T h e M i l e s t o n e P r o j e c t

Transcription

1 T h e M i l e s t o n e P r o j e c t September 2012 Growth Through the Salt of the Earth

2 Disclaimer Forward-Looking Statements and Cautionary Notes 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 words 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. The forward-looking statements that are contained in this presentation are based on various assumptions and estimates by Western Potash Corp. (the Company ) and involve a number of risks and uncertainties. As a consequence, actual results might differ materially from results forecast or suggested in these forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause the actual results to differ include: 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. These statements are based on a number of assumptions. The material assumptions upon which such forward-looking statements are based include, among others: 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 the pre-production capital and operating cost estimate as disclosed in the Company s Preliminary Feasibility Study. Although 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 to differ. Forward-looking statements contained herein are made as of the date of this presentation and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by 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 estimate as current mineral resources or mineral reserves. The Company is not treating the historical estimate as current mineral resources or mineral reserves. The economic analysis contained in the Preliminary Feasibility Study (the highlights of which are contained in this presentation) is based on measured and indicated resources. The Preliminary Feasibility Study forms the fundamental basis of a NI Technical Report titled NI Technical Report Summarizing the Preliminary Feasibility Study for a Potash Solution Mine on the Milestone Project (Subsurface Mineral Lease KLSA 008), Saskatchewan dated effective October 31, 2011 and prepared by Agapito Associates, Inc. and AMEC Americas Limited. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Cautionary Note to U.S. Readers 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 for Disclosure of 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. 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. TSX - WPX FSE - AHE 2

3 Milestone Project Timeline *Initial Technical Report Purchased over 2,550 acres to build the plant site. Completed PFS Feasibility Completion Q Phase 1 & 2 Drill Program (20, 153m) Scoping Study Delivered **NI Technical Report Delivered Measured 67 Mt recoverable KCL Indicated 187 Mt recoverable KCL Inferred 701 Mt recoverable KCL *Effective October 31 st 2011, NI Technical Report Summarizing the Prefeasibility Study for a Potash Solution Mine on the Milestone Project (Subsurface Mineral Lease KLSA 008), Saskatchewan. Agapito Associates Inc. Q.P. : Michael P. Hardy, Ph.D.,P.E.,P.Eng., Douglas M. Hambley, Ph.D., P.E.,P.Eng.,P.G. AMEC Americas Limited Q.P.: Paul O Hara, P.Eng. Western Potash Corp. Q.P.: Dean Pekeski, P.Geo., Greg Vogelsang, P.Eng., P.Geo. **Effective July 12, 2010, Concerning Mineral Resource Estimates Subsurface Mineral Permits KP 408 and KP 409 Saskatchewan. Agapito Associates Inc. Q.P.: Michael P. Hardy, Ph.D.,P.E.,P.Eng., Douglas M. Hambley, Ph.D., P.E.,P.Eng.,P.G. Western Potash Corp. Q.P.-Dean Pekeski, P.Geo. TSX - WPX FSE - AHE 3

4 Milestone Property D Seismic Work Drill Program 2010 Drill Program Resource Estimate Delivered Scoping Study Delivered 2011 Drill Program MOU City of Regina (Water) Plant Site Acquired Updated Technical Report Delivered PFS Completed 2012 Feasibility Process Continues Environmental review commences TSX - WPX FSE - AHE 4

5 World Class Resource NI Technical Report Measured Recoverable Resource 66.6 Million Tonnes 25.75% KCL Indicated Recoverable Resource Million Tonnes 25.97% KCL Inferred Recoverable Resource Million Tonnes 25.96% KCL Effective July 12, 2010, Concerning Mineral Resource Estimates Subsurface Mineral Permits KP 408 and KP 409 Saskatchewan. Agapito Associates Inc. Q.P.: Michael P. Hardy, Ph.D.,P.E.,P.Eng., Douglas M. Hambley, Ph.D., P.E.,P.Eng.,P.G. Western Potash Corp. Q.P.-Dean Pekeski, P.Geo. TSX - WPX FSE - AHE 5

6 Solution Mining TSX - WPX FSE - AHE 6

7 Milestone PFS Highlights Net Present Value (NPV 10 ) Preliminary Feasibility Study Highlights NPV 10 $4.14 B CAD $4,140 IRR 22.7% $3,367 $2,859 $2,345 Payback Period OPEX Initial CAPEX Port CAPEX 5 Years $62.35/tonne CAD $2.458 BN CAD $300 MM CAD $1,694 $1,286 Life of Mine 40 years Construction Start-up 2013 Mining Start-up 2016 $990 Years To Full Secondary Production 6 n.a. Long-Term Potash Price (FOB) Gate $511 US/tonne - As of June, 2012* Target Annual Production Rate 2.8 Mt/yr TSX - WPX FSE - AHE 7

8 Milestone CAPEX Total Initial CAPEX Requirement $2.458 Billion CAD Contingency (25%) 18% Escalation (1.5%/yr) 4% Secondary Mining 4% Mining 4% Civil 2% Civil Piping 1% Architectural 10% Building Services 3% Mechanical 6% Mechanical Bulks 2% Process Piping 4% Direct & Indirect Costs 23% Water Supply 12% Instrumentation <0.1% Electrical 7% TSX - WPX FSE - AHE 8

9 PFS Processing Plant Diagram TSX - WPX FSE - AHE 9

10 Milestone Infrastructure Approx. 30 km Southeast of Regina Approx. 40 km pipeline from the Regina wastewater treatment plant to the Milestone Potash Project mine site Access to Rail Access to Port TSX - WPX FSE - AHE 10

11 Sustainable Water Source The City of Regina approved the Key Commercial Terms to deliver a large portion of the City s treated sewage effluent routed to the Milestone Potash mine site Worth more than $200 million to the City of Regina over the 45 year term of the Agreement Up to 60,000 cubic metres of treated effluent diverted daily from the Regina wastewater treatment plant to the Milestone Potash Project mine site TSX - WPX FSE - AHE 11

12 Rail Options Competitive/efficient multiple rail access (CN & CP or UP & BNSF) Railcars can be leased or purchased Canadian port - 17,340 MT/unit train (144 trains/yr) Fleet of 900 railcars (5 unit trains plus spares) Moved in car unit trains using 47 covered hopper cars with 102 MT capacity (1 train every 2.5 days) TSX - WPX FSE - AHE 12

13 Port Options Existing terminal infrastructure power, roads, wharf Build-out time within 3 years Options include: Prince Rupert (new terminal) Port Metro Vancouver Kinder Morgan, Fraser Surrey Docks, Western Stevedoring Existing brownfield terminals in WA and OR Tacoma, Longview, Kalama, Portland. TSX - WPX FSE - AHE 13

14 Milestone EIS Process Submit Project Description Issue EIA T.O.R. Publish EIS Regulatory Technical Review Publish EIS Amendment Public Scoping Publish Ministers Record of Decision Fall 2011 Summer 2012 Fall 2012 Spring 2013 Definitions: EIS Environmental Impact Statement Project Description Detailed descriptions of all project phases (supported by Technical Data) EIA Environmental Impact Assessment is an assessment of the possible positive or negative impact that a proposed project may have on the environment, together consisting of the social, environmental and economic aspects. TOR Terms of Reference Public Scoping Public interests and participation are an important part of the process (identifying potential issues and impacts) TSX - WPX FSE - AHE 14

15 Management Patricio Varas President & CEO Professional Geologist with over 24 years experience in exploration, project development and corporate management. WPX President and CEO since inception. Executive Vice President Dean Pekeski Professional Geologist with over 17 years experience in mineral exploration. Previously the VP of Exploration with WPX. Project Director Richard Lock Over 24 years engineering experience in the mining industry Involved with Rio Tinto's Diavik Diamonds Project - Took the project from the evaluation stage to production. Commercial Director Bruno Hegner 20 Years experience in the mining industry with relation to multiparty mining venture agreements and M&A transactions. Most recently with Rio Tinto as Managing Director of the Copper Projects Group. John Costigan VP Corporate Development Over 25 years experience in technical sales /marketing to the mining, food, and pulp & paper multinationals. VP of Corporate Development at WPX since inception. VP Corporate Finance & Director Patrick Power Over 17 years of experience as a stock market professional and as director of public companies. Played a critical role in raising approximately 80 million for WPX to date. Manager of Environmental & Regulatory Affairs Greg Vogelsang P.Eng and P.Geo with 25 years experience related to environmental management of large industrial facilities. Recently elected President-Elect for Geoscientists Canada and will assume role in TSX - WPX FSE - AHE 15

16 Milestone Timeline Milestone Drilling & Seismic Present Environmental Assessment Permitting & Licensing Scoping Study Feasibility Process Mine Development & Construction Commercial Production TSX - WPX FSE - AHE 16

17 Potash Sector Merger and Acquisition Activity TSX - WPX FSE - AHE 17

18 Capital Structure Ticker Symbol TSX:WPX, FSE:AHE Issued Shares 161,295,183 Issued and Outstanding 187,437,923 Warrants ($1.10) 1,272,740 expiry June 21, 2013 ($1.75) 9,091,000 expiry June 21, As of June 30 th, 2012* Analyst Coverage Alta Corp John Chu BMO Capital Markets Joel Jackson Fundamental Research Siddharth Rageev Laurentian Bank Services Nelson Mah Mackie Research Capital Jaret Anderson MGI Securities Corey A. Diaz National Bank Robert B. Winslow Northern Securities Fadi Benjamin Raymond James Steve Hansen Salman Partners Andrea Rubakovic Scotiabank Ben Isaacson Stifel Nicolaus Nick Morton TSX - WPX FSE - AHE 18

19 Thank you Growth Through the Salt of the Earth