October 2012 K+S Group
Experience growth.
The K+S Legacy Project
Jens Werdelmann (K+S Potash Canada GP, Saskatoon, Canada)
20th Anniversary of K-UTEC
October 5, 2012
October 2012 K+S Group
The K+S Legacy Project
Content
A. Legacy Project - Overview
C. Recent Achievements
D. Geological Knowledge
E. Outlook
B. Solution Mining Approach
F. Conclusion
1
October 2012 K+S Group
German Potash Mining History in Canada
1968 – 1977 (JV EMC-MDPA/Wintershall/Salzdetfurth):
Alwinsal Potash Mine, Lanigan, SK / Alwinsal Potash of Canada Ltd.
1980 – 1998 (JV Denison Mines/Potacan-EMC&K+S):
Clover Hill Potash Mine, Sussex, NB / Denison-Potacan Potash Company (DPPC) /
Potacan Mining Corporation (PMC)
2
The K+S Legacy Project
October 2012 K+S Group 5 5
Milestones Aquisition
The transaction of the formal takeover of Potash One was completed on 24 March
2011.
The Potash One office in Vancouver has been closed, the new company operates
now under the name of K+S Potash Canada GP and the company’s representation
in Saskatoon and at the construction site has been widened since.
The conversion of the exploration permit KP 289 into a mine lease took place in
January 2011.
The project feasibility study review was completed in fall 2011 and the capital
expenditure of 3.25 billion CAD was approved.
Initial works at the site have been completed including water supply, electricity and
road development.
Cavern wells and disposal drill holes have been completed in spring 2012.
The K+S Legacy Project
October 2012 K+S Group
Content
A. Legacy Project - Overview
C. Recent Achievements
D. Geological Knowledge
E. Outlook
B. Solution Mining Approach
F. Conclusion
7
The K+S Legacy Project
October 2012 K+S Group
K+ S Solution Mining Operations
8
Europe
Bernburg, Germany
Frisia Zout, Harlingen, The Netherlands
North America
Silver Springs, NY, USA
Rittman, OH, USA
Manistee, MI, USA
Hutchinson, KS, USA
Glendale, AZ, USA
Grand Saline, TX, USA
Lindbergh, AB, Canada
Windsor, ON, Canada
The K+S Legacy Project
October 2012 K+S Group
Primary Mining
Hot Water Injection
9
Product from Vacuum Cooling
Crystallization
The K+S Legacy Project
October 2012 K+S Group
Secondary Mining
Injection of brine which
is saturated in NaCl. 10
Product from a Cooling Pond
The K+S Legacy Project
October 2012 K+S Group
K+S Legacy Solution Mining Approach
11
1 Pad = 9 Caverns = 18 Wells
The K+S Legacy Project
October 2012 K+S Group
Content
A. Legacy Project - Overview
C. Recent Achievements
D. Geological Knowledge
E. Outlook
B. Solution Mining Approach
F. Conclusion
13
The K+S Legacy Project
October 2012 K+S Group
Water Supply Completion
14
Legacy Site Pipeline to the
Site
Pumphouse
July 2012
The K+S Legacy Project
October 2012 K+S Group
Initial Construction Works completed
15
Drill Rig
(Disposal Well)
Office
Area
Water Pond
Power
Sub-
Station
Wellfield
(eastbound)
The K+S Legacy Project
Temporary
Cavern
Operation
Facilities
October 2012 K+S Group
Disposal Wells completed and proofed
16
Disposal Depth
~ 2.100 m
350 m
The K+S Legacy Project
Potash Seams
~ 1.500 m
October 2012 K+S Group
2012 Cavern Operation prepared
17
Temporary Cavern
Operation Facilities
Cavern Wells
Pipeline to the
Site
The K+S Legacy Project
October 2012 K+S Group
2012 Cavern Operation Tasks & associated Work
18
Full scale test, scheduled to begin
in 2012 and last for about a year
Facilitate operational processes and
results accordant to the models prepared and
the training of wellfield operators
Based on the recent drill cores, results
from dissolution tests have fully
confirmed the expectations
The K+S Legacy Project
October 2012 K+S Group
Investigative Program implemented
● Sampling
● Analysis
● Rockmechanics
● Dissolution Tests
● 3D-Modeling (Mining& Geology)
● Process Simulation
Tests Performance
Prediction Model
Mining &
Production
Planning
19
The K+S Legacy Project
October 2012 K+S Group
Safety, Health and Environment
Safety Health and Environment Management System “SHEMS”,
Processes on the Licensing Procedure and further
KSPC Management Systems have been defined, implemented and adjusted with the
partnering Companies.
At present, KSPC has 61 Employees in Saskatoon and
39 Employees at the Legacy Minesite.
20
Security and Medical Service at the Site
The K+S Legacy Project
October 2012 K+S Group
Content
A. Legacy Project - Overview
C. Recent Achievements
D. Geological Knowledge
E. Outlook
B. Solution Mining Approach
F. Conclusion
21
The K+S Legacy Project
October 2012 K+S Group
Detailed Stratigraphy by Mud/Core/Wireline Logging
24
Salt Stringer
Cretaceous
Jurassic
Triassic
Mississippian
Devonian
Stratigraphy
Prairie
Formation
The K+S Legacy Project
October 2012 K+S Group
Results from Drill Hole Investigations
25
Legend
Clayey Halite
Clayey Sylvite
Claystone
Clay enriched Zone
Sylvite, low K Content
Halite
Halite with Sylvite
Sylvite, high K Content
10 m
Upper Mining Horizon
18,8 m - 31% KCl
Middle Mining Horizon
8,5 m - 29,5% KCl
Lower Mining Horizon
10,3 m - 21,6% KCl
%K2O GR (API)
0 50 800 0
Results have fully confirmed the expectations
The K+S Legacy Project
October 2012 K+S Group
Seismic Modeling
26
Second Red Bed to Shell Lake Evaporite Isopach Map Illustrating Possible Collapse Features as
Identified by 3D Seismic Surveys, Exploration Drill Holes integrated
South-15
South-16
South-14
South-3
South-2 South-1
Dis
ley
South-1
Exploration Drill Hole
The K+S Legacy Project
October 2012 K+S Group
Reserve/Resource Modeling and Mine Plan
27
South-15 South-16
South-14 South-2 South-1
South-3
No KCl
The K+S Legacy Project
October 2012 K+S Group
Content
A. Legacy Project - Overview
C. Recent Achievements
D. Geological Knowledge
E. Outlook
B. Solution Mining Approach
F. Conclusion
28
The K+S Legacy Project
October 2012 K+S Group 29 29
Potash One and the Legacy Project
Located in the Heart of Saskatchewan’s Potash-Rich Basin
Regina
Two additional potash permit areas in the Esterhazy potash region
Two more potash exploration licences close to Esterhazy
in mln. t KCl % KCl % K2O
Reserves (Proven and Probable Reserves) Legacy Project area 160 29 18
Resources (Inferred and Indicated Resources) Legacy Project area + KLSA 009 981 27 17
Reserves and Resources
The reserves figures were determined in accordance with the requirements of the Canadian standard Nl 43-101 of the “Canadian Securities Regulators”.
The K+S Legacy Project
October 2012 K+S Group
Reserve/Resource Modeling and Mine Plan
30
The NI 43-101 report for Potash One originally reported “proven
and probable reserves” of about 136 million tonnes of KCl
product.
As KSPC has acquired additional mineral rights within the
Legacy lease area, reserves of 160 million tonnes of KCl product
are available for a production lifetime of more than 50 years at
2.86 million tonnes of KCl product per year.
Remaining „inferred resources“ related to the current mining
lease amount to 982 million tonnes of KCl product.
The K+S Legacy Project
October 2012 K+S Group
Content
A. Legacy Project - Overview
C. Recent Achievements
D. Geological Knowledge
E. Outlook
B. Solution Mining Approach
31
F. Conclusion
The K+S Legacy Project
October 2012 K+S Group
Conclusion
32
The Legacy Project with its new potash solution mine in Saskatchewan
perfectly fits in the strategy of the Potash and Magnesium Products
business segment:
Will add new capacities and an extension of the average lifetime
of our potash plants.
Will provide a good scalability of capacity utilization and improve
the flexibility due to a higher share of variable costs.
Will boost our international competitiveness in combination with
our German potash mines and thus
contributing to K+S growth within the global potash market and
further widening the product portfolio and production network.
The K+S Legacy Project
October 2012 K+S Group
Experience growth.
Investor Relations:
K+S Aktiengesellschaft
Bertha-von-Suttner-Strasse 7
34131 Kassel
Germany
phone: +49 (0)561 / 9301-0
E-Mail: [email protected]
Public Relations:
K+S Aktiengesellschaft Address: Bertha-von-Suttner Str. 7
34131 Kassel
Germany
Phone: +49 561 9301 1262
E-Mail: [email protected]
Internet: www.k-plus-s.com
K+S Potash Canada GP 300-211 4th Ave S
Saskatoon SK S7K 1N1
Canada
Phone: +1 306 986 5251
Fax: +1 306 986 5252
Internet: www.ks-potashcanada.com
Thanks!