developing america’s next phosphate mine of any kind in documents filed with the united states...
TRANSCRIPT
2
Forward-Looking Statements
Disclaimer
• The contents of this presentation are not to be reproduced or distributed to any third party, including the general public or the media, without the express written consent of Stonegate
Agricom Ltd. (“Stonegate” or the “Corporation”). The information contained herein, while obtained from available sources which the Corporation believes are reliable, is not guaranteed as
to its accuracy or completeness. Stonegate is engaged in the business of acquiring, exploring and developing agricultural nutrient projects and is currently focused on the development of
the Paris Hills phosphate project located in Bear Lake County, Idaho (the “Paris Hills Project”) .
Cautionary Note Regarding Forward-Looking Information
• This presentation contains “forward-looking statements” and “forward-looking information” within the meaning of applicable law, which include statements herein relating to the potential to
increase mineral resource and mineral reserve estimates. Generally, forward-looking statements and forward-looking information can be identified by the use of forward-looking
terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, “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”. All forward-looking
statements and forward-looking information are based on reasonable assumptions that have been made by the Company as at the date of such information. Forward-looking statements
and forward-looking information are 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 statements and forward-looking information, including but not limited to: risks relating to
assumptions used in preparation of the Feasibility Study on the Lower Phosphate Zone of the Paris Hills Phosphate Project including government regulation, phosphate prices, labour
costs and capital costs, and project risks including project location, permitting requirements, project delays, ground control and dilution and water management; the general risks associated
with the speculative nature of the Company’s business, commodity prices, current global financial conditions, uncertainty of additional capital, price volatility, the Paris Hills Phosphate
Project being a development-stage project, limited operating history, no history of earnings, government regulation in the mining industry, environmental risks and hazards, impending
climate change legislation, required approvals and permits, foreign subsidiaries, risks relating to the retention of the Paris Hills Project, expiration of leases and permits for the Paris Hills
Project, title to mineral properties, obtaining mineral concessions and surface rights, community relations and project support, water rights, exploration, development and operating risks,
uncertainty in the estimation of mineral reserves and resources, uncertainty of inferred mineral resources, mineral exploration, reliability of historical exploration work, risks associated with
having a controlling shareholder, arbitrary offering price, dilution to the common shares, dependence on key personnel, currency fluctuations, insurance and uninsured risks, competition,
legal proceedings, conflicts of interest and lack of dividends as well as those factors discussed in the section entitled “Risk Factors” in the Company’s most recently filed annual information
form available at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-
looking statements and forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such
information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not
place undue reliance on forward-looking statements or forward-looking information. The forward-looking statements and forward-looking information contained in this presentation are
included for the purpose of providing investors with information to assist them in understanding the Company’s expected financial and operational performance and may not be appropriate
for other purposes. Stonegate does not undertake to update any forward-looking statement or forward-looking information that is included herein, except in accordance with applicable
securities laws.
Cautionary Note to United States Investors Concerning Estimates of Mineral Resources
• This presentation uses the terms “Measured Mineral Resources”, “Indicated Mineral Resources” and “Inferred Mineral Resources”. United States investors are advised that while such
terms are recognized and required by Canadian regulations to be disclosed, the United States Securities and Exchange Commission generally does not permit disclosure of mineral
resources of any kind in documents filed with the United States Securities and Exchange Commission. “Inferred Mineral Resources” have a great amount of uncertainty as to their
existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under
Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or
any part of Measured Mineral Resources or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to
assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable.
• The contents of this presentation are for informational purposes only and do not constitute an offer to sell or a solicitation to purchase any securities referred to herein.
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Stonegate to Target
Opportunities in the
Shrinking Merchant Market
Potential Customers:
Large fertilizer producers
Trading companies
End-user groups seeking
secure supply
*Sources: IFA, US Geological Survey, Argus Media (FMB). Merchant market share (world
exports as a percentage of world production) declined from 22% in 1999 to 13% in 2012. For
2012, Morocco’s exports were approximately 9.5 million tonnes, or 35% of total world
exports of approximately 27 million tonnes.
Global Phosphate Rock Concentrate Market
Corporate Strategy
4
U.S. 22-Year
History
U.S. Phosphate Rock Concentrate Production
and Grade are Decreasing
Source: U.S. Geological Survey, Mineral Commodity Summaries and Minerals Yearbook. *Grade data 1990 - 2011.
Year Production Grade*
1990 46.3 mt -37%
30.7% P2O5 -5.2%
2012 29.2 mt 29.1% P2O5
5
Net Exports
Mill
ion t
onnes
Source: U.S. Geological Survey. Net imports = exports - imports. In 2012, U.S. net imports (2.85 million tonnes) were 9.7% of U.S. consumption
(29.5 million tonnes) of phosphate rock concentrate. IFA 2012 data shows one-third of U.S. imports came from Peru and two-thirds from Morocco/Western
Sahara.
U.S. is Net Importer of Phosphate Rock
Concentrate
U.S. currently imports from Morocco/Western Sahara and Peru
Net Imports
6
Weighted-average permitted mine life = 11.6 years*
Existing producers have applied to permit 4 new open-pit mines/expansions under federal
NEPA process**
Typical length of time for NEPA permitting = 6 – 10 years
Permitting applications for open-pit mines being challenged by environmental groups due to:
Florida: Disruption of wetlands, pollution from tailings and discharge
Idaho: Selenium leaching into waterways from large waste rock piles
Next U.S. mines to run out of permitted reserves
Production Capacity Estimated Final Year Years
Million tonnes of Permitted Mine Life Remaining
Mosaic – Hookers Prairie, Florida 2.1 2014 Closed in June 2014
Agrium – North Rasmussen, Idaho 1.5 2017 3.4
Mosaic – Four Corners, Florida 6.5 2021 7.2
Mosaic – South Fort Meade, Florida 6.0 2022 8.3
Existing U.S. Producers Face Challenges in
Permitting Needed New Mines
* Weighted by phosphate rock concentrate production capacity. See individual mine details in the appendix.** In Idaho, Agrium has applied for a permit for
Husky 1/North Dry Ridge . In Florida, Mosaic has applied for permits for two new mines, Ona and DeSoto, and for an expansion of South Pasture.
8
Close to phosphate mines and fertilizer plants
Paris Hills Phosphate Project
Producing Mines
Agrium Monsanto
Simplot
Simplot
9
Project property area is 1,010 hectares
Close to highway, electrical grid
Union Pacific railroad is 19 km away
Local labour is available
Paris Hills Phosphate Project
10
Paris Hills Phosphate Project
Cross Section – Looking west, showing underground phosphate zones
in the foreground, mountains in the background
Not to Scale
0
-500
-1,000
Depth below
surface
me
tres
Lower Zone 1.5 - 3 metres
Upper Zone Upper Zone
3 - 5 metres
11
Lower Zone Mineral Resources
Mineral
Resources*
Tonnes
(millions)
Grade
(% P2O5)
Measured 15.4 30.4
Indicated 14.4 29.6
Total M&I 29.8 30.0
Inferred 4.6 29.9
Lower Zone
*Mineral Resources for the Lower Phosphate Zone were prepared as
of December 10, 2012 by Agapito Associates Inc. Leo Gilbride, P.E.,
Vanessa Santos, P.G., Gary L. Skaggs, P.E., P.Eng., Susan B. Patton,
Ph.D., P.E., and Eric Dursteler, P.E., C.F.M. are the qualified persons as
defined in National Instrument 43-101. Additional information is available
in a Stonegate news release dated December 10, 2012 and in a NI 43-
101 Technical Report on the Paris Hills Phosphate Project dated
January 18, 2013 (restated July 8, 2013). Lower Zone estimates do not include the Upper Zone or Upturned Limb.
12
Mine plan includes use of 6 continuous miners
Typically used in the mining of coal, potash, phosphate, salt, soda ash, etc.
Continuous Miners
13
Reserves/Marketable production:
16.7 million tonnes
29.53% P2O5
19-year mine life
Direct-ship phosphate ore
No processing plant required
Commercial Production achieved Year 2:
1st year: 320,000 tonnes
2nd year: 740,000 tonnes
Average annual production: 904,000 tonnes
Paris Hills Lower Phosphate Zone –
Feasibility Study Highlights*
* Additional information in Stonegate news release dated December 10, 2012 and a NI 43-101 Technical Report on the Paris Hills Phosphate Project
dated January 18, 2013 (restated July 8, 2013). Amounts are estimates for Lower Phosphate Zone. Map indicates Lower Phosphate Zone mining
schedule based on planned room-and-pillar mining technique.
14
Initial project capital (to start of commercial production): $121.0 million
Sustaining capital (cumulative total, years 3-19) $134.0 million
Total capital per tonne of reserves/marketable production $15.27/tonne
Cash operating cost (FOB mine site): $69.49/tonne
Assumed average product price (FOB mine site): $165/tonne
Pre-tax After-tax
NPV (8% discount rate): $477 million $360 million
Internal rate of return (IRR): 45.9% 40.2%
Paris Hills Lower Phosphate Zone –
Feasibility Study Highlights*
* More information in Stonegate news release dated December 10, 2012 and in a Technical Report on the Paris Hills Phosphate Project dated January
18, 2013 (restated July 8, 2013). Amounts are estimates for Lower Phosphate Zone horizontal limb, in U.S. dollars. Initial project capital includes cost
contingency of $4.6 million and working capital of $5.2 million.
15
Paris Hills Lower Phosphate Zone –
Feasibility Study Highlights*
Concentrate Sales Price (per tonne)
Pre-Tax NPV (US$ million)
After-Tax NPV (US$ million)
$140 $292 $240
$150 $366 $289
$160 $440 $336
$165 (Base Case) $477 $360
$175 $552 $407
$200 $737 $524
Concentrate Price Sensitivity Table
Source: Stonegate news release dated Dec. 10, 2012.
16
Key remaining permits required for Lower Zone
Formal Permit Title Permit issuer Expected Date
Air Quality Permit To Construct Idaho
Department of Environmental Quality Q1 2015
Mining and Reclamation Plan Idaho
Department of Lands Q2 2015
Groundwater Point of Compliance Permit
Idaho
Department of Environmental Quality
Q2 2015
Dewatering/Injection Well Permits Idaho
Department of Water Resources Q2 2015
Building and Conditional Use Permits
(required to begin construction)1
Bear Lake County
Planning and Zoning Commission
Q2 2015
State of Idaho is primary regulator for permitting
1 To be applied for after arranging an off-take agreement
Timing Completed
Commence drilling to confirm grade/size September 2010
Fertilizer test results August 2011
Mineral Resource estimates October 2011
Pre-Feasibility Study – Lower Zone March 2012
Site Specific Management Additions April 2012
Update Mineral Resource estimates August 2012
Complete Feasibility Study – Lower Zone December 2012
Complete permitting Q2 2015
Begin construction/production Subject to permitting
and financing
17
Paris Hills Development Milestones
18
Upper Zone Mineral Resources
*Mineral Resources for the Upper Phosphate Zone were prepared as
of December 10, 2012 by Agapito Associates Inc. Leo Gilbride, P.E.,
Vanessa Santos, P.G., Gary L. Skaggs, P.E., P.Eng., Susan B.
Patton, Ph.D., P.E., and Eric Dursteler, P.E., C.F.M. are the qualified
persons as defined in National Instrument 43-101. Additional
information is available in a Stonegate news release dated December
10, 2012 and a NI 43-101 Technical Report on the Paris Hills
Phosphate Project dated January 18, 2013 (restated July 8, 2013).
Upper Zone estimates do not include the Lower Zone or Upturned Limb.
The NI 43-101 Technical Report on Paris Hills Phosphate Project
noted that two preliminary laboratory tests have shown that the Upper
Phosphate Zone horizontal limb material can be successfully
beneficiated into an acceptable phosphate rock concentrate of about
30% P2O5, with CaO/P2O5 ratios of 1.44 to 1.50 and minor element
ratios of 0.06 and 0.07. The process recovered about 70% of the
P2O5.
Mineral
Resources*
Tonnes
(millions)
Grade
(% P2O5)
Measured +
Indicated 60.3 22.7
Inferred 9.4 22.6
Upper Phosphate Zone
19
Phosphate Exploration Targets at Paris Hills
Bed
Cut-off
(%P2O5)
Estimated
Tonnes 1
(millions)
Grade
(%P2O5)
Upper Phosphate Zone 20.0 14 – 20 21.0 – 25.0
Lower Phosphate Zone 24.0 7 – 10 28.0 – 32.0
Source: NI 43-101 estimates completed as of December 10, 2012 by Agapito Associates Inc. Leo Gilbride, P.E., Vanessa Santos, P.G., Gary L. Skaggs,
P.E., P.Eng., Susan B. Patton, Ph.D., P.E., and Eric Dursteler, P.E., C.F.M. are the qualified persons as defined in National Instrument 43-101. Additional
information is available in a Stonegate news release dated December 10, 2012 and a NI 43-101 Technical Report on the Paris Hills Phosphate Project
dated January 18, 2013 (restated July 8, 2013).
1 The Exploration targets are conceptual in nature and there has been insufficient exploration to define them as Mineral Resources, and it is uncertain if
further exploration will result in the determination of a Mineral Resource under NI 43-101. The Exploration Targets are not being reported as part of any
Mineral Resource or Mineral Reserve.
Upturned Limb – Upper and Lower Phosphate Zones
Kerry Knoll, Co-Chairman and Acting Executive Officer
• Co-founder of Blue Pearl Mining Inc., Glencairn Gold Corporation and
Wheaton River Minerals Ltd.
• Former editor of both The Northern Miner Magazine and the Canadian
Mining Journal
Andrew Stronach, P. Eng.
• Managing Director, Sprott Consulting LP and Sprott Resource Corp.
• Advisor on strategic and operational matters
• Holds MBA from Rotman School of Management, U. of Toronto, along
with MSc. And BSc. In Mechancial Engineering, Queen’s University
William Roscoe
• Principal Geologist, Chairman Emeritus, Principal Geologist and Co-
founder of Roscoe Postle Associates Inc., an international firm of
geological and mining consultants.
• Expertise: Mineral resource and reserve work, valuation of mineral
properties, mineral exploration
Ian McDonald, Co-Chairman and Acting Executive Officer
• Co-founder of Blue Pearl Mining Inc., Glencairn Gold Corporation and
Wheaton River Minerals Ltd.
• Former Vice-Chairman, Thompson Creek Metals Company
Laurence Curtis
• Over 35 years of international experience in the natural resource sector
with global experience. Currently VP Research at Dundee Capital
Markets.
• Founder of Intrepid Minerals in 1996 and was President and CEO until
2008 and former President of Curtis & Associates, a mineral resource
consulting firm, from 1980 to 1996
Denis Arsenault
• Former CFO of Sulliden Gold Corporation and Central Sun Mining Inc.
(formerly Glencairn Gold Corporation)
• Director of a number of public companies including Thompson Creek
Metals Company Inc., MBAC Fertilizer Corp. and Murchison Minerals
Ltd.
Ron P. Gagel
• Executive Vice President and CFO, TMAC Resources Inc.
• Former Senior Vice President and Chief Financial Officer of FNX
Mining Company Inc. from 2006 to 2010
• Former director of FNX Mining Company Inc., HudBay Minerals Inc.
and Central Sun Mining Inc.
20
Stonegate Board of Directors
21
Stonegate Management Team
David Kramer, P.E. − GM, Paris Hills Project
• Highly experienced soft-rock continuous mining specialist formerly with
Massey Energy Co.
• Supervised the start up and operation of over 10 greenfield U.S.
underground coal mines utilizing the same room and pillar mining
method with continuous miners as outlined in the Paris Hills
Feasibility Study
Germaine Coombs − VP and CFO
• More than 15 years of financial and management experience, mainly in
the mining industry
• Former Corporate Controller, FNX Mining Company Inc. from 2004
until May 2010 when it merged with Quadra Mining Ltd.
• Previously held senior accounting roles in operations and finance at
Iron Ore Company of Canada (owned by Rio Tinto)
James Geyer − VP, North America
• 35 years of experience constructing and managing open-pit and
underground gold and base metal mines in the Americas and Australia,
recently as Senior Vice President of Gold Reserve Inc.
• Currently a Director of Gold Reserve Inc. and Thompson Creek Metals
Company Inc.
22
Capital Structure
Common Shares
Basic issued and
outstanding*
194,242,704
Warrants* 38,333,333 @$0.40 expiring July 24, 2015
Options 15,298,334 @ C$0.19−$1.20
Fully diluted 180,808,343
Market Capitalization (based on $0.06/share price)
Basic shares $12 million
Fully diluted $15 million
Principal Shareholders*
Outstanding Fully Diluted
Sprott Resource Corp. 70,950,462 (36.5%) 84,750,462 (34.1%)
Management 11,409,000 (5.9%) 24,048,099 (9.8%)
Float (issued and
outstanding):
112,073,513 (57.7%)
Cash Balance
Cash balance
(September 30, 2014)
$2.2 million
*As of November 10, 2014. TSX listings: ST (common shares) , ST.WT.A (warrants exercisable@$0.40 expiring July 24, 2015). Shares and warrants
exclude 2,300,000 Broker Units @ $0.30 expiring July 24, 2015. Each Broker Unit entitles the holder to one common share and half a warrant exercisable
@ $0.40 expiring July 24, 2015.
401 Bay Street, Suite 2010,
Toronto, Ontario
Canada M5H 2Y4
Phone: (416) 864-0303
Fax: (416) 860-0813
www.stonegateagricom.com
Questions?
23
24
U.S. Needs New Mines to Maintain Phosphate
Production Capacity
US Mines – Currently Operating
State / Owner Mine Capacity (Mt) Permitted Mine
Life (years)
Final Year of Permitted Reserves*
FLORIDA
Mosaic Four Corners 6.5 7.2 2021
Hookers Prairie 2.1 Closed in June 2014
South Fort Meade 6.0 8.3 2022
Wingate 1.4 34.0 2048
South Pasture 3.4 11.5 2025
PotashCorp Swift Creek/White Springs 3.6** 19.2 2032
NORTH CAROLINA
PotashCorp Aurora 6.0 11.1 2025
IDAHO
Agrium North Rasmussen 1.5 3.4 2017
Monsanto South Rasmussen / Blackfoot Bridge 1.3 16.0 2030
J.R. Simplot Smoky Canyon 1.4 16.3 2030
UTAH
J.R. Simplot Vernal 1.2 13.0 2027
Source: Company reports and Stonegate estimates. *Final Year refers to the expected end of production under current environmental permits. **Potash
Corp. has operated the Swift River Mine at a reduced rate after closing one of two fertilizer production facilities at White Springs in 2014.
25
Global Fertilizer Consumption
Fertilizer increases world food production by 40%
Phosphate fertilizers facilitate
Root development
Water-use efficiency
Early plant maturity
Higher yields
No substitutes/recycling exist for phosphate in agricultural uses
Phosphate − Crucial for Food Production
Source: FAO. Percentages based on average annual tonnes of fertilizer applied.
23% Phosphate
16% Potash
61% Nitrogen
26
Phosphate Basics
Phosphate Mineral Converted into Fertilizer
Phosphate Ore (Deposit) Typical “in situ” grades: 4-35% P2O5
Phosphate Rock Concentrate (PhosRock) >28% P2O5
TSP DAP/MAP SSP
Typical N-P-K ratios: SSP 0-16-0-11(S); TSP 0-46-0; DAP 18-46-0; MAP 11-52-0
IFA: 85% of world phosphate production comes from sedimentary deposits (including guano) and 15% from igneous
deposits.
Phosphate Deposits
Guano
Igneous
Sedimentary
Phosphate Fertilizers
Single superphosphate (SSP)
Triple superphosphate (TSP)
Diammonium phosphate (DAP)
Monoammonium phosphate (MAP)
Phosphoric Acid (Intermediate Feedstock)
27
World Phosphate Rock Reserves
67,000 million tonnes*
* Source: 2013 Reserves, Millions of Metric Tonnes, U.S. Geological Survey, Mineral Commodity Summaries, February 2014
Egypt 100
China 3,700
Algeria 2,200
Syria 1,800
South Africa 1,500
Jordan 1,300
Russia 1,300
USA 1,100
Australia 870
Peru 820
Other 667
Iraq 430
Brazil 270
Kazakhstan 260
Saudi Arabia 211
Israel 130
Tunisia 100
Morocco / Western Sahara 50,000
28
Eight countries in Middle East and North Africa account for:
83% of world reserves
26% of world production
71% of world merchant market
Morocco has 32% of the merchant market
Middle East/North Africa – Main Phosphate Rock
Concentrate Supplier to Merchant Market
Sources: Production and Exports estimates are 2012 estimates from the International Fertilizer Industry Association (IFA), Phosphate Rock Statistics 2012, Product Per Tonne Basis, published October 2013. Average production grade is 30.6% P2O5. Merchant market is defined as the sum of total exports by producing countries. Reserves estimates are 2013 estimates from U.S. Geological Survey, Mineral Commodity Summaries, published February 2014.
Phosphate rock concentrate production (% of world total): Morocco and Western Sahara (13.7%); Algeria (0.7%); Tunisia (1.3%); Egypt (3.2%); Jordan (3.3%); Syria (0.9%); Israel (1.5%); Saudi Arabia (1.6%).
Phosphate rock concentrate exports (% of world total): Morocco and Western Sahara (31.8%); Algeria (4.0%); Tunisia (0.1%); Egypt (13.5%); Jordan (14.4%); Syria (4.1%); Israel (2.9%); Saudi Arabia (0.0%).
Phosphate rock reserves (% of world total): Morocco and Western Sahara (74.6%); Algeria (3.3%); Tunisia (0.1%); Egypt (0.1%); Jordan (1.9%); Syria (2.7%); Israel (0.2%); Saudi Arabia (0.3%).
29
Morocco (OCP) Exports More DAP, MAP TSP –
Less Concentrate (% total P2O5 exported)
29%
12%
59%
2005
22%
31%
47%
2012
Phosacid
DAP, MAP,
TSP
Concentrate
DAP, MAP, TSP
Phosacid
Concentrate
Source: 2005 data from International Fertilizer Association (IFA), Production and Trade Statistics: 2012 data from FMB Monthly Report Phosphates, February 2012.
OCP (Office Cherifien des Phosphates) is owned by the Government of Morocco. Morocco’s concentrate exports were 13.4 million tonnes in 2005 and approximately
9.5 million tonnes in 2012.
30
World Phosphate Rock Concentrate Market
Morocco acts as swing producer, adjusting export volumes to match demand and support prices
Morocco’s phosphate rock concentrate exports
Source: Export statistics are from the International Fertilizer Association (IFA) and FMB Argus Media. Phosphate Rock Concentrate Price is for 30-32%
P2O5 Concentrate FOB Morocco. DAP price is for Diammonium Phosphate (DAP) FOB Tampa, Florida.
Price
(U
S$
pe
r to
nn
e)
DAP Price (Tampa) Phosphate Rock Concentrate Price (Morocco)
Mill
ion
s o
f To
nn
es
Concentrate price is less volatile than the DAP price
31
Million Tonnes of Nutrient P2O5
World Consumption of Phosphate Fertilizer
Mill
ion t
onnes
Source: International Fertilizer Industry Association (IFA), Short-Term Outlook for Global Fertilizer Supply and Trade 2012-2013, presented by Patrick Heffer in
December 2012 to the 38th IFA Enlarged Council Meeting.
32
World Phosphate Rock Concentrate Production
1990 – 2012 M
illio
n t
onnes
Source: IFA and U.S. Geological Survey, Mineral Commodity Summaries and Mineral Yearbook.
33
World Phosphate Rock Concentrate Production
224 million tonnes/annum
Source: 2013 Production Estimate, U.S. Geological Survey, Mineral Commodity Summaries, February 2014
Canada
Brazil
Australia
Other
Tunisia
Togo
Syria
South Africa Senegal Russia
Mexico
Jordan
Egypt
China 43%
Morocco / Western Sahara 13%
Algeria
Peru
Israel
India USA 14%
34
Positive Fertilizer Test for Paris Hills Lower Zone
Phosphate Material
N-P-K ASSAY RESULTS From in-situ Lower Zone material
N-P-K assay results meet industry specs
Lab test done on 105-Kg in-situ sample*
Sample not processed (beneficiated) prior to test
Results support plans for an underground mine producing direct-ship concentrate-quality phosphate rock
Paris Hills MAP: 12 – 56 – 0
Industry Specifications: 11 – 52 – 0
Paris Hills DAP: 19 – 50 – 0
Industry Specifications: 18 – 46 – 0
* The composite in-situ Lower Zone sample was from 15 diamond drill core holes and averaged 32.33% P2O5 with a minor element ratio (MER) of 0.057
and a CaO:P2O5 ratio of 1.52. The tests were performed at an engineering consultancy based in Florida . Additional information is available in a NI 43-
101 Technical Report on the Paris Hills Phosphate Project dated January 18, 2013 (restated July 8, 2013). Leo Gilbride, P.E., Vanessa Santos, P.G.,
Gary L. Skaggs, P.E., P.Eng., Susan B. Patton, Ph.D., P.E., and Eric Dursteler, P.E., C.F.M. are the qualified persons as defined in National Instrument
43-101.
35
Mineral Reserve of the Paris Hills
Lower Phosphate Zone5
Tonnes 1, 2
Thickness
(m)
P2O5 Grade
(wt %) MER 7
CaO/P2O54
Ratio
Proven 7,956,329 1.57 29.9 0.06 1.52
Probable 8,747,371 1.55 29.2 0.07 1.56
Total Reserves 16,703,700 1.56 29.5 0.06 1.54
Effective date December 10, 2012
1 Average in-situ bulk dry density of 2.6 t/m3.
2 Minimum mining height of 1.5 m + 0.15 m dilution.
3 Minor Element Ratio, MER = (Fe2O3 + AI2O3 + MgO)/P2O5, <0.10 desirable for
phosphate rock concentrate.
4 CaO to P2O5 ratio; <1.60 desirable for phosphate rock concentrate.
5 Proven and Probable Mineral Reserve estimates for the Lower Phosphate Zone
were prepared by Agapito Associates Inc., an independent geological and mining
engineering consulting firm based in Grand Junction, Colorado. Leo Gilbride, P.E.,
Vanessa Santos, P.G., Gary L. Skaggs, P. E., P.Eng., Susan B. Patton, Ph.D.,
P.E., and Eric Dursteler, P.E., C.F.M. are the qualified persons as defined in
National Instrument 43-101. Additional information is available in Stonegate news
release dated December 10, 2012 and in a NI 43-101 Technical Report on the
Paris Hills Phosphate Project dated January 18, 2013 (restated July 8, 2013).
Numbers may not add up due to rounding.
36
Mineral Resource of the Paris Hills
Lower Phosphate Zone
1 Average in-situ bulk dry density of 2.6 t/m3.
2 Zone thickness cut-off 0.5 m, composite grade cut-off 24.0% P2O5, excludes
out-of-seam dilution.
3 Minor Element Ratio, MER = (Fe2O3 + Al2O3 + MgO)/P2O5, <0.10 desirable for
phosphate rock.
4 CaO to P2O5 ratio; <1.60 desirable for phosphate rock.
Source: Stonegate news release dated December 10, 2012 and NI 43-101
Technical Report on the Paris Hills Phosphate Deposit dated January 18, 2013
(restated July 8, 2013). Leo Gilbride, P.E., Vanessa Santos, P.G., Gary L. Skaggs,
P. E., P.Eng., Susan B. Patton, Ph.D., P.E., and Eric Dursteler, P.E., C.F.M. are the
qualified persons as defined in National Instrument 43-101.
5 Measured Mineral Resource located within a 200-m radius of an exploration hole.
6 Indicated Mineral Resource located between a 200-m and 400-m radius of an
exploration hole.
7 Inferred Mineral Resource located between a 400-m and 800-m radius of an
exploration hole.
8 Mineral Resources include Mineral Reserves.
Effective date December 10, 2012
In-Place
Tonnes 1, 2
(millions)
Average
Thickness
(m)
P2O5
Grade
(wt %) MER 3
CaO/P2O5 4
Ratio
Measured 5 15.4 1.8 30.4 0.050 1.51
Indicated 6 14.4 1.7 29.6 0.061 1.55
Total M&I 29.8 1.7 30.0 0.061 1.53
Inferred 7 4.6 1.6 29.9 0.063 1.53
37
Mineral Resource of the Paris Hills
Upper Phosphate Zone
1 Average in-situ bulk dry density of 2.6 t/m3.
2 Zone thickness cut-off 1.5 m, composite grade cut-off 20.0% P2O5, excludes
out-of-seam dilution.
3 Measured Mineral Resource located within a 200-m radius of an
exploration hole.
Source: Stonegate news release dated December 10, 2012 and NI 43-101
Technical Report on the Paris Hills Phosphate Deposit dated January 18, 2013
(restated July 8, 2013). Leo Gilbride, P.E., Vanessa Santos, P.G., Gary L. Skaggs,
P. E., P.Eng., Susan B. Patton, Ph.D., P.E., and Eric Dursteler, P.E., C.F.M. are the
qualified persons as defined in National Instrument 43-101.
4 Indicated Mineral Resource located between a 200-m and 400-m radius of an
exploration hole.
5 Inferred Mineral Resource located between a 400-m and 800-m radius of an
exploration hole.
Effective date August 15, 2012
In-Place
Tonnes 1, 2
(millions)
Average
Thickness
(m)
P2O5
Grade
(wt %)
Measured 3 28.4 3.8 22.8
Indicated 4 31.8 3.7 22.6
Total M&I 60.3 3.7 22.7
Inferred 5 9.4 3.5 22.6
Drill Hole Vertical Depth LPZ Top (m)
Vertical LPZ Thickness (m) P2O5 Fe2O3 Al2O3 MgO MER 1 CaO:P2O5
2
PA001A 174.4 2.01 32.8 1.50 0.90 0.19 0.080 1.46
PA003B 186.8 2.29 29.1 0.82 1.46 0.34 0.123 1.47
PA004 106.3 2.26 31.5 0.44 1.66 0.22 0.079 1.42
PA005 163.9 1.86 30.7 0.79 1.09 0.42 0.077 1.36
PA005C 162.9 1.92 31.6 0.56 0.84 0.25 0.053 1.49
PA007 213.3 2.86 32.1 0.46 0.95 0.25 0.052 1.48
PA008 296.7 1.85 31.8 0.34 0.78 0.23 0.042 1.46
PA010A 117.5 1.81 31.3 0.21 1.45 0.24 0.063 1.46
PA012 317.1 1.62 31.0 0.51 1.37 0.27 0.074 1.49
PA013 383.7 1.52 28.4 0.61 1.13 0.40 0.076 1.54
PA014 406.4 1.87 30.6 0.78 0.83 0.27 0.062 1.50
PA016A 130.4 2.41 31.2 0.76 1.85 0.21 0.095 1.43
PA019A 122.6 2.03 32.2 0.26 1.02 0.27 0.049 1.47
PA021B 307.0 2.11 30.1 0.50 0.80 0.24 0.052 1.54
PA023 423.1 2.70 31.0 0.26 1.02 0.24 0.050 1.45
PA025 301.9 1.81 29.7 0.45 0.86 0.39 0.058 1.55
PA041 282.4 1.67 30.4 0.47 0.87 0.17 0.050 1.55
PA043 307.4 1.14 30.0 0.46 0.71 0.28 0.049 1.61
PA070 407.2 1.36 31.3 0.49 0.82 0.26 0.051 1.42
38
Lower Phosphate Zone at Paris Hills
Source: NI 43-101 Technical Report Paris Hills Phosphate Project dated January 18, 2013 (restated July 8, 2013). Leo Gilbride, P.E., Vanessa Santos, P.G.,
Gary L. Skaggs, P. E., P.Eng., Susan B. Patton, Ph.D., P.E., and Eric Dursteler, P.E., C.F.M. are the qualified persons as defined in National Instrument 43-101.
1 Minor Element Ratio, MER = (Fe2O3 + AI2O3 + MgO)/P2O5, <0.10 desirable for phosphate rock concentrate.
2 CaO to P2O5 ratio; <1.60 desirable for phosphate rock concentrate.
.
Drill-Hole Composites Used for Mineral Resource Estimation
Drill Hole Vertical Depth LPZ Top (m)
Vertical LPZ Thickness (m) P2O5 Fe2O3 Al2O3 MgO MER 1 CaO:P2O5
2
PA089 59.4 2.13 33.3 0.46 0.85 0.19 0.045 1.45
PA095 225.5 1.35 31.1 0.61 1.12 0.25 0.065 1.47
PA103 517.8 1.86 29.6 0.45 0.86 0.27 0.054 1.56
PA105A 403.6 1.87 31.2 0.50 0.76 0.25 0.048 1.46
PA106A 621.2 1.77 28.6 0.57 0.75 0.25 0.056 1.69
PA107 492.4 1.65 29.8 0.46 0.73 0.35 0.052 1.54
PA109 703.0 1.72 29.1 0.73 0.89 0.22 0.064 1.58
PA117 129.4 1.86 32.2 0.34 1.15 0.23 0.054 1.42
PA142A 642.1 2.11 28.7 0.49 0.79 0.27 0.055 1.72
PA154 717.7 1.10 30.4 0.44 0.80 0.41 0.054 1.49
PA162 890.4 2.03 24.5 0.33 0.76 3.46 0.238 1.92
PA163 777.7 1.79 29.6 0.39 0.76 0.34 0.051 1.48
PA164 554.0 1.15 29.2 0.60 1.01 0.90 0.088 1.52
PA165 576.9 1.85 29.8 0.54 0.68 0.25 0.050 1.52
PA171 667.5 1.69 31.6 0.52 0.77 0.26 0.049 1.44
PA183 796.3 1.46 30.4 0.44 0.67 0.30 0.046 1.58
PA184 929.9 1.74 30.1 0.41 0.71 0.42 0.054 1.53
PAADITSUB1 68.9 1.19 32.0 0.38 1.35 0.22 0.062 1.41
PAADITSUB3 9.0 2.32 33.5 0.24 0.98 0.16 0.042 1.42
PAADITSUB4 43.9 1.86 34.2 0.35 1.06 0.16 0.046 1.41
39
Lower Phosphate Zone at Paris Hills
Source: NI 43-101 Technical Report Paris Hills Phosphate Project dated January 18, 2013 (restated July 8, 2013). Leo Gilbride, P.E., Vanessa Santos, P.G.,
Gary L. Skaggs, P. E., P.Eng., Susan B. Patton, Ph.D., P.E., and Eric Dursteler, P.E., C.F.M. are the qualified persons as defined in National Instrument 43-101.
1 Minor Element Ratio, MER = (Fe2O3 + AI2O3 + MgO)/P2O5, <0.10 desirable for phosphate rock concentrate. 2 CaO to P2O5 ratio; <1.60 desirable for phosphate rock concentrate.
Drill-Hole Composites Used for Mineral Resource Estimation (cont’d)
40
Assay Results for the Upper Phosphate Zone
at Paris Hills*
Hole From To Cored Interval True Bed Thickness %P2O5
PA005C 108.6 m (356.3 ft) 112.5 m (369.0 ft) 3.9 m (12.7 ft) 3.5 m (11.6 ft) 26.97
PA019A 70.1 m (230.0 ft) 74.2 m (243.6 ft) 4.1 m (13.6 ft) 4.0 m (13.2 ft) 29.35
PA020 221.2 m (725.6 ft) 223.9 m (734.5 ft) 2.7 m (8.9 ft) 2.5 m (8.2 ft) 24.29
PA021B 246.2 m (807.7 ft) 249.0 m (817.0 ft) 2.8 m (9.3 ft) 2.8 m (9.1 ft) 23.66
PA024 207.4 m (680.3 ft) 212.6 m (697.5 ft) 5.2 m (17.2 ft) 5.0 m (16.3 ft) 21.11
PA041 226.1 m (741.7 ft) 229.9 m (754.2 ft) 3.8 m (12.5 ft) 3.6 m (11.8 ft) 21.50
PA065 382.2 m (1,254.0 ft) 387.4 m (1,271.0 ft) 5.2 m (17.0 ft) 4.9 m (16.1 ft) 20.37
PA070 355.4 m (1,166.2 ft) 360.5 m (1,182.6 ft) 5.1 m (16.4 ft) 4.7 m (15.3 ft) 21.05
PA095 179.9 m (590.3 ft) 182.9 m (600.0 ft) 3.0 m (9.7 ft) 2.9 m (9.6 ft) 21.46
PA103 480.1 m (1,575.1 ft) 484.2 m (1,588.5 ft) 4.1 m (13.4 ft) 4.0 m (13.3 ft) 22.85
PA105A 350.6 m (1,150.4 ft) 353.9 m (1,161.0 ft) 3.3 m (10.6 ft) 3.0 m (9.7 ft) 22.13
PA154 658.0 m (2,158.8 ft) 661.4 m (2,170.1 ft) 3.4 m (11.3 ft) 3.1 m (10.1 ft) 22.62
PA162 864.7 m (2,836.9 ft) 867.7 m (2,846.9 ft) 3.0 m (10.0 ft) 2.9 m (9.6 ft) 22.11
PA163 726.4 m (2,383.3 ft) 729.3 m (2,392.6 ft) 2.9 m (9.3 ft) 2.6 m (8.6 ft) 24.19
PA183 747.1 m (2,451.1 ft) 750.9 m (2,463.7 ft) 3.8 m (12.6 ft) 3.7 m (12.0 ft) 22.56
* Source: Stonegate Agricom news release published April 25, 2012. Dan Thompson, P.E., Manager, Technical Services, Paris Hills Agricom Inc., is the qualified
person as defined in National Instrument 43-101.
Hole From To Cored Interval True Bed Thickness %P2O5
PA007 143.6 m (471.0 ft) 149.4 m (490.0 ft) 5.8 m (19.0 ft) 5.4 m (17.8 ft) 21.46
PA008 238.2 m (781.5 ft) 241.2 m (791.5 ft) 3.0 m (10.0 ft) 3.0 m (9.8 ft) 22.84
PA012 254.5 m (835.0 ft) 258.4 m (847.9 ft) 3.9 m (12.9 ft) 3.7 m (12.2 ft) 21.58
PA013 317.1 m (1,040.5 ft) 321.3 m (1,054.0 ft) 4.2 m (13.5 ft) 3.9 m (12.8 ft) 22.80
PA014 375.8 m (1,233.0 ft) 379.5 m (1,245.0 ft) 3.7 m (12.0 ft) 3.6 m (11.7 ft) 23.16
PA016B 79.1 m (259.6 ft) 82.2 m (269.8 ft) 3.1 m (10.2 ft) 3.1 m (10.0 ft) 31.29
PA023 388.5 m (1,274.5 ft) 392.4 m (1,287.5 ft) 3.9 m (13.0 ft) 3.8 m (12.6 ft) 22.45
PA106A 567.8 m (1,863.0 ft) 571.8 m (1,876.1 ft) 4.0 m (13.1 ft) 3.9 m (12.8 ft) 22.09
PA142A 589.4 m (1,933.8 ft) 592.6 m (1,944.1 ft) 3.2 m (10.3 ft) 3.0 m (9.9 ft) 21.00
PA159 351.3 m (1,152.4 ft) 353.9 m (1,161.1 ft) 2.6 m (8.7 ft) 2.6 m (8.7 ft) 21.46
PA164 509.0 m (1,669.8 ft) 512.2 m (1,680.3 ft) 3.2 m (10.5 ft) 3.2 m (10.5 ft) 23.25
PA165 513.8 m (1,685.6 ft) 517.7 m (1,698.5 ft) 3.9 m (12.9 ft) 4.0 m (13.0 ft) 22.84
PA171 613.9 m (2,014.1 ft) 616.7 m (2,023.2 ft) 2.8 m (9.1 ft) 2.7 m (8.8 ft) 23.43
PA0184 870.0 m (2,854.2 ft) 873.9 m (2,867.2 ft) 3.9 m (13.0 ft) 3.7 m (12.2 ft) 21.58
41
Assay Results for the Upper Phosphate
Zone at Paris Hills* (Continued)
* Source: Data provided in a June 8, 2012 Stonegate news release and subsequently by Dan Thompson, P.E., Manager, Technical Services, Paris Hills Agricom Inc., who
supervised the drilling program at Paris Hills and is the qualified person as defined in National Instrument 43-101.