For personal use only
Investor presentation – August 2014
“As iron ore was the boom commodity over the past 10 years, we highlight
potash as the commodity for the next decade.”
– Goldman Sachs
Global Resources Corporation
For personal use only
Disclaimer
This presentation has been prepared as a summary only, and does not contain all information about Global Resources Corporation Limited’s
(“Global”) assets and liabilities, financial position and performance, profits and losses, prospects, and the rights and liabilities attaching to
Global’s securities. The securities issued by Global are considered speculative and there is no guarantee that they will make a return on the
capital invested, that dividends will be paid on the shares or that there will be an increase in the value of the shares in the future. Global does
not purport to give financial or investment advice. No account has been taken of the objectives, financial situation or needs of any recipient of
this report. Recipients of this report should carefully consider whether the securities issued by Global are an appropriate investment for them in
light of their personal circumstances, including their financial and taxation position.
Forward Looking Statements
Some of the statements contained in this report are forward looking statements. Forward looking statements include but are not limited to,
statements concerning estimates of potash tonnages, expected costs, statements relating to the continued advancement of Global’s projects and
other statements which are not historical facts. When used in this report, and on other published information of Global, the words such as
“aim”, “could”, “estimate”, “expect”, “intend”, “may”, “potential”, “should” and similar expressions are forward-looking statements.
Although Global believes that its expectations reflected in the forward-looking statements are reasonable, such statements involve risk and
uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors could
cause actual results to differ from these forward looking statements include the potential that Global’s projects may experience technical,
geological, metallurgical and mechanical problems, changes in product prices and other risks not anticipated by Global.
Competent Person’s Statement
The information in this investor presentation that relates to Exploration Results is based on information reviewed by Mr Laurie Mann, who is a
fellow of AusIMM. Mr Mann is a consultant to Global Resources Corporation Limited and was the Registered Manager for Shark Bay Salt Joint
Venture, a solar salt operation in Western Australia. Mr Mann has in excess of 5 years’ experience which is relevant to the types of deposits
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the
“Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Mann consents to the inclusion in this
presentation of the matters based on this information in the form and context in which it appears.
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Global Resources Corporation
For personal use only
Corporate snapshot
Share capital
Share price
Directors and management
$0.17/share
Ordinary shares
81.1m
In-the-money options
16.2m
Diluted market capitalisation
12 month price range
$16.5m
$0.04 – $0.20/share
Balance sheet
Cash
$1.5m
Debt
$0.0m
Top shareholders
Tim Lyons
11.4%
Reward Minerals
9.3%
Mark Savich
7.8%
Terra Capital
7.5%
Walloon Securities
5.6%
Top 20
51.6%
Stephen Everett, Non-Executive Chairman
Chemical engineer with more than 35 years of management and
board experience in the international resources industry. Has held
senior executive and chairman positions of various private and ASX
listed companies. Also chairman of MetroCoal Ltd.
Mark Savich, Executive Director
Chartered financial analyst with over 10 years of experience dealing
with technical and corporate aspects of resource companies, from
early stage exploration through to production. Skilled in project
identification, technical and economic evaluation and corporate
development. Also a director of Regal Resources Ltd.
Alec Pismiris, Non-Executive Director and Company Secretary
Director of Capital Investment Partners. Has over 25 years
experience as director and company secretary for various ASX listed
companies. Also a director of Cardinal Resources Ltd, Mount Magnet
South NL, Aguia Resources Ltd and Papillon Resources Ltd.
Tom Lyons, General Manager – Exploration & Development
Geologist with broad experience in a range of commodities including
industrial minerals, precious and base metals and bulks. Has
previously worked throughout a number jurisdictions, including the
East Pilbara region of Western Australia.
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For personal use only
Potash Industry
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The food security story
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Rising food consumption is a long term trend
 United Nations forecasts approximately 71 million new mouths to feed each year
 While at the same time arable land is shrinking around the world
 Emerging markets will need to improve agricultural yields through the use of fertiliser
 For many countries outside the OECD, particularly China and India, food security is still a key concern
 Potash is a late cycle commodity and should experience demand growth even as the industrialisation
phase in developing countries winds down
“It now appears they [BHP Billiton] are picking a
megatrend (food consumption – fertiliser) and
choosing the most attractive commodity within this (in
this case, potassium over nitrogen and phosphate)”
– Macquarie Bank
Source: Goldman Sachs
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What is SOP
For personal use only
Demand is driven by high value crops
 SOP (K2SO4) is 17.5% sulphur and contains no chloride, compared to MOP (KCl) which contains 46% chloride
 A premium form of potash that is used on high value crops such as vegetables, fruit and tree nuts
 Essential for chloride-sensitive crops and advantageous in saline and arid soils
 SOP improves crop yield, quality and shelf life, generally if it needs to look good and taste good it needs SOP
Chloride intolerant
crops
tobacco
tea
grapes
almonds
potatoes
strawberries
oranges
coffee
Chloride tolerant
crops
sugar beet
coconut
date palm
cereals
oil crops
sugar cane
rubber
cotton
Orange without SOP
Orange with SOP
Source: IC Potash
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Potash market
For personal use only
SOP is a highly strategic commodity
 Global potash production is 64Mt per annum, including 55Mt of muriate of potash (MOP) and 6Mt of sulphate of potash (SOP)
 The SOP market is worth circa US$3.5 billion per annum
 SOP is far more strategic and geologically scarce than MOP
 More than 50% of the world’s SOP is produced from upgrading MOP, via the Mannheim process or sulphate salts reaction
Total potash market
(~64 million tonnes per annum)
Total SOP market
(~6 million tonnes per annum)
MOP
Mannheim
SOPM
NOP
SOP
Source: CRU
Primary SOP
Reacted Salts
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Potash market
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A highly concentrated supply side
 Potash supply is highly concentrated, both geographically and at a corporate level
 The major deposits being mined – in Russia, Belarus and Canada – all produce MOP
 For the past decade, circa 65% of the world’s potash production has been marketed by an oligopoly:
•
Canpotex representing PotashCorp, Mosaic and Agrium
•
Belarus Potash Company (BPC) representing Uralkali and Belaruskali
 In July 2013, Uralkali withdrew from BPC
SOP production (million tonnes per annum)
MOP installed capacity (million tonnes per annum)
Source: Compass Minerals, Company websites
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SOP market
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Brine producers sit at the bottom of the cost curve
 There are only three primary producers of SOP – SDIC in China, Compass Minerals in the USA and SQM in Chile
 All three producers are exploiting brine deposits via low cost pumping and solar evaporation techniques
 More than 50% of global SOP production, or 4Mt per annum, comes from high cost secondary sources
 The Mannheim process is energy intensive and uses MOP as the primary input, therefore providing a price floor for SOP
 The hydrochloric acid by-product from the process is becoming increasing costly and environmentally hazardous to dispose of
SOP industry operating cost curve
Global brine operations – MOP and SOP
Source: EPM Mining Ventures, CRU, Company websites, Parthenon Analysis
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SOP market
For personal use only
New sources of SOP are extremely scarce
 More than 4Mt per annum of high cost
secondary production to be displaced
 Most new projects are extremely capital
intensive, i.e. both IC Potash and Potash Ridge
have a CAPEX requirement of over US$1 billion
Potential SOP production (million tonnes per annum)
 Production expansions which are planned by
Chinese companies and Compass Minerals are
likely to be challenging
 Greenfields developments include:
 IC Potash – project financing stage on the
Ochoa hard-rock deposit (polyhalite) in USA
 Potash Ridge – feasibility stage on the Blawn
Mountain alunite deposit in USA
 Reward Minerals – scoping level stage on the
Lake Disappointment brine deposit in
Australia
 South Boulder Mines – pre-feasibility stage
on the Colluli hard-rock deposit in Eritrea
Source: Compass Minerals, Company websites
 EPM Mining Ventures – feasibility stage on
the Sevier Lake brine deposit in USA
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SOP market
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Prices remain strong post-BPC break up
 In July 2013 Uralkali withdrew from BPC and caused a price shock in MOP
 Uralkali is the world’s lowest cost producer with the most unused capacity
and publicly stated that in future it would prioritise volume over price
 SOP prices have remained very stable and since 2011 there has been
a widening in the price differential between MOP and SOP
 Compass Q2 2014 financial results quoted an average selling price of
US$670/ton FOB (short tons)
 Compass forecasts an average selling price of US$725/ton – US$750/ton
for 2H14
Compass Minerals – 2H14 Outlook Summary
Source: Compass Minerals
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Mackay Project
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Mackay Project
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Overview
Project background:
 Applicant to five Exploration
Licences covering 2,276km2 in
Western Australia
 Situated on Lake Mackay, the
largest salt lake in Western Australia
 Arid environment is well suited to
low cost solar evaporation
 A program of 24 shallow holes were
drilled in 2009 which tested for SOP
 Global’s initial site visit confirmed
the Project’s potential
Location:
 Located 540km north-west of Alice
Springs
 All sealed and unsealed access
roads are in excellent condition and
well maintained
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Mackay Project
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2009 drilling program
 A program of 24 shallow drill holes was completed in September 2009
 Drilling was completed using a helicopter supported and purpose built Vibrocore rig
 The holes were drilled on wide spaced grid of 10km by 10km
 Drilling was completed to a maximum depth of only 4m
 Drill core was collected in sealed tubes to recover the lake sediments as well as the entrained brine
 Samples of brine were submitted for analysis to Ultratrace Laboratories Pty Ltd in Perth
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Mackay Project
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Current activities
 Recent site visit confirmed favourable logistical
conditions from Alice Springs
 Work program:
 All technical and commercial data acquired
from Reward Minerals is being thoroughly
reviewed
 Previous drilling data is being verified and used
in calculating a Mineral Resource Estimate,
compliant with the JORC Code, 2012 Edition
 Desktop studies are being progressed to assess
key project parameters
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Mackay Project
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Conceptual development plan
 The Lake Mackay region benefits from a very hot, windy and dry environment with excellent evaporation conditions
 Low cost solar evaporation techniques could result in very competitive capital intensity and operating costs
 There are five solar evaporation operations in Western Australia, including Rio Tinto’s three salt operations (Lake Macleod,
Dampier and Port Hedland) and Mitsui & Co.’s two salt operations (Onslow and Shark Bay)
Conventional processing route: trenching  evaporation  harvesting  milling & SOP conversion
Source: Mitsui & Co. (these are not Global’s operations)
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Great Sandy Desert Project
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Great Sandy Desert Project
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Overview
Project background:
 Extensive land position covering
2,570km2 in the East Pilbara
 Situated in a new globally significant
SOP province
 Arid environment is well suited to low
cost solar evaporation
 Heritage Agreement has been
executed
 Desktop Study is being undertaken
by Golder Associates
Location:
 95km south of the Great Northern
Highway and accessible via well
maintained roads
 25km from the Telfer gas pipeline
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Great Sandy Desert Project
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Geological model
 Tenements cover approximately half of the Waukarlycarly Embayment, a major depositional sink for inflowing brines
 Permian sediments of the Poole Sandstone and Paterson Formation represent the targeted geological horizon
 The underlying Grant Group is interpreted to exist at depths of between 500 to 600m
 Surface sampling in the Waukarlycarly Embayment confirmed economically significant levels potassium and sulphate in brines
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Great Sandy Desert Project
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Regional brine flows
 Very hot and arid environment combined with saline water flow
has resulted in the widespread presence of salt lakes
 Many salt lakes host known occurrences of potash-bearing
brines and some host existing Mineral Resources*:
Lake Disappointment: Indicated Resource of 24.4Mt of SOP
Karly: Exploration Target of between 384 – 960Mt of SOP
 These resources and targets demonstrate that this is potentially
a world class SOP province which needs further exploration
 Brines may exist to a much larger extent within ancient buried
lake systems (palaeovalleys) and consolidated sedimentary
aquifers
 Based on reports by Geoscience Australia (GA), the
palaeovalleys are interpreted to flow north-west throughout the
region
 The Waukarlycarly Embayment is believed to be a large
regional depositional sink at the end of the flow
 Surface sampling undertaken in 2013 (on adjoining tenements
owned by Reward Minerals) has confirmed significant levels of
potassium with brine chemistry suggested suitable for SOP
* Projects are owned by Reward Minerals
Source: Geoscience Australia
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Great Sandy Desert Project
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Seismic data demonstrates scale of embayment
 Waukarlcarly Embayment is a large graben feature composed of Canning Basin sediments up to 3.5km deep
 Embayment is possibly acting as a major depositional sink for groundwater flow from the Canning Palaeoriver
 Permian sandstone units throughout the Embayment are a potential aquifer/s for brine
Source: Geoscience Australia
Note: Depth to Proterozoic basement map
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Great Sandy Desert Project
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Airborne electromagnetic data suggests brine exists
 Airborne electromagnetic (AEM) survey
has indicated that the Waukarlycarly
Embayment is highly prospective for
potash bearing brines
 Government funded $2.7 million AEM
survey conducted in 2008
 Survey covered ~50,000km² in the
Paterson Province
 Conductive unit extends throughout
the Embayment and is likely to
correlate with saline groundwater
 Sampling of near surface brines at Lake
Waukarlycarly returned an average
potassium grade of 10.02kg SOP/m³ of
brine*
 Historical drilling by BHP and others
near Lake Waukarlycarly intersected
considerable saline groundwater flows
– never assessed for water quality
* Average has been calculated from the brine analysis results
published by Reward Minerals on 10 December 2013 in the ASX
Release titled: “HIGHLY ENCOURAGING POTASH BRINE ANALYSES”
Source: Geoscience Australia
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Global Resources Corporation
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Company summary
 Strategic focus on exploration and development of high value sulphate of potash (SOP) deposits

SOP price has increased from US$250/t in 2004 to over US$700/t in 2014 and market fundamentals remain strong

SOP is a geologically scarce commodity and global supply is highly concentrated

Brine hosted deposits have attractive cost structures and typically lie in the first quartile of industry cost curves
 Focussed on two large scale SOP assets, both 100% owned and located in Western Australia
1. Mackay Project:

Subject to 24 shallow drill holes in 2009 which tested for SOP

Drill holes were drilled to a maximum depth of only 4m

Excellent potential to increase the size of the deposit at depth
2. Great Sandy Desert Project:

Large land position in an emerging and globally significant potash province

Greenfields conceptual target based on AEM survey is extremely large

Close to high quality infrastructure including roads and gas pipeline
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