extract | nourish | flourish
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EXTRACT | NOURISH | FLOURISH
2020
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All statements, other than statements of historical fact, contained in this presentation constitute “forward-looking statements” and are based on the reasonable
expectations, estimates and projections of Brazil Potash Corp. (the “Company”) and the Company’s managers as of the date of this presentation. The words
“plans,” “expects,” or “does not expect,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates,” or “does not anticipate,” or
“believes,” or variations of such words and phrases or statements that certain actions, events or results “may,” “could,” “would,” “might,” or “will be taken,”
“occur” or “be achieved” and similar expressions identify forward-looking statements. Forward-looking statements include, without limitation, statements
regarding mineral resource estimates, bankable feasibility study projections, strategic transactions and financing sources, the growth of the potash market,
expected industry demands, the Company’s business strategy, projected capital and operating expenditures, currency fluctuations, government regulation and
environmental regulation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable
by the Company as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies.
The estimates and assumptions contained in this presentation, which may prove to be incorrect, include, but are not limited to, the various assumptions of the
Company set forth herein. Known and unknown factors could cause the actual results to differ materially from those projected in the forward-looking
statements. Such factors include, but are not limited to, fluctuations in the supply and demand for potash, changes in competitive pressures, including pricing
pressures, timing and amount of capital expenditures, changes in capital markets and corresponding effects on the Company’s investments, changes in
currency and exchange rates, unexpected geological or environmental conditions, changes in and the effects of, government legislation, applicable regulations,
taxation, controls and regulations and political or economic developments in jurisdictions in which the Company carries on its business or expects to do
business, success in retaining or recruiting officers and directors for the future success of the Company’s business, officers and directors allocating their time to
other ventures; success in obtaining any required additional financing to make target acquisition or develop an acquired business; employee relations,
community relations and risks associated with obtaining any necessary licenses or permits. Many of these uncertainties and contingencies can affect the
company’s actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on
behalf of, the Company. 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. All of the forward-looking statements made in this presentation are qualified by these cautionary
statements. These factors are not intended to represent a complete list of the factors that could affect the Company. The Company disclaims any intention or
obligation to update or revise any forward-looking statements, except to the extent required by applicable law or regulation. The reader is cautioned not to
place undue reliance on forward-looking statements.
ABSOLUTELY NO COMMUNICATIONS FOUND ON https://www.potassiodobrasil.com.br/, OR ANY OF THE COMPANY’S SOCIAL MEDIA, CONSTITUTE
OR ARE MEANT TO CONSTITUTE AN OFFER OR SOLICITATION TO SELL SECURITIES, ADVERTISING, CONDITIONING THE MARKET, OR SELLING
EFFORTS OF ANY KIND. ANY OFFERING IN THE FUTURE, IF EVER MADE, FOR FUTURE SALES OF SECURITIES MAY BE MADE ONLY BY
DELIVERY OF A SECURITIES AND EXCHANGE COMMISSION FORM 1-A OFFERING CIRCULAR DISCLOSURE DOCUMENT OR OTHER QUALIFIED
DISCLOSURE DOCUMENT CONTAINING DISCLOSURES AND A SUMMARY OF RISKS. NO STATEMENTS IN THIS PRESENTATION, ON THE WEB
SITE, https://www.potassiodobrasil.com.br/ OR SOCIAL MEDIA SHALL BE INCORPORATED BY REFERENCE INTO SUCH DISCLOSURE DOCUMENT.
This presentation includes a summary of a bankable feasibility study (“BFS”). The BFS was authored by Stanislaw Kotowski, Darrell Hladun and Ralf John
Dickson of WorleyParsons, who are independent qualified persons within the meaning of NI 43-101 of the Canadian Securities Administrators. There is no
certainty that the BFS results will be realized. David Gower, an Officer of the Company and a qualified person under NI 43-101, has reviewed the scientific
and technical information herein.
Cautionary Note Regarding Forward Looking Statements
− Lowest all-in delivered cost to
Brazil
− Cost to mine, process and
deliver equivalent to importers
delivery costs alone
− Brazil is one of the world’s largest exporters of agricultural products
− World’s second largest and highest growth rate market for potash but
imports 94% of its needs 14,000 to 20,000km from mines
− Project located only 8km from major river flowing to farm region
− Brazil’s potash basin estimated to be ~2/3 the size of Saskatchewan
and ~2x Russian Ural potash basin
− Proven and probable reserves support 34 year mine life based on
drilling only 10% of the land potentially mineralized
− Potash is an essential
nutrient to grow food with
no substitute
− Highest value mainstream
fertilizer
Brazil
Location
Robust
Economics
Essential
Product
Massive
Scale
Compelling Food Security Investment OpportunityFour key components make Brazil Potash a one of a kind asset
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Brazil is a Rapidly Growing Agricultural Powerhouse BUT Imports ~94% of its Potash Need
• Brazil is one of the world’s largest net exporters of agricultural products
• Agribusiness currently represents ~24% of Brazil’s GDP and has significant growth potential with GAGR estimated at 4.4%2
• Brazil is the second highest consumer of potash globally at 10.2Mtpa (16% of global production) with CAGR of 3.5%2
Availability of Arable Land
79
188 132
170
96 103 47 24
224
81
87
42 16
36
303
269
219
170
138 119
83
24
0
100
200
300
400
Brazil USA Russia India China EU AustraliaThailand
Hecta
res (
mill
ion
)
Land in use Available land
3.8x Growth Potential
Crop Production(1) Exports(1) % of Global
Exports
Orange Juice 77%
Sugar 45%
Soybeans 39%
Poultry 34%
Coffee 29%
Meat 22%
Source: United Nations (UN) World Population Prospects
(1) Source: United States Department of Agriculture
(2) Source: Integer Research, March 2018
Brazil’s production of food products
KCl Consumption by Country (Kt)2
10,162
9,838
4,585
3202
853930626
20,24715,400
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Substantial and Sustainable Logistics Cost Advantage Also Results in GHG Emission Reductions
• Imported potash primarily from Canada and Russia travels 14,000 to 20,000 kilometers by rail, boat and then truck to reach Brazilian fertilizer blenders
• By being located in Brazil only 8km from major river system, logistics cost savings of ~US$129 / tonne and GHG emission reduction of ~508kt/yr CO2eq relative to Canadian and Russian producers
Source: Integer Research (Sep 2018)
(a) Sea Freight US$25 / tonne+ Port & Handling Expenses US$33 / tonne
(b) Freight Costs US$89 / tonne from Paranagua Port to Rondonópolis
∆ US$129 / tonne
Primary Global Potash Routes
Freight at Origin US$35 / tonne
Sea Freight US$58 / tonne(a)
Inland Freight US$89 / tonne(b)
Canpotex US$182 / tonne
Inland Freight US$53 / tonne
BPC US$53 / tonne
Primary
KCl Market 8Mtpa+
Secondary
KCl Market 1Mtpa+
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Low Cost Water Transportation Access to Farmers
• Product transportation by water is the lowest cost means
- Rail tends to be >2.5x
- Trucking typically >10x
• Strategic location close to farmingregions of Brazil
- Largest soybean producing areas, major consumers of potash
- Nearly 50% of total agricultural production in Brazil
• Experiencing significant agriculture expansion with large and undeveloped rural properties
• Potential to achieve even higher agricultural yields through better use of fertilizers
Main Fertilizer Ports
Fertilizer Bulk Blender
Waterways
Cerrado Region
São Luiz
Manaus
Brasilia
Belo Horizonte
Rio de Janeiro
Sao Paulo
Autazes Creates Significant Employment and Positive Social Impacts
◼ Remove thousands of people from diesel generated power by connecting to Brazil’s national electricity grid –~75% hydro1
◼ Sustainable jobs for the people in the Amazon
◼ 1,500 direct construction jobs and 1,200 direct jobs during several decades of operation
◼ Potash supply facilitates the reuse of existing arable land –mitigating deforestation
◼ Unnecessary international transport of potash saves ~508kTpa of GHG emissions
◼ Dry stacked tailings are ultimately disposed underground resulting in no legacy footprint
◼ Investing in local school programs that ensure ~170 children learn core skills such as growing vegetables and school tutoring
7(1) Source: www.hydropower.org
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Private Company with Strong Stakeholder Support
Share Capital: Shares Outstanding, Basic 130 million
Warrants, Options & DSUs 40 million
Shares Outstanding, Fully-Diluted 170 million
Brazil & International Major Shareholders
Strong Government & Community Support
• Government keen to reduce Brazil’s dependence on imported potash & improve living standards
• Significant tax breaks in State of Amazonas to encourage development
• Local communities highly engaged & supportive
• Brazil Potash funds pre/post school program that supports underprivileged ~140 children
Senior Management
Previous Experience
Matt Simpson
CEO
Marcos Pedrini
Vice President,
Potash Sales
Stan Bharti
Executive Chairman
Guilherme Jacome
Director Brazil,
Project Director
• Previously served as General Manager at Rio Tinto's Iron Ore Company of Canada managing over $300 million / year spend, accountable for all operations, maintenance and technical people to safely move > 70 mtpa
• Previously worked with Hatch Consulting, designing and constructing metallurgical refineries globally
• Over 35 years of extensive hands-on experience selling and arranging delivery of Potash in Brazil
• Previously worked with Vale, where he retired as General Manager of Agriculture Sales
• Founder of Forbes & Manhattan; over 30 years of experience in mining, agriculture, energy, finance and technology
• Experienced in emerging markets, with a proven track record in leveraging top tier management and operational professionals
• Invested and raised $10 billion+ over the last 10 years
• Engineer, MBA FDC (Brazil) and MBA IMD (Switzerland)
• Former General Manager of global projects for Vale
• Experience includes greenfield, brownfield and expansion of Brazil underground Potash Mine
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Skilled Management Team with Mine Construction,
Operations and Potash Sales Experience
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Feasibility Study Reinforces Compelling Economics
Potash (KCl) Production: 2.4 Mtpa
Initial Capital Investment to achieve full production:
(Pre-tax)
(After-tax)
(Capital intensity)
US$1.9 billion
US$2.1 billion
US$778 / tonne
OPEX – FOB Port Average Over Mine Life: (Freight On Board = includes mining, processing & barge loading)
US$80 / tonne KCl
Potash Long-Term CFR Brazil Benchmark Price Forecast:
Brazil Potash Estimated Realized Price (FOB Port):
$334 / tonne
$399 / tonne
EBITDA: US$718 million
Estimated Reserve Mine Life: 34 years
Ramp-up Period to Reach Full Production: 3 years
1. Feasibility study completed April 2016 by WorleyParsons.
Marketing study updated in August 2018 by Integer Research.
Mine: Underground 8.5 Mtpa ROM
Plant: Production 2.4 Mtpa Granular Potash
$964
$718
$415
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Profitable Across a Range of Potash Prices
Projected Annual EBITDA and Breakeven
Downside Case(1)
CFR Brazil
US$230/t KCl
Base Case(2)
CFR Brazil
US$334/t KCl
Upside Case(3)
CFR Brazil
US$500/t KCl
(1) Downside Case based on 10-year low CFR Brazil KCl price for life of mine
(2) Base Case based on Integer Research CFR Brazil KCl forecast prices
(3) Upside Case based on US$500/t CFR Brazil KCl prices for life of mine
(4) Financial projections, forecasts or forward-looking statements are based on assumptions or expectations which are believed by management to be fair and
reasonable at the time they were prepared and were arrived at after careful consideration. Readers are cautioned that such financial projections, forecasts or
forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and contingencies, many of which
are beyond management’s control. There are a number of factors that could affect the future operations of Brazil Potash including without limitation: changes in
demand, industry competition, legislative, fiscal and regulatory developments, economic and financial market conditions including but not limited to the current
COVID-19 global pandemic. These factors and risks could cause actual results, performance or events to differ materially from those expressed or implied by
the financial projections, forecasts or forward-looking statements available on this website.
(US$mm)
• Producing potash companies valued at 8 to 10x EBITDA
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Global Potash COGS
• Brazil Potash average operating cost at full run-rate production estimated to be ~US$80 / tonne FOB Autazes Port
• Imported potash is typically sold CFR Brazil ports and a further ~US$31 / tonne is spent on inland freight
Source: Clarksons Platou Securities Inc.
Run Rate Average Operating Costs
Unit US$M / year US$ / tonne FOBMining 57 25Surface Facilities 112 48Transportation 9 4G&A 7.5 3Total $185 $80
By Far the Lowest Delivered Cost to Brazil
~70% of producers losing money at $240/T
Brazil Potash Near Construction Ready
Dec 2009
Start ofMineral
Research
2010/2013
Jul/2015
Autazes ore body discovery and further drilling
2013/2014
EIA & PEA completed
Jan/2015
EIA submittedfor Gov
Approval
Preliminary License issued
IndigenousConsultations
Initiated
2016
FeasibilityStudy
completed
Jul/2019
InstallationLicense
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Start ofConstruction
• Substantial number of the required to obtain the Installation License required to start construction have been completed and approved
• Major outstanding item is completion of additional indigenous consultations which are currently ongoing
High quality management team with extensive Brazil experience
Compelling project economics from Phase I and ability to increase future production
Autazes delivers strong social and environmental benefits including ~508kT Green House Gas Emission savings
Multi-generational operation potential given basin size
Autazes benefits from a structural and sustainable cost advantage
Brazil is the world’s second largest and highest growth market for potash but imports 94% of its needs
Brazil is one of the largest global seaborne agricultural producers and this project will supply 25% of the country’s potash needs
Rare Opportunity to Invest in Sustainable Global Seaborne Agricultural Supply with Generational Potential
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For more informationcontato@potassiodobrasil.com.br
Toronto Main Office: +1416309213865 Queen Street WestSuite 805, P.O. Box 71Toronto, ON CanadaM5H 2M5
Brazil Headquarters: +5592991736863 R. Rio Iça, 310Sala 105, N. Sra. GraçasManaus / AM Brazil69053-100
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