 8000 150000 6.029 6000 5.376 119.809 105.769 96.233 3.956 100000 4000 71.183 3.055 62.895 2.492 56.585 2.209 50000 2000 1.491 32.221 1.329 1.358 23.600 20.6
Slide 8: Sales, General and Administrative Expenses
SALES, GENERAL AND ADMINISTRATIVE EXPENSES All amounts in CAD $’000, except percentages Q2 2021 Q2 2020 YoY 2021 YTD 2020 YTD YoY Sales Expenses Sales and marketing expenses (410) (369) 11% (712) (635) 12% Product delivery freight expenses (1,826) (235) 678% (2.055) (392) 425% Total Sales expenses (
Slide 9: Other Highlights
OTHER HIGHLIGHTS FOB vs CIF (tonnes) General Expenses (C$’000) 120.000 0 -27 -50 100.000 -70 -100 80.000 -150 -200 -197 60.000 -250 -240 40.000 -300 -350 -349 20.000 -400 -422 0 -450 Q2 2020 Q2 2021 Q2 2020 Q2 2021 FOB CIF Total General administrative expenses IT/Software expenses Total General expe
Slide 10: Financial Summary
FINANCIAL SUMMARY Rev e n u e Revenue from sales for Q2 2021 was $5.37M from the sale of 96.2K tonnes of the Product, at $56 per tonne sold. Despite the 20% Brazilian Real devaluation against the Canadian Dollar, revenue per tonne was higher than Q2 2020 ($35 per tonne sold) mainly due to three fact
Slide 11: Summary of Interest-Bearing Loans and Borrowings
SUMMARY OF INTEREST-BEARING LOANS AND BORROWINGS Grace period Total interest Lender Loan start date Purpose Term (months) Value (R$’000) Repayable by (months) payable Bradesco Mar, 2021 Vehicle 01 36 168 Feb, 2024 10.46% Santander Oct, 2020 Equipment and working capital 01 36 2,000 Oct, 2023 10.95%
Slide 12: Brazilian Economic Scenario
USD/BRL Exchange Rate BRAZILIAN ECONOMIC SCENARIO 6,00 5,64 5,56 5,50 5,32 5,20 5,29 5,03 Brazilian Real versus US Dollar 5,00 4,50 From April to June 2021, the Brazilian Real revalued by 4,00 2% in relation to US Dollar compared to the same period 3,50 3,00 of 2020. 2,50 2,00 As of August 23, 2021,
Slide 13: Potassium Chloride Price
CIF MG (USD) 1 POTASSIUM CHLORIDE PRICE 800 700 600 Q2 2020 vs Q2 2021 500 400 Potassium Chloride CIF (Minas Gerais) price increased from US$287-US$303 per tonne in Q2 2020 to US$395- 300 535 per tonne in Q2 2021. 200 100 0 Apr/20 May/20 Jun/20 Jul/20 Ago/20 Set/20 Out/20 Nov/20 Dez/20 Jan/21 Fev/21
Slide 14: Year-on-Year Sales Growth
YEAR–ON-YEAR SALES GROWTH (TONNES) Quarter 2018 2019 YoY Growth 2020 YoY Growth 2021 YoY Growth Q1 N/A 1,093 N/A 10,170 830% 16,558 63% Q2 N/A 23,600 N/A 71,183 202% 96,233 35% Q3 9,007 62,895 598% 105,769 68% To be announced - Q4 20,641 32,221 56% 56,585 76% To be announced - Total 29,648 119,809 3
Slide 15: Revenue (R$ '000)
Phase 3 Target: Revenue (R$ ’000) R$2,058,200 3, 4 Phase 2 Target: 65.000 R$580,560 3, 4 2 60.500 2021 Revised 55.000 Target: R$55,000 2021 Initial Target: R$50,000 45.000 35.232 35.000 Q4 26,813 up to Q2 2021 25.000 Q3 17.906 Q4 15.000 Q3 Q2 5.000 3.816 Q2 Q1 790 Q1 Q1 2017 2018 2019 2020 2021 202?
Slide 16: Appendix
APPENDIX “VERDE
Slide 17: Potassium Chloride Replacement
PATASSIUM CHLORIDE REPLACEMENT Potassium salt fertilizers are soil biodiversity’s number 1 enemy. The average farmer applies 200 kg of potassium chloride to the soil per hectare per year. This is equivalent to the applicati on of 1,600 litres of bleach as far as killing soil biodiversity.¹ The world
Slide 18: Permit Status – Last 12 Months
PERMIT STATUS – LAST 12 MONTHS Mine Pit Date Category Status Event 2 December 23, 2020 Environment Granted 2,500,000 tpy Preliminary, Installation and Operation License 2 November 03, 2020 Mining Granted 50,000 tpy Mining Permit 3 August 24, 2020 Environment Applied 2,500,000 tpy Preliminary, Instal
Slide 19: Permit Summary
PERMIT SUMMARY Verde currently has full rights to mine 482,800 tpy (since it holds mining Concessions/Permits and Environmental Licenses) and has submitted joint mining and environmental applications for an additional 2,500,000 tpy. Mining (tpy) Environmental (tpy) Mine Pit Fully Permitted to Produc
Slide 20: Q&A Questions
Q&A QUESTIONS Concerning the lithium content in the material you mine, I understand that it may be a too big investment for the company to better understand the recovery possibilities of lithium. Could it be an opportunity to bring in an external partner, to pay for the exploration, studies and extr
Slide 21: Q&A Questions
Q&A QUESTIONS Do you have a December 31, 2021 projection for what the Company believes the December 31, 2021 Canadian dollar Brazil Rias exchange rate will be? At year end last year it was $0.245, with today reporting $0.24. If not a spot price, do you have a range estimate, or even a directional es
Slide 22: Q&A Questions
Q&A QUESTIONS You once mentioned that K-Forte is not as popular with farmers of short-season crops. Has that changed at all, and does the company have a strategy to increase demand for its products from these industries? Can you confirm you will not sacrifice future prospects of the company in the f
Slide 23: Q&A Questions
Q&A QUESTIONS I'm a new private investor in Verde. I'm still doing research/DD. Who should I contact with many general questions about the basics of the industry and specifics on Verde? How many individual non-insider employees were included in the grant of 96,217 options in Q2? While Verde gains mo
Slide 24: Q&A Questions
Q&A QUESTIONS Can you explain what caused the forfeiture of 144,496 of the 185,780 $0.40 stock options issued on February 21, 2020 (140,827 forfeited in Q1 and 3,669 in Q2? In the presentation it was mentioned that some of the cost increase was partially due to increasing the hiring & technologica l
Slide 25: Q&A Questions
Q&A QUESTIONS How do you see competition from other brazilian companies selling other chloride free potassium fertilizers? Although the 750,000 $1.22 stock options issued on March 5 2021 formally vest on July 1, 2021, the Board negotiated with the recipient of this option an over-riding contingent c
Slide 26: Q&A Questions
Q&A QUESTIONS Inventory levels at the end of June 30, 2021 were reported at $727,000 versus $567,000 in 2020. How much of this represented finished product ready to be sold (at approximately $15.57 per tonne), versus raw material awaiting processing (at approximately $0.24 per tonne)? Sulphur addito
Slide 27: Q&A Questions
Q&A QUESTIONS Can we get an update on when to expect the revised preliminary feasibility study? BHP is proceeding with the Jansen Sask project. Of course many years will pass before this potash will hit in the market. Will increased global output be an impact to Verde? Does the company considers acq
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