Americas Petrogas Growmax Agri Corp AGM presentation

AMERICAS PETROGAS INC.
Annual General Meeting
June 27, 2016
1
Forward Looking Statements
Certain information contained herein respecting Americas Petrogas Inc. (“Americas Petrogas” or the “Company”), the Company's properties or anticipated financial results or performance of the
Company or its properties constitutes forward-looking information. Such forward-looking information, including but not limited to, statements with respect to comments regarding the timing and
content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, anticipated rates of production, the estimated costs and timing of the
Company's planned work program and reserves determination involve many known and unknown risks, uncertainties and other factors which may cause the actual costs and results of the Company
and its operations to be materially different from estimated costs or results expressed or implied by such forward-looking statements. Such factors include, but are not limited to, risks related to
international operations including political risks, general risks associated with petroleum and mining operations (such as commodity prices, production delays, production costs, exchange rate
fluctuations and environmental costs and risks) and risks associated with equipment procurement and equipment failure. Although the Company has attempted to take into account important factors
that could cause actual costs or results to differ materially, there may be other factors that cause costs of the Company's program or results not to be as anticipated, estimated or intended. There
can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. GrowMax Agri. Corp’s
(“GrowMax”) project in Peru is at an early stage and all estimates and projections are based on limited and possibly incomplete data. More work is required before the mineralization and the projects’
economic aspects can be confidently modeled. Actual results may differ materially from those currently anticipated in this presentation. No representation or prediction is intended as to the results of
future work, nor can there be any promise that the estimates and projections herein will be sustained in future work or that the project will otherwise prove to be economic. The forward-looking
statements contained herein are made as of the date hereof and the Company undertakes no obligations to update or revise any forward-looking statements or information, whether as a result of
new information, future events or otherwise. Accordingly, readers should not place undue reliance on forward-looking information.
Phosphate Mineral Resource Estimate
Qualified Persons
The scientific and technical information within this presentation, other than the Phosphate Mineral Resource Estimate (see below), was prepared under the supervision of John A. Nicholson, P.Geo,
of Geominex, who is a member of the Association of Professional Engineers and Geoscientists of British Columbia and is an independent qualified person under NI 43-101.
Phosphate Mineral Resource Estimate
The Independent Qualified Person responsible for the preparation of the report is Mr. Jerry DeWolfe, P. Geo., Senior Geological Consultant at Golder. Mr. DeWolfe traveled to the GrowMax Bayóvar
Project site and core logging facility in Piura from November 17 to November 20, 2014 to perform a QP current personal inspection site visit as required under NI 43-101. During the site visit the
Golder QP reviewed the core logging, splitting, sampling and analytical methods and procedures at the core logging and storage facility. One day was spent at the site verifying the locations of drill
holes and reviewing the project property geology and access.
Geological Modelling and Phosphate Mineral Resource Estimation Methodology
Golder developed a single 3D geological model for the entire GrowMax Bayóvar Project area (Bayóvar N°6, Bayóvar N°7 and Bayóvar N°8 concessions inclusive) using the Ventyx MineScape
geological modelling and mine planning software package. Both the stratigraphic and grade components of the geological model were developed as gridded surface models using a grid cell size of
20 by 20 m. The geological model includes an undifferentiated overburden unit that overlies a sequence of 17 correlatable phosphorite beds identified as PH00 through PH16.
Base data for the geological model included the drill hole data and observations collected by Geominex personnel during the logging and sampling and program performed between October 2014
and February 2016. The geological database included downhole lithology records from 133 drill holes totaling 10,367 m of core and 13,102 phosphorite bed and interburden bed analytical samples.
The topographic surface in the geological model was developed using data extracted from a 1.5 m cell size digital elevation model.
Grade data in the geological model, including P2O5 and SiO2 (by gravimetric analyses) and major oxides (by ICP-OES analyses) were interpolated for all 17 correlatable phosphorite beds. As
sampling in the interburden units was limited to roof and floor wing samples bounding the phosphorite beds, the interburden grade samples were used by Golder to verify phosphorite bed roof and
floor picks but the interburden grade data was not interpolated into the geological model.
As reliable density analyses were not available for the Bayóvar Project, Golder applied global default relative densities of 1.25 grams per centimetre cubed (g/cm3; dry-basis) and 1.65 g/cm3 (wet
basis) to convert estimated phosphorite resource volumes to tonnes. The global default dry and wet bases density values used were established based on Golder’s experience in similar phosphate
deposits both locally and globally. As per NI 43-101 guidelines, Golder is reporting only in situ phosphate Mineral Resources as a mine plan, processing/metallurgy study, environmental study,
economic analysis, marketing analysis, and other modifying factor studies have not been completed to a minimum of a Pre-Feasibility level of study as of the effective date of the resource estimate.
No minimum thickness, grade cut-off, dilution, recovery or other mining factors have been applied to the in situ resource estimate and no Mineral Reserves are being reported at this time.
Based on an evaluation of the drill hole spacing and geological continuity of the phosphorite beds (both thickness and grade parameters were evaluated) Golder has applied a Mineral Resource
classification schema of 0 to 400 m spacing for Measured Resources, 400 to 800 m spacing for Indicated Resources and 800 to 1,600 m for Inferred Resources. Based on this classification scheme
there are currently no reportable Measured Resources.
The geological model, Mineral Resource estimation and classification of phosphate Mineral Resources will be re-evaluated once the results of the next phase of resource delineation and in-fill
drilling, currently underway, have been completed.
(Continued Next Page)
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Phosphate Mineral Resource Estimate (cont’d)
Geological Data and Interpretation Verification
Geological data and interpretation verification performed by Golder was in the form of a desktop review of the descriptive logs, sample interval data and analytical data to ensure
the geological database was free from typographic errors or omissions.
Golder prepared graphic logs of each of the GrowMax drill holes using all available data for each drill hole. Lithology intervals were reviewed and where minor errors or
omissions were identified Golder performed these adjustments. GrowMax provided Golder with phosphorite bed correlations which Golder used as reference during the review.
During the review process, Golder reinterpreted and updated the correlations where mirror errors or omission existed in the phosphorite and diatomite bed correlations between
drill holes.
Analytical Data Verification
Analytical data verification performed by Golder includes cross referencing the spreadsheet analytical data against pdf copies of the Certimin laboratory certificates to ensure
the analytical database was free from typographic errors or omissions. Analytical data for the phosphorite and diatomite beds was reviewed in detail by Golder to ensure the
data was free of any miscorrelations, errors and/or omissions.
Golder performed and independent assessment of the laboratory and field QA/QC results for the program. Golder did not independently collect samples to submit for analyses.
Limits on Data Verification
The primary limitation on the data verification relates to the time elapsed between drilling of the Phase 1 core, drilled in 2011-2012, and the sampling and analyses of the core in
2014-2015. Golder had initial concerns that the prolonged exposure to air, heat and humidity might negatively impact the core and the resultant analytical results. Upon visual
inspection the core appeared to be in good condition and was no worse for wear during the 2 plus years of storage. The analytical results for the phosphorite and diatomite
samples were consistent with results elsewhere in the Bayovar area. Both of the points suggest the long storage of the core before sampling did not materially affect the core
negatively but this should be evaluated in the future via twinning of select holes to verify reproducibility and representativeness of the analytical results.
Other significant factors and risks that may affect access, title, or the right or ability to perform work on the property
A portion of the GrowMax Bayovar Project property is included within the proposed conservation areas, known as both the Humedales de Sechura and Humedales de Virilla Namon y Napique. The proposal for a regional conservation area, known as the Humedales de Sechura, was submitted to the Piura Regional Government in 2010. In 2011, a
second proposal was submitted for a slightly reduced regional conservation area, known as the Humedales de Virilla - Ramon y Napique. As the effective date of this report,
neither of the poposed areas has been approved by the Piura Regional Government. At present none of the drill holes used for the basis of this resource estimate and technical
report occur within either the Humedales de Sechura or Humedales de Virrila - Ramon y Napique, and the impact on the current phosphate Mineral Resource being reported is
deemed by Golder to be minor.
As the effective date of this report, Golder and GrowMax are not aware of any indication that either of the proposed regional conservation areas will be approved. Should
approval for either of the consevation areas, in their present form or some modified version thereof, be granted in the future, the impact on Mineral Resources, site access,
future mine planning activities etc. would have to be evaluated.
Golder and GrowMax are not aware of any other significant factors and risks that may affect access, title, or the right or ability to perform work on the GrowMax Bayovar project.
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Potash Mineral Resource Estimate
This resource estimate was prepared by Ercosplan and is available at sedar.com in chapter 14 of the report titled “Amended and Restated NI 43-101 Mineral Resource Statement
for Mineral Concessions Bayovar 5 to 8, Sechura Area, Piura Province, Peru” with an effective date of January 11, 2013.
Qualified Persons
The qualified person and principle author of the above report is Dr. Henry Rauche, the Managing Director and CEO of the ERCOSPLAN. Dr. Rauche has over 25 years experience in
industrial-scale conventional and solution mining of potash ore and rock salt, in particular for sylvinite and carnallitite. Dr. Rauche holds a Master’s Degree in Mining Geology from the TU
Bergakademie Freiberg, East Germany and has a PhD in Natural Sciences from the Ruhr-Universitat Bochum, Germany.
The co-author of the report is Dr. Sebastiaan van der Klauw, EuroGeol who holds a Master’s Degree in Geology and a PhD in Natural Sciences from the Ruhr Univeristy Bochum.
Geological Modelling and Phosphate Mineral Resource Estimation Methodology
In determining the potential extent, quality, and volume of the potash-bearing Brine Resource the authors were guided by principles for exploration and sampling techniques commonly used
in the world-wide potash industry for exploration as well as by the guidelines established by the Canadian Institute for Mining, Metallurgy and Petroleum (CIM) for reporting mineral resources
and mineral reserves. For a brine mineral resource, these techniques have been adapted:
• The primary tool employed to determine thickness of the brine reservoir is air drilling, with lithological description of the cuttings from the hole to identify potential reservoir lithologies. The
top of the brine sequence is determined from the presence of brine in the cutting material
• Samples are taken from representative parts of the reservoir to determine typical effective porosity
• Brine is pumped from the drill hole for about 5 minutes to obtain an undisturbed brine sample, which can be analyzed in the laboratory
• The extent of the brine reservoir and its continuity can be determined by subsurface mapping, geoelectric surveys also provide additional information about continuity
• For the estimation of the mineral resources, the aerial extent around the drill holes for which it is reasonable to infer the geological conditions depends on the continuity of the deposit and
may vary from 10m up to 2 miles.
• Ercosplan has applied a schema of 0-750m for measured resources, 750-1500m for indicated resources and 1500-3000m for inferred resources.
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COMPANY OVERVIEW
Americas Petrogas Inc, is an international Canadian mining company
with phosphates and potash brine exploration blocks in Peru
Stock Exchange
Total Shares O/S
Insiders
Share Price
Market Capitalization
Working Capital
BOE – TSX Venture
216 Million (236 Million Fully Diluted)
59 Million (27%)
$0.22 (As of June 24, 2016)
$48 Million
$52 Million and no debt
(estimate as of May 31, 2016)
PERU Concessions
• Phosphate, Potash and other non metallic minerals exploration blocks
• Approximately 227,000 gross acres (202,000 net acres)
ARGENTINA Concessions
• Four E&P Blocks in the Neuquén Basin
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DIRECTORS AND OFFICERS
•
•
•
•
•
•
•
•
•
•
Abdel (Abby) Badwi – Executive Chairman
Vice Chairman and Past CEO of Bankers Petroleum and Rally Energy
Ken Geren – Director
Portfolio Manager of Point72 Asset Management
Ron Ho – Director
Vice President Finance Sandstorm Gold & Sandstorm Metals & Energy
Rakesh Kapur – Director
Joint Managing Director and CFO of the Indian Farmers Fertiliser Cooperative (IFFCO)
Carlos Lau – Director
President of Electra Holdings and Past Executive Chairman of Americas Petrogas
Ross McCutcheon – Director
Past Managing Partner of Maitland and Co.
Easton Wren – Director
Past VP Exploration of Americas Petrogas
Douglas Yee – Chief Financial Officer
Chartered Accountant
Edward Tapuska – Corporate Secretary
Partner at Osler, Hoskin & Harcourt LLP
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FOCUS TO ENHANCE VALUE
OF EXISTING ASSETS
• Re-structure the Company to focus on the
Company’s Phosphate and Potash Brine blocks in
Bayovar to fully assess the upside potential of these
assets
• Change Name to Growmax Resources Corp. to
reflect Strategic focus
• Initiate plans to sell the Argentine subsidiary
(Energicon)
• Reduce G&A and preserve cash on hand
• Plans are underway to build a first class
management and operational team in Peru
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GROWMAX AND IFFCO
RELATIONSHIP
• Americas Petrogas is an 89% interest holder in its
subsidiary, GrowMax Agri Corp, the title owner of
the Bayovar concessions in Peru.
• GrowMax Agri Corp has 100% interest and
operatorship in the Bayovar concessions.
• Indian Farmers Fertiliser Cooperative (IFFCO) is the
world’s largest fertilizer co-op with 34,000
cooperatives and more than US$4 Billion annual
revenue.
• IFFCO Associates hold 11% of GrowMax Agri Corp
shares and 13.5% of Americas Petrogas Inc. shares
• Advancing Phosphates Offtake Agreement with
IFFCO.
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BAYOVAR AREA
• GrowMax blocks are
Adjacent to producing mines
and other Phosphate Projects
•
VALE (Miski Mayo-Mosaic-Mitsui)
–
•
7
(project development)
(Pre-Feasibility)
FOSYEIKI
–
•
6
8
NB
FOCUS VENTURES
–
•
5
Production: 3.9 Mt concentrate/Year
FOSFATOS DEL PACIFICO
(Hochschild-Mitsubishi-Zuari)
–
•
Bayovar Port
Production: <0.1 Mt/year phosphate rock
Proximity to infrastructure
•
FOCUS
VENTURES
FOSFATOS
DEL PACIFICO
In the vicinity of Major roads, power
plants and port facilities
VALE
FOSYEIKI
*Vale: Vale Annual Report, March 31, 2016 SEC EDGAR Filing. Fosfatos: Cementos Pacasmayo Annual Report, April 29, 2016 SEC
EDGAR Filing. Focus: 43-101 Update April, 2016. SEDAR Filing. Fosyeiki: company website.
There can be no assurance that GrowMax’s properties will have similar levels of production in the future.
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2015-2016 PHOSPHATE
RESOURCE EXPANSION DRILLING
• Completed extensive
drillhole program in Q42015 and Q1-2016
• Target on Bayovar
blocks 5 and 7 (near
surface + Shallow beds)
• Updated 43-101
Resource Estimate
released on June 27,
2016 including:
• Initial Resource Report
for Bayovar 5 confirming
26.5 MT of Inferred
Phosphate Mineral
Resources (12% P205)
• Additional borehole
*An updated NI 43-101 Mineral Resource Technical Report on the GrowMax Bayovar Phosphate Project, Piura
Region, Peru, will be filed on SEDAR within 45 days. See slide 2&3 for methods of resource estimation and
disclosure related to Phosphate Mineral Resources. Also see news release dated June 27, 2016.
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drilling planned in 2016 other
**These mineral resources are not mineral reserves and do not have demonstrated economic viability.
BAYOVAR 7
PEA PHOSPHATE FOCUS
•
•
•
•
•
Bayovar 7
I.
29.7 MT Measured
Resources (12% P205)
II.
137.4 MT Indicated
Resources (12% P205)
Shallow depth, near
surface of the
phosphate beds
12% average P2O5
Focus of PEA is to
develop a mine on
Bayovar 7
Preliminary Economic
Assessment (PEA) to
be completed in Q3*An updated NI 43-101 Mineral Resource Technical Report on the GrowMax Bayovar Phosphate Project, Piura
2016
Region, Peru, will be filed on SEDAR within 45 days. See slide 2&3 for methods of resource estimation and other
disclosure related to Phosphate Mineral Resources. Also see news release dated June 27, 2016.
**These mineral resources are not mineral reserves and do not have demonstrated economic viability.
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PHOSPHATE MINERAL RESOURCES
June 2016 43-101 UPDATE
Table 1: Summary of Measured* Mineral Resources, All Area, All Beds
Area
Vertical
Thickness (m)
Dry Tonnes
(MT)**
Wet Tonnes
(MT)**
P2O5 (wt%)
SiO2
(wt%)
Dry Density
(g/cm3)
Wet Density
(g/cm3)
Bayovar 7
Total Indicated
0.61
0.61
29.7
29.7
38.9
38.9
12.00
12.00
30.90
30.90
1.21
1.21
1.58
1.58
Table 2: Summary of Indicated* Mineral Resources, All Area, All Beds
Area
Vertical
Thickness (m)
Dry Tonnes
(MT)**
Wet Tonnes
(MT)**
P2O5 (wt%)
SiO2
(wt%)
Dry Density
(g/cm3)
Wet Density
(g/cm3)
Bayovar 7
Bayovar 6S/8N***
Total Indicated
0.60
0.47
0.59
137.4
11.9
149.3
181.0
15.8
196.8
12.33
14.20
12.48
31.38
29.48
31.23
1.20
1.18
1.20
1.58
1.56
1.58
P2O5 (wt%)
SiO2
(wt%)
Dry Density
(g/cm3)
Wet Density
(g/cm3)
35.37
1.21
1.58
31.34
29.94
28.97
1.21
1.17
1.17
1.58
1.54
1.54
29.97
1.18
1.55
Table 3: Summary of Inferred* Mineral Resources, All Area, All Beds
Vertical
Thickness (m)
Dry Tonnes
(MT)**
Wet Tonnes
(MT)**
Bayovar 5
Bayovar 7
Bayovar 6S/8N***
Bayovar 8S***
0.48
26.5
34.6
0.58
0.42
0.46
63.7
114.5
225.4
83.8
151.6
298.8
12.17
11.94
13.86
14.10
Total Inferred
0.47
430.1
568.8
13.60
Area
* In Situ Indicated Mineral Resources, no minimum thickness applied.
** MT: million tonnes
*** Previously reported values have not changed.
*An updated NI 43-101 Mineral Resource Technical Report on the GrowMax Bayovar Phosphate Project, Piura Region, Peru, will be filed on SEDAR within 45 days. See
slide 2&3 for methods of resource estimation and other disclosure related to Phosphate Mineral Resources. Also see news release dated June 27, 2016.
**These mineral resources are not mineral reserves and do not have demonstrated economic viability.
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PHOSPHATE MINERAL RESOURCES
GROWTH
Phosphate Mineral Resource growth
Bayovar 7
Phosphate Mineral Resource growth
Bayovar 5,6,7,8
150.0
140.0
13.84% P2O5
160.0
500.0
130.0
120.0
20.0
10.0
Measured
Indicated
Inferred
Measured
Indicated
Jul-16
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
Jun-15
May-15
Apr-15
Jul-16
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
Jun-15
0.0
May-15
0.0
12.48% P2O5
13.82% P2O5
100.0
12.00% P2O5
30.0
13.99% P2O5
14.15% P2O5
13.72% P2O5
50.0
40.0
200.0
12.00% P2O5
60.0
300.0
14.15% P2O5
70.0
11.94% P2O5
80.0
12.94% P2O5
90.0
Million tonnes
400.0
13.37% P2O5
100.0
Apr-15
Million tonnes
110.0
13.60% P2O5
600.0
12.33% P2O5
170.0
Inferred
*An updated NI 43-101 Mineral Resource Technical Report on the GrowMax Bayovar Phosphate Project, Piura Region, Peru, will be filed on SEDAR within 45 days. See
slide 2&3 for methods of resource estimation and other disclosure related to Phosphate Mineral Resources. The May 2015 and Apr 2016 data reference previously filed
reports titled “NI 43-101 Mineral Resource Technical Report on the GrowMax Bayovar Phosphate Project, Piura Region, Peru” with effective dates of March 15, 2015 and
Feb 12, 2016. Also see news release dated June 27, 2016.
**These mineral resources are not mineral reserves and do not have demonstrated economic viability.
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BRINE 43-101 MINERAL RESOURCE
ESTIMATES (2013)
Salt Reservoir
Resource
Category
Measured
Indicated
Inferred
Resource (tonnes)
Brine Mass
KCl
Content
10,419,000
22,515,000
140,325,000
110,000
210,000
1,340,000
Sand Reservoir
Average
Grade
Resource (tonnes)
Brine Mass
1.08%
0.95%
0.96%
KCl
Content
50,429,000
280,000
159,234,000
780,000
819,562,000 3,540,000
Average
Grade
0.56%
0.49%
0.43%
*This Mineral Resource Estimate was prepared by Ercosplan and is available at sedar.com in chapter 14 of the report titled “Amended and Restated NI 43-101 Mineral
Resource Statement for Mineral Concessions Bayovar 5 to 8, Sechura Area, Piura Province, Peru” with an effective date of January 11, 2013. See slide 4 for further
information related to Potash Mineral Resources.
**These mineral resources are not mineral reserves and do not have demonstrated economic viability.
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PILOT BATCH
EVAPORATION PONDS
• Ercosplan’s Inferred Potash
Resource Estimate is 4.9 million
tonnes of Potassium Chloride
• Recent mineralogical tests on
samples obtained from the pilot
evaporation ponds suggest a higher
content of Kainite (Magnesium
Sulphate) and Sulphate of Potash
(“SOP”) rather than Potassium
Chloride
• Currently assessing the economic
value to produce a premium potash
product such as SOP, the most
commonly used non chloride
fertilizer.
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SUMMARY 2016 OBJECTIVE
• Continue initiatives to exit Argentina
• Complete Phosphate PEA by September 2016
• Continue monitoring pilot evaporation ponds
results with an objective of test SOP production
in Q2-2017
• Announce the Company’s strategic plan in
September 2016
• Begin Q4-2016 & 2017 capital spending
program
• Accelerate investor relationship program and
marketing campaign
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THANK YOU
AMERICAS PETROGAS INC.
Annual General Meeting
June 27, 2016
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