SELIGDAR MINING AND CHEMICAL COMPLEX

2015

PROJECT GOAL

The project goal is creating on the basis of the Seligdar apatite deposit of a contemporary mining and chemical complex producing apatite concentrate, compound phosphoric fertilizers and concomitant products.

Current stage of the project:It is expected that the Federal Agency for Mineral Resources will for the second time announce an auction for the right of using the Seligdar mineral deposit;

a search is under way for a strategic investor to participate in the auction and to finance the project of construction on the MCC.

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PROJECT TEAM

Initiator: South Yakutia Development Corporation, a public company

South Yakutia Development Corporation has been working since 2007 on the investment project of national importance, called “Integrated Development of South Yakutia”.

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2011 2012 2013 2014 20150

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14

16

18

20

3.8

6.67.3

10.9

15.1

2.3

6.9

8.9

14.7

18.8

1.4 1.9 1.9 2.22.9

MARKET BALANCE BETWEEN DEMAND AND SUPPLY OF MAIN FERTILIZERS, MLN. TONS Source: IFA

The growth rates of the global fertilizer market range from 2.8% to 3.2% per year.

Its key driver is population growth.0

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100

150

200

250

2010 2012 2015 2020

potassium

phosphoric

nitrogen

FORECASTING GLOBAL CONSUMPTION OF MINERAL FERTILIZERS, MLN. TONS Source: IFA

MARKET OF PHOSPHORIC FERTILIZERS

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USA24%

Russia17%

China 16%

Morocco8%

Tunisia7%

Other countries

28%

BREAKDOWN OF GLOBAL PRODUCTION OF PHOSPHORIC FERTILIZERS Source: IFA

oversupply on nitrogen-bearing fertilizers, million tons oversupply on carbomide, million tons oversupply on phosphoric acid, million tons

SELIGDAR APPATITE DEPOSIT

MINERAL RESERVES*

apatite ore – 1,277,177 thou tons

phosphoric oxide (Р2О5) – 85,587 thou tons

rear earth metals ∑ TR2O3 – 4,410.4 thou tons

average content of Р2О5 in apatite ore – 6.77%

Building stone: dolomite rocks, syenite porphyries, gneisses, crystalline schist – 353,242 thou cu. m

*as of Jan. 1, 2014, for the В+С1 category

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PRODUCTION CAPACITY OF SELIGDAR MCC

MINING AND PROCESSING INTEGRATED WORKS

opencast with 30m tons of ore and 18.9m cu m of stripping

ore-dressing plant

CHEMICAL PLANT OF COMPOUND PHOSPHORIC MINERAL FERTILIZERS567 thou tons per year

BLASTING COMPOUNDS AND OVERBURDEN ROCK CONSTRUCTION MATERIALS PLANT

Annual output of the MCC:

apatite concentrate (Р2О5 – 35,5%) – 3m 286 thou tons

compound phosphoric mineral fertilizers – 567 thou tons

crushed stone for construction -10m tons

sand – 1m 200 thou tons

dolomite powder -10m tons

industrial explosives – 35 thou tons (including for sale – 7 thou tons)

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KEY PARAMETERS OF SELIGDAR MCC PROJECT*

* Data of Feasibility Report 2007

Estimated investments 1.5bn USD

including into infrastructure 130mn USD

Recoupment time 8.8 years

Number of workplaces 3,500

IRR 31.3%

Tax proceeds after reaching full output capacity

5.2bn rubles a year

Construction period 6.5 years

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INFRASTRUCTURE FOR SELIGDAR MCC

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For the MCC to function properly, transport infrastructure and electric grids need to be created on the principles of public-private partnership:

Power supply:

7.5 km of 220 KW HVL for Seligdar MCC and a substation;

Transport infrastructure:

13-km-long railway line from railway station Kosarevsky to Seligdar MCC.

Forming an SPV company and obtaining the license  

Design                         

                         

Preparatory works                          

                         

Construction on a building materials plant                          

                         

Construction on a powder-mill (explosives plant)                          

                         

Construction on an MPIW

                         

                         

Construction of chemical works                          

                         

Months from the start - 6 12 18 24 32 38 42 48 54 60 66 72 78

SELIGDAR MCC PROJECT DELIVERY SCHEDULE

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CONCLUSIONS

STRENGTHS

large apatite ore reserves;the trend towards further growth of the phosphoric fertilizers market, including in the APR;lack of competition in the Far East;acceptable economic efficiency;availability of transport and energy infrastructure.

POTENTIAL

Increasing production volumes given the favorable conditions on global markets of phosphoric fertilizers;raising the project effectiveness and resilience in relation to market fluctuations due to the integrated utilization of raw stuff and the development of accompanying production capacities;government support of infrastructure and REA creation;preferential railway service and electric power rates.

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PROPOSAL FOR INVESTORS

WE INVITE INVESTORS TO CREATE SPV FOR:

participating in the auction for the right of developing the Seligdar apatite deposit (initial payment for the right of using the deposit is up to 4bn rubles);

Seligdar MCC construction project delivery.

Stakes in SPV:

investors - 75% minus 1 share

South Yakutia Development Corporation: 25% plus 1 share

THE CORPORATION WILL PROVIDE FOR:

draft feasibility report preparation;

essential permits and formalization of land plots,

on-site interaction with suppliers and contractors;

personnel recruitment and the launch of operations;

government support of the project;

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+7 (495) 232-42-44office@sy-corp.ru

http://www.sy-corp.ru

SOUTH YAKUTIA DEVELOPMENT CORPORATION

Thanks for your attention!

11b Seleznevskaya St, Moscow, 127473