IC Potash — Investor Presentation (March 2014)
32 slides from IC Potash's investor presentation, March 2014
Slide 1: The Ochoa Project
The Ochoa Project World’s Most Advanced Sulphate of Potash Project Investor Presentation March 2014
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: IC Potash Corp. (ICP-TSX)
IC Potash Corp · The Ochoa Project IC Potash Corp. (ICP-TSX) • ICP intends to become a primary producer of Sulphate of Potash (SOP) by mining its 100%-owned Ochoa property in southeast New Mexico, a polyhalite mineral deposit. • SOP is a non-chloride potash fertilizer that sells at a substantial pre
Slide 4: Milestones: Notable Accomplishments
Ochoa Project · Milestones Notable Accomplishments • Identified world-class potassium sulphate deposit • Released positive Feasibility Study on January 23, 2014 • Completed five stage Pilot Plant in Q4 2013 • Executed strategic marketing alliance with Yara International • On track to obtain environm
Slide 5: SOP (K2SO4) Potash Fertilizer
Potash Fertilizer · Sulphate of Potash SOP (K2SO4) • Premium quality potash • Global market 5.5 million tonnes per year • No chloride • Premium price: 30% - 60%+ over MOP • Ideal for fruits, vegetables, and nuts • Ideal for arid and sandy soils • Improves yield, taste, color, aroma, and shelf life 5
Slide 6: MOP (KCl) Potash Fertilizer
Potash Fertilizer · Muriate of Potash 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: Advantages
Ochoa Project · Advantages IC Potash is the only visible new source of SOP supply globally Significant economic advantages • Game-changing new process ̶ Pilot Plant tested • Bottom quartile SOP producer • 50+ year mine life in Feasibility Study ̶ 100+ years with all resources • High profit margins ̶
Slide 8: Price History: SOP & MOP
Price History · SOP & MOP 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 8 Sources: Green Markets, IFA, Corporate Reports, Analyst Reports
Slide 9: SOP Per Metric Tonne cost comparison
Ochoa Project · SOP Per Metric Tonne Primary Producers Secondary Producers The IC Potash Advantage: ICP expected to be world’s Brine Lakes MOP & Mannheim (Outside China) Kieserite Process lowest cost SOP producer $214 $350 $475 $550 % 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 ) 1
Slide 10: Location: Southeast New Mexico
Ochoa Project · Location 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 gas • Skille
Slide 11: Feasibility Study
Ochoa Project · Feasibility Study1 Full Equity Basis (i.e. No Debt) Before Tax After Tax Capital Cost $1,018 million $1,018 million Operating Cost Per Ton SOP $195 $195 Internal Rate of Return 17.8% 16.0% Net Present Value, 8% Discount Factor $1,502.3 $1018.9 Net Present Value, 10% Discount Factor $
Slide 12: NPV Sensitivity
Ochoa Project · NPV Sensitivity Input Variable to Base -20% -10% +10% +20% Financial Model Case Capital Cost 19.3% 17.5% 16.0% 14.7% 13.6% Revenue 11.3% 13.8% 16.0% 18.1% 20.1% Operating Cost 17.8% 16.8% 16.0% 15.1% 14.2% 12
Slide 13: Capital Cost
Ochoa Project · Capital Cost 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 13 Contingency
Slide 14: Operating Cost
Ochoa Project · Operating Cost 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 14
Slide 15: Operating Cost
Ochoa Project · Operating Cost Estimated Operating Cost Per Ton of SOP Steady State Production 714,400 Tons Per Year of SOP Mining Cost Per Ton $78 Processing Cost Per Ton $108 G&A Cost Per Ton $9 Total Operating Cost Per Ton $195 % of Operating Cost – Labor 24.8% % of Operating Cost – Electricity 2
Slide 16: Mineral Resources
Ochoa Project · 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 3.3
Slide 17: Mineral Reserves
Ochoa Project · 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 Pr
Slide 18: Permitting: Environmental Accomplishments
Ochoa Project · Permitting Environmental Accomplishments • Favorable Record of Decision on Environmental Impact Statement expected in early April 2014 • Air Quality Bureau deemed Project complies with air quality standards • No authorization required from U.S. Army Corps of Engineers for constructio
Slide 19: Mine Overview
Ochoa Project · Mine Mine Overview • 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 leases • 3.7 million sh
Slide 20: Mine Design
Ochoa Project · Mine Mine Design • EPC for slope and shaft • Utilize both slope and shaft to maximize benefits of both • “Super Section” operating philosophy ̶ Concept used in coal industry ̶ Reduces capital and labor costs • Hard rock continuous miners will effectively mine the ore • Staged ventila
Slide 21: Process Plant
Ochoa Project · Process Plant 21
Slide 22: Process Plant Design and Operation
Ochoa Project · Process Plant Design and Operation Stage Recovery Source Crushing/Washing 96.5% Crushing/Washing Tests Calcination 99.8% Test Work and Air Quality Limits Leaching 95.0% Pilot Plant Crystallization/Evaporation 90.8% Test Work Granulation 99.0% Vendors Overall Recovery 82.24% Pilot Pla
Slide 23: Pilot Plant
Ochoa Project · Pilot Plant 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 Leonite crystal
Slide 24: Markets
Ochoa Project · Markets EUROPE USA JAPAN NORTH AFRICA MEXICO CENTRAL AMERICA MALAYSIA SOUTH AMERICA SOUTH AFRICA 24
Slide 25: Technical Consultants
Ochoa Project · Technical Consultants 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
Slide 26: Management Team
Ochoa Project · Management Team Sidney Himmel President & CEO, Director Kevin Strong CFO Randy Foote COO, Director Deepak Malhotra Process Advisor Richard Beauchamp Chief Mine Engineer Patrick Okita, PhD Chief Exploration Officer Arthur Roth Director of Marketing Tommy Cope Executive Vice President
Slide 27: ICP Partner: Yara International
ICP Partner · Yara International Revenue US$14.0 billion EBITDA US$3.2 billion Market Cap US$11.6 billion Operations > 50 countries Sales Worldwide Owns 19.9% ICP stake Off-take 30% ICP production 27
Slide 28: Yara International: Financial and Strategic Advantages
ICP Partner · Yara International Financial Advantages • US$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 28
Slide 29: ICP Equity Snapshot
ICP Equity Snapshot · March 7, 2014 TSX: ICP (Canadian Dollars) Recent Share Price $0.33 Shares Issued & Outstanding (MM) 172.5 Market Capitalization (MM) $56.9 Options (MM) 13.1 Warrants (MM) 11.3 Cash Balance - September 30, 2013 (MM) $12.6 Transaction Volume 68,150 29
Slide 30: Board of Directors
ICP · Board of Directors George Poling Chairman Sidney Himmel Director Ernest Angelo, Jr Independent Director Randy Foote Director Anthony Grey Independent Director Knute Lee, Jr Independent Director Pierre Pettigrew Independent Director Jorgen Stenvold Director 30
Slide 31: Analyst Coverage
ICP · Analyst Coverage Alta Corp Capital Cormark Securities Industrial Alliance Securities Laurentian Bank Securities Macquarie Equities Research National Bank Financial Paradigm Capital Stonecap Securities 31
Slide 32: Contact Information
ICP · Contact Information Mr. Mehdi Azodi Investor Relations Director 416-779-3268 mazodi@icpotash.com www.icpotash.com 32