0 ppl. disclaimer except for historical information, this presentation contains forward-looking...
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DisclaimerExcept for historical information, this presentation contains forward-looking statements, which reflect the Company's current expectation regarding future events.
These forward-looking statements involve risks and uncertainties, which may cause actual results to differ materially from those statements.
Those risks and uncertainties include, but are not limited to, changing market conditions, and other risks detailed from time-to-time in the Company's ongoing filings.
We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking events in this presentation might not occur.
MagMinerals – Company Presentation Sep 2008 2
Primefield Potash
Hydroelectric Developments (Zungeru)
Forest Products(Eucalyptus)
(FROC)
Primefield Potash Project(PFP)
100% 100%62% Pre-IPO
3
FEDERAL REPUBLIC OF NIGERIA – ATTRACTIVE FOR INVESTMENT
Federal Republic of Nigeria
Location of Prime field Potash project
Single party dominance, stable country
Population: over 170 Million people
Major multinationals (TOTAL, Chevron-Texaco, ENI) operating uninterrupted for ~30 years
PPL Experience in the Federal republic of Nigeria
22-year operating history in the FRON (licensed in 2011)
Senior management with deep roots in the country/continent
Junior non-government employer through PPL Forestry
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Potash Market Dynamics Global potash consumption to
grow 14 MM tonnes/yr by 2020
Higher crop demand from population growth and biofuels
Global grain restocking and potash catch-up are drivers
India/China have official policies to increase potash use
Most new capacity controlled by major producers (2011+)
PRIMEFIELD POTASH NIGERIA has one of the only investable near-term production plays outside of the majors
Potash Price Forecast(Brazil CFR)
0
200
400
600
800
1000
1200
1400
1600
2004
2006
2008
2010
2012
2014
2016
2018
Bra
zil
cfr
($ /
to
nn
e)
Source: Resouce Investing News
Current: US$600 – US$1,000 per tonne
(June. 2008)
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Key Potash Market:
Nigeria consumption is over 1.5mm tons / yr
Brazil 3rd largest importer of potash 4.4mm tons/yr
Strong potash demand globally /limited supply
1Source: Fertecon
+2.62.6 MM
Tonnes/yr
(+59%59%) vs. 2008
+2.62.6 MM
Tonnes/yr
(+59%59%) vs. 2008
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
000's
Tonnes
K20
Imports
Domestic Supply
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FOB Pointe-Noire Build-up for Brazil sales
$66 Net Realized Price Advantage vs. Cana.
Notes: Freight and related costs include shipping, storage, stevedoring, insurance, LC charges, technical losses and inspection costs. Freight and related costs based on management estimates.
Free on Rail - Saskatchewan $780
FOB Vancouver Price $820
Free on Rail – Primefield Potash Facility ~$846
Freight and related costs – PN to Brazil ($54)
CFR Brazil pricing $900
Rail and Handling to Vancouver ($40)
Freight and Related Costs – VCR to Brazil ($80)
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Primefield Potash Plant DesignProven technology from leading equipment
manufacturer (HPD)Same process as Dead Sea Works facility
(Israeli Chemicals) Current process in commercial operation since early 1980’s
Scale Scale Model:Model:
Phase I in Phase I in BlueBlue
Phase II in Phase II in WhiteWhite
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600,000 tpy potash plant
Feasibility study Feb/16
Debt financing Sep/16 Construction start
Oct/16 US$60+MM development costs spent to date
Construction US$723MM
Includes Phase II infrastructure
Mid 2018
Description
Status/Targeted
Timing
Construction Cost Estimate
Production Start-up
Phase Phase I
Target debt-to-equity of 70:30
Project Financing
600,000 tpy expansion
NI 43-101 updated in August 2015
Final feasibility H1 2016
Technical feasibility update (June 2015) indicates US$423 MM
Late 2019 – Early 2020
Phase II
Target debt-to-equity of 70:30
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Blue Chip Project Team Feasibility study One of the leading groups of engineering and
construction companies in the world
Active in 100 countries worldwide
Potash marketing / off-take
International grain and fertilizer trader with 1,100+ employees
Leading position in Brazilian market
Sells 10 million tons of fertilizer, 3 million tons of grain and sizeable petrochemical and metal volumes annually
Crystallization equipment
Global leader in evaporation and crystallization technology
Over 650 installations in 30+ countries
Veolia Environnement subsidiary, world’s largest environmental company
Financial project advisor
Nº6 in the banking industry (‘Global 2000 Forbes’ 2007)
Operates in over 85 countries and has 162,700 employees
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Blue Chip Project TeamE+PC
Engineering Procurement Contracting Management
E+PC is part of the publicly-listed AVENG group located in Johannesburg, South Africa
AVENG is the largest EPCM contractor in S.A. with over 30,000 employees and extensive project experience in Africa
Construction Management
A leading construction, engineering, procurement and development company
140,000+ employees; emphasis on the Middle East and Africa
ERCOSPLAN Solution Mining
Experts Long-term support contract with access to experts for
reserve evaluation, solution mining technology and operations
NORBERT GRÜSCHOW
Solution Mining Expert
MagMinerals Advisory Board
Chief technology advisor, solution mining, preproduction and commercialization
Mentor and trainer of junior resources
Manage cavern development R&D plan
3 year commitment
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Discovery historically (1958-1990) 11
Production conventional (2006-2015) 12
Proven and Probable Reserve Life (@ 600k tpy) 120 years
43-101 Inferred Reserves (KCl) xxxx MMt
Proven & Probable Reserves (KCl) xxx MMt
Mineral Exploration Area = 1,472 km2
Exploitation Permit = 215km2
Resource Report
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Low Cost Operation• Transportation cost advantages
– Only 680km to 10 acre port site– Shortest sailing distance to Africa countries, to Brazil and
others
• Low cost energy access– 25-year power supply agreement in documentation stage– Allows low cost, short construction time solution mining
application
• Positive labour conditions– Available low cost local labour– Strong reputation through PrimefieldForestry
Potential for best economics in the industry
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• Exploration license secured
Accomplishing Milestones - 2015Exploration License Secured
$101MM Financing on
Ecpected CEO Joins Team
Off-take Agreement
Strategic Investors Fund $105MMEnergy Supply
Update of Reserve Estimate
Construction Progress
Finalize Potash Investment AgmtListing of Shares on TSX
• $101 million for Primefield JV Minerals ($4.00 per share)
• 5% dilution penalty if public-listing not met by Oct. 3, 2015
• Broad institutional participation
• Construction deposit, site prep, and $25MM loan repayment
April 2014
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• CEO joins the team
• With International experience
• Participated or led in build-out of large industrial projects in various countries
• Holds 3 masters degrees (science, engineering, business), speaks 5 languages and has lived in 4 countries
Accomplishing Milestones - 2015Exploration License Secured
$101MM Financing Completed CEO Joins Team
Off-take Agreement
Strategic Investors Fund $105MM
Oct 1, 2015
Energy Supply
Update of Reserve Estimate
Construction Progress
Finalize Potash Investment AgmtListing of Shares on TSX
18
• Z Co.awarded exclusive 12-year potash marketing agreement
Governs the sale of 1.2MM tpy of potash (both Phases)
• Z Co. announces a $70MM strategic investment ($5.00/sh)
• Announced $35MM strategic investment by the president of a top FRON construction firm ($12 MM cash + $23MM paid-in-kind)
• Both strategic expected to contribute to success of project
Accomplishing Milestones - 2015Exploration License Secured
$101MM Financing Completed CEO Joins Team
Off-take Agreement
Strategic Investors Fund $105MM
Nov 27, 2015
Power/Energy Supply
Update of Reserve Estimate
Construction Progress
Finalize Potash Investment AgmtListing of Shares on TSX
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• Official minutes outlining power/energy supply understanding between FRON government, x Co and PPL
• Formal supply agreement with X Co in drafting
• Pipeline construction started
Accomplishing Milestones - 2015Exploration License Secured
$101MM Financing CompletedCEO Joins Team
Z Co Off-take Agreement
Strategic Investors Fund $105MMPower/Energy Supply
Dec 2015
Update of Reserve Estimate
Construction Progress
Finalize Potash Investment AgmtListing of Shares on TSX
20
Accomplishing Milestones - 2015Exploration License Secured
$101MM Financing CompletedCEO Joins Team
Z Co Off-take Agreement
Strategic Investors Fund $105MMNatural Gas / Power Supply
• Ercosplan provided update of 43-101 reserve report (released Jan 2016)
Update of NI43-101 Reserve Estimate
• Site earthworks preparation started• Long lead time items contracted• All major purchasing packages being
prepared
Construction Progress
• Gas, rail and port agreements complete
• Water & construction permits• ESIA agreement
Potash Investment Agreement
• Filed preliminary prospectus in Canada on Jan, 2016
Listing of Shares
Update of Reserve Estimate
Construction Progress
Finalize Potash Investment AgmtListing of Shares on TSX
21
NPV Sensitivity to PricingCurrent NPV Assumptions*
Discount Rate: 12.0%
Terminal Value: 7.5x EBITDA
Terminal Year: 2035
NPV per Share $31.85
Sensitivity to Potash Pricing*
Pricing assumptions:Resource News $0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2004
2006
2008
2010
2012
2014
2016
2018
Net
-Bac
k P
rici
ng
Po
inte
No
ire
($ /
ton
ne)
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*Assumes $82 MM Phase I equity offering at $5.00/share and $160 MM Phase II offering at $12.00/share.
Brazil Potash Price (Cost & Freight )(US$ / Tonne)
$600 $800 $1,000 $1,200 $1,400 $1,600
NPV per Share $10.93 $17.45 $23.96 $30.48 $36.99 $43.51
CFPS $2.40 $3.57 $4.73 $5.90 $7.06 $8.23
Primefield Potash Ownership
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PPL JV Industries 96,000,000 62.0%
Z Marketing Co 14,000,000 9.3%
Q Construction Co. 7,000,000 4.6%
Other Investors 25,000,000 16.7%
Employee Options 10,500,000 7.0%
Total 152,750,000 100.0%
Pre IPO Shares %
Investment Highlights Pure play exposure to attractive potash sector
Exclusive rights to large potash carnallite deposit
Strategic location relative to high demand potash end-markets
Proximity to high-capacity port with existing rail capabilities
Significant input and operating cost advantages
Blue chip project team of engineers, contractors, equipment providers and financiers
Construction to begin in H2 2015
Senior management with deep roots in the country/continent
Compelling valuation with well-defined growth potential
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