Disclaimer TSX: WPX FSE: AHE

Transcription

1 January 2016

2 Disclaimer Forward-Looking Statements and Cautionary Notes Except for statements of historical fact, this presentation contains statements that constitute forward-looking statements within the meaning of Section 21E of the United States Securities Exchange Act of 1934 and forward-looking information within the meaning of applicable Canadian securities legislation (collectively, forward-looking statements ). Forward-looking statements often, but not always, are identified by the use of forward-looking terminology such as seek, anticipate, believe, plan, estimate, expect, targeting and intend and statements that an event or result may, will, should, could, or might occur or be achieved and other similar expressions. Forward-looking statements include, but are not limited to, statements concerning plans of Western Potash Corp. (the Company ) at the Milestone Project, the estimated potash production and the timing thereto and capital and operating costs. The forward-looking statements that are contained in this presentation are based on the opinions and estimates of management of the Company as of the date of this presentation and they are subject to known and unknown risks, uncertainties, and other factors that may cause the actual results of the Company to be materially different from those expressed or implied by such forward-looking statements. Such factors include, among others: risks relating to fluctuations in the price of potash; the inherently hazardous nature of mining-related activities; uncertainties concerning resource estimates; results of exploration; availability of capital and financing on acceptable terms; inability to obtain required regulatory approvals; unanticipated difficulties or costs in any reclamation which may be necessary; market conditions; and general business, economic, competitive, political and social conditions. The material assumptions upon which such forward-looking statements are based include, among others: the ability of the Company to access capital; the ability of the Company to conclude a transaction(s) with third parties to fund the development of our projects and mineral properties (including the Milestone Project); that the demand for potash will develop as anticipated; that the price of potash will remain at levels that will render the Company s potash projects economic; that operating and capital plans will not be disrupted by issues such as mechanical failure, unavailability of parts and supplies, labour disturbances, interruption in transportation or utilities, or adverse weather conditions; that the Company will continue to have the ability to attract and retain skilled staff; and that there are no material unanticipated variations in the cost of energy or supplies, or in any of the capital and operating cost estimates as may be disclosed in the Company s public record, as filed on SEDAR. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements, there may be other factors which cause actual results not to be as anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this presentation and the Company does not undertake to update any forward-looking statements contained in this presentation, except in accordance with applicable securities laws. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. This presentation may contain information regarding a historical mineral resource. A qualified person has not done sufficient work to classify the historical estimates as current mineral resources or mineral reserves. The Company does not treat any historical estimate as current mineral resource or mineral reserve. The Company has prepared and filed an NI Technical Report titled NI Technical Report Summarizing the Scoping Study for a Pilot Scale Selective Solution Mining Operation on the Milestone Project (Subsurface Mineral Lease KLSA 008), Saskatchewan dated August 4, 2015 and effective July 2, 2015 (the Pilot Study ). The report was prepared by Agapito Associates, Inc. and Novopro Projects Inc. The economic analysis used in the report was based on measured and indicated resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The Pilot Study is a preliminary economic assessment, is preliminary in nature and includes inferred mineral resources, which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that inferred resources will be converted to the measured and indicated categories, that the measured and indicated resources will be converted to the proven and probable mineral reserve categories and there is no certainty that the Pilot Study will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability; the estimate of mineral resources in the Pilot Study may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. The projected mining method, potential production profile and plan and mine plan referred to in the Pilot Study and this presentation are conceptual in nature and additional technical studies will be required in order to fully assess their viability. There is no certainty that a potential mine will be realized or that a production decision will be made. A mine production decision that is made without a feasibility study carries additional potential risks that include, but are not limited to, the inclusion of inferred mineral resources, which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mine design and mining schedules, metallurgical flow sheets and process plant designs will require additional detailed work and economic analysis and internal studies to ensure satisfactory operational conditions and decisions regarding future targeted production. To the extent that the use of the terms ore, mineable production, and mining occurs on this presentation or in the Pilot Study, its use is intended solely to differentiate between mineralized material (including dilution) above an economic cut-off grade and waste rock; there is no inference of mineral reserves. Qualified Persons under NI Please refer to the specific document accessible, cross-referenced or otherwise referred to in this presentation for the description of the particular applicable qualified person(s) in respect of that document. For general purposes, please note the following. The Pilot Study was read and approved by Dr. Douglas F. Hambley, P.E. (US), P.Eng. (SK), P.G. (US), Dr. Bo Yu, P.E. (US) and James Brebner, Eng. (QC), all independent Qualified Persons, as defined by NI The Pilot Study has been prepared by Agapito Associates, Inc. and Novopro Projects Inc. The in-house Qualified Persons for the purposes of NI guidelines is J. Patricio Varas, P.Geo., who has reviewed and approved the scientific and/or technical contents of this presentation. Cautionary Note to U.S. Readers and NI This presentation contains information with respect to adjacent or similar mineral properties in respect of which the Company has no interest or rights to explore or mine. The Company advises US investors that the mining guidelines of the US Securities and Exchange Commission (the SEC ) set forth in the SEC s Industry Guide 7 strictly prohibit information of this type in documents filed with the SEC. The Company is exempt from the requirements of Industry Guide 7 pursuant to the Canada-US Multi-Jurisdictional Disclosure System. Readers are cautioned that the Company has no interest in or right to acquire any interest in any such properties, and that mineral deposits on adjacent or similar properties are not indicative of mineral deposits on the Company s properties. National Instrument Standards of Disclosure for Mineral Projects ( NI ) is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. The disclosure in this presentation may use terms that comply with reporting standards in Canada. In addition, the terms mineral resource, measured mineral resource, indicated mineral resource, inferred mineral resource, probable mineral reserve and proven mineral reserve are defined in and required to be used by the Company by NI ; however, these terms are not defined terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into mineral reserves. Inferred mineral resources have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility studies, pre-feasibility studies or other economic studies, except in prescribed cases, such as in a preliminary economic assessment under certain circumstances. It cannot be assumed that all or any part of the measured mineral resources, indicated mineral resources or inferred mineral resources will ever be upgraded to a higher category. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Accordingly, information contained in this presentation containing descriptions of the Company s mineral deposits may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder. 2

3 The Milestone Project Key Highlights Experienced Management Team with Project Development and Mine Construction Backgrounds Large Scale and High-Grade Potash Reserve/Resource Base Environmental Risks Mitigated One of the Most Advanced Independent Greenfield Potash Solution Mining Projects Globally Completed Pilot Project Scoping Study/ Established Pathway to Commercial Production Located near existing Potash Mines and Infrastructure Recently Completed Strategic Investment to be used for the development of the pilot plant scale selective solution mining operation 3

4 Strategically Located Attractive Mining-Friendly Jurisdiction Saskatchewan Potash Host to ~50% of the world s reserves Produces ~30% of the world s supply of potash 10 operating potash mines Key Advantages of Potash Mining in SK Long history of potash mining Well-explored and documented geology Developed infrastructure Skilled labour Political stability Predictable tax regime 4

5 Milestone Project Overview 5

6 Infrastructure in Place Water Railway Port Power Natural Gas Roads 6

7 Environmental Risk Mitigated All requirements have been met according to Saskatchewan s Environmental Assessment Act Water Agreement with the City of Regina Secured a continuous and highly reliable source of water Considered a net positive benefit First potash solution mine in the world to utilize treated waste water Treated effluent discharge into Wascana Creek near City of Regina wastewater treatment plant Milestone has Environmental Assessment Approval 7

8 Pilot Project Scoping Study Rationale The Milestone Project has a high-grade, large-tonnage, world-class potash resource of significant value Previously completed Feasibility Study (2012) design and scope Focuses on business and project risk reduction while maximizing value (large tonnage, long life, mining methodology used at Mosaic Belle Plaine Potash Solution Mine) Historic potash supply and demand dynamics suggest pricing cycles are broad and favor lower cost producers A new paradigm was required in order to effectively exploit the Milestone asset while reducing CAPEX, maintaining competitive OPEX, and insulating Western from broad commodity pricing cycles 8

9 Pilot Project Scoping Study Mining and Processing Methodology contemplates selective solution mining of potash using horizontal wells injecting NaCl saturated solvent and selectively dissolving KCl KCl recovery through mechanical crystallization 146,000 tonnes standard grade MOP per year Methodology is scalable and unique in the Saskatchewan potash industry Projects that employ some key aspects of the selective solution mining process Intrepid Potash Moab, Utah Natural Soda, Colorado (Nahcolite) Eti Soda, Turkey (Trona) Other projects that employ selective solution mining from dual well caverns Deusa International GmbH (Carnallite) Mosaic Belle Plaine Potash Mine, and K+S Legacy Project in Saskatchewan 9

10 Selective Solution Mining Operating Mines/Projects Intrepid Potash Moab, Utah ~1.1 Mt produced since 2004 Natural Soda, Colorado (Nahcolite) Injection Well Injection Wells Extraction Well Extraction Well 25 years experience Eti Soda, Turkey (Trona) 40 caverns in production Deusa International GmbH (Carnallite) Gathering Cavern Mosaic Belle Plaine Potash Mine, and K+S Legacy Projects in Saskatchewan Horizontal Bore Array Source: Intrepid Potash 2010 Analyst Presentation 10

11 Key Highlights/Assumptions Pilot Project Scoping Study Initial CAPEX CDN $80.6 million $2.0 million pre-production cashflow Potash Price US $315/tonne (CDN $385/tonne) Sustaining CAPEX CDN $12 million in year 5 Operating Expenditures CDN $80/tonne Transportation Cost CDN $70/tonne US/CDN Exchange Rate 1.22 After-Tax/Royalties NPV 10 CDN $56.7 M After-Tax/Royalties IRR 25.2% Lifespan 12 year operation (2 sets of caverns) Reclamation allowance included, Real Economic Basis 11

12 Process Flow Schematic Pilot Project Scoping Study Dryer Loadout Boiler Esterhazy Potash Bed Production Well Crystallizers Heat Exchangers Injection Well Solution Mining Cavern 12

13 CAPEX/t Comparison Pilot Project Scoping Study provides a pathway to commercial production at significantly reduced CAPEX $1, $1, $1, Feasibility Study 2012 $1, $1, $1, $1, $ $ Scoping Study 2015 Reduced by ~40% $ $ Source: Raymond James Fertilizer Research Report 2013, Eurochem Company Documents,2014, K+S Company Documents 2014, BHP Company Documents 2014, Vale Company Documents 2014 (Rio Colorado originally planned at $6 billion but costs escalated to an estimated $11 billion) 13

14 Schedule Pilot Project Scoping Study Preliminary project time line that allows for optimization with first production anticipated within 24 months Optimization Pre Engineering Pre Construction/Site Prep Long Lead Orders Engineering/CM Construction Cavern Construction Commissioning Production Ramp up Project Start Year 1 Year 2 Month 1 Month 4 Month 7 Month 10 Month 13 Month 16 Month 19 Month 22 Month 24 14

15 Strategic Investment Beijing Tairui Innovation Capital Management Ltd. Equity investment (Sept. 2015) of C$80,000,000 C$ per common share Total 238,264,635 shares 53% premium over volume weighted average price on the TSE (30 day) Proceeds from the Investment will be used for the development of the pilot plant scale selective solution mining operation 15

16 TSX-WPX Thank You West Georgia Street Vancouver, BC. V6E 4M3 Canada