Thailand`s Great Undeveloped Resource

Thailand’s
Great Undeveloped
Resource
December 2015
Argus Metals Corp
INVESTMENT STRATEGY
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The primary goal of Argus Metals Corp is to aggregate a
significant land package targeting potash, at a very low
cost of entry, 6 claims for a total of 96 sq. km.
Sakon Nakhon Basin
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On the successful registration of a Prospecting license,
Argus will move to
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Khorat Basin
define a economic potash resource
move the project towards a production decision
financing and construction
operation of a potash mine.
Argus’ advantage in this process is a combination of:
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a strong local team,
proven financing abilities
Close links to Mining Plus –engineering contractors
Close links to Byrnecut International, - a world class
contact mining company.
December 2015
Argus Metals Corp
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PROJECT AREA
Japan
Southeast Asia.
China
India
Burma
Laos
Thailand
Bangkok
Vietnam
The Philippines
Cambodia
Malaysia
Indonesia
1,000 km
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Potash in Thailand
Potash, potassium chloride, is a fundamental ingredient of all man-made, plant
fertilizers, accounting for approximately one third of the finished product.
The greatest production of potash is in Canada and Russia/Belarus. The greatest
demand is in Asia, particularly in China and India. The current Asian deficit of demand
over production is 20 million tonnes per annum (Mtpa) – and rising as the world
population, particularly in the southern hemisphere, increases and the extent of arable
land diminishes.
Sakon Nakhon Basin
Khorat Basin
km2
The 56,000
of north east Thailand is underlain by one of the biggest potash
deposits in the world. The Potash is found at shallower depths that other major
deposits in places like Canada and Russia. It is also deposited in a form that is generally
more concentrated that the mineralization in other deposits. Therefore Thai Potash is
worth more while being cheaper to mine.
The Thailand potash deposits are found in two large evaporite basins described as the
Khorat Evaporite Basin (36,000 km2) and the Sakhon Nakhon Evaporite Basin (20,000
km2). The two basins cover a total area about 60,000 square km. About 10% of the
basin extends into Laos in the north (Vientiane basin) and east (Khamoune basin). Laos
has created a thriving potash industry and is planning to produce up to 7 Mtpa in the
near future. Thailand has lagged behind Laos in Potash production as they slowed the
development process down to allow for local consultation.
The Udon Potash mine is now entering production and provides a local road map and
timeline for project definition, costs, time and potential value for investors.
Thailand is also strategically located near areas of fertilizer demand; reducing shipping
costs and increasing margins.
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ABOUT POTASH
Potash, also known as potassium chloride, is the common term for fertilizer forms of the element potassium
(K). The term is widely applied to naturally occurring potassium salts deposited in evaporite basins, and the
commercial products that are developed from them. The name derives from the collection of wood ash in metal
pots when the beneficial fertilizer properties of this material were first recognized many centuries ago.
Potash in Nature
Potassium occurs abundantly in nature. It is the 7th most common element in the earth’s crust.
Large potash bearing rock deposits occur in many regions of the world deriving from the minerals in ancient seas
which dried up millions of years ago. Potash for fertilizer is mainly derived from this potash rock, requiring only
separation from the salt and other minerals and physical grading into a form suitable for fertilizer manufacture or
farm spreading.
Typical Economic Potassium Chloride Minerals
Ore
Mineral compound
K2O %
Sylvite
KCl
63
Sylvinite
KCl + NaCl
35
Carnallite
KCl + MgCl2 +6H2O
17
Kainite
KCl + MgSO4 + 316H2O
19
Langbeinit
e
K2SO4 + 2MgSO4
23
Polyhalite
K2S4 + MgSO4 + 2CaSO4 + H2O
16
Alunite
K2SO4 + Al2(SO4)3 + 4Al(OH)3
11
The compound potassium oxide (K2O) is used as a quality metric, as it measures the concentration of potassium in
rock deposits as well as in commercial potash products.
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POTASH MINES WORDWIDE
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MARKET FAST FACTS
Asia Fertilizer Use
• Population 4.4 billion (combined)
• Account for approximately 22 million tonnes of world fertilizer consumption and only produces 5.3 million tonnes of
fertilizer.
• Potash deposits in Asia are limited to Thailand and Laos
• China is a net exporter of nitrogen and phosphate but imports over half of its potash requirements
• Very poor nutrient balances in India’s soils, insufficient potash applied relative to nitrogen, and more than 70 percent of
soils have low to medium potassium content
• Production of rice, grain , palm oil and vegetables relies on fertilizer to sustain yields.
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DEMAND DRIVERS
Short-Term Demand Drivers
Mid-Term Demand Drivers
Grain prices
Grain inventories
Weather
Crop yields
Crop mix
Planting intentions
Fertilizer inventories
Shipping rates
Exchange rates
Current economic conditions
Dumping
Feedstock costs
Availability of credit
New capacity announcements
Plant shutdowns and mine closures
Current economic conditions
Changing tax regimes and government policies
Energy price changes
Shrinking agricultural land base
Adoption of genetically modified seeds
Irrigation improvements
Political unrest
Cash costs of swing producers
Permanent capacity utilization rate changes
Farmer income, subsidies, protection, and financing
Long-Term Demand Drivers
Global population growth – could increase by 40%+ by 2050
Arable land per capita is shrinking fast
Global meat consumption per capita is increasing
One tonne of poultry requires feed corresponding to 2 tonnes of grain;
One tonne of pork requires feed corresponding to 4 tonnes of grain; and
One tonne of beef requires feed corresponding to 7 tonnes of grain.
Global GDP growth should get back on track – higher disposable incomes
lead to a demand increase for higher-protein diets, including the
consumption of more meat, and higher-quality fruits and vegetables
Adoption and growth of biofuels markets
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THE NEED FOR POTASH
Potash fulfills many vital functions in a wide variety of processes in plants, animals and man.
If the world’s farmers stopped growing food today, there would only be enough grain inventories to feed the world’s population for slightly less than
two months. As a result, 95% of globally produced potash is applied as a fertilizer to help feed the world’s growing population.
Benefits of potash include:
Slows growth of crop diseases
Maintains cell resilience
Reduces wilting
Reduces water loss
Increases the protein available to plants
Assists in photosynthesis by activating more than 50 enzymes
Improves drought resistance
Builds cellulose
Generally reduces the development of weak stocks, leading indirectly to increased crop yields
Potash has no commercial substitute as a potassium fertilizer source.
Potash is primarily applied to large yielding crops such as cereals, oilseeds, potatoes, sugar beets, pulses, and forage crops.
Potash is also used as a feed supplement, as it contributes to both animal growth and milk production. Additionally, potash has several industrial
purposes, including the production of glass, ceramics, and soaps.
Visual Comparison of Impact of Potash
Source: International Plant Nutrition Institute
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POTASH DEPOSITS
Potash is the key ingredient in plant fertilizers and global sales are
expected to be between 58-60 million tons in 2015, according to
Potash Corp. of Saskatchewan, the world's largest producer. The USGS
has projected a 3% increase in potash consumption per year through
2016, owing to world population growth and the associated need for
food and biofuels.
Deputy Prime Minister Pridiyathorn Devakula told a business
conference on Jan. 29 that the government was focused on "launching
new industries that will better utilize existing natural resources in
Thailand."
He added that Thailand has huge deposits of potash ore, estimated
Evaporitehaslayer
(rock
salt)to
at about 400 billion tons. "This Government
already
begun
support potash mining, using the most advanced and clean potash
mining technology," he declared. The right to mine the mineral is a
long sought-after prize in Thailand, with major projects planned for
large scale mining stretching back to the 1980s.
February 20, 2015 7:00 pm JST
Thailand mining
Government hopes potash will revive sector
MICHAEL SAINSBURY, Contributing writer
A potash/rock salt section
at Bamnet Narong
December 2015
A potash/rock salt column
at Udon Thani
Argus Metals Corp
MAJOR TRANSPORTATION ROUTES
Sea Transportation Routes
Train Service
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