lac à paul phosphate projectarianne-inc.com/files/website corporate presentation_2017... ·...
TRANSCRIPT
‹N°›
Lac à Paul Phosphate Project
‹N°›
DISCLAIMER
Total resources only include the measured and indicated categories.
All currencies are in US$ unless otherwise stated.
This presentation contains forward-looking statements. All statements, other than
statements of historical fact, included herein, including, without limitation,
statements regarding potential mineralization and reserves, exploration results
and future plans and objectives of Arianne Phosphate Inc., are forward-looking
statements that involve various risks and uncertainties. There can be no assurance
that such statements will prove to be accurate and actual results and future
events could differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ materially from Arianne
Phosphate Inc.’s expectations are disclosed under the heading "Risk Factors" and
elsewhere in Arianne Phosphate Inc.’s documents filed from time-to-time with the
TSX Venture and other regulatory authorities.
May 2017
Copyright© 2017 Arianne Phosphate Inc. 2
‹N°›
ARIANNE PHOSPHATE INC.
✓ On TSX-Venture: « DAN »
✓ On OTC: DRRSF
✓ Head office: Saguenay
✓ Project: Lac à Paul
✓ TSX-V: DAN OTC: DRRSF
Shares Outstanding 98 million
Options (C$1.09 avg.) 5 million
Warrants (C$ 1.12avg.) 16 million
Fully Diluted 119 million
May 2017
Copyright© 2017 Arianne Phosphate Inc. 3
‹N°›
PHOSPHORUS
ESSENTIAL TO GLOBAL FOOD SECURITY
87%
is used in the production of fertilizers
✓7% is used in animal feed
✓6% is used in food, metallurgy, water treatment,
toothpaste, cosmetics, ceramics and miscellaneous
1 of the 3 key components in fertilizer
✓ Alongside nitrogen (N) and potassium (K)
✓ Essential for root and stem
development in plants
87%
6%7%Other Uses
Animal Feed
Fertilizers
There are no substitutes for phosphorus in agriculture.May 2017
Copyright© 2017 Arianne Phosphate Inc. 4
‹N°›
PHOSPHATE ROCK
IGNEOUS VS SEDIMENTARY DEPOSITS
IGNEOUS PHOSPHATE vs.
SEDIMENTARY
➢ Only ~10% of global
phosphate is igneous
➢ Arianne’s Phosphate rock is
igneous
➢ Arianne’s recovery is 90%
➢ Arianne’s igneous ore will
produce phosphate rock
concentrate at 40% P2O5
➢ High ratio of P2O5/CaO
means low acid
consumption in MAP/DAP
production
➢ Heavy metal content in
Arianne product near or
below detection limits
Igneous Deposits Sedimentary Deposits
Grade of ore
(nutrient) 4-15% P2O5 10-30% P2O5
Crushing Consolidated rocks
Very easy if the rocks are
unconsolidated
Beneficiation
(recovery of
nutrient content)
Efficient processing
Recovery can be >90%
Less efficient processing
Recovery 75 to 85%
Nutrient Content
of Concentrate 37-41% P2O5
Average grade 29% P2O5
(can reach 35% P2O5)
Environmental
Impact
Contains few or no
contaminants
Usually contains some
contaminants (heavy
metals, uranium and
cadmium)
May 2017
Copyright© 2017 Arianne Phosphate Inc. 5
‹N°›
LAC À PAUL PROJECT HIGHLIGHTS
✓ World’s Largest Greenfield Phosphate Rock Project
✓830Mt of Measured & Indicated Resource
✓Drilling has Grown Inferred Resource (over 1 Billion tons)
✓ Produces A Very High Quality Phosphate Concentrate
✓40% P2O5 Concentrate (Providing Premium Pricing)
✓Minimal Deleterious Elements
✓ Very Long Mine Life
✓Currently At 26 Years With the Stated Goal of Demonstrating 50 Years
✓ Safe Geopolitical Environment
✓Mining Friendly
✓Mine permit in hand
✓North America has a Growing Reliance on Foreign Rock
✓Infrastructure in Place
✓Cooperation Agreement with the First Nations
✓ Strong Government Support
✓Largest Quebec Mining Project in a Decade
✓$12.5B in Economic Benefit to the Region
✓ Shovel ReadyMay 2017
Copyright© 2017 Arianne Phosphate Inc. 6
‹N°›
SUPPLY DEMAND & SECURITY OF PHOSPHATE ROCK
210 million tons are produced annually, of which 85% is integrated with downstream production
Of the 30 million tons traded, roughly 70% is sourced from Middle Eastern Countries and Northern Africa:
•Morocco (and Western Sahara): pressure on Companies that receive their rock from Bou Craa
•Tunisia: Jihadist activity since Arab Spring has led to a 75% reduction in production
•Syria: two phosphate mines no longer under government control
•Israel: ongoing regional conflict as well as uncertainty around permitting and tax
•Others: Egypt, Jordan, Algeria
•Russia: growing tensions with the West; the only 39% rock available
Major importers of phosphate rock: USA (3 million tons/yr)
Canada (1 Mt)
India (8 Mt)
Western Europe (8Mt)
Latin America (4Mt)
SE Asia (5Mt).
Fertilizer and agricultural commodity supplies are dependent on political stability in Middle East and Northern African countries
USA dependence on
imports will continue to
grow in the next 5 years!!
May 2017
Copyright© 2017 Arianne Phosphate Inc. 7
‹N°›
Phosphate Rock Demand is growing 2%, or roughly 4M tons/year
Mine Capacity (Million tons/yr) being developed through 2023* includes:
Saudi Arabia 8
Morocco 6
Canada - Arianne Phosphate 3
China** 3
Peru 3
Russia 1
Brazil 1
**China considers Phosphate Rock a Strategic Mineral, and restricts exports
*Source: Integer Research 2015
NEW PHOSPHATE MINE DEVELOPMENT
May 2017
Copyright© 2017 Arianne Phosphate Inc. 8
Most new mine development continues to come from regions that lack
security of supply AND/OR integrate the output directly into fertilizer
‹N°›
PHOSPHATE ROCK
NORTH AMERICAN MARKET
CF Phosphate 1
Integrated plant
Phosrock importer
J.R. Simplot Company
Groupo Fertinal
J.R. Simplot CompanyVernal, UTRock Springs, WY
Groupo FertinalLazaro Cardenas, Mexico
Innophos GeismarGeismar, LA
MosaicFaustina, Uncle Sam, LABartow, New Wales, Riverview, FL
Innophos CoatzacoalcosCoatzacoalcos, Mexico
Mississippi PhosphatePascagoula
CF PhosphateHardee County, FL
PCS PhosphateAurora, NCGeismar, LAWhite Springs, LA
PCS Phosphate
Mississippi Phosphate
Mosaic
Innophos Coatzacoalcos
Innophos Geismar
Agrium Redwater
Canada
United States
Mexico
May 2017
Copyright© 2017 Arianne Phosphate Inc. 9
‹N°›
GOOD ACCESS TO EXISTING POWER & TRANSPORTATION
INFRASTRUCTURE
Proposed New Port Infrastructure
Distance from mine to port: ~240 km
May 2017
Copyright© 2017 Arianne Phosphate Inc. 10
‹N°›
LAC À PAUL – BFS FROM OCTOBER 24, 2013
• 590 Mt M&I reserves @ 7.1 % P2O5,(cut-off
grade: 4.0 % P2O5)
• 472Mt P&P reserves @ 6.9% P2O5,(cut-off grade:
3.5 % P2O5)
• Premium market value for 3Mt/year of high-
quality phosphate concentrate (38.6% P2O5)
• 26 years mine life with 1:1,14 strip ratio
• Total capital costs (CAPEX): ~ $1.2B
• Cash operating cost (mine site): $80/t✓ Cash operating costs (FOB ship): $94/t
$1.9Bpre-tax NPV8%
21%pre-tax IRR
4.4year capital payback period
* As per BFS, assumed concentrate price $213/t May 2017
Copyright© 2017 Arianne Phosphate Inc. 11
‹N°›
WORKING TOWARDS 50 YEARS RESERVE
Drilling surrounding the Paul Zone has shown the potential
of an additional 260Mt to 390Mt
▪ Nicole Zone 78 Million tons Inferred (5.3% P2O5)
▪ Drilling on the Western extension of the Paul Zone extends
1.1 km West (holes showed intersections above 7% P2O5)
▪ TraMan Zone 146 Million tons Inferred (5.3% P2O5)
May 2017
Copyright© 2017 Arianne Phosphate Inc. 12
‹N°›
590 MT
702 MT (M+I) @ 7,16 %P2O5
(cut-off grade: 4,0 %P2O5)
PAUL ZONE AND ITS EXTENSIONS
May 2017
Copyright© 2017 Arianne Phosphate Inc. 13
‹N°›
Measured (M)(1) Indicated (I)(1) Total (M+I)(1) Inferred (I)(2)
Mt %P2O5 Mt %P2O5 Mt %P2O5 Mt %P2O5
Paul (cut-off grade: 4 %P2O5)
314,36 7,28 357,99 7,08 672,35 7,18 10,57 6,63
West Ext.(cut-off grade: 4 %P2O5)
3,19 8,06 14,68 6,96 17,87 7,16 2,92 6,88
Est Ext.(cut-off grade: 4 %P2O5)
0,09 5,30 12,39 6,32 12,48 6,31 12,52 6,46
Manouane(cut-off grade: 2,43 %P2O5)
136,90 5,93 26,90 5,64 163,80 5,9
Nicole(cut-off grade: 3,5 %P2O5)
78,20 5,34
Traverse(cut-off grade: 3,5 %P2O5)
17,00 5,98
TraMan Sud(cut-off grade: 3,5 %P2O5)
146,00 5,30
Zone 2(cut-off grade: 2,43 %P2O5)
64,00 4,55
(1) Cautionary Statements: Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
(2) Cautionary Statements: Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. That it is uncertain if further exploration will
result to upgrade this inferred resource at indicated and measured resource.
The resources provided in this table were published in press releases from February 18, 2015, July 16, 2014, May 15, 2014 and November 8, 2011.
DRILLING RESULTS
May 2017
Copyright© 2017 Arianne Phosphate Inc. 14
‹N°›
LONG TERM POTENTIAL – OTHER PROMISING AREA
Lise:7 drill holes totaling 1 401 m. were done. Mineralisation is observed over 1.1 km.
The best intersections along drill holes are 131.1 m. at 5.50% P2O5 and 124.15 m. at
4.92% P2O5 (May 8, 2012 press release).
Lucie:Lucie area is associated with one of the largest magnetic anomaly of the property
(over 2 km. long and 550 m. large). 6 drill holes totaling 1 247 m. have been done.
The best intersections along drill holes are 250 m. at 5.10% P2O5 including 141.8
m. at 6.13% P2O5 and 235.2 m. at 4.72% P2O5 (May 8, 2012 press release).
Naja Zone:An intersection of 131.9 m. at 6.58% P2O5 along a drill hole allows the interpretation
of a mineral zone ranging 40 to 50 m. in true thickness. Moreover, grab samples and
three trenches realised during 2014 exploration campaign show potential mineral
resources associated with a magnetic anomaly recognised over 2.4 km. (February 18,
2015 press release).
Mini-Paul:Grab samples with value up to 13% P2O5 have been collected (February 18, 2015
press release).
North TraMan:North TraMan is the continuity of the South TraMan area. During the 2013
exploration campaign 20 samples with value over 5% P2O5 were collected, with the
best sample at 9.17% P2O5.
Turc:Mineralisation is observed along 1.6 km. During the 2013 exploration campaign 17
samples with value over 5% P2O5 were collected, in which 5 with value over 8%
P2O5. The best results collected are 12.7 and 10.4% P2O5.
May 2017
Copyright© 2017 Arianne Phosphate Inc. 15
‹N°›
PROJECT DEVELOPMENT PROGRESS SINCE BFS2014
✓ Metallurgical optimization reduces operating costs
✓ Favorable power deal (L-rate) achieved with Hydro-Québec
✓ Québec Government joins financing of Lac à Paul project
✓ Formal collaboration with Port of Saguenay established
✓ Drilling extends Paul Zone to 3.8 km
2015
✓ Optimized mine plan saves 5% on production costs
✓ New 43-101 Resource estimates Paul Zone has 702 Mt @ 7.1% P2O5
✓ Metallurgical testing confirms concentrate quality at 40% P2O5 with MER of 0.036
✓ Collaboration Agreement with First Nations signed
✓ Arianne’s Lac à Paul receives Québec Ministerial Decree (Permit)
2016
✓ Québec grants Arianne 20% discount off L-rate for electrical power
✓ Port project description and Environmental Impact Assessment filed with regulators
✓ New additions to board and management
✓ Public hearings for Port completed… permit expected at the end of 2017
✓ Close to signing contracts with preferred engineering & key suppliers
✓ Financial Advisor appointed and Lac à Paul project finance now underway
➢ Information Memorandum being prepared for financial institutions
➢ Revised Economic analysis shows project is robust
➢ Currently discussing Off-take / Sales Agreements to support project revenue stream
✓ Options on land at the future site of the maritime terminal exercised
May 2017
Copyright© 2017 Arianne Phosphate Inc. 16
‹N°›
PROJECT DEVELOPMENT PROGRESS SINCE BFS (Cont’d)
2017
✓ Agreement with Rio Tinto
• Discussions centered around maritime transport synergies
• Provides both economic and environmental benefits
✓ MOU Agreement with Construction Proco
• Covers architectural & structural engineering and mill construction
✓ Agreement with the Ministry of Energy and Natural Resources
• Allotment of an additional 14MW of power for ore processing facility
• Provides both economic and environmental benefits
✓ MOU Agreement with ABB
• Provides for EPS of electrification and automated mining solutions
• Commitment to assist Arianne with financing strategies
✓Introduction into Swiss ECA SERV
✓ MOU Agreement with SNC-Lavalin and Cegertec
• Provides project management support, coordination and consulting
✓ MOU Agreement with FLSmidth
• Provides for work surrounding production equipment and engineering
• Commitment to assist Arianne with financing strategies
✓Introduction into Danish ECA EKF
✓ MOU Agreement with Groupe Alfred Boivin
• Provides ground transport of phosphate concentrate
✓ Finalized the purchase of land at the future site of the maritime terminal
May 2017
Copyright© 2017 Arianne Phosphate Inc. 17
‹N°›
Future Mine Site
N
May 2017
Copyright© 2017 Arianne Phosphate Inc. 18
‹N°›
ECONOMIC SPIN OFFS
✓ Job creation/Major employment source for local communities
• 2250 in construction
• 1000 in operation (for more than 26 years)
✓Economics spin offs over $12B for the region, Quebec and Canada
✓$4B in revenue for the provincial and federal governments
May 2017
Copyright© 2017 Arianne Phosphate Inc. 19
‹N°›
FIRST NATIONS
Three Innu communities are involved in the project:
✓ Pessamit
✓ Mashteuiatsh
✓ Essipit
➢ Collaboration agreement for the exploration and pre-construction phase signed on
June 12, 2015
This agreement contains the basis for the Impact
And Benefits Agreement (IBA) negotiations
which is the final step.
Picture taken at the signing of the pre-agreement. Saguenay, Quebec.
May 2017
Copyright© 2017 Arianne Phosphate Inc. 20
‹N°›
Agreement with :
✓Lake Neil residents
✓ZEC Martin-Valin
Committees :
✓Monitoring committee
for the project
✓MRC Development Consultation Table
SOCIAL ACCEPTABILITY
COMMUNITY RELATIONS
May 2017
Copyright© 2017 Arianne Phosphate Inc. 21
➢ Finalized the purchase of
land on the Saguenay River
in 2017
‹N°›
MARKET CAP PROGRESSION
TOTAL EQUITY RAISED:$27 Million
TOTAL CREDIT FACILITY:up to $22.85 Million
CURRENT MARKET CAP:$93 Million (basic)
May 2017
Copyright© 2017 Arianne Phosphate Inc. 22
‹N°›
LEADERSHIP TEAM
Management TeamBrian Ostroff – CEO: see below
J.S. David – COO: Geologist; formerly VP-Sustainable Development for Osisko, previously with Iamgold,
Cambior, Louisiana-Pacific
Jim Cowley – CFO: see below
Board of Directors
Jean Lamarre (Chairman): 40 years senior management & board positions; Lavalin Group, Semafo, Tele-
Quebec, Le Devoir
Dominique Bouchard (Vice-Chairman): 33-year veteran of Alcan and Rio Tinto, retired President of Rio
Tinto Iron & Titanium. A native of the Chicoutimi area and an expert in local community issues
Brian Ostroff: 25+ years experience in capital markets, RBC Dominion, Goodrich Capital, Partner at
Windermere Capital
Jim Cowley: 30+ years Metallurgical Engineer, MBA in Finance, held positions with major international mining
companies
Dave DeBiasio: 40+ year veteran (retired) of Agrium, responsible for Energy & Raw Materials, development
of Kapuskasing Mine
Steven Pinney: 30+ year veteran (retired) of Cargill and Mosaic, most recently as Senior Vice President
Phosphates
Marco Gagnon: 20+ years in Quebec mining exploration/development, former CEO of Adventure Gold,
current VP Probe Metals
Siva Pillay: 20+ years in accounting, law, trade project finance and development of product off-take
financing, CEO of Ocean Partners
May 2017
Copyright© 2017 Arianne Phosphate Inc. 23
‹N°›
STEPS ACCOMPLISHED FOR DEVELOPMENT
✓Quality of Resources Base
✓Exploration (proven & probable reserves)
✓Social Acceptability
✓Local Community Support
✓Sustainable Development Process
✓Permitting (mine to port)
✓Collaboration agreement with First Nations
✓Experienced Management Team
✓High-quality Board of Directors
✓Build-up of Owner’s team (greenfield & operations)
✓Execution Plan
✓Optimized OPEX (Value Engineering)
✓Well thought through CAPEX plan (BFS)
✓Construction driven (Cost & Schedule Certainty)
✓Shovel Ready (Definitive Feasibility Study)
May 2017
Copyright© 2017 Arianne Phosphate Inc. 24
‹N°›
PENDING CATALYSTS
➢Discussions Ongoing With Potential Strategic Partners
- Many companies are no longer fully vertically integrated
- Not a lot of options in safe geopolitical jurisdictions
- “Off-takers” looking for supply
- Continued strong support from the Quebec government
➢Discussions With Potential Financing Partners
- Engaged Endeavour Financial as advisor
- Major equipment financers
- Banking syndicate (including ECAs)
- Product prepayment (off-take)
- Minimize equity tranche
➢Project Execution Plan
- Concession discussions for Port Infrastructure
- Early Contractor Involvement
- Definitive Feasibility Study with Engineering/PMC firm
➢First Nations
- Cooperation Agreement signed
- Final step is the IBA
May 2017
Copyright© 2017 Arianne Phosphate Inc. 25
‹N°›
SUMMARY OF INVESTMENT HIGHLIGHTS
✓World’s Largest Greenfield Phosphate Rock Deposit✓830Mt of Measured & Indicated Resource
✓Drilling has Grown Inferred Resource (over 1 Billion tons)
✓Very Long Life of Mine✓Currently At 26 Years With the Stated Goal of Demonstrating 50 Years
✓Produces A Very High Quality Phosphate Concentrate✓40% P2O5 Concentrate (Providing Premium Pricing)
✓Minimal Deleterious Elements
✓ Safe Geopolitical Environment✓Mining Friendly with strong local community support
✓Mine permit in hand
✓North America has a Growing Reliance on Foreign Rock
✓Infrastructure in Place
✓Cooperation Agreement with the First Nations
✓ Strong Government Support ✓Largest Quebec Mining Project in a Decade
✓$12.5B in Economic Benefit to the Region
✓Cost Schedule Certainty Execution Plan (Shovel Ready)
May 2017
Copyright© 2017 Arianne Phosphate Inc. 26
‹N°›
Head Office
393 Racine St. E., Suite 200
Chicoutimi, QC G7H 1T2
Canada
Tel: (418) 549 7316
Fax: (418) 549 5750
Email: [email protected]
Web site: www.arianne-inc.com
Contacts
Jean-Sébastien David, COO
Brian Ostroff, CEO