2. 1 Potash Development Aboriginal Entrepreneurs Conference and Tradeshow Workshops Session 2 – Potash Development in Saskatchewan Kevin Stone Minerals and Metals Sector, Natural Resources Canada October 24, 2011

3. POTASH IN CANADA

4. 3 Canadian Potash  Potash is the No.1 commodity by production value among all minerals, valued at $5.7billion In 2010  Canada is the world’s largest producer, accounting for 30% of the world total in 2010  Canada is the world’s largest exporter, accounting for 37% of the world total in 2010  Canada has the world’s largest production capacity, accounting for 35% of the world total in 2011  Canada has the world’s largest potash reserves and reserve base, accounting for 60% of the world total based on the US Geological Survey

5. 4 Potash Prices Sources: NRCan, FERTECON

6. Contribution to Economy Saskatchewan Source: Saskatchewan Potash Producers Association

7. 6 Canada Potash Operations Saskatchewan 10 New Brunswick 1 11 mining/milling operations in Canada PotashCorp6 Mosaic4 Agrium1 Canpotex – Offshore Marketing Conventional9 Solution2

8. POTASH DEPOSIT

9. 8 Saskatchewan Prairie Evaporite 1973 Provincial Estimate 107 000 Mt KCl (66 000 Mt K 2 O equivalent) Ore grade: 42% KCl (25% K 2 O) Depth: 900-3000 metres

10. 9 Potash Reserves and Reserve Base Source: USGS USGS estimates total at 26,300 Mt K 2 O (8,300 Mt reserves and 18,000 Mt reserve base) Canada has 15,400 Mt (60% of the world total)

11. DEMAND FOR POTASH

12. 11 Potash Use  About 95% of potash is used as a fertilizer in agriculture  Smaller amounts are also used in manufacture of potassium-bearing chemicals such as detergents, ceramics, and pharmaceuticals as well as water conditioners, de-icing salt, and etc  Global leading potash users are those economies with large agricultural sectors such as China, India, Brazil, the US, Indonesia and Malaysia  In the US, more than 45% of potash is applied to produce corn  In China, 50% of the potash is applied to produce fruits and vegetables, and 28% to produce rice  In Brazil, more than 75% of the potash is applied to produce soybean, sugar cane and corn  In Malaysia and Indonesia, oil palm accounts for more than 70% of potash consumed.  All major consuming countries lack of potash resources and need to import potash to support their agricultural production

13. 12 Major Potash Consumers Sources: NRCan

14. 13 World Potash Consumption Sources: IFA, NRCan

15. 14 Forecast Demand for Potash Sources: IFA, NRCan

16. PRODUCTION & PRODUCERS

17. 16 World Potash Production Sources: IFA, NRCan

18. 17 Potash Producing Countries Sources: IFA, NRCan World total production 53.03 Mt KCl in 2010 53.86 Mt KCl 2008 12 countries produce potash in 2010

19. 18 Producing Companies Source: NRCan, IFA

20. CAPACITY DEVELOPMENT

21. 20 Forecast Capacity Increase - World Source: IFA, NRCan Actual

22. 21 Forecast Capacity Increase - Canada Source: NRCan

23. 22 Forecast Demand-Supply Balance Sources: IFA, NRCan

24. POTASH & ABORIGINAL PEOPLE

25. 24 Benefit for Aboriginal People  Potash mining provide high paying jobs which will improve quality of life for Aboriginal people  Potash mining provide jobs for life which will provide stable employment for Aboriginal people  Global demand for potash is forecast to continue to grow with the highest growth rate among three essential nutrients  Saskatchewan’s massive potash deposit will support a long term production  Saskatchewan is in the unique position to capture the global wave and benefit from it  Potash will bring economic benefits for Aboriginal people in Saskatchewan, the province, Canada, and all Canadians

26. 25 Encanto  Encanto Potash Corporation was created to work with First Nations in Saskatchewan to develop potash resources on their lands  The exploration has been advancing well Source: Encanto

27. 26 Challenges of New Entry  High capital cost to build a new potash mine  Current estimate is between $1.5 and $2 billion to build a 1-Mt capacity potash mine  Longer lead times for new mines  3-5 years for sufficient exploration work for a mine construction decision  Minimum 5 years to build a conventional underground mine  Minimum 4 years to build a solution mine  Minimum 7 up to 10 years for a new mine coming on stream  Rising cost of construction materials, labour, equipment, supplies and energy  A long time to recoup the investment

28. 27 Summary  Global demand is forecast to continue to grow with the highest growth rate among three essential nutrients  Canada is in the unique position to capture the global wave and benefit from it  Potash will bring economic benefit back to Canada and Canadians

29. 28 Contact Kevin Stone Senior Commodity Analyst Minerals and Metals Sector Natural Resources Canada 580 Booth Street, Ottawa, Ontario K1A 0E4 Phone: 613-992-5199 Fax: 613-943-8450 Email: Kevin.Stone@NRCan-RNCan.gc.caKevin.Stone@NRCan-RNCan.gc.ca