The Sintoukola Potash
Project
Technical Overview of Potash
Mining
Paul Kluge
March 2013
ASX: ELM, TSX: ELM
0
Agenda
● About Elemental Minerals
● The Potash Market
● Potash Basics
● The Sintoukola Potash Project
 Geology
 Mining
 Processing
 Infrastructure
 Economics
● Summary & Conclusion
1
About Elemental Minerals
● Exclusively focused on the 93% owned Sintoukola
Potash Project in Republic of Congo (Brazzaville)
● Listed on the ASX and TSX
● Management Team based in Dainfern, South Africa
● Global group of consultants from
Vancouver, SRK Denver lead engineers
Perth
to
● Key Milestones so far:
● Start of drilling – Sep 2010
● Maiden resource – Apr 2011
● PEA – Aug 2011
● IPO in Toronto – Aug 2011
● PFS completed – Sep 2012
● ESIA and mining license application – Dec 12
2
The Potash Market
Why Potash?
• Potash primary use is in fertiliser, along with nitrogen and phosphorous (NPK)
• Saleable product is Murate of Potash (MoP) which is pure KCl
• K improves crop water retention, yield, nutrient value, taste, colour and
disease resistance
3
The Potash Market
Potash Supply
• One third of production concentrated in
Saskatchewan Canada – controlled by Canpotex
• One third of production concentrated in the FSU,
controlled by Belarussion Potash Corporation
• Final Third of Production spread between Germany,
Chile, Chine, Israel, Jordan
• No supply currently from Africa, but a historic
operation in RoC flooded in the 1970’s (Holle Mine)
Potash Demand
• Demand from agricultural users
• Mature markets: USA, EU
• Growth markets: China, India, SE Asia, BRAZIL
• Brazilian market consumed 8.2Mtpa in 2013 (own
production 800ktpa), demand projected to grow to
10.2Mtpa by 2017
4
Potash Basics
● Potash sold as 96-98% pure KCl (60-61% K2O) –
Muriate of Potash (MoP)
● Potash Ores:
● Sylvinite = Sylvite (KCl) + Halite (NaCl)
● Grades typically 15%-25% K2O
● Basis for reserve at Sintoukola (21% K2O
& HWS intersection at 35% K2O)
● Most of world production
● Carnallitite = Carnallite (KMgCl3·6H2O) + NaCl
● Grades typically 10%-15% K2O
● More difficult to process
● Production often in conjunction with Mg
5
The Sintoukola Project - Location
● Situated in the south west corner of the Republic of Congo
● 30km direct line of sight from the coast
● 60km north of Pointe Noire
● 1,408km2 exploration license covering the Kola and Dougou
deposits – 90km2 explored to date
Distance
(St. Petersburg – Santos)
6,447 nautical miles
Pacific NW
Vancouver
Portland
New Brunswick
NW Europe
St. Petersburg
Ventspils
Klaipedia
Hamburg
USA
China
Middle East
Distance
(Ashdod – Santos)
6,411 nautical miles
Distance
(Vancouver – Santos)
8,491 nautical miles
Ashdod
Eilat
Aqaba
India
Africa
Pointe Noire
Significant
opportunity for
Asian markets
Brazil
Distance
(Pointe Noire – Santos)
3,560 nautical miles
6
Historic Exploration
•
Potash discovered in 1935. French (Potasse d’Alsace) explored
coastal plain, scattered drilling, focussed at Holle.
•
>60 historic boreholes within basin completed by previous oil
and potash explorers, most contain references to potash. >10
within SP permit area.
•
Within SP permit >400 line kilometres of 2D oil industry seismic
data from 80’s to 2006. Plus oil exploration boreholes.
•
ELM acquired most historic borehole logs and 200 kms of
historic seismic data through purchase and swap agreements
•
ELM initated exploration by twinning K6 and K18 at Kola in 2010
Kola Deposit
Boreholes, seismic lines
and resource outlines
Historic log
Strategic World Class Potash Project
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The Sintoukola Potash Project - Resource
• All exploration with consultation and sign-off by CSA Global of Perth.
• Team of 10 local and expat geologists and technicians
• Drilling of 45 exploration boreholes (15,737 metres)
• Drilling of 22 hydrological boreholes (3,779 metres)
• 203 line kms of 2D Seismic data over 2 phases.
• 3 resource estimations (by CSA) the latest being August 2012.
• Phase 3 commenced 8th Jan 2013.
Mineral Resource estimate for sylvinite mineralization only at a
10% K2O cut-off grade
Measured
Tonnes(M
t)
HWS
Indicated
%K2O
%KC
l
Tonnes(M
t)
Inferred
%K2O
%KCl
Tonnes(M
t)
%K2O
%KCl
-
-
-
-
-
-
47
34.8
55.0
Upper Seam
171
22.5
35.5
159
22.0
34.9
96
21.8
34.5
Lower Seam
93
19.2
30.4
150
19.1
30.2
107
19.1
30.3
225
17.6
27.9
475
20.4
32.3
Footwall
Seam
Total
264
21.3
33.7
309
20.6
32.6
8
•
80 m of limestone and dolomite.
•
Anhydrite and clay aquitard (5-15 m
thick) rests on the ‘Top of salt’.
•
Salt sequence typically 400 metres thick,
mainly halite and carnallitite.
•
Upper 50-100 metres of the salt
sequence contains the sylvinite seams.
•
The clastic syn-rift sediments of Upper
Jurassic form the FW to the evaporites.
Geology
Mg
Top of salt
150-200 metres soft sands, clays, silts,
Fe-sandstones overly;
•
K2O
gamma
Project Geology
sylvinte
anhydrite
bischofite
Typical anhydrite sequence: an aquitard
anhydrite
Evaporite sequence
dominated by salt
10’s metres of
carnallitite
(<15% K2O)
clay
Base of salt
9
The Sintoukola Potash Project - PFS study structure
Strategic World Class Potash Project
10
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The Sintoukola Potash Project - Mining
Solar evaporation from brine lakes
• Approx. 20% of world production: Chile, China, Israel, Jordan
• Lowest production costs
• Large environmental impact
• Limited new resources available
Solution Mining
• Approx. 10% of world production: Canada, Russia
• Generally conversion from flooded conventional mines
• High operating costs, power & water requirements
• Amenable to deep deposits
Conventional Mining
• Approx. 70% of world production
• Lowest environmental impact
• Underground Room & Pillar Mining
• Maintaining seal between mine workings and overlying aquifer is
critical
• Borer Miner or Continuous Miner
• Requires ground freezing for shaft sinking
11
The Sintoukola Potash Project - Mining
Selected Conventional Mining
• Use continuous miners feeding shuttle cars
• Underground conveyors to shaft
• Convert 573Mt of M&I resource to 152Mt of reserve at 20% K2O
• 26% overall extraction ratio
• Production of 2Mtpa – 23 mine life with current resource
12
The Sintoukola Potash Project - Processing
Hot or cold crystallization
• In conjunction with evaporation & solution mining
• Required for the processing of carnallite
• Energy and water intensive
Floatation
• Used in conjunction with conventional mining
• Chosen at Sintoukola
13
The Sintoukola Potash Project - Infrastructure
Roads
● 30km road to the mine site
● 12km road to the process plant
Processing Facility at Coast
● Central, scalable process plant located at the coast
● Facilitates brine disposal in ocean
Material Transport
● RoM material via 36km overland conveyor to plant (6.8Mtpa)
Port
● Jetty facility at Tchiboula adjacent to plant
● Transship product in barges for 10km to ocean going vessels
Infrastructure
● Power transmission from existing national grid (50MW required –
200MW available)
● Water sourced from ocean and aquifer
● 80km Gas line for product drying
● Employee facilities for approximately 950 people near the process
plant
Infrastructure Funding
● Pursuing opportunities to fund these infrastructure packages
externally
Existing Camp
LEGEND
UP
Existing Roads
Existing Tracks
Haulage Road
New Track Service Road
Existing Tracks Upgraded
Under Pass
Shoreline Buffer Zone
Reserve Buffer Zone
REPUBLIC
OF CONGO
UP 3.17
UP 5.26
Existing Track 1
(ET1-N6)
UP 8.01
Dougou
UP 13.59
UP 17.09
UP 23.98
Electrical
Substation
UP 27.51
Employees Facilities
UP 33.70
TCHIBOULA
Existing Track 2
(ET1-N5)
Process
Plant
Jetty
Existing Track 2
(ET2)
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Study and Implementation schedule
Plant Basic
Engineering
Phase 2 Mineral Resource Estimation
Detail Engineering
PFS-level Technical Report
Infrastructure and plant construction
Plant
Production
Ramp-up
Full production
Definitive
Feasibility Study
Shaft and mine construction
ESIA Process
Plant
Com
Mine ramp up
Permitting
15
Capital and Operating Costs – 2.0 Mtpa mine
Capital Cost by Discipline
($1.85bn)
Operating Costs by Discipline
($79.7/tonne MoP)
$20
$2.0
$204
$353
$0.6
$6.0
$5.1
$1.7
$27.7
$252
$116
$59
$98
$47
$42
$23.5
$536
$13.1
$125
Mine
Hauling
Process Plant
Mining
Hauling
Jetty & Marine
Waste & Brine
Employee Facilities
Process
Jetty & Marine
General Infrastructure
Owner's Costs
Contingency
Waste & Brine
Employee Facilities
EPCM
Insurance
General Infrastructure
G&A
NI 43-101 Technical Report, Sintoukola Potash Project, Sep. 17, 2012; available at www.sedar.com
Note: Capital estimates exclude sustaining capital costs
16
Benchmarking Elemental vs. Peers
Capex Comparison
High Grade Sylvinite Resource
Mining Methodology
23%
Solution
Open Pit
Mining Methodology
(1)
22%
Conventional
21%
18%
17%
16%
11%
11%
11%
10%
9%
$1,471
Western Potash
(Milestone)
9%
$1,196
Verde Potash
(Cerrado Verde)
Source: Company Reports, NI 43-101 Technical Report, Sintoukola Potash Project, Sep. 17, 2012
1. Sulphate of Potash (“SoP”) production
Shallow Mineral Resources Depth
Conventional
Solution
Open Pit
1,700
$1,111
Encanto Potash
(Muskowekwan Property)
$1,069
K+S / Potash One
(Legacy)
US$/tonne of KCl Capacity
Karnalyte Resources
(Wynyard)
Prospect Global
Resources
(Holbrook Basin)
MagIndustries
(Mengo)
South Boulder
(Colluli Potash)
Allana Potash
(Danakhil Project)
Western Potash
(Milestone)
K+S / Potash One
(Legacy)
Encanto Potash
(Muskowekwan
Property)
Elemental Minerals
(Sintoukola Potash)
IC Potash
(Ochoa)
BHP Billiton
(Burr)
BHP Billiton
(Jansen)
MagIndustries
(Mengo)
Mining Methodology
Open Pit
Solution
BHP Billiton
(Jansen)
K2O Grade (%)
25%
Conventional
$1,035
Capacity
(Mtpy)
8.0
2.8
1.2
2.8
2.7
BHP Billiton
(Burr)
$969
2.0
Elemental Minerals
(Sintoukola Potash)
$944
2.0
Karnalyte Resources
(Wynyard)
$944
2.1
Verde Potash
(Cerrado Verde)
$779
3.0
South Boulder
(Colluli Potash)
$760
2.0
$759
0.9
1,211
945
264
1,013
425
(1)
IC Potash
(Ochoa)
465
65
Source: Company Reports, NI 43-101 Technical Report, Sintoukola Potash Project, Sep. 17, 2012
1. Sulphate of Potash (“SoP”) production
Western Potash
(Milestone)
K+S / Potash One
(Legacy)
Encanto Potash
(Muskowekwan
Property)
Karnalyte Resources
(Wynyard)
BHP Billiton
(Jansen)
BHP Billiton
(Burr)
MagIndustries
(Mengo)
Prospect Global
Resources
(Holbrook Basin)
Allana Potash
(Danakhil Project)
IC Potash
(Ochoa)
(2)
Elemental Minerals
(Sintoukola Potash)
South Boulder
(Colluli Potash)
56
392
950
725
(1)
Verde Potash
(Cerrado Verde)
Mine Depth (metres)
1,500
Elemental Minerals
(Sintoukola Potash)
$679
2.0
Prospect Global Resources
(Holbrook Basin)
$664
2.0
Allana Potash
(Danakhil Project)
$642
1.0
Source: Company Reports, NI 43-101 Technical Report, Sintoukola Potash Project
1. Sulphate of Potash (“SoP”) production
2. Excludes capital costs of US$530mm due to infrastructure opportunities
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171
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10
9
8
7
6
5
4
3
2
1
309
308
307
306
305
304
303
302
301
300
299
298
297
296
295
294
293
292
291
290
289
288
287
286
285
284
283
282
281
280
279
278
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276
275
274
273
272
271
270
269
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264
263
262
261
260
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257
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255
254
253
252
251
250
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245
244
243
242
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236
235
234
233
232
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227
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163
162
161
160
159
158
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149
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144
$140
143
142
141
140
139
138
137
136
135
134
133
132
131
130
129
128
127
126
125
124
123
122
121
120
119
118
117
116
115
114
113
112
111
110
109
108
107
106
105
104
103
102
101
100
99
98
97
96
95
94
93
92
91
90
89
88
87
86
85
84
83
82
81
80
79
78
77
76
75
74
73
72
71
70
69
68
67
66
65
64
63
62
61
60
59
58
57
56
55
54
53
52
51
50
49
48
47
46
45
44
43
42
41
40
39
38
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36
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33
32
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30
29
28
27
26
25
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22
21
20
19
18
17
16
15
14
13
12
11
10
9
1.2 67812345
309
308
307
306
305
304
303
302
301
300
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297
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293
292
291
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285
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185
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182
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178
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176
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172
171
170
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168
167
166
$162 164
165
163
162
161
160
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158
157
156
155
154
153
152
151
150
149
148
147
146
145
144
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137
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135
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133
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60
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24
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22
21
20
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18
17
16
15
14
13
12
11
10
9
8
7
6
5
2.0
4
3
2
1
309
308
307
306
305
304
303
302
301
300
299
298
297
296
295
294
293
292
291
290
289
288
287
286
285
284
283
282
281
280
279
278
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274
273
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270
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266
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263
262
261
260
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257
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253
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247
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245
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208
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208
178
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161
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155
154
153
152
151
150
149
148
147
146
145
144
143
142
141
140
139
138
137
136
135
134
133
132
131
130
129
128
127
126
125
124
123
122
121
120
119
118
117
116
115
114
113
112
111
110
109
108
107
106
105
104
103
102
101
100
99
98
97
96
95
94
93
92
91
90
89
88
87
86
85
84
83
82
81
80
79
78
77
76
75
74
73
72
71
70
69
68
67
66
65
64
63
62
61
60
59
58
57
56
55
54
53
52
51
50
49
48
47
46
45
44
43
42
41
40
39
38
37
36
35
34
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32
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28
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22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
Estimated Potash Developer Cost Curve
(US$/tonne KCl)
Royalties
Freight Costs
Operating Costs
$96
Expected
Capacity
(Mtpa)
2.0
$112
2.7
$133
2.8
$163
8.0
$170
2.8
309
309 ##
308
308
307
307
306
306
305
305
304
304 ###
303
303
302
302
301
301
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300
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299
298
298 ###
297
297
296
296
295
295
294
294
293
293
292
292 ###
291
291
290
290
289
289
288
288
287
287
286
286 ###
285
285
284
284
283
283
282
282
281
281
280
280 ###
279
279
278
278
277
277
276
276
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275
274
274 ##
273
273
272
272
271
271
270
270
269
269 ###
268
268
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266
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265
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263 ###
262
262
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261
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259
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256
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253
253
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251 ###
250
250
249
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245 ###
244
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240
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239 ###
238
238
237
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236
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235
234
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233
233 ##
232
232
231
231
230
230
229
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228
228 ###
227
227
226
226
225
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224
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223
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222
222 ###
221
221
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219
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218
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217
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216 ###
215
215
214
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213
213
212
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211
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210 ###
209
209
208
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207
207
206
206
205
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204 ###
203
203
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202
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201
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200
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197
197
196
196
195
195
194
194
193
193
#
$191
192
192
191
191
190
190
189
189
188
188
187
187 ####
186
186
185
185
184
184
183
183
182
182
$179
181
181 ##
180
180
179
179
178
178
177
177
176
176
175
175 ###
174
174
173
173
172
172
171
171
170
170
169
169 ###
168
168
167
167
166
166
165
165
164
164
163
163 ###
162
162
161
161
160
160
159
159
158
158
157
157 ###
156
156
155
155
154
154
153
153
152
152
151
151 ##
150
150
149
149
148
148
147
147
146
146 ###
145
145
144
144
143
143
142
142
141
141
140
140 ###
139
139
138
138
137
137
136
136
135
135
134
134 ###
133
133
132
132
131
131
130
130
129
129
128
128 ###
127
127
126
126
125
125
124
124
123
123
122
122 ###
121
121
120
120
119
119
118
118
117
117
116
116 ###
115
115
114
114
113
113
112
112
111
111
110
110 ##
109
109
108
108
107
107
106
106
105
105 ###
104
104
103
103
102
102
101
101
100
100
99
99 ###
98
98
97
97
96
96
95
95
94
94
93
93 ###
92
92
91
91
90
90
89
89
88
88
87
87 ###
86
86
85
85
84
84
83
83
82
82
81
81 ###
80
80
79
79
78
78
77
77
76
76
75
75 ###
74
74
73
73
72
72
71
71
70
70
69
69 ##
68
68
67
67
66
66
65
65
64
64 ###
63
63
62
62
61
61
60
60
59
59
58
58 ###
57
57
56
56
55
55
54
54
53
53
52
52 ###
51
51
50
50
49
49
48
48
47
47
46
46 ###
45
45
44
44
43
43
42
42
41
41
40
40 ###
39
39
38
38
37
37
36
36
35
35
34
34 ###
33
33
32
32
31
31
30
30
29
29
28
28 ###
27
27
26
26
25
25
24
24
23
23
22
22 ##
21
21
20
20
19
19
18
18
17
17 ###
16
16
15
15
14
14
13
13
12
12
11
11
10
10
9
9 ##6
9
8
8
8
7
7
7
6
5 0.9 6
5
5
4
40.3
4
3
3
3
2
2
2
1
1
1
309
308
307
306
305
304
303
302
301
300
299
298
297
296
295
294
293
292
291
290
289
288
287
286
285
284
283
282
281
280
279
278
277
276
275
274
273
272
271
270
269
268
267
266
265
264
263
262
261
260
259
258
257
256
255
254
253
252
251
250
249
248
247
246
245
244
243
242
241
240
239
238
237
236
235
234
233
232
231
230
229
228
227
226
225
224
223
222
221
220
219
218
217
216
215
214
213
212
211
210
209
208
207
206
204
$200 205
203
202
201
200
199
198
197
196
195
194
193
192
191
190
189
188
187
186
185
184
183
182
181
180
179
178
177
176
175
174
173
172
171
170
169
168
167
166
165
164
163
162
161
160
159
158
157
156
155
154
153
152
151
150
149
148
147
146
145
144
143
142
141
140
139
138
137
136
135
134
133
132
131
130
129
128
127
126
125
124
123
122
121
120
119
118
117
116
115
114
113
112
111
110
109
108
107
106
105
104
103
102
101
100
99
98
97
96
95
94
93
92
91
90
89
88
87
86
85
84
83
82
81
80
79
78
77
76
75
74
73
72
71
70
69
68
67
66
65
64
63
62
61
60
59
58
57
56
55
54
53
52
51
50
49
48
47
46
45
44
43
42
41
40
39
38
37
36
35
34
33
32
31
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
2.1
4
3
2
1
309
308
307
306
305
304
303
302
301
300
299
298
297
296
295
294
293
292
291
290
289
288
287
286
285
284
283
282
281
280
279
278
277
276
275
274
273
272
271
270
269
268
267
266
265
264
263
262
261
260
259
258
257
256
255
254
253
252
251
250
249
248
247
246
245
244
243
242
241
240
239
238
237
236
235
234
233
232
231
230
229
228
227
226
225
224
223
222
221
220
219
218
217
216
215
214
213
212
211
210
209
208
207
206
205
204
203
202
201
200
199
198
197
196
195
194
193
192
191
190
189
188
187
186
185
184
183
182
181
180
179
178
177
176
175
174
173
172
171
170
169
168
167
166
165
164
163
162
161
160
159
158
157
156
155
154
153
152
151
150
149
148
147
146
145
144
143
142
141
140
139
138
137
136
135
134
133
132
131
130
129
128
127
126
125
124
123
122
121
120
119
118
117
116
115
114
113
112
111
110
109
108
107
106
105
104
103
102
101
100
99
98
97
96
95
94
93
92
91
90
89
88
87
86
85
84
83
82
81
80
79
78
77
76
75
74
73
72
71
70
69
68
67
66
65
64
63
62
61
60
59
58
57
56
55
54
53
52
51
50
49
48
47
46
45
44
43
42
41
40
39
38
37
36
35
34
33
32
31
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
$286
3.0
(US$/tonne)
Project
Operating
Costs
Freight
Costs
Royalties
(1)
Sintoukola Potash
(1)
$81
(2)
Legacy
Burr
Danakhil
Project
Milestone
Mengo
Holbrook Basin
Jansen
Muskowekwan
Property
Ochoa
Sevier Lake
Project
Wynyard
Cerrado Verde
$63
$59
$69
$63
$124
$98
$163
$54
$158
$155
$131
$285
--
$49
$59
$30
$60
--
$44
--
$51
$4
--
$45
--
$14
--
--
$24
$10
$16
$20
--
$65
$17
$36
$25
(3)
$1
Sintoukola’s opex per tonne is the lowest when benchmarked against its peers
Source: Company Reports, Equity Research, NI 43-101 Technical Report, Sintoukola Potash Project, Sep. 17, 2012; available at www.sedar.com
Note: Freight and royalties included where available, excludes Saskatchewan Potash Production Taxes
1. Figures based on weighted average cost over LOM production
2. Includes sales and marketing costs; using Q2 2013 figures
3. Includes 2.5% crown royalty and 3.0% Saskatchewan resource surcharge based on US$450/tonne KCl price
18
Summary & Conclusions
● The growing world population underpins strong fundamentals for the potash
market
● Price levels are likely to remain high due to the controlled concentration of
production and the high barriers to entry
● The Sintoukola Potash Project hosts a significant high grade resource
● Strong cost advantages result in excellent project economics: NPV = $2.97bn,
IRR = 29%.
● Proven conventional mining, processing and shallow depth
● Excellent location to serve the Brazilian market
19
Questions?
20
Appendix
21
PFS Mineral Reserves & Resource Estimate
Mineral Reserve for sylvinite mineralization only at a 10% K2O cut-off grade
Proven
Tonnes(Mt)
87.9
Probable
%K2O
20.0
%KCl
31.7
Tonnes(Mt)
63.8
Total
%K2O
20.0
%KCl
31.7
Tonnes(Mt)
151.7
%K2O
20.0
Mineral Resource estimate for sylvinite mineralization only at a 10% K2O cut-off grade
Measured
Tonnes(Mt)
HWS
Indicated
%K2O
%KCl
Tonnes(Mt)
%KCl
31.7
(1)
Inferred
%K2O
%KCl
Tonnes(Mt)
%K2O
%KCl
-
-
-
-
-
-
47
34.8
55.0
Upper Seam
171
22.5
35.5
159
22.0
34.89
96
21.8
34.5
Lower Seam
93
19.2
30.4
150
19.1
30.17
107
19.1
30.3
225
17.6
27.9
475
20.4
32.3
Footwall Seam
Total
264
21.3
33.7
309
20.6
32.61
Mineral Resource estimate for sylvinite and carnallitite mineralization at a 10% K2O cut-off grade
Measured
Tonnes(Mt)
Indicated
%K2O
%KCl
Tonnes(Mt)
Inferred
%K2O
%KCl
HWS
Tonnes(Mt)
%K2O
%KCl
47
34.8
55.0
Upper Seam
245
19.5
30.9
310
17.8
28.1
278
16.3
25.8
Lower Seam
313
13.3
21.0
448
13.7
21.8
398
13.1
20.8
225
17.6
27.9
948
16.2
25.6
Footwall Seam
Total
559
16.0
25.4
758
(1)
15.4
24.4
Source: NI 43-101 Technical Report, Sintoukola Potash Project, Sep. 17, 2012; available at www.sedar.com
1. Includes resources upgraded to P&P reserves
Strategic World Class Potash Project
22
Disclaimer
This Presentation contains "forward-looking statements" ‘‘forward-looking information’’ within the meaning of applicable Canadian securities legislation. Wherever possible, words
such as ‘‘plans’’, ‘‘expects’’, or ‘‘does not expect’’, ‘‘budget’’, ‘‘scheduled’’, ‘‘estimates’’, ‘‘forecasts’’, ‘‘anticipate’’ or ‘‘does not anticipate’’, ‘‘believe’’, ‘‘intend’’ and similar
expressions or statements that certain actions, events or results ‘‘may’’, ‘‘could’’, ‘‘would’’, ‘‘might’’ or ‘‘will’’ be taken, occur or be achieved, have been used to identify forwardlooking information.
Forward-looking statements in this Presentation may include, but are not limited to, statements regarding: future extraction, methodologies and the exploitation of mineral
deposits; capital expenditure requirements; IRR and NPV of the Sintoukola Potash Project; expected production capacity; certain mining assumptions; cost estimates; product
market assumptions; market price assumptions; transportation and marketing costs; life of mine production parameters; arable land per capita projections; estimation of Mineral
Resources; the Company spending the funds available to it as stated in this Presentation; expectations regarding the Company’s ability to subsequently raise capital;
expenditures to be made by the Company to meet certain work commitments; work plans to be conducted by the Company; reclamation and rehabilitation obligation and
liabilities; treatment under governmental regulatory regimes with respect to environmental matters; treatment under governmental taxation regimes; government regulation of
mining operations; dependence on personnel and competitive conditions.
Forward-looking statements are based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of
trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that
such statements are made, but which may prove to be incorrect. Management believes that the assumptions and expectations reflected in such forward-looking statements are
reasonable. Assumptions have been made regarding, among other things: the Company executing its project development plans in accordance with its budgets and planning;
feasibility and other studies supporting the Company’s development plans; the Company being able to obtain sufficient financing when required and on reasonable terms; the
Company being able to convert existing Mineral Resources into Proven or Probable Mineral Reserves; the Company obtaining required licenses and approvals in a timely manner;
applicable environmental and other laws and other regulations not being amended; key management continuing to serve in their respective roles with the Company; title to the
Sintoukola Potash Project not being challenged; and no changes occurring to the price of potash that might adversely affect the prospects for developing and operating the
Sintoukola Potash Project or which might make it uneconomic to proceed with development.
Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate
indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking
statements, including risks related to: no history of mineral production; lack of revenue from operations; dependence on the Sintoukola Potash Project; uncertainty of estimates
of Mineral Resources; lack of Proven or Probable Mineral Reserves; projections being materially different than results; challenge of title to the Project; failure to obtain approvals
and licenses; adverse regulatory requirements; litigation; mining complexities; construction delays; potential for water ingress; potential for ground water access to Mineral
Resources; adverse climate conditions; failure to secure suitable waste disposal permits; inadequate infrastructure; delays in gaining access to land; existence of cultural heritage
on lands for which access is required; inability to recruit and retain key employees; unknown environmental risks; uninsurable risks; potential officer and director conflict of
interest; inability to secure additional capital; global financial conditions; competition in the mining industry; cyclical demand for potash; weather patterns and natural disasters;
volatility in potash prices; political and economic risks in the ROC; entitlement of the Congolese government to a stake in the Sintoukola Potash Project; enforcement of
contractual rights in the ROC; exchange rate fluctuations; repatriation of funds; failure to declare funds prior to bringing them into the ROC; opposition from non-governmental
organizations; lack of dividends; volatility and lack of liquidity of ordinary shares of the Company. Although the forward-looking statements contained in this Presentation are
based upon what management of the Company believes are reasonable assumptions, the Company cannot assure investors that future performance and actual results will be
consistent with these forward-looking statements. The Company, its directors, officers, agents, employees or advisors, do not represent, warrant or guarantee, expressly or
impliedly, that the information in this Presentation is complete or accurate. To the maximum extent permitted by law, the Company disclaims any responsibility to inform any
recipient of this Presentation or any matter that subsequently comes to its notice which may affect any of the information contained in this Presentation. These forward-looking
statements are made as of the date of this Presentation and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the
Company does not assume any obligation to update or revise them to reflect new events or circumstances.
23
Disclaimer cont’d
This Presentation does not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for any securities nor shall it or any part of it
form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever in any jurisdiction. Recipients of
this Presentation who are considering acquiring securities of the Company are reminded that any such purchase or subscription must not be made on the basis of the
information contained in this Presentation but are referred to the entire body of publicly disclosed information regarding the Company.
The information contained in this Presentation is derived solely from otherwise publicly available information concerning the Company and does not purport to be allinclusive or to contain all the information that an investor may desire to have in evaluating whether or not to make an investment in the Company. The information is
qualified entirely by reference to the Company’s publicly disclosed information.
This Presentation is being supplied to you solely for your information and may not be reproduced, further distributed or published in whole or in part by any other
person. Neither this Presentation nor any copy of it may be taken or transmitted into or distributed in Canada, the United States or any other jurisdiction which
prohibits the same except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of applicable securities
laws.
No representation, warranty or guarantee express or implied, is made or given by or on behalf of the Company or any of their subsidiary undertakings or any of the
directors, officers, employees or advisors of any such entities as to the accuracy, completeness or fairness of the information or opinions contained in this
Presentation (or of any other written or oral information made or to be made available to any interested party or its advisors) and, to the fullest extent permitted by
law, no responsibility or liability, howsoever arising, is accepted by any person for such information or opinions. In furnishing this Presentation, the Company does
not undertake or agree to any obligation to provide the attendees with access to any additional information or to update this Presentation or to correct any
inaccuracies in, or omissions from, this Presentation that may become apparent. The information and opinions contained in this Presentation are provided as at the
date of this Presentation. The contents of this Presentation are not to be construed as legal, financial or tax advice. Each prospective investor should contact his, her
or its own legal adviser, independent financial adviser or tax adviser for legal, financial or tax advice. In particular, any estimates or projections or opinions contained
in this Presentation necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relation to
such matters.
Competent Person / Qualified Person Statement:
All scientific or technical information, including information that relates to exploration results and minerals resources (“Information”) in this press presentation is
based on information prepared and/or approved by Andrew Scogings, MSc, MAusIMM, MAIG, PhD (CSA), Jean Hector, Senior Geologist (EGIS), Jane Joughin,
Pr.Sci.Nat., MSc (SRK), Johan Boshoff, MEng, P.Eng. (SRK), Neal Rigby, CEng MIMMM, PhD (SRK), Paul O’Hara, P.Eng. (AMEC) and Simon Dorling, MSc, MAIG, PhD
(CSA) (collectively, the “Qualified Persons”), each of whom are independent of the Company and have sufficient experience which is relevant to the style of
mineralization and type of deposit under consideration and to the activity they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the
“Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (the JORC Code) and as a Qualified Person for the purposes of
Canadian National Instrument 43-101. Each of the Qualified Person consents to the inclusion in this press presentation of the Information, in the form and context in
which it appears.
Further information respecting Elemental’s Sintoukola Potash Project and the PFS is contained in a technical report entitled ‘‘NI 43-101 Technical Report, Sintoukola
Potash Project, Republic of Congo’’ dated September 17, 2012 with an effective date of September 17, 2012 (the “Technical Report”). The Technical Report can be
accessed on the Company’s profile on SEDAR.
24
Disclaimer cont’d
Canada
This document may only be provided, and offers and sales may only be concluded in Canada, with or to, persons that are “accredited investors” as defined in National
Instrument 45-106 – Prospectus and Registration Exemptions. This document is not, and under no circumstances is it to be construed as, an offer to sell the
securities described herein or a solicitation of an offer to buy the securities described herein in any jurisdiction in Canada where the offer or sale of these securities is
prohibited. This document is not, and under no circumstances is it to be construed as, an advertisement or a public offering in Canada of the securities referred to in
this document. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed upon this document or the merits of the
securities described herein and any representation to the contrary is an offence.
United Kingdom
Neither the information in this document nor any other document relating to the offering described herein has been delivered for approval to the Financial Services
Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended ("FSMA")) has
been published or is intended to be published in respect of the securities described herein. This document is issued on a confidential basis to "qualified investors"
(within the meaning of section 86(7) of FSMA) in the United Kingdom, and the securities referenced herein may not be offered or sold in the United Kingdom by
means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to
section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any
other person in the United Kingdom.
Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the
securities described herein has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United
Kingdom in circumstances in which section 21(1) of FSMA does not apply to the Company.
In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments
falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 ("FPO"), (ii) who fall within
the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may
otherwise be lawfully communicated (together "relevant persons"). The investments to which this document relates are available only to, and any invitation, offer or
agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its
contents.
United States
This document may not be released or distributed in the United States or to U.S. persons (as defined under the U.S. Securities Act of 1933, as amended (the “U.S.
Securities Act”)) (“U.S. Persons”) or to persons acting for the account or benefit of U.S. Persons, except to persons that satisfy the requirements set forth in Rule
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to, or for the account or benefit of, any U.S. Persons except to persons that satisfy the requirements set forth in Rule 501(a)(1), (2), (3) or (7) of Regulation D. The
securities described herein have not been, and will not be, registered under the U.S. Securities Act or the securities laws of any state or other jurisdiction of the
United States. Accordingly, the securities described herein may not be offered or sold, directly or indirectly, in the United States or to, or for the account or benefit of
U.S. Persons , unless they have been registered under the U.S. Securities Act, or are offered and sold in a transaction exempt from, or not subject to, the registration
requirements of the U.S. Securities Act and any other applicable state securities laws.
25