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1 Corporate Presentation December 2013 1 TSX-V: INP

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Page 1: Inp corporate presentation dec_2013

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Corporate Presentation

December 2013

1

TSX-V: INP

Page 2: Inp corporate presentation dec_2013

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This Presentation discloses management policies, investment strategies and courses of conduct that may constitute “forward-looking

information” within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included

herein may be forward-looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology

such as “plans”, “expects” or “does not expect”, “proposed”, “is expected”, “budgets”, “scheduled”, “estimates”, “forecasts”, “intends”,

“anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases, or by the use of words or phrases which state

that certain actions, events or results may, could, would, or might occur or be achieved. This forward-looking information reflects the

Company’s current beliefs and is based on information currently available to the Company and on assumptions the Company believes are

reasonable at the time of preparation. These assumptions include, but are not limited to, the actual results of investee’s being equivalent to or

better than estimated results by the Company. Forward-looking information is subject to known and unknown risks, uncertainties and other

factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those

expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business,

economic, competitive, political and social uncertainties; commodity prices; cyclical nature of the agricultural industry; weather; the early

stage development of the farming operations or dishonesty of the streaming partners; reliance on Messrs Emsley, Nystuen, Farquhar, and

Burgess, uncertainty in identifying and structuring streaming agreements, liquidity of investments, potential conflicts of interest, failure of the

Company to meet targeted returns, limited transferability of Shares, defaulting streaming partners, competition; changes in project parameters

as plans continue to be refined; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental

legislation affecting the Company and its streaming partners; timing and availability of external financing on acceptable terms; conclusions of

economic evaluations; and lack of qualified, skilled labour or loss of key individuals. Although the Company has attempted to identify

important factors that could cause actual results to differ materially from those contained in forward-looking information, there maybe other

factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-

looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable

securities laws. As a result of these risks and uncertainties, actual events or results and the actual performance of the Company or its business

may be materially different from those reflected or contemplated in the forward looking statements or information. Likewise, in considering the

prior performance information contained herein, prospective investors should bear in mind that past performance and experience is not

necessarily indicative of future results, and there can be no assurance that the Company will achieve comparable results.

The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933

Act”), or any state securities laws. Accordingly, these securities may not be offered or sold within the United States of America or to a U.S.

Person (as such term is defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws

or an exemption from such registration is available.

Forward Looking Information

Page 3: Inp corporate presentation dec_2013

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1. Input Capital

2. Overview of Canola Industry

Page 4: Inp corporate presentation dec_2013

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WHO WE AREThe world’s first agricultural commodity streaming company

Innovative source of long-term, non-constraining working capital

Aligned with producers to boost yields using industry-leading

precision agriculture practices

Input Capital provides a platform for significant value creation

Page 5: Inp corporate presentation dec_2013

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THE WORLD’S PREMIER AG-STREAMING COMPANY

• Input Capital Corporation (“Input Capital” or the “Company”) is the world’s first agricultural

commodity streaming company

• Input Capital was created to bridge the gap in available funding sources for farm working capital

by providing non-constraining long-term working capital aimed at boosting production through

precision agronomics

• Crop insurance mitigates downside crop yield risk while the negotiated interest in crop production

allows Input Capital to participate in any increased crop yield

• Canola is the initial focus of Input Capital as it is the most profitable commodity for Canadian farmers

with an addressable target market of 50,000+ farmers in Western Canada alone

• Management has developed a strong track record in the ag-sector, currently managing a portfolio of

$125+ million of farmland rented to 136 farmers, at least 75 of whom are canola producers

Page 6: Inp corporate presentation dec_2013

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0

20

40

60

80

100

120

2005 2006 2007 2009 2010 2011 2012 2013

Th

ou

sa

nd

s o

f A

cre

s O

wn

ed

Management has Created a Leader in Canadian Agriculture Investing

Management Track Record

THEN: Launched first farmland private equity fund in Canada in 2005

NOW: Largest farmland investment fund in Canada

Diversified $125+ million portfolio of ~117,000 acres of Saskatchewan farmland

$40 million farmland mortgage facility through Farm Credit Canada

20.2% IRR (net of all fees) since inception

in 2005

Units have appreciated from $18 in 2005 to

~$59 in 2013

Initial investors in Assiniboia have also

received $4.93 / unit in cash distributions

Raised $53 million in equity

through eight private & public

offerings since 2005

136 high quality farming tenants

across Saskatchewan

Real Value

Creation

Source: Assinoboia Farmland Limited Partnership MD&A

Page 7: Inp corporate presentation dec_2013

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Name Highlights

Doug EmsleyChairman

• Co-Founder and President of Assiniboia Capital and Palliser Farmland Management Corp.

• President of Emsley & Associates (2002) Inc., Chairman of Security Resource Group Inc. and Sabre West Oil & Gas

Ltd.

• Board member – Bank of Canada, Public Policy Forum, Saskatchewan Roughriders Football Club, Information

Services Corporation (TSX: ISV)

Brad FarquharDirector

• Co-Founder, Vice-President & CFO of Assiniboia Capital and Palliser Farmland Management and President of Nomad

Capital Corp.

• Director of Greenfield Carbon Offsetters Inc., Frontier Centre for Public Policy, and SIM Canada

• Member of the Regina & District Chamber of Commerce Policy Committee

David LaidleyIndependent Director

• Chairman Emeritus, Deloitte Touche LLP (Canada)

• Director, Aimia Inc., EMCOR Group Inc., ProSep Inc., Bank of Canada, Nautilus Indemnity Holdings Ltd.

• CPA (Quebec)

Dr. Lorne HepworthIndependent Director

• President of CropLife Canada and Chairman of Genome Canada, Director of CARE Canada

• Independent Review Committee – Assiniboia Farmland Limited Partnership

• Member, Canadian International Food Security Research Fund Scientific Advisory Committee

• Former Saskatchewan Minister of Agriculture, Finance, Education, and Energy & Mines

David A. Brown, QCIndependent Director

• Counsel, Davies Ward Phillips & Vineberg LLP

• Former Chairman & CEO – Ontario Securities Commission (OSC)

• Former Chair, Board of Directors, Canadian Employment Insurance Financing Board

• Member, Investment Advisory Board, Westerkirk Capital Inc.

• Director & Member, Funds Advisory Board, Invesco Trimark Group of mutual funds

Special Advisor:

John BudreskiSpecial Advisor

• CEO, Morien Resources and Chairman, Delta Gold

• Director, Sandstorm Gold Ltd., Sandstorm Metals & Energy Ltd. and Delta Gold Ltd.

• Director, Alaris Royalty Corp.

• Formerly Vice-Chairman, Cormark Securities, President & CEO of Orion Securities Inc., and Head of Investment

Banking, Scotia Capital Inc.

Board of Directors & Special Advisor

Page 8: Inp corporate presentation dec_2013

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Management

Name Highlights

Doug EmsleyPresident, CEO &

Chairman of the Board

• Co-Founder and President of Assiniboia Capital and Palliser Farmland Management Corp.

• President of Emsley & Associates (2002) Inc., Chairman of Security Resource Group Inc. and Sabre West Oil & Gas

Ltd.

• Board Member – Bank of Canada, Public Policy Forum, Saskatchewan Roughriders Football Club, Greenfield Carbon

Offsetters Inc., Information Services Corporation (TSX: ISV)

• Former Board Member – Royal Utilities Income Fund (TSX)

Brad FarquharExecutive VP, CFO &

Director

• Co-Founder, Vice-President & CFO of Assiniboia Capital and Palliser Farmland Management and President of Nomad

Capital Corp.

• Director of Greenfield Carbon Offsetters Inc., Frontier Centre for Public Policy, and SIM Canada

• Member of the Regina & District Chamber of Commerce Policy Committee

Gord NystuenVP, Market Development

• Previously served as VP of Corporate Affairs at SaskPower

• Former Deputy Minister of Agriculture, Chief of Staff to the Premier of Saskatchewan and Chairman of Saskatchewan

Crop Insurance Corporation

• Partner, Golden Acres Seed Farm & Director of Avena Foods Ltd.

Jamie BurgessDirector of Finance & Administration

• Director of Finance & Administration for Assiniboia Capital Corp. and Palliser Farmland Management Corp.

• Previously served as a senior manager at Deloitte & Touche LLP

• Director of Saskatchewan Science Centre

Page 9: Inp corporate presentation dec_2013

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Increased

Population

Long-Term Rising

Global Incomes

Decreasing Arable

Land

• Long-term food production must increase to keep pace with needs of a rising

population with the U.N. forecasting the global population will grow to 8+ billion

within the next decade

• Economic growth in developing nations (i.e. China, India) fueling demand for

more and better food, driving demand for meats and better quality grains

• Decreasing amount of arable farm acreage per capita is increasing pressure on

farmers to produce more food from less land by increasing crop yields

Recent Interest in

Biofuels

• Rising interest and production in biofuels increasing demand for all grain

products and feedstock commodities

Agriculture Industry Fundamentals

Page 10: Inp corporate presentation dec_2013

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• Canola is a crop that produces pods from which seeds are harvested and crushed to create

canola oil and meal

• Canola demand is growing for many reasons:

The healthy oil

• FDA has tentatively ruled to effectively ban the use of trans fats in foods

• Canola oil is high in good fats, is trans fat free, contains no cholesterol and is a good source

of vitamin E

Biofuel feedstock and high quality animal feed

• Canola is used as a source of feedstock for biofuel

• Canola meal in animal feed is known to increase milk production by one litre, per cow, per day

Emerging industrial uses

• Including plastics, protein isolates, adhesives and sealants

Canola is a $19.3 Billion Industry in Canada

Page 11: Inp corporate presentation dec_2013

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Big Market

Demographically

Driven

Sector

Consolidation

• Canadian farm assets = $330+ billion with Western Canada accounting for 52%

• 50,000+ canola farmers in Canada

• Massive intergenerational transfer of farm assets over the next 10-15 years:

• Expected to be over $30 billion in Saskatchewan alone

• Aging Western Canadian farmers – more than 35% over age of 55 (vs. Canada @

30%)

• Ongoing consolidation of farming sector

• Many farmers are faced with once-in-a-lifetime expansion opportunities they cannot

afford on their own

Underserved

Market

• Significant shortage of financing available for working capital in the farming sector

that matches the needs and requirements of farmers

• Unlimited supply of farmland mortgage capital (FCC - $23 billion book) and leasing

capital (i.e. John Deere)

• Precision farming is more capital intensive than older, less productive farming methods

The Opportunity

Western Canada’s agriculture sector is significantly undercapitalized

and offers excellent, overlooked investment opportunities

Source: Statistics Canada

Page 12: Inp corporate presentation dec_2013

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INPUT CAPITAL HIGHLIGHTS“Game Changer” for Farmers• Accelerates farm growth and productivity and improves bargaining power with grain handlers and input

providers

100% of Current Streams Will Generate Revenue in 2013• No production delays or capex overruns and close to immediate revenue (unlike many mining streams)

Scalable, Diversifiable Model where Key Relationships Create Barriers to Entry• Best in class farming relationships with the largest investor-to-farmer footprint in all of Saskatchewan

Strong Risk / Return Profile with Meaningful Future Growth Potential• Excellent return metrics and robust, unlevered operating cash flow generation

Strong Board and Management Team with Demonstrated Track Record in Ag-Space• High profile experienced management team

Page 13: Inp corporate presentation dec_2013

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Business Process

1. Up Front Payment

Up front payments to farmer for a Crop Production Interest

2. Consulting AgrologistAssigned

Retain services of a science-based agrologist

3. Farmer Grows the Crop

The farmer and the agrologistwork to grow the best possible

crop

4. Crop Payment

The farmer delivers Input Capital’s share of crop to

established elevators and is paid a fixed price/tonne

5. Upside Potential

Input Capital receives a share of measured yield

improvement on farm resulting from improved agronomy

6. New Streaming Contracts

Free cash flow reinvested in new streaming contracts for

compounding returns

Page 14: Inp corporate presentation dec_2013

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Crop Shortfall

(i.e. weather, bad crop, etc.)

• Geographic diversification

• Streaming contracts call for fixed tonnage and are not yield dependent

• Crop Insurance, paid for by the farmer, guarantees 70% of the farmer’s long-term average

yield

• Science-based agrologist on every farm helps ensure optimum crop yields

• Ability to accept other commodities of equal value in lieu of canola

• Strong track record with ~$20 million deployed within the first 6 months of operations

• Relationships with farm advisory firms provide thousands of potential clients

• Assiniboia Farmland provides a pipeline of 75 canola farmer tenants

• Typically-sized deal with each tenant would require over $130 million in capital

Capital Deployment

Counterparty Risk

Potential Concerns Mitigating Factors

• Contractual protection on the “use of proceeds”

• Strong security covenants embedded into every contract

• General Security Agreement on the entire farm

• Purchase Money Security Interest on inputs used and crops being grown (like a

Crop Lien)

• Second Mortgage against farmland in many cases

• Term life insurance provides an “easy exit” in the event of death of the farm operator

Risk Management

Page 15: Inp corporate presentation dec_2013

15

Growing

marketing

channels lead to

large deal-flow

3 million acres

6+ million acres

3,000+ farm clients

75+ canola farmers

Growth Opportunities

Expansion to Northern U.S. states that

grow similar crops to Western

Canadian farms i.e. ND, SD, MT

Expansion to global food companies

and overseas farmers that deal in a

variety of agricultural commodities

Farms produce other crops that

provide ancillary streaming

opportunities:

• Grains (wheat, barley, oats, durum)

• Pulses (lentils, peas, beans)

• Oilseeds (mustard, flax)

Geographic ExpansionOther Crops Grown Existing

Farm Partners

Additional capital

to be raised to

satisfy farmer

demand Pending strategic

relationship

Three well-known and top quality

farmers greatly enhance deal

generation and processing

capabilities:

• Previous Saskatchewan Young

Farmer of the Year award winners

• Strong ambassadors for Input

Top-Tier Business

Development Team

Page 16: Inp corporate presentation dec_2013

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High Quality Canola Streaming Portfolio

Contract Summary 2014B 2015F 2016F 2017F 2018F 2019F

Contract Base Tonnes 13,502 13,377 13,377 13,502 13,527 13,577

In-Year Additions to Base Tonnes 3,650 - - - - -

Total Base Tonnes 17,152 13,377 13,377 13,502 13,527 13,577

Claim to Bonus Tonnes 15% 15% 15% 15% 15% 15%

Average Cash Cost / MT $79.05 $73.13 $73.13 $72.46 $72.32 $72.06

• High quality asset base, well-diversified by

geography

• 10 producing farms in 2013

• Farm range in size from 1,700 – 40,000

acres farmed

• Most recent contract represents first

expansion of Input into Alberta

• Operating in a well-established industry in an

area of negligible political risk

• Existing portfolio provides strong earnings

visibility

Source: Saskatchewan Ministry of Agriculture, Input Capital

Page 17: Inp corporate presentation dec_2013

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Exposure to Western Canadian Ag Space

• Investors are increasingly looking for exposure to the secular tailwinds benefiting the

agriculture industry

• Opportunities for direct exposure to farming and ownership of physical commodity are

restricted or difficult for most investors

• International grain trading companies provide limited exposure to the Western Canadian

geography and are no longer purely focused on agriculture

Accessible to

InvestorsNo Debt

Commodity

Price ExposureYield Upside

Multiple

Expansion

No Operating

Cost Exposure

Farming

Canola Futures

Grain Trading

Companies

Input Capital

Page 18: Inp corporate presentation dec_2013

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Inputs Crop Revenue

Traditional Farming $200/acre $150-$250/acre

Input Capital $300/acre $300-$450/acre

Farmer Input

Leverage to canola price

No crop input overruns

No ongoing capex

Fixed cash costs for life of contract

It is expensive to be poor … we help farmers drive down their cost of capital

Buying inputs off peak-season

• $25 - $30 per acre savings on fertilizer alone, reducing fertilizer costs by 20% to 25%

• By buying and applying fertilizer in the fall, spring seeding logistics are improved and de-risked

20% - 40%

Discounts for cash purchases 3%

Interest Costs 10%

Flexible Crop Marketing Program 6% - 12%

Total Savings (Inherent Cost of Capital) 39 - 65%

Benefits to Farmers

Page 19: Inp corporate presentation dec_2013

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• Ideal farm has 3,000 – 12,000 acres of land located in dark brown & black soil zones of

Manitoba, Saskatchewan, and Alberta

• Young farmers who possess the agronomic skills to grow great crops but require capital

partners to finance the intergenerational transfer of the farm

• Established farmers with large expansion opportunities

• Pre-qualified farmers without sufficient working capital to achieve their production goals or

potential

• Farmers looking to expand significantly without degrading their balance sheets

Size of Farm: 4,000 acres Per Acre Capital Required

Farmland $1,000+ $4,000,000+

Equipment ~$350 ~$1,400,000

Annual Inputs $200+ $800,000+

Totals $1,550+/acre $6,200,000+

Source Assiniboia Farmland, Iron Search, Input Capital

Profile of Target Farmers

Page 20: Inp corporate presentation dec_2013

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Source: Company Filings & Records, TSX.com.

Public Market Summary

Capitalization Summary (December 2, 2013)

Trading Symbol TSX-V: INP

Shares Outstanding 61.20M

Fully Diluted Shares 67.16M

Price $1.73

Market Capitalization $106M

52 Week Range $1.58 - $2.12

Average Daily Volume ~81,000

Debt $0

Cash Position $41M

Ownership

Directors & Management 18.4% Basic, 25.4% FD

Catlin Group 19.99%

Other Institutional 12.66%

Private Investor 4.45%

Widely Held 43.80%

December 1, 2013

In its monthly update for November 2013, Input announced that

it has surpassed the $1 million in revenue with recent deliveries.

October 15, 2013

Input took delivery of canola from its first streaming contract,

selling 712 tonnes of canola for proceeds of $359,862, or an

average net price of $505 per tonne.

October 4, 2013

Input announced the closing of a previously announced bought

deal public offering and private placement for gross proceeds of

$37.5 million.

Recent Public Market Events

Spencer Churchill

Michael Mills

Siddharth Rajeev

Analyst Coverage

Anoop Prihar

Page 21: Inp corporate presentation dec_2013

21

INPUT CAPITALThe world’s first agricultural commodity streaming company

Innovative source of long-term, non-constraining working capital

Aligned with producers to boost yields using industry-leading

agronomic practices

Input Capital provides a platform for significant value creation

Page 22: Inp corporate presentation dec_2013

22

CONTACT INFORMATION

Issuer: Input Capital Corp.

Ticker Symbol: TSX-V: INP

President, CEO & Chairman:

Doug Emsley

(306) 347-1024

[email protected]

Executive VP, CFO & Director:

Brad Farquhar

(306) 347-7202

[email protected]

Page 23: Inp corporate presentation dec_2013

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1. Input Capital

2. Overview of Canola Industry

Page 24: Inp corporate presentation dec_2013

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• Canada is one of the largest producing countries of canola and the largest exporter,

exporting more than two thirds of global canola

• Exports from Canada are driven primarily by demand in China, Japan, Mexico, the U.S., and other

parts of Asia

• Canola produced in Canada is used for food (oil, animal feed) and industrial products (bio-fuels,

lubricants, etc)

Source: USDA (2012/13) Source: International Grains (2011/12)

Global Canola Producers Global Canola Exports

Canada, 72%

Australia, 17%

Ukraine, 8%

Other, 3%

EU-27, 32%

(19.9mT)

Canada, 24%

(14.7mT)

China, 19%

(12mT)

India, 11%

(6.9mT)

Other, 13%

(8mT)

Global Canola Production

Page 25: Inp corporate presentation dec_2013

25

Sources: Statistics Canada, Industry Canada Trade Data Online, Potash Corporation of Saskatchewan, Sask Mining Association, Canola Council of Canada

• Canola is a bigger global market than potash

• Canola is a bigger export business for Canada than potash

• Canadian canola exports have been growing at a CAGR of 18.3% over the last 10 years (compared to

13.6% for potash)

• Canola is Canada’s #7 export to the world (potash is #10)

• Canadian canola exports have double the market share in global export markets than potash

• Canadian canola exports to China are 8.5x the value of Canadian potash exports to China

• Canadian canola exports to China have been growing at a CAGR of 36.4% over the last 10 years

(compared to 4.1% for potash)

• Canola represents 16.0% of all Canadian exports to China (compared to 1.9% for potash)

• Canola is Canada’s #1 export to China (potash is #12)

• Canola employs 249,000 Canadians; Potash employs 5,041 Canadians

• There are three companies providing investment exposure to Canadian potash production: POT, AGU,

MOS. They have a combined market cap of $60 billion.

• In canola, there are 50,000 canola producers, but only one public company – Input Capital Corp

Canola is Bigger than the Potash Industry

Page 26: Inp corporate presentation dec_2013

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Country

% of Canadian

Export Market for

Canola (2012)

Volume Growth Rate

(Last 5 Years)

Canola Rank Among

Imports from Canada –

Ranked by $ Value

(2012)

Canola Value as %

of Total Value of

Goods Imported

from Canada

(2012)

China 36.3% 333.0% 1 15.6%

Japan 28.2% 21.1% 2 14.4%

Mexico 18.1% 35.1% 1 17.8%

United Arab

Emirates6.9% 216.6% 1 22.7%

USA 5.0% 75.5% 25 0.4%

Pakistan 2.7% 48.1% 1 44.5%

Bangladesh 1.2% 130.2% 2 15.8%

Others 1.5% 129.5%

Source: Statistics Canada, as published in the Western Producer, March 21, 2013; CanolaCouncil.org; Industry Canada Trade Data Online

• Canadian exports of canola continue to be driven by demand from Asia and emerging

markets with China accounting for the largest share of Canadian exports at 36.3%

Canadian Canola Exports

Page 27: Inp corporate presentation dec_2013

27

Input Capital Target

area

• Canada is the largest single producer of canola

with production concentrated in Western

Canada (specifically, Saskatchewan),

consisting of 20+ million acres seeded to

canola

• There are also approximately 1.7 million

seeded acres of canola grown in the north

central and south eastern U.S. with North

Dakota as the dominant producing region

Source: Canola Council of Canada, U.S. Canola Association

North American Canola Production

Page 29: Inp corporate presentation dec_2013

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• Canada is the dominant exporter of

canola to the world with domestic

production having increased by ~300%

over the last decade

• Canola is one of the world’s most

important oilseed crops, and the most

profitable commodity for Canadian

farmers, representing 25% of all farm

cash receipts in the country

• Canola is grown by 52,000 Canadian

farmers with 52% of Canadian canola

originating from Saskatchewan

• Canada’s dominant export position of

canola creates a natural hedge for

pricing

• When production falls due to poor crop

results, prices tend to rise to

compensate for lost tonnage

• For example, when 8 mm acres went

unseeded in W. Canada in 2010,

canola prices rose from $373/tonne to

over $600/tonne

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000Alberta Saskatchewan Manitoba

Western Canadian Canola Production in Tonnes

Source: Canola Council of Canada

Canadian Canola Industry

Page 30: Inp corporate presentation dec_2013

30

• Canola prices have risen significantly over the last two years driven by increased demand from Asia, the

emerging biofuels industry, and the war on trans fats in western economies

Source: Canola Council of Canada

Historical Canola Prices – 10 Year

$-

$100

$200

$300

$400

$500

$600

$700

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

CA

D p

er

To

nn

e

Canola Monthly Price

Canola Volatility and Prices

Page 31: Inp corporate presentation dec_2013

31

• The average canola in Saskatchewan is typically 25-30 bushels / acre while the yield potential

of modern canola varieties, using modern farm practices with optimal weather, is between 60-

70 bushels/acre

• With the right agronomic program, farmers can focus on optimizing the yield potential of their

crops through;

• Soil & tissue testing

• Seed & seed treatments

• Seeding precision

• Weed control

• In-crop operations – perfect timing & application

• Crop residue management

• Yield goals

Source: Canola Council of Canada

Value Creation of Agronomics