About The Karlsson Group's Holbrook Arizona Potash Project
Overview
The Karlsson Group 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
Karlsson Group 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 the Karlsson Group 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 Karlsson Group on state and private lands, no federal or tribal land issues to deal with –nearly all permitting already completed
Mineral ResourceKarlsson Group has the only favorable potash land package in the Arizona Holbrook Basin
Karlsson Group has the only favorable potash land package in the Arizona Holbrook Basin
- 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
The Karlsson Group'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)
Why Potash?
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.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. Karlsson Group plans to build a potash mine in Arizona to supplement local potash production in the United States.
Directors & Management Team
Anders Karlsson
Anders Karlsson is one of the founders of Karlsson Group, and has been a director and president of KG since 2006. He was responsible for the initial creation of the resource land package, including extensive work with Arizona State Land Department, finding and obtaining private mineral rights, and early foundation building of the resource company in Arizona. Prior to working on the Holbrook potash project he was a principle in charge of financing and project management for several US and foreign mining ventures.
Michael Stone
Michael Stone was one of the founders of Karlsson Group 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.
Education: 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.
David Aronow
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”).
Christopher Stephens
Mr. Stephens serves as the Corporate Counsel of the Karlsson Group. 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.