Premium Potash Project Driven by a Proven Management Team TSX ¡: ¡PRK ¡ OTCQX ¡: ¡POTRF ¡ September ¡2014 ¡
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 27, 2013, 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
Focused on near term sulphate of potash (“SOP”) production at its Blawn Mountain property in Utah SOP 645,000 tons average per annum 40 year Project Life backed by reserves 3
EXPERIENCED AND PROVEN MANAGEMENT Ross Phillips Chief Operating Officer Guy Bentinck President & CEO 10 years experience in large resource and Chartered Accountant; energy sector projects 20 years mining/resource experience Sherritt, Capital Power ¡ Sherritt: CFO and SVP Capital Projects Paul Hampton VP, Project Jeff Hillis Chief Financial Officer Management Chartered Accountant; Geologist and Metallurgical Engineer; 10 years mining sector finance, including CFO of several public mining companies ~30 years experience in design, construction, start-up and management of mineral processing Iberian Minerals, Excellon, Falconbridge facilities ¡ SNC, Washington Group, Outotec OVER 80 YEARS COMBINED EXPERIENCE 4
COMPETITIVE ADVANTAGES Premium potash product with supply deficit that cannot be met by existing production processes; 180% premium over MOP Current SOP consumption is ~5 million tpa, demand potential is 10-12 million tpa Large surface mineral deposit - low cost and low risk mining, with easy access to ore for test work. Known process – existing production facility in Azerbaijan ¡ Reserves supporting 645,000 tons of SOP production per annum over 40 year mine life plus two additional areas of potential resources Established infrastructure nearby, designated development lands and efficient state permitting; no federal permits for plant site Water rights, large mine operations and groundwater discharge permits all secured. Only major permit remaining (air permit) will be completed in parallel with feasibility study. PFS completed November 2013: $1.0 billion NPV at 10%; 20.5% after tax IRR; excludes potential revenue from alumina rich material Mining friendly jurisdiction with strong state and municipal government support. MOUs under negotiation for $641m of support infrastructure, project financing expression of support received from Export Development Canada 5
POTASH OVERVIEW 6
POTASH: ESSENTIAL TO THE WORLD’S FOOD SUPPLY No known substitute Increasing world population Growing per capita income Decreasing arable land Increasing use of biofuels POTASH WORLD DEMAND +5% EXPECTED ANNUAL DEMAND TO 2016; SOP HIGHER GROWTH POTENTIAL 7
SOP: PREMIUM FERTILIZER Sulphate of Potash Muriate of Potash (SOP) (MOP) Consumption of SOP share of potash SOP restricted by market: 50% K 2 O Equivalent 60% K 2 O Equivalent limited production Current: 5 Mt capacity, with little Potential: 10-12 Mt* expansion potential 17% S 0% S <1.0% Cl 45% Cl Trend toward high Trend towards pricing of nutrient fertilizers SOP based on incremental revenue 4.8 million tonnes sold in 2013 1 50 million tonnes sold in 2013 1 through yield/quantity improvements vs. Improves yield, quality, taste Crop quality/yield diminish as premiums over MOP and enhances shelf life 1 chloride builds up 1 POTASSIUM AND SULPHUR ARE ESSENTIAL NUTRIENTS 8 1 CRU 2013 Chemical makeup assumes 92.5% K 2 SO 4 and 95% KCl product * Within target markets
SOP – A DISTINCT & VALUABLE POTASH PRODUCT Especially valued for chloride sensitive crops, SOP improves yields on high value crops such as: Fruits Tobacco Vegetables Tea Nuts Coffee Horticultural Plants Dry/Salty soil 9
SOP MARKET DYNAMICS Existing SOP Production by Process ¡ SOP Consumption by Region ¡ Africa 5% RoW Process ¡ World ¡ Avg ¡Cost ¡/ ¡ Future ¡ Region Process ¡Inputs Products Ton 1 9% Method Capacity Outlook Europe High ¡Cost/ China/ ¡ MOP SOP • • 24% 2.3Mt ¡ by-‑product ¡ Europe ¡ Mannheim Sulfuric ¡Acid Hydrochloric ¡Acid $453 ¡ • • 43% limits ¡ ¡ ¡ ¡ Energy • growth SOP • N. MOP No ¡ • MOP ¡and ¡ 1.2Mt ¡ Magnesium ¡ ¡ • America Europe Kieserite $440 ¡ addiQonal ¡ • Kieserite 22% Chloride 7% Energy deposits • ¡ ¡ China SOP No ¡ • 49% China/ ¡ Lake ¡Brines • C & S 1.9Mt ¡ Magnesium ¡ addiQonal ¡ • USA/ ¡ Salt ¡Lakes Energy $381 ¡ • America 35% Chloride suitable ¡ ¡ ¡ Chile 6% Sodium ¡Chloride lakes • New sources of SOP from these existing CRU predicts SOP consumption processes are unlikely due to lack of of 9,500,000 tonnes per annum primary sources and difficulties by 2019 – where will this surrounding secondary source production. ¡ production come from? ¡ 10 1 CRU 2013
SOP PREMIUM PRICE TRENDS ¡800.0 ¡ ¡ Recent quotes from blenders in Uberaba, Brazil $750/tonne ¡700.0 ¡ ¡ Compass Q2/14 realized price $738/tonne 1 ¡600.0 ¡ ¡ ¡500.0 ¡ ¡ ¡400.0 ¡ ¡ ¡300.0 ¡ ¡ ¡200.0 ¡ ¡ Potash Corp Q2/14 realized price $263/tonne 2 ¡100.0 ¡ ¡ POT ¡-‑ ¡North ¡America ¡(MOP) ¡ U.S. $/tonne CMP ¡-‑ ¡(SOP) ¡ ¡-‑ ¡ ¡ ¡ ¡ Q1 ¡ Q2 ¡ Q3 ¡ Q4 ¡ Q1 ¡ Q2 ¡ Q3 ¡ Q4 ¡ Q1 ¡ Q2 ¡ 2012 ¡ 2013 ¡ 2014 ¡ CURRENT PREMIUM 180% FOR SOP IN US 11 1 ¡Compass ¡Minerals ¡Q2 ¡2014 ¡Report, ¡ 2 ¡Potash ¡Corp ¡Q2 ¡2014 ¡Report ¡
SOP MARKET TARGETS SOP consumption: 385,000 tons 1 Potential consumption: 920,000 tons 2 Large scale production of chloride intolerant crops such as nuts in California United States and citrus fruits in Florida drive a large part of US SOP demand. Consumption of these crops continues – e.g. Almond crops have grown by 7% per year since the mid 1990s. SOP consumption: 42,000 tons per year 2 (0.4% of total potash consumption) Brazil Potential consumption: 2.1 million tons 2 Brazil is the world’s largest grower of coffee, soybeans and citrus fruits, all SOP crops. Low consumption is entirely due to lack of SOP availability. SOP consumption 2.5 million tons per year 1 Potential consumption: 5.5 million tons per year 2 China China produces close to half of the world’s fruits and vegetables, and nearly one-third of the world’s tobacco and tea. SOP consumption almost doubled between 2007 and 2012 1 , with large untapped growth potential. SIGNIFICANT GROWTH POTENTIAL EASY ACCESS TO LOCAL MARKETS 12 1 CRU 2013 2 From PRK Study August 2013, based on crops that are best suited for SOP
THE BLAWN MOUNTAIN PROJECT 13
PROJECT OVERVIEW Large alunite deposit, which is expected to be processed into SOP, and possible alumina rich material Average 645,000 tons of SOP per annum Historical work expedites project development Mineral deposit to be surface mined Proven process backed by extensive metallurgical testing ANTICIPATED MINE RAMP-UP IN 2017 14
ORE TEST PIT 15
UTAH: AN ATTRACTIVE MINING JURISDICTION Major resource producer Existing potash production Best state for business 1 Top quartile mining jurisdiction 2 ALMOST 100 YEARS OF POTASH PRODUCTION 16 1 Forbes Magazine, December, 2012 2 Fraser Institute, April, 2013
OUR LAND ADVANTAGE State-owned land designated for development Leasehold and royalty agreements negotiated No known adverse environmental or social issues Roads, rail, transmission and natural gas nearby Construction materials, equipment suppliers and skilled labour force MUNICIPAL AND STATE SUPPORT OF PROJECT 17
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