Investor Presentation FEBRUARY 2017
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 Potash Ridge Corporation (the "Corporation"), or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this presentation, such statements use such words as "may", "would", "could", "will", "intend", "expect", "believe", "plan", "anticipate", "estimate" and other similar terminology. These statements reflect the Corporation's current expectations regarding future events and operating performance and speak only as of the date of this presentation. Forward-looking statements involve significant risks and uncertainties, which include, but are not limited to the factors discussed under “A Cautionary Note Regarding Forward Looking Statements” and "Risk Factors" in the Corporation’s Annual Information Form dated March 28, 2016, and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. Although the forward-looking statements contained in this presentation are based upon what management of the Corporation believes are reasonable assumptions, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. These forward- looking statements are made as of the date of this presentation and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the Corporation assumes no obligation to update or revise them to reflect new events or circumstances. 2
ABOUT US Potash Ridge is a near term producer of potassium sulphate (SOP) fertilizer using two different processes; one in Utah and one in Quebec. TSX:PRK 3
OUR VISION IS TO BECOME THE SOP MARKET LEADER IN NORTH AMERICA Potassium Blawn Valleyfield Sulphate Strategy Mountain (Quebec) (SOP) (Utah) • Low-chloride fertilizer required for • • • Become lowest cost Acquired in 2015 Original SOP project fruits, vegetables, nuts North American SOP • • 40,000 tpy of SOP 230,000 tpy of SOP • Domestic selling price 3x potash producer (“MOP”) • • CDN$50 million capex US $458 million capex • • Global consumption ~7 million Become first producer tonnes per year (“ tpy ”) • • 30% after tax IRR 20.1% after tax IRR using Mannheim • Demand potential is 10 million tpy process in North • • Proven process Lowest cost producer in North • 400k t current production in North America America (US$ 172/ton) • America versus projected demand Production targeted in H1 2018 of 1M t demand • Major permits and water rights • Scalable • One other North American secured; infrastructure nearby producer • Potential for $14m in average • • Qualifies as “organic” Potential for US$100M in annual cash flows average annual cash flow • NPV (after tax 10%) $82 million • NPV (after tax 10%) $482 million TSX:PRK 4
POTASSIUM SULPHATE: Two Macronutrients in One In fertilizers, there are 6 macro nutrients required for a plant’s life cycle. No substitutes Nitrogen Sulphur ALUNITE Phosphate Calcium CRUSHING & GRINDING Potassium Magnesium CALCINATION SO2 ACID PLANT SUPHURIC ACID Potassium Chloride (MOP) Potassium Sulphate (SOP) Low chloride, high sulphur – providing benefits to crops not available Contains chloride – detrimental to plants and soil with MOP WATER LEACH Global market 55 million tpy Global potential market demand of 10 million tpy Market is in over supply, with idle capacity and multiple projects in pipeline Capacity growth limited in current North American process US$150/tonne in North America US$630/tonne in North America Chloride can leach into groundwater or build-up in arid soil conditions, Improves yield, taste, appearance and shelf life impacting yields and crop quality Significant benefits for fruits, vegetables, nuts, tobacco TSX:PRK Primarily for corn and grain crops that can withstand chloride 5
POTASSIUM APPLICATION IMPROVES YIELD AND QUALITY – IMPACT ON TOMATOES 300lb/acre 100lb/acre 200lb/acre 6 Uni Univer ersit ity of of Florida: Com omparison on of of Pot Potassiu ium Sou ources es and Rates es For or Tom omato Pr Prod oductio ion in Florid ida
POTASSIUM SULPHATE ELIMINATES CHLORIDE DAMAGE Peach and grape leaves suffering salt (chloride) damage Clem emson Uni Univer ersity, The e Australia ian and New Zealand Fie ield ld Guid ide e to o Diseases es, Pe Pests and Disorders of of Grapes es 7
SOP: SUPERIOR PRODUCT WITH ATTRACTIVE MARKET DYNAMICS SOP: A top performing commodity in last 5 years $US/ton 1,200.0 SOP 1 MOP 2 1,000.0 800.0 SOP price influenced by high-value 600.0 crop economics not MOP price 400.0 200.0 - SERVING AN UNDERSERVED MARKET 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1 Compass Minerals Q3 2016 Report, 2 Potash Corp Q3 2016 Report 8
SOURCES OF POTASSIUM SULPHATE POTASH RIDGE’S TWO SOP PROJECTS CHEMICAL REACTION: Mannheim Process SOP 50% of all SOP produced uses Mannheim Process VALLEYFIELD FERTILIZER CORP. (Quebec) Used in Asia, Middle East and Europe Soluble and granular form MINERAL PROCESSING: Alunite SOP Proven process BLAWN MOUNTAIN (Utah) Soluble and granular form EVAPORATION: Salt Lake SOP Finite resource Found in USA, Chile, China, Europe Granular form TSX:PRK 9
SOP CONSUMPTION MATCHES LOCAL AVAILABLE PRODUCTION North America is Underserved 000’s tonnes 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 North A. South A. Europe Asia Middle East Current Production Existing Consumption Estimated Demand Green Markets, Northern Shoreline, company reports 10
TWO PROJECTS STRATEGICALLY LOCATED TO SERVE SOP-DEMANDING CROPS Valleyfield Almonds Citrus Grapes Vegetables Apples Potatoes Lettuce Blawn Mountain Tobacco 11
Quebec Qu Valleyfield Project TSX:PRK
VALLEYFIELD PROJECT (QUEBEC) Phase 1 - Economic Summary (CDN$) Low capex with fixed price contract (CAD$50 million) Initial capital cost $50.0 million Short build time: 9-12 months 40,000 tpy of SOP (scalable) IRR (unlevered after tax) 30% Other locations in North America being for expansion opportunities NPV (after tax at 10%) $82.0 million Utilities and logistics infrastructure well-established Technology and commercial relationships create barrier to entry SOP price/tonne $820 Land use approved by local city council – enthusiastic government support 370 1 Opex/tonne Long term offtake for hydrochloric acid by product secured Long term supply of sulphuric acid secured Margin/tonne $450 (1) Net of acid credit. 13 TSX:PRK
VALLEYFIELD: STRATEGICALLY LOCATED Located in industrial area near Montreal, Quebec Property secured in industrial zone Strong local support Rail access at site Port within 2 km, allowing access into key U.S. markets Within 5 km of sulphuric acid supplier Located near hydrochloric acid customers Quebec Government highly supportive of new investments that create employment (including providing financial support) TSX:PRK 14
PROVEN MANNHEIM PROCESS Raw Material 2-Stage Process Finished Products Converts MOP to SOP Proven production process (150 year history) , POTASSIUM .84t with numerous operating CHLORIDE facilities in Europe and China (50% of current SOP 1.0t POTASSIUM production is from Mannheim) SULPHATE (SOP) High quality, consistent MANNHEIM production process .56t SULPHURIC ACID FURNACE Scale allows for construction HYDRO- time of 12-months 1.2t CHLORIC ACID (HCl) Migao Corp. (long-term SOP producer) engaged to provide 550 o C HEAT procurement and technical services TSX:PRK 15
VALLEYFIELD MILESTONES 1 2 3 4 5 6 Engineering Permitting Commercial SOP Offtake Financing Construction Arrangements Milestones Preliminary engineering Applications being Negotiating long term Debt and Equity completed Q1 2017 submitted Q1 2017 offtake agreements negotiations ongoing Negotiating long Break ground Q2 2017 at Valleyfield level term supply of MOP City has passed Phase I near completion Direct sales to local Complete construction resolution for use Long term supply growers Quebec & Federal Q1 2018 Partnered with Migao of land government financial of sulphuric acid Corp. to leverage 20-year programs available Ramp up to full secured Mannheim experience production H1 2018 Lock in natural Expected to proceed with gas contract execution in Q1, 2017 HCl offtake with Jones Hamilton secured TSX:PRK 16
Utah Blawn Mountain Project TSX:PRK
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