2. Disclaimer
This presentation contains certain âforward looking statementsâ, which include but is not limited to, statements with
respect to the future financial or operating performance of Verde Potash Plc (the âCompanyâ), its subsidiaries and
its projects, statements regarding use of proceeds, exploration prospects, identification of mineral reserves, costs
of and capital for exploration projects, exploration expenditures, timing of future exploration and permitting,
requirements for additional capital, government regulations of mining operations, environmental risks, reclamation
expenses, title disputes or claims, and limitations of insurance coverage. Forward looking statements can
generally be identified by the use of words such as âplansâ, âexpectsâ, or âdoes not expectâ or âis expectedâ,
âanticipatesâ or âdoes not anticipateâ, or âbelievesâ, âintendsâ, âforecastsâ, âbudgetâ, âscheduledâ, âestimatesâ or
variations of such words or phrases or state that certain actions, event, or results âmayâ, âcouldâ, âwouldâ, âmightâ,
or âwill be takenâ, âoccurâ or âbe achievedâ. Forward looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or achievements expressed or implied by said
statements. There can be no assurances that forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those anticipated in said statements. Accordingly, readers
should not place undue reliance on forward-looking statements.
Total resources include all categories unless otherwise stated. All currency are in Canadian $ unless otherwise
stated.
TSXv : NPK 2
3. Verde Potash
Brazilian fertilizer company
â˘Founded and led by strong and successful Brazilian team
â˘Listed on the Toronto Venture Exchange (NPK : TSX-V)
Cerrado Verde Potash Project
â˘105.1Mt @ 10.3% K2O of Potash inferred resource
â˘Phase 1 : ThermoPotash
⢠Low Capex: US$196.8m
⢠Strong Economics: NPV : US$445.5M
â˘Phase 2: Conventional Potash - KCl
⢠New technology under development
⢠University of Cambridge partnership
Investment Highlights
â˘High grade potash at surface
â˘Close proximity to fertilizer distribution and farms
â˘Strong government support: tax advantages and potential financing
Potash rock at surface grading 11% K2O
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4. Capital Structure & Share Price
Shares Issued 32,122,769 Share Price
$10.00 0.9
$9.00 0.8
Options 2,862,136 $8.00 0.7
$7.00 0.6
$6.00
0.5
Warrants 208,686 $5.00
0.4
$4.00
$3.00 0.3
0.2
Diluted 35,193,591 $2.00
$1.00 0.1
$0.00 0
52 week: Hi/Lo C$10.95/C$1.32 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11
Analyst Coverage
Market Cap (at $7.95) C$255 million
Salman Partners Jaret Anderson
Average Volume (3 mo.) 90,040 Wellington West Robert Winslow
Ocean Equities Natasha Liddell
Cash Position ~C$13.6 million
Octagon Capital Max Vichniakov
GMP Securities
Kaiser Bottom Fish (John Kaiser)
Anoop Prihar
Debt 0
Bottom Fish John Kaiser
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5. Management & Directors
Management Independent Directors
Cristiano Veloso Founder, President, CEO Peter Gundy Chairman
⢠12 years experience; Brazilian entrepreneur ex Banco do ⢠Former Chairman of Neo Materials Technologies Inc.; VP of
Brasil S/A, CEMIG; LL.B, LL.M International Business Law Brascan Inc; Executive VP, Finance of Potash Corporation of
Saskatchewan Limited.
MaurĂcio Sampaio VP Operations
⢠30 years experience; ex President of Brazilian Agribusiness
Association, Operations and Marketing Director for Bunge Dr. Getulio Lamartine de Paula Fonseca
Fertilizantes and Operations Director for Fertiza ⢠Former General Director National Department of Power &
Water Supply; Executive-Secretary Industry & Commerce
Pedro Ladeira VP Engineering Ministry;
⢠17 years experience; ex Operations Director at Cementos
Minetti; Process and Production Manager for Holcim Brazil Dr. Henrique BrandĂŁo Cavalcanti
⢠Former Brazilâs Minister of the Environment (1994), Deputy
Ysao Munemassa Exploration Manager Minister of Mines Energy (1967-69), Deputy Minister of Interior
⢠41 years experience; ex BP Minerals, VALE, Union Carbide, (1969-74).
INCO, Teck Cominco, Newmont Gold
Dr Derek Fray Metallurgical Consultant Dr. Renato Gomes
⢠45 years experience; University of Cambridge Professor & ⢠Director of the ABCI Institute (Brazilian International Trade
Director of Research Scholars) Lawyer and member of Brazilian and Portuguese Bar
Associations
Jed Richardson VP Corporate Development
⢠10 years experience; ex Mining Analyst with Sprott/Cormark
and RBC Capital Markets, Mining engineer with Alcan Dr. Richard Garnett
Aluminium ⢠PhD. in Economic Geology (Royal School of Mines, UK), MBA
(Cranfield University, UK); Mining Engineer. Has held senior
positions with Rio Tinto, Anglo American, Hudson Bay Mining
and Diamond Fields Resources
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6. Brazilâs Agribusiness: Feeding the World
â˘Brazil has almost 20% of worldâs â˘The great agricultural frontier is Brazilâs
undeveloped potential arable land Cerrado, or Savannah away from the
Amazon forest
Undeveloped Potential Arable Land
600
Amazon
500
Available
Brazil
Millions of Hectares
400
Planted
300 Cerrado
200
100
South
0 America
Brazil US Russia China India
Source: Food and Agriculture Organization, UN
â˘Brazil has worldâs largest renewable fresh
â˘Climate allows for multiple crops during
water reserve
the year
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7. Brazilâs Fertilizer Supply & Consumption
Dependency on Imported Potash
â˘Potash ranks in the top ten of Brazilian
imports by dollar value (2008 #6, 2009
#10)
â˘Brazilian government targets 2020 to
be fertilizer-independent
â˘Brazil is to be ranked #1 globally for
potash imports in 2020 at 7.2 million
tonnes of K2O1
Source: FAO,UN
Note
1Source: FERTECON report (FERTECON, 2009, /15/)
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8. Location, Location, Location
~ 60% of Brazilâs
fertilizer consumption
takes place in Minas
Gerais state where
Verdeâs projects are
located and adjacent
states
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9. Transportation Advantage
From Saskatchewan to Brazil
$43.29 1 $30-35 $80-115
Saskatchewan /tonne Port of Vancouver /tonne Port of Santos /tonne NPK Blenders
Total: $153-193/tonne
Verde Potash
Transportation Cost 2
Cerrado Verde to NPK Mixers
(per tonne)
Minas Gerais $22.27
Mato Grosso $59.72
Goias $29.66
Parana $67.33
Mato Grosso do Sul $57.27
Cerrado Verde Bahia $47.63 NPK Blenders
Sao Paulo $40.85
1Government of Canada, Ministry of Transportation
2 Agroconsult TSXv : NPK 9
10. Potash at Surface
Growing Resource
⢠Initial NI 43-101 Inferred Resource of 105.1Mt @
10.3% (7.5% cut-off)
⢠Potassium rich rock (Muscovite and Microcline)
distributed over an area approximately: 100km x
10km x 20m to 80m thick
⢠26,000m drilling program underway (see press
release dated May 9, 2011)
Low-Cost Mining
⢠High Grade
⢠Open Pit
⢠Drilling Results include up to 64m @ 10.3% K2O
from surface
Potash rock at surface being drilled
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11. Verdeâs Advantage
Verdeâs
Carnallite Sylvinite
K Rock
Depth 0m 500 - 1000m 1000 - 1500m
Open Pit Mining Solution Mining Conventional Underground
Grade 10-13% K2O 10-14% K2O 20-25% K2O
Time 2 yrs 5-7 years 7-10 years
Cap-Ex $200 million $1-2 billion $2-3 billion
Energy Costs Fluid and Boreholes Conventional Mining
Op Cost Low mining costs Solution Separation Flotation Separation
Product ThermoPotash KCl KCl
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12. ThermoPotash Scoping Study
NI 43-101 Preliminary Economic Production Rate 1.1Mtpy2 2.2Mtpy2
(Brazil market share of (2%) (4%)
Assessment Completed Potash âK2Oâ)
â˘PEA completed by SRK Consulting
(U.S.), Inc. studied open pit mining and NPV (10%) US$445.5m US$844.1m
pyrometallurgy process to create the
ThermoPotash fertilizer NPV (12%) US$331.6m US$642.0m
IRR 32.7% 40.0%
Potential Cost Savings Operational Cost US$41.80/t US$36.36/t
â˘Use of natural gas or eucalyptus
charcoal instead of pet coke as heating
CapEx US$155.3m US$218.4m
fuel source Contingency US$23.3m US$32.8m
â˘Utilization of Verdeâs potential Pre-construction US$18.2m US$18.2m
Total CapEx US$196.8m US$269.4m
limestone source
â˘Reduction of ICMS1 value-added taxes
Payback 2.38 years 1.87 years
â˘Flow sheet Optimization
NOTE
12
1 Tax on the Circulation of Goods, Interstate and intercity Transportation and Communication Services
2 These figures can be found on page IV of the Preliminary Economic Assessment available on SEDAR published on December 13, 2010
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13. ThermoPotash : Benefits
Benefits to farmers
⢠Provides potash in a slow release form
⢠Provides substantial doses of other
macronutrients
⢠Reduces limestone use for pH correction
⢠No change to final fertilizer application
quantities or techniques
Benefits to fertilizer blenders
⢠Overseas imports price is set 2 months
before it arrives at facility, plus possible
port delays
⢠60% of fertilizer consumption occurs in 4
month window
⢠Transport distance creates unusable
powder from granules
⢠Potential to replace 581,236 tonnes of
imported KCl in the region
Port of Santos
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14. Beyond ThermoPotash: Conventional KCl
New Technology has potential to revolutionize Potash industry
⢠Method invented for reacting Verdeâs
potassium rich rock with a simple mixture of
salts to form water-soluble potash
⢠Invented by Dr. Derek Fray, Professor and
Director of Research at the University of
Cambridge, UK, sponsored by Verde
⢠Reactions occur at moderate temperatures
of 800-1000°C
⢠The route allows for the production of SOP
and KCl
⢠Verde has commissioned a leading
commercial lab to scale up the current Potassium rich rock
processing concept to industrial levels
⢠If the process proves economic it could
revolutionize the Potash market
Dr Derek Fray, University of Cambridge, UK
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15. Brazilian Government Commitment
Memorandum of Understanding (âMOUâ) Signed
with State of Minas Gerais
(see April 7, 2011 release)
â˘Potential financing for working capital and fixed
investment support; funds administered by the
Development Bank of Minas Gerais (BDMG)
â˘Secretary of Financeâs approval of special tax treatment
defined as:
⢠Suspension of âICMSâ tax payable on:
a) imports of foreign goods;
b) imports of foreign raw materials;
c) purchases of domestic raw materials
⢠Eeffective tax load of 4% payable on sales of
fertilizer products
⢠Tax benefit will reduce:
⢠capital and operational expenditures for the Minas Gerais State Governor, Antonio Augusto, and
Cristiano Veloso, Verde Potashâs CEO
proposed TK production
⢠sales tax on TK
15
17. Potash Rock vs. Oil Sands
Oil Sands Potash Rock
Commodity Crude oil Potash
Potential Resource 170 billion barrels of oil equivalent 15 billion tonnes
Cause for ⢠Dependence on oil imports in the 1970s ⢠Dependence on potash imports in
development ⢠Rising price of oil making the projects Brazil with growing agriculture
economic industry
Life Stage 45 companies developing 82 projects; Verde: market and product development
25 projects in operation stage
Key Companies Major International Oil Companies Verde Potash
Suncor, Nexen, Cenovus, Husky
Sector Value C$120 billion C$200 million
Oil sands
⢠Oil sands now an accepted source of crude oil shows the potential our new source of potash
⢠Oil sands deposits were developed because of increasing dependence on oil imports; Brazilâs
dependence on potash imports can be reduced by this development
⢠In 30 years, oil sands emerged from a niche technology to a mainstream source of oil,
supplying 6.6% of U.S. oil consumption. Our potash rock may follow suit, providing an answer
for growing global potash need in the future
17
18. Why Potash is Important: Potash is Energy
Sugarcane Milling and Refining Ethanol Production Ethanol
replaces about
⢠Uses 160kg/ha of potash ⢠Once harvested, sugarcane ⢠Ethanol is produced by 50% of the fuel
per year, 55% of total is milled to collect the microbial fermentation of needed to
nutrient required (In juice that contain 10-15% the sugar operate light
comparison, corn uses sucrose ⢠Water is removed by vehicles on
140kg/ha of potash, 31% ⢠Juice is filtered and refined distillation and dehydration gasoline
of reqâd nutrient)
⢠Sugarcane is grown in Bagasse power
about 8 million hectares of Electricity Generation generation
land, of which 55% of the represents
harvest is used for ethanol â˘Bagasse is burned to generate 4.1% of total
production electricity for production installed
plant and grid capacity
Ethanol Production Cost
Sugarcane (Brazil): $0.83
Corn (US): $1.14
Ratio energy input to manufacture
to energy output of ethanol
Sugarcane (Brazil): 1:9.3
Corn (US): 1:1.4
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20. Process and Operating Costs
ThermoPotash Production Process Estimated Operating Cost
1. Mining (1.1mtpy) 1
⢠Potassium rich rock comes from open pit and â˘Energy
the limestone comes from suppliers in the $18.45 â˘petroleum coke, electricity
surrounding area or Verdeâs quarry
â˘Raw Materials
2. Grinding $2.35 â˘limestone
⢠Potassium rock and limestone are ground by
upright rod mill â˘Labour
$8.91
3. Mixing
⢠The ground rock and limestone are mixed â˘Maintenance
and 4% moisture is added $1.80
4. Pelletization and Drying
⢠Material is rolled into pellets by disc â˘Equipment Operation
$5.50
pelletizers, and dried by exhaust gas from the
rotary kiln â˘Marketing
$1.76
5. Rotary Kiln and Quenching
⢠After drying, pellets go into the rotary kiln to â˘Non-Operating Expenses
be heated to 1250oC and rapidly cooled $3.04 â˘administration
6. Packaging of ready ThermoPotash product
US$41.80/tonne
1These figures can be found on pages 17-15 & 17-16 of the Preliminary Economic Assessment
available on SEDAR published on December 13, 2010
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21. Pricing Estimates
Marketing Study
⢠Agroconsult conducted an
Mato Grosso
Bahia
325,18ty
independent market study to
895,043t/y
$189.85
$141.61 understand potential sale price and
Goias $93.98
$130.13
495,68t/y market size of ThermoPotash
$142.64 Minas
$112.98 Gerais ⢠Prices derived exclusively on how
896,051t/y
$182.31 blenders can optimize NPK formulas
Cerrado Verde $160.04
using ThermoPotash and keep raw
Mato Grosso
material costs equal
do Sul
246,621t/y Parana
$179.47 778,17t/y Sao Paulo
$122.20 $131.01 722,513t/y
$63.68 $131.77 Highlighted Market
$90.92 Annual Market Potential:
4,359,267 tonnes
Potential Sale Price:
US$179.47/t1
Delivery-adjusted Price:
US$122.20/t1
NOTE
1 Weighted-average of the highlighted market
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22. Pricing Estimates
Optimized Formulation vs. Standard Formulation in 4-20-20 Fertilizer1
Standard - w/o TK Optimized Formulation - w/ TK
Weight Price N P K Weight Price N P K
(kg) (US$) (kg) (US$)
Am. Sulphate 74.2 19.18 1.48% 0.00% 0.00% 5.6 1.45 0.11% 0.00% 0.00%
(US$258.52/t)
SSP 352.8 89.28 0.00% 7.06% 0.00% 0 0.00 0.00% 0.00% 0.00%
(US$253.07/t)
MAP 239.7 123.22 2.52% 12.94% 0.00% 370.4 190.41 3.89% 20.00% 0.00%
(US$514.06/t)
KCl 333.3 171.83 0.00% 0.00% 20.00% 288.6 148.79 0.00% 0.00% 17.32%
(US$515.55/t)
ThermoPotash 0 0 0.00% 0.00% 0.00% 335.5 61.16 0.00% 0.00% 2.68%
($182.31/t)
Total Weight 1000 403.53 4.00% 20.00% 20.00% 1000 401.81 4.00% 20.00% 20.00%
NOTE
1 Agroconsult (see press release dated October 26, 2010)
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23. ThermoPotash Agronomic Results
Nutrient Availability Tests Limestone Replacement Tests
(See August 11, 2010 release) (See October 14, 2010 release)
⢠Tests showed that ThermoPotash ⢠Every tonne of ThermoPotash used
(TK) provided statistically equivalent reduces limestone required by 490
nutrients to plants as KCl kg
Slow and Controlled Release
(See October 15, 2010 release)
⢠Resin tests confirmed slow
release properties of
ThermoPotash (best suited for
Brazilian soils)
Potassium Leaching Tests
(See December 16, 2010 release)
⢠TK suffers minimal nutrient loss as a
result of leaching, whereas KCl loses
26% under the same conditions
Carrotâs planted at Sekita using TK & KCl: statistically inconclusive results
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24. Why It Hasnât Been Done Before?
1200 120
Potash Shipments (MMt)
1000 Shipments Brazil 100
Potash Price ($/t)
800 China 80
600 60
400 40
200 20
0 0
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2002 2003 2004 2005 2006 2007 2008 2009 2010E
Potash price was too low Existing Production Govât Built
⢠When Verdete was first tested KCl ⢠Large conventional mines are
was only $70/t privatized government assets
⢠In 2007 KCl price was still $200/t ⢠No new large mines since 1980âs
reaching $1100/t during 2008 ⢠Now it would cost billions with long
⢠Now $400/t FOB, $600/t in Brazil lead times to production
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25. ThermoPotash Partnerships
ArcelorMittal to Fund Agronomic Trials (See Sept. 22, 2009 release)
⢠Agreement represents a first step in developing corporate demand for ThermoPotash. ArcelorMittal
has 170,000ha of cultivated eucalyptus forests for charcoal production.
Agrifirma to Undertake Agronomic Trials (See Nov. 24 & Dec. 9, 2009 release)
⢠Agreement secures real world field trials of ThermoPotash for use in corn and soy plantation, also as
part of process for conversion of Cerrado scrubland for commercial cultivation. Agrifirma is a Jersey-
based land fund with 42,000ha of farmland in Brazil
Sekita to Fund Agronomic Trials (See March 22, 2010 release)
⢠Agreement establishes a relationship with one of the largest Brazilian vegetable producers.
ThermoPotash to be tested in real world conditions for use with various vegetables. Its farms are
located less than 10km from the Cerrado Verde Project
Included in Sugarcane Fertilizer Taskforce (See August 4, 2009 release)
⢠ROCKAPL (âRockâ Arranjo Produtivo Local) is a collaborative effort between government and private
enterprise focused on developing fertilizer alternatives for sugarcane destined for ethanol production
University of Uberlandia Undertakes Agronomic Trials (See December 9, 2009 release)
⢠Agreement with Dr. Gaspar KorndÜrfer, Professor of Agriculture at the Universidade Fedederal de
Universidade Fedederal de Uberlandia Uberlandia, secures initial agronomic studies used for the planning of Amazonâs metallurgical test
work and laboratory scale tests on the application of ThermoPotash
University of Lavras Agreement (See August 31, 2010 release)
⢠Agreement with the University of Lavras to complete a full slate of tests to register the ThermoPotash
product as a fertilizer in Brazil
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26. Apatita Phosphate Project
⢠30km of mineralized phosphate with
widths between 1km and 5km (see
November 8, 2010 release)
⢠Average grade of 7.13% P2O5 from 435
surface grab samples
⢠12 hole, 1,022m drilling program
provided encouraging results at two
prospect regions:
⢠Alto da Serra zone - high grade potential
of 2m at 9.49% P2O5
⢠Nau de Guerra zone - high grade
potential of 1m at 8.43% P2O5 and 3m at
6.35% P2O5
⢠First concentration test result: 29.8%
P2O5 with significant potential for
improvement
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27. Phosphate in Brazil
Avg Production
Resource 1 Reserve 2 Grade P2O5 Capacity4
Company Project Status Type (Mt) (Mt) P2O5 (%) Concentr.3 (ktpy)
Fosfertil/Vale Tapira Operating Carbonatite 1,309.2 7.69 35.5 2,030
Copebras/Anglo Ouvidor Operating Carbonatite 256.7 7.63 38.0 1,300
Vale Araxa Operating Carbonatite 88.7 11.12 35/33 910
Fosfertil/Vale Catalao Operating Carbonatite 223.6 8.96 36/34 1,209
Vale Cajati Operating Carbonatite 85.1 5.45 36.0 528
Fosfertil/Vale Patos Operating Metasediments 304.6 12.36 24.0 150
Fosfertil/Vale Salitre Implementati Carbonatite 852.0 10.74 - 1,600 forecast
on
Vale Anitapolis Implementati Carbonatite 54.0 9.01 - 300 forecast
on
MBAC5 Itafos Operating Metasediments 44.0 5.39 28/30 50
Notes
1 Resource and Grades: Salitre-DNPM 1975/Anitapolis:, DOU 1980 (DOU = Official Diary of Brazil)
2 Reserve and Grades: DNPM 2006 Mineral Annuary
3 Concentration/Production: ANDA Annuary 2008
4 Major Phosphate Rock Producer by Bete,Inc. for Cargill Fertilizer, inc 1998. Values updated to 2010 including exchange variation and inflation
5 BMO â MBAC report figures April 2010 and Website info September 2010 TSXv : NPK 27