Announcement PDF ASX Announcement 22 January 2014 _____________________________________________________________________________________ COMPANY DETAILS PRESENTATION MODIFICATION ABN: 62 147 346 334 PRINCIPAL AND REGISTERED OFFICE Potash West NL Suite 3 23 Belgravia Street Belmont WA 6104 POSTAL ADDRESS PO Box 588 Belmont WA 6984 At the request of the ASX the presentation released to the ASX on 20 January 2014 has been modified. Slide 28 has been replaced by 2 slides, 28 and 29 to achieve 2 objectives: 1. Show the resource category, indicated and inferred, and its breakup, new slide 28 2. Separate the Exploration Target from the resource statement, new slide 29 We regret any confusion the original may have caused. W www.potashwest.com.au For further information contact: E info@potashwest.com.au P +61 8 9479 5386 F +61 8 9475 0847 ASX CODE PWN OTC PINK PWNNY CORPORATE INFORMATION (22 January 2014) 94M Ordinary shares 4M Unlisted options 8M Listed options BOARD OF DIRECTORS Adrian Griffin (Non-Executive Chairman) Patrick McManus (Managing Director) George Sakalidis (Non-Executive Director) Gary Johnson (Non-Executive Director) Media: Potash West NL: Patrick McManus Managing Director Tel: +61 (08) 9479 5386 info@potashwest.com.au Web: www.potashwest.com.au Professional Public Relations: Colin Hay Tel: +61 (08) 9388 0944 About Potash West Potash West (ASX:PWN) is an exploration company focused on developing potassium-rich glauconite deposits in West Australia’s Perth Basin. The Company aims to define a substantial resource base and investigate how best to recover potash from the mineral. The project is well situated in relation to infrastructure, with close access to rail, power and gas. A successful commercial outcome will allow the Company to become a major contributor to the potash and phosphate markets at a time of heightened regional demand. The Company has a major land holding over one of the world’s largest known glauconite deposits, with exploration licenses and applications covering an area of 2,700km2. Previous exploration indicates glauconite sediments are widespread for more than 150km along strike and 30km in width. Current JORC compliant Indicated Mineral Resources stand at 241Mt at 3.0% K2O, including 120Mt at 4.6% K2O amenable to processing by the K-Max process and 90Mt at 2.65% P2O5 of phosphate mineralisation. 1 This presentation is for information purposes only. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction. This presentation may not be distributed in any jurisdiction except in accordance with the legal requirements applicable in such jurisdiction. Recipients should inform themselves of the restrictions that apply in their own jurisdiction. A failure to do so may result in a violation of securities laws in such jurisdiction. This presentation does not constitute financial product advice and has been prepared without taking into account the recipients investment objectives, financial circumstances or particular needs and the opinions and recommendations in this presentation are not intended to represent recommendations to particular persons. Recipients should seek professional advice when deciding if an investment is appropriate. All securities transactions involve risks which include, amongst others, the risk of adverse or unanticipated market, financial or political developments. Certain statements contained in this presentation, including information as to the future financial or operating performance of Potash West NL (“Potash West” or “the Company”) and its projects, are forward-looking statements. Such forward-looking statements are necessarily based upon a number of estimates and assumptions that, whilst considered reasonable by Potash West, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies; involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward-looking statements; and may include, among other things, statements regarding targets, estimates and assumptions in respect of potash and phosphate production and prices, operating costs and results, capital expenditures, ore reserves and mineral resources and anticipated grades and recovery rates, and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions. Potash West disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise. The words “believe”, “expect”, “anticipate”, “indicate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and other similar expressions identify forward-looking statements. All forward-looking statements made in this presentation are qualified by the foregoing cautionary statements. Investors are cautioned that forward looking statements are not guarantees of future performance and accordingly investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. Many known and unknown factors could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward-looking statements. Such factors include, but are not limited to: competition; mineral prices; ability to meet additional funding requirements; exploration, development and operating risks; uninsurable risks; uncertainties inherent in ore reserve and resource estimates; dependence on third party smelting facilities; factors associated with foreign operations and related regulatory risks; environmental regulation and liability; currency risks; effects of inflation on results of operations; factors relating to title to properties; native title and aboriginal heritage issues; dependence on key personnel; and share price volatility and also include unanticipated and unusual events, many of which are beyond the Company’s ability to control or predict. 2 Information in the presentation that relates to the Mineral Resource estimate for Dinner Hill is fully described in the ASX release of 11 October 2012. Information relating to the Dinner Hill Extended Exploration Target was released to the ASX on 07 May 2013. Information relating to the phosphate Mineral Resource estimate for Dinner Hill was released to the ASX on 23 September 2013. The Company is not aware of any new information or data that materially affects the information included in this presentation. All material assumptions and technical parameters underpinning the Mineral Resource estimates and Exploration Target in this presentation continue to apply and have not materially changed. The K-Max Scoping Study referred to in this presentation was fully described in the ASX release of 10 January 2013 and the Phosphate Scoping Study was released on 19 September 2013. Both are based on low-level technical and economic assessments, and are insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised. All material assumptions and technical parameters used in the Scoping Studies, and included in this presentation, continue to apply and have not materially changed. Potash West has concluded that it has a reasonable basis for including the forward looking statements provided in this presentation. Competent Persons statements The information in this report that relates to the estimation of Exploration Targets and Mineral Resources is based on and fairly represents information and supporting documentation prepared by J.J.G. Doepel, who is a member of the Australasian Institute of Mining and Metallurgy. Mr Doepel, Principal Geologist of the independent consultancy Continental Resource Management Pty Ltd, has sufficient experience relevant to the style of mineralisation and type of deposit under consideration. He is qualified as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. This report is issued with Mr Doepel’s consent as to the form and context in which the Mineral Resource appears The information in this report that relates to reporting of Exploration Results based on and fairly represents information and supporting documentation prepared by Lindsay Cahill, who is a member of the Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscience. Mr Cahill is a consultant to the mineral industry and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration. He is qualified as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Cahill consents to the inclusion in this report of the matters based on information in the form and context in which it appears. The metallurgical information in this report is based on and fairly represents information and supporting documentation compiled by Gary Johnson, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Johnson has sufficient experience relevant to the activity being undertaken to qualify as a Competent Person as defined in the 20012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Johnson is a Non-executive Director of Potash West and Managing Director of Strategic Metallurgy Pty Ltd. This report is issued with Mr. Johnson’s consent as to the form and context in which the results appear. Photo’s courtesy of IPI: www.ipipotash.org: International Potash Institute (IPI) , Horgen, Switzerland 3 COMPANY SNAPSHOT Experienced Board and Management Team Adrian Griffin – Chairman Mine production and corporate management, Founding director of Washington Resources, Ferrum Crescent and Northern Minerals, MD Cobre Montana Patrick McManus– Managing Director Industrial minerals specialist, project development and minerals marketing. Rio Tinto, RGC and Cable Sands. Founding Director and ex MD Corvette Resources George Sakalidis – Non-executive Director Founding Director and ED Image Resources, Magnetic Resources & Meteoric Resources Gary Johnson - Non-executive Director Process and extraction specialist. Deep hydrometallurgical experience. Developed Activox Process, Director Hard Creek Nickel (TSX) and Antipa Resources (ASX) 4 CORPORATE SNAPSHOT ASX CODE PWN SHARE PRICE - 31Dec 2013 AU$0.09 MARKET CAP. AU$8.3M SHARES ON ISSUE 92 M 12 MONTH RANGE 9c – 28c TOP 20 SHAREHOLDERS 52% MGMT AND DIRECTORS 26% 5 INVESTMENT CASE  We are creating an opportunity in the global fertiliser industry, :  Making fertiliser products from one of the world’s largest glauconite deposits, 150 km from Perth in WA, close to markets in WA and SE Asia.  Low capex, low risk route to cashflow through phosphate production first. Low impact mining.  Scoping study completed  Community support  Scale large enough to attract JV partners in fertiliser industry 6 FERTILISER BUSINESS  3 Fertiliser bulk commodities,  N, Nitrogen, promotes green growth  P, Phosphorous, promotes plants yield potential  K, Potassium, enables plants to take up nutrients from soil and air  3 Minors, Ca, S and Mg  Most soils deficient in NPK  Not interchangeable  Different crops = different ratios, eg  Bananas 3,000 kg of potash per ha. per year  Wheat 500kg per ha. per year 7 FERTILISER BUSINESS  Forecast value of US$172B in 2015,  Fertiliser wholesalers mix products for region, from bulk raw materials:  Nitrogen (109 Mtpa, N): from air, gas and coal  Urea  Ammonia Nitrate  Phosphates (41Mtpa, P): mined from rock phosphate deposits  Superphosphate  Phosphoric Acid  MAPs& DAPs  Potash (28Mtpa, K)  Salt lake brines  Ancient buried seabeds 8 “The challenge is clear. With nearly 1 billion people already suffering from hunger and malnutrition in some of the fastest growing areas of the world, the challenge of doubling food production by 2050 will become more difficult as key resources become increasingly scarce and a changing climate creates unforeseen obstacles. Undoubtedly, the world is going to have to produce more. But it cannot do so at the expense of the land or environment. We must produce more with less.” (Hugh Grant, Forbes October 2011) 9 PHOSPHATE MARKET  International Phosphate Market Dominated by MENA(1)  +50% of traded Rock Phosphate  +75% of reserves “The world faces a dangerous shortage of phosphate, which could slash global crop yields and send food prices soaring within a generation if nothing is done to control its use in chemical fertilisers, according to two of Australia’s leading sustainability researchers. The use of phosphate rock as a fertiliser has significantly boosted crop yields in the past 50 years and it will become increasingly important as the world’s population grows and living standards rise.” (Sydney Morning Herald Feb 21 2013) (1) – Middle East-North Africa 10 Distance advantage to importing regions 11 12 13 PROJECT LOCATION  +2,000 km2 of prospective area  ~150km of strike  ~+20km width  Many intersections +40m  Great infrastructure  Rail  Power  Gas  Water  Close to local markets, WA and SE Asia  Similar mining activity already in region  Close to export ports 14 EXPLORATION  Focus on Northern area, 409 holes drilled, 159 on Dinner Hill  Numerous intersections of high grades close to the surface  Dambadjie, +60m of high grade  Dinner Hill, first resource, phosphate closer to surface 15 16 DINNER HILL PHOSPHATE RESOURCE  Phosphate resource (JORC indicated), of 90 Mt @ 2.65%P2O5, close to surface  Within less than 20% of Dinner Hill target area 17 FLOW SHEET 18 PHOSPHATE PLANT STUDY PARAMETERS  Mining Rate 3.8 Mtpa  One product: 342,000 tpa Single superphosphate  Commodity Grade, 18% P2O5  Capex and Opex estimates +/-35%  100,000 tpa consumed locally, balance exported  Project works, despite low feed grade, because:  Unconsolidated sand ore, very low cost mining  Ability to upgrade to ~ 12% P2O5, with screening  High quality infrastructure in place, <200 km from ports  Access to sulphuric acid at low on-site cost  Low capital requirements  Low technical risk 19 20 DEVELOPMENT PLAN  Immediate target, focus on phosphate project:  Circuit optimisation,  Flotation to treat chalk layer  Commence permitting  Investigate and quantify synergies between projects  Shared front end, mining and concentration plant  Shared infrastructure  Pursue K-Max when market is right 21 INDICATIVE TIMELINE Activity 2013 2014 2015 2016 Phosphate scoping study updated JORC resource updated scoping study JORC measured resource flowsheet finalisation OPEX, CAPEX and financial assessment Permitting Plant Construction Commissioning 22 2017 Value proposition, Market capitalisation of explorers and developers, A$M 250 200 150 100 50 0 MBAC ( TSX V Arianne MBC) (TSX:DAN) Rum Jungle ( Chatham Rock Minemakers ASX: RUM ) Phosphate (ASX MAK) (NZX: CRP) Fertoz (ASX: Potash West ( Celamin (ASX Minbos (ASX FTZ) ASX: PWN) CNL) MNB) 23 INVESTMENT HIGHLIGHTS  Exposure to the growing fertiliser business  Region is major importer  Strategic location  Low risk start up with phosphate project  Blue sky with large scale K-Max process  High margin operations  Control of one of the world’s largest known glauconite/greensands deposits  Significant resource potential  Strong expansion opportunities  Ready market on doorstep 24 APPENDIX: K-MAX PROCESS A process developed by Potash West to produce a range of chemicals from Glauconite 25 26 27 DINNER HILL MINERAL RESOURCE Potash (K-Max Process) Unit Category Molecap Greensand Indicated Inferred Total Poison Hill Greensand Indicated Inferred Total Total Resources Indicated Inferred Total Tonnes (Mt) 120 2 122 121 1 122 241 2 244 K2 O % 4.6 4.4 4.6 1.5 1.6 1.5 3.0 3.6 3.0 P2O5 % 1.8 2.2 1.8 1.4 1.1 1.4 1.6 1.9 1.6  Total high grade KMax resource 122 Mt @ 4.6%K2O, within less than 20% of Dinner Hill target area. Total area 60 square km Dinner Hill Resource: above 1% K2O lower block cut – October 2012. 28 DINNER HILL EXPLORATION TARGET  Exploration target of 1 to 1.5Bt of greensand @ 4.0 to 4.8% K2O  Includes 300-600Mt of phosphate mineralisation at a grade of between 1.5% and 3% P2O5. The exploration target has been derived from the exploration already undertaken by the Company. Refer to the diagram to the right. (NB: The potential quantity and grade of the target is conceptual in nature, as there has been insufficient exploration to estimate a Mineral Resource over its area and as it is uncertain if further exploration will result in the estimation of a Mineral Resource.) 29 30 K-MAX STUDY PARAMETERS Mining Rate 2.4 Mtpa Suite of products:  85,000 tpa Sulphate of Potash, SOP  195,000 tpa high Magnesium SOP, KMS  220,000 tpa Iron oxide  900,000 tpa Aluminium Sulphate  310,000 tpa phosphate  SOP and Phosphate consumed locally Balance exported 31 K-MAX STUDY RESULTS THROUGHPUT 2.4 mtpa NPV10 $m 808 Capital Costs, $m 650 Opex, $/tonne of feed 55 Revenue, $/tonne of feed 150 Alum 40%, Potash 30%, Phosphate 25%, Iron 5% IRR % 21 Mine Life +60 years Free Cash Flow $AM, pa 228 32 33 QUESTIONS? Unit 3 23 Belgravia Street Belmont WA 6104 Patrick McManus Managing Director Mobile +61 (0) 408 956 798 patrick.mcmanus@potashwest.com.au Adrian Griffin Chairman Mobile +61 (0) 418 927 658 adrian.griffin@potashwest.com.au PO Box 588 Belmont WA 6984 Phone +61 (0) 8 9479 5386 Fax +61 (0) 8 9475 0847 www.potashwest.com.au 34