Preparing for the Future

THE HOLBROOK ARIZONA POTASH PROJECT

Phase 1

Updating engineering reports using existing data.

Phase 2

Raising capital for project.

Phase 3

Forming a qualified team to manage the building and operation of the project.

OVERVIEW

Potash Arizona Inc. owns 100% of a late-stage potash development project (“Holbrook Project” or “the Project”) in Arizona, United States

There is a sizable resource hosting potential — it could become the largest potash producing mine in the United States and lowest cost Northern American potash producer on a freight adjusted basis to the Western United States.

With significant competitive advantages of local rail, roads, power and water, it is a unique opportunity to acquire a potash project with low capex intensity, low opex and a transportation advantage due to its close proximity to key United States agriculture belts

CURRENT STATUS

Potash Arizona Inc. is evaluating strategic alternatives for its Potash Arizona project including a sale of a partial interest to fund the DFS or a sale of their full 100% interest 

Pre-Feasibility Study completed – 1.3 million tons per annum average annual production – $825 million estimated capital cost (read more)

To date, approximately $110 million has been raised for the project with approximately $65 million having been spent on direct and indirect costs of the project 

2 of 3 Permits required have already been obtained by Potash Arizona Inc. for its Potash Arizona project along with a 20 year mineral/mining lease with the State of Arizona.

Potash sits at relatively shallow depths (generally less than 1,500 feet) which will be accessed by shafts using conventional underground room and pillar mining will be employed

STRATEGIC ADVANTAGES

Minimal infrastructure capex required

30 year+ mine life with excellent expansion potential

Mining-friendly jurisdiction – lowest geopolitical risk of any greenfield potash project

Strong location advantage –all production can be sold into key United States potash markets

BNSF main-line borders north end of property and private rail spur runs through property

All potash mining to be conducted by Potash Arizona Inc. on state and private lands, no federal or tribal land issues to deal with –nearly all permitting already completed

Mineral Resource

In August 2012, North Rim estimated the Holbrook Arizona Potash Project Resource in accordance with CIM standards

Resource estimate based on 57 historical holes, 13 holes drilled in 2011, 10 holes drilled in 2012

17 additional holes drilled in 2013 have not been included in the resource estimate yet

25 additional Arizona State sections of potash mineral rights acquired in 2015 have also not been included in the resource estimate yet

2 potash beds identified, KR-1 and KR-2

KR-2 bed of similar grade and thickness, with less impurities than New Mexico potash mines
Potash beds occur at shallow depths

Potash Arizona's permitting is close to complete.

Three key permits are required

Mineral Lease (conversion of potash exploration permits to long-term potash mineral lease)
Air Permit (received for 2.2 million ton per annum potash operation, will need amended down)
Aquifer Protection Permit (3-4 month process)

Man holding Potash in Arizona, Karlsson Group, United States

With the world’s population projected to grow by over 20% by 2040, the demand for potash to make fertilizer will grow along with it. Sources of potash are finite.

Why Potash?

Potash is a potassium-bearing mineral found in the Earth’s surface. It has become a critical ingredient in fertilizer and is required to support the healthy growth of crops by regulating enzyme activation, photosynthesis, water use efficiency, starch formation, and protein synthesis. Crops infused with potash are more likely to survive harsh environments and ward off attacks from disease and pests. According to The Fertilizer Institute, billions of people could starve without the use of potash fertilizers.

Market Outlook Beyond 2014: CRU projects annualized growth rates for potash of more than 4 percent between 2013 and 2018 while the International Fertilizer Association is forecasting annual growth of nearly 3 percent. (source: PotashCorp’s Fall 2014 Field Reports)

The Fertilizer Institute also reports that only 12 countries in the world produce potash. Over 80 percent of the world’s potash production is exported, and as many as 99 countries import the product, including major consumers such as China, India, Brazil, and the United States.

The major producers of potash are Canada and Russia, followed by Belarius and Germany. On a combined basis, Canada and Russia produce approximately 75% of annual global potash production. The United States, in particular, relies on foreign production for over 85 percent of its potash demand. Intrepid Potash (NYSE:IPI) with its mines in New Mexico and Utah, is the largest U.S. producer with an annual output of 870,000 tons and currently supplies approximately 9.3 percent of the United States’ annual consumption needs. Potash Arizona Inc. plans to build a potash mine in Arizona to supplement local potash production in the United States.

DIRECTORS & MANAGEMENT TEAM

David Aronow of The Karlsson Group, Inc. - Potash Investment - Arizona, United States

DAVID ARONOW

President

Co-founder, Principal and President (retired) of MetTel, a privately held telecommunications provider since 1996, which serves as a leading provider to medium to large enterprises as well as local, state and the Federal Government for wireline and and wireless services. MetTel was one of ten carriers, including Verizon and ATT to be recently awarded the General Services Administration’s (“GSA”) 15 year 50 Billion Dollar contract for Enterprise Infrastructure Solutions (“EIS”).

Michael Stone of The Karlsson Group, Inc. - Potash Investment - Arizona, United States

MICHAEL STONE

CFO

Michael Stone was one of the founders of Potash Arizona Inc. and has been a Director and CFO of KG since 2006. Prior to joining KG, he held various positions in Strategic Planning, Marketing and Operations including Director of Operations for the European Water Treatment Chemicals Division of Stauffer Chemical/Rhone Poulenc/Rhodia, a multi billion dollar international chemical and pharmaceutical company. Mr. Stone holds a Masters Degree in Business Administration with an emphasis in finance from the University of Southern California and a Bachelor of Science in Chemical Engineering from UC Berkeley.

Chris Stevens of The Karlsson Group, Inc. - Potash Investment - Arizona, United States

CHRIS STEPHENS

Corporate Counsel

Mr. Stephens serves as the Corporate Counsel of Potash Arizona Inc. Mr. Stephens brings nearly 20 years of experience in natural resource, environmental and real estate law. He has worked on numerous complex mining, natural resource, energy and real estate projects throughout the United States and has been involved with the Potash Arizona project for the past five years. Mr. Stephens was previously a partner at Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. and prior to that he was a partner at Brownstein Hyatt Farber Schreck, LLP. Mr. Stephens received a Bachelor’s degree from Brigham Young University, a Master’s degree in Organizational Psychology from the California School of Professional Psychology and a law degree from the University of California at Berkeley.

COMPANY MILESTONES

2010-2011

  • Initial land package secured, including approximately 5,120 owned acres and over 21,000 acres under state exploration permits
  • Acquired 50 sections totaling approximately 31,000 acres
  • Secured mineral rights on 101 adjacent/contiguous private sections totaling approximately 63,000 acres (in addition to the company’s 31,000 acres)
  • North Rim resource estimate/Tetra Tech Preliminary Economic Assessment completed
  • Completed phase I drilling –13 holes
  • Completed seismic program

2012

  • Completed phase II drilling program –10 holes
  • Updated North Rim resource estimate completed (NI 43-101 Resource Report)
    • Upgraded nearly 40% of the resource estimates from the “inferred” to the “measured and indicated” category
  • Tetra Tech completed Cost Feasibility Study for a 2.2 million ton per annum project

2013

  • Completed Pre-Feasibility Study
    • $825 million capital cost
  • Received Air Permit from ADEQ
  • Completed final phase III and IV infill drilling program -17 holes

2014-2016

  • Submitted Mineral Development Report to Arizona State Land Department
  • Received long term mineral leases from the Arizona State Land Department for 34 state land sections
  • Received an amended long term mineral lease from Arizona State Land Department with an additional 24 sections –58 state sections in total

2017-2018

  • Complete definitive feasibility study

2019-2022

  • Evaluate possibility of building solution mine instead of underground mine.