TSX ¡: ¡PRK ¡ Premium Potash and Bauxite Project Driven by a Proven Management Team
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 final prospectus of the Corporation dated November 27, 2012, 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
A potash company focused on its Blawn Mountain property in Utah SOP: 680,000 tonnes per annum Bauxite material: 3.3 million tonnes per annum 3
EXPERIENCED AND PROVEN MANAGEMENT Guy Bentinck President & CEO Chartered Accountant; 20 years mining/resource experience Sherritt: CFO and SVP Capital Projects Jeff Hillis Chief Financial Officer Ross Phillips Chief Operating Officer Chartered Accountant; 10 years experience in large resource and 10 years mining sector finance, including CFO energy sector projects of several public mining companies Sherritt, Capital Power ¡ Iberian Minerals, Excellon, Falconbridge ¡ Paul Hampton VP, Project Laura Nelson VP, Government and Management Regulatory Affairs Geologist and Metallurgical Engineer; Extensive experience in government relations, permitting and power planning, including the ~30 years experience in design, construction, successful permitting of the Red Leaf oil shale start-up and management of mineral processing project facilities Red Leaf Resources, Utah Government ¡ SNC, Washington Group, Outotec OVER 80 YEARS COMBINED EXPERIENCE 4
COMPETITIVE ADVANTAGES Large mineral deposit containing premium-quality potash and bauxite material Strategically located in a mining friendly jurisdiction with established infrastructure nearby State-owned land allows for an efficient permitting process Historical work expedites project development Lower risk surface mining deposit; expected lowest cost producer 30 year mine life, with upside potential PEA completed: $1.3 billion NPV at 10%; 21.3% after tax IRR; excludes bauxite material revenue 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 ~5% EXPECTED ANNUAL GROWTH IN DEMAND TO 2016 7
SULPHATE OF POTASH (SOP) IS A PREMIUM PRODUCT Sulphate of Potash (SOP) Muriate of Potash (MOP) Potassium Sulphate (K 2 SO 4 ) Potassium Chloride (KCl) 6 million tonnes sold in 2011 1 55.8 million tonnes sold in 2011 2 Potassium and sulphur are essential nutrients 2 Crop quality/yield diminish as chloride builds up 2 Improves yield, quality, taste and enhances shelf life 2 AVERAGE 47% PRICE PREMIUM OVER MOP 3 8 1 Source: Fertecon 2 Source: CRU 3 Based on historical data
USES OF SOP Fruits Tobacco Vegetables Tea Nuts Dry soils Horticultural Plants Salty soil 9
SOP PREMIUM PRICE TRENDS 900 ¡ U.S. $/tonne 800 ¡ 700 ¡ 600 ¡ 500 ¡ 400 ¡ 300 ¡ 200 ¡ 100 ¡ 0 ¡ 2006 ¡ 2007 ¡ 2008 ¡ 2009 ¡ 2010 ¡ 2011 ¡ 2012 ¡ 2013 ¡ SOP 1 MOP 2 HISTORICAL PRICE PREMIUM FOR SOP HAS RANGED BETWEEN 30% AND 61% 10 1 SOP, standard grade cif NW Europe (Source: Fertilizer Week) 2 MOP, all grades, fob Vancouver/Portland (Source: CRU)
SOP MARKET CHARACTERISTICS Global SOP Consumption and Commodity Price 1 ¡ 12,000 $1,000 $900 10,000 $800 Rest of Africa the World $700 Europe 4.6% 8,000 14.9% 23.3% $600 (US$/tonne) Tonnes (000s) 6,000 $500 N. America 8.6% $400 China 4,000 44.3% $300 $200 2,000 $100 Central and 0 $0 South America 2000 2004 2008 2012 2016 2020 4.3% Global SOP Consumption Historical Standard FOB NW Europe (US$/tonne SOP) Estimated Standard FOB NW Europe (US$/tonne SOP) 11 1 Source: Fertecon, CRU
SOP MARKET DYNAMICS SOP share of potash market: Limited production and premium Current: ~10% price has restricted demand Potential: >28% 1 Trend toward high Potential to use SOP in typical cereal crop fertilizer blends instead of ammonium sulphate nutrient fertilizers SOP consumption: China (pop. 1.3 billion): 1.9 million tpy India India: (pop. 1.2 billion) 50,000 tpy (<1% of country’s potash consumption) SOP consumption = 32,000 tpy (0.4% of total potash Brazil consumption) Premium crops grown on 20% of planted land SIGNIFICANT GROWTH POTENTIAL 1 Based on crops that are best suited for SOP 12
THE BLAWN MOUNTAIN PROJECT 13
PROJECT OVERVIEW Large alunite deposit, which is expected to be processed into SOP, by-product bauxite material and sulphuric acid Target 680,000 SOP tonnes and 3.3 million bauxite material tonnes per year; start up by 2H-2016 Historical work expedites project development Mineral deposit to be surface mined Proven process ANTICIPATED PRODUCTION BY 2016 14
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 15 1 Forbes Magazine, November, 2011 2 Fraser Institute, February, 2012
OUR LAND ADVANTAGE State-owned land Simpler permitting process Leasehold and royalty agreements negotiated No known adverse environmental, social or aboriginal issues Sufficient water nearby – rights application made MUNICIPAL AND STATE SUPPORT OF PROJECT 16
ESTABLISHED INFRASTRUCTURE NEARBY Roads, rail and natural gas Construction materials and equipment suppliers nearby Skilled labour force Access to ports of Los Angeles (530 miles) and Houston (1,550 miles) 17
SOP AND ALUMINA HOSTED IN ALUNITE (K 2 SO 4 ⋅ Al 2 (SO 4 ) 3 ⋅ 2Al 2 O 3 ⋅ 6H 2 O) Volcanic rock mined for over 500 years Contains alumina (Al 2 O 3 ), potassium (K 2 O), and sulphur (SO 3 ) Historic source of SOP and alumina in U.S. and Australia Long-term (30+ years) SOP and alumina production in Azerbaijan 18
HISTORICAL PRODUCTION OF SULPHATE OF POTASH & ALUMINA FROM ALUNITE Ganja, Azerbaijan Alunite mine and processing facility operated from1960s until 1994. Plant shut-down due to lack of power following collapse of Soviet Union Production: (per annum) • 103,000 tonnes of SOP • 300,000 tonnes of bauxite Utah, United States New South Wales, Australia • 1915-1930 SOP produced from alunite • 1878 - Alunite ore shipped from New South • Alunite mine and processing plant Wales to England where it was processed. produced SOP and alumina however the mine shut down after World War 1 • World War I – Alunite mine and processing as demand for alumina subsided. facility produced aluminum sulphate and alumina • 1941-1945 Kalunite Project • 1940-1949 – An alunite mine and processing facility in Lake Campion produced potash and alumina. Plant shut down post World War II for economic reasons Australia ¡ COMMERCIALLY PROVEN PROCESS 19 ¡
ORE TEST PIT 20 ¡
EXTENSIVE DEVELOPMENT ON BLAWN MOUNTAIN COMPLETED IN 1970’s Drilling Resource estimate Feasibility study Approx. $25 million spent Mine plan (~ $100 million in today’s dollars) Engineering Permitting Pilot plant: 3-year operation processing 11 tonnes/day • Project ultimately shelved due to poor economic conditions in early 1980s • Potash Ridge owns all historical data PREVIOUS WORK ACCELERATES PROJECT DEVELOPMENT 21
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