pacific potash corp investor presentation neu
TRANSCRIPT
TSX-V: PP
FSE: P9P
FSE: P9P
Certain statements in this presentation constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws (“forward-looking statements”). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Pacific Potash Corp (“Pacific Potash” or “the Company”), or developments in Pacific Potash Corp’s business or in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements include all disclosure regarding possible events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action. Forward-looking statements may also include any statement relating to future events, conditions or circumstances. Pacific Potash Corp cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Forward-looking statements relate to, among other things, changes in the resource market; the market focus of Pacific Potash Corp’s revenue mix and margin targets; operations priorities; and strategy for its products and solutions. The risks and uncertainties that may affect forward-looking statements include, among others, the completion and integration of acquisitions, the possibility of technical, logistical or planning issues in connection with deployments, the continuous commitment of Pacific Potash Corp's investors, demand for Pacific Potash Corp's equity and assets and other risks detailed from time to time in Pacific Potash Corp's filings with the Securities and Exchange Commission and Canadian provincial securities regulators. Forward-looking statements are based on management’s current plans, estimates, projections, beliefs and opinions, and the Company does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change.
Key Considerations
Forward Looking Statements
2
FSE: P9P
2
The Company
•Corporate Overview ......................................................................... 3
•Capital Overview ............................................................................ 4
•Capital Structure ........................................................................... 5
•Management Team...................................................................... ...6-7
•Recent News...... .... .................................................................. ... .8
The Project
•A Mineral Profile............................................................................. .9
•Potash in Alberta........................................................................ 10-11
•Regional Geology.............................................................................12
•The Properties...................................................................... ....13 -14
•Past Exploration.........................................................................15 -16
•Provost Potash Property ............................................................... 17-18
The Plan
•Solution Mining ....................................................................... ......18
•Key Value Drivers …………………................................................ ...... ......19
•Global Production Shortfall…………………..................................................20
•Commodity Prices. . ........................................................................21
•Contact Us................................................................................... 22
Table of Contents
FSE: P9P
Corporate Overview
Toronto Stock Exchange
(TSX-V)
PP
Frankfurt Stock Exchange
(FSE)
P9P
Date of Formation Mar 21 1997
Corporate
Head Office
Suite 602 – 595 Howe Street
Vancouver, BC V6C 2T5
Jurisdictions British Columbia, Alberta
Classification Junior Resource – Mining
Transfer Agent Computershare Trust
Auditor Manning Elliot
Legal Counsel Anfield, Sujir, Durno
and Kennedy
Year End Jun 30
Website www.pacificpotash.com
3
FSE: P9P
Pacific Potash Corporation
Corporate Overview
Corporate Comparison
4
FSE: P9P
Company
Name
Shares Issued
Market
Capitalization
Cash
52 Week
High/Low
% Owned by
Management
Allana Potash
(AAA.V)
147,433,000
216,742,000
55,000,000
2.43 – 0.365
10
Western Potash Corp
(WXP.V)
160,945,183
209,229,000
37,000,000
1.55 – 1.08
14.9
Ethiopian Potash Corp
(FED.V)
107,914,626
86,322,000
11,000,000
1.27 – 0.085
25
Passport Potash Inc.
(PPI.V)
125,920,157
66,780,000
9,000,000
1.86 – 0.055
40
Encanto Potash Corp.
(EPO.V)
251,626,281
60,413,000
8,300,000
0.65 – 0.125
7
Grizzly Discoveries
(GZD.V)
48,320,000
29,457,000
8,000,000
0.85 – 0.21
65
Pacific Potash Corp.
(PP.V)
34,500,396
7,546,000
6,200,000
1.08 – 0.18
25
Capital Structure
Stock Symbol PP.V
Stock Exchange TSX Venture
------------------------------------------------------------
Issued & Outstanding* 34,500,396
Options Outstanding 2,672,500 - Priced between $.20 - $.40
Warrants Outstanding 16,909,772 - 12,500,000 @ $0.28 (February 2014)
- 1,643,750 @ $0.20 (March 2016)
------------------------------------------------------------
Fully Diluted 54,082,668
Market Capitalization $7,546,000
------------------------------------------------------------
Working Capital $6,188,525
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October 27, 2011
FSE: P9P
Steven Khan, MBA, CFA Director & CEO
------------------------------------------------------------------------------------------------------------------------------
Balbir Johal, B.A, LL.B
Director and
Executive Chairman
------------------------------------------------------------------------------------------------------------------------------
Steve Butrenchuck, P.Geo, M.Sc.
Director & President
• Currently serves as President, Director and Chairman of Strathmore Minerals
and is a founder and former senior executive officer for Fission Energy
• Former senior executive officer of full-service national brokerage houses
• Major joint venture projects with Chinese, Korean and Japanese governments
and private companies (e.g., Roca Honda and Sumitomo JV–2007)
• B.Sc. and MBA from UBC, Chartered Financial Analysts and former CSI Fellowship
• +27 years of leadership in the global venture capital markets
• Lawyer since 1983 serving public companies as a senior officer and director
• Served as a senior officer and director for Centurion Minerals, Abzu Gold,
Signature Resources, Mega Copper Tiller Resources, etc.
• B.A. from UBC and Bachelor of Law from the University of Windsor
• +20 years in the global capital markets—resource and exploration
• +40 years in mining and mineral exploration, development and operations
• Currently a director of Passport Potash Inc. (former President and CEO of Passport
Potash Inc.) and a senior officer and director of several public resources
companies: BonTerra Resources, Equinox Exploration, etc.
• Exploration and geology management for majors (16 years with Cominco)
• Former Consulting Geologist for the Geological Survey of British Columbia
• Member of the Assoc. of Prof. Engineers, Geologists and Geophysicists of Alberta
Senior Executive
Management Team
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Management Team (cont’d)
Jody Dahrouge, B.Sc., Sp.C., P.Geo
Director and Sr. VP Exploration
------------------------------------------------------------------------------------------------------------------------------
Bryce Clark, CFA
Direcor and Chief Financial Officer
Don Larmour
Senior Executive
• 20+ years of executive administration for public and private companies
• Current/Former CEO/CFO of New Destiny Mining, Harmony Gold, etc.
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• +20 years of leadership in international mineral exploration and resource
• Senior executive officer, director and/or geologist with Commerce Resources,
Quantum Rare Earth, Fission Energy, Equitas Resources, AM Gold, etc.
• Member of Assoc. of Prof. Engineers, Geologists and Geophysicists of AB and BC
• Qualified geological professional in asset analysis, M&A evaluation, etc.
Advisory Board • 30 years experience in potash industry
• 28 years with Potash Corp. of Saskatchewan
• President and principle of Global Potash Solutions Consulting
• Intricate knowledge of conventional and solution mining operations
• Expertise in all aspects of potash processing, construction auditing, plant
commissioning and environmental compliance
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Recent News
• Pacific Potash acquired permits for two potash drill holes on its 100% Owned Provost
Potash Property located in Alberta, Canada. The Company has retained Taylor Land
Services whom have assisted with the permitting process, site selection and
negotiations with surface rights holders. Barlon Engineering was retained to conduct
and manage the potash exploration drilling program.
• Drilling has commenced on the 100% Owned Provost Potash Property. The Provost
11-29-37-1W4m well is located immediately west of the Alberta-Saskatchewan
border, near the community of Provost, Alberta. The site targets a strong gamma ray
response at a depth of approximately 1340 m, within the top of the Prairie Evaporite
Formation.
• The Company announced that its common shares are now listed and trading on the
Frankfurt Stock Exchange under the symbol P9P as of October 27th 2011. The German
stock code number for the Company is A1JMQD and the ISIN number is CA8278502072
• Don Larmour was appointed to be the first member of the company’s advisory board,
to provide guidance and expertise as the company advances its projects. Don brings
30 years of experience with Potash Corporation of Saskatchewan (PCS), holding
various engineering positions within PCS including research engineer, plant
metallurgist and senior process engineer. His assignments included conventional, as
well as solution mining operations.
― I believe strongly in the potential of the project, having done the initial analysis of the
existing well log data and helped organize the initial group that stake the original claim
on the Provost Area ‖ - Don Larmour, Advisory Board Member
Pacific Potash Corp. Latest News
PPC Provost 11-29-37-1W4m
2D & 3D Seismic
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A Mineral Profile
“Potash” = Potassium Carbonate (K2CO3)
– Sedimentary ore bodies formed from ancient seas
– Last mineral depositions from salt-rich brines
– Common geology: ―evaporite formations‖
Composition: Carnallite (KMgCl3•6H2O) and Sylvite (KCI)
• Key indicators of potash mineralization
• Potash (KCI) = fertilizer form of potassium (K)
– 95% of Potash is used for fertilizer
– Canada is the world’s leading producer of potash
– Largest consumers: China, the United States, Brazil and India
Commercial Uses
• Increases crop yields
• Improves the quality of agricultural produce
• Helps plants survive droughts and cold weather
• Helps plants resist pests and infections
• Boosts the efficiency of nitrogen fertilizers
Potassium Carbonate (K2CO3)
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Potash Ore Sample
Potash Drill Core Sample
1. Well-Log History
• 1st Recorded Occurrence (1945)
o VCO # 15 – Vermillion, Alberta
o 100 km North West of Provost
o 4m of carnallite, 12m of (possible) sylvite
o Up to 10% K2O
• 2nd Recorded Occurrence (1946)
o Provost No. 2 – Provost Alberta
o 10 km West of Provost Potash Property
o 110m of 4.1% K2O
• 1st Potash Exploration Project (1946)
o Unity, Saskatchewan
o 45 km East of Provost Potash Property
o 1st well - Verbata No. 2 drilled with the intent to recover and sample potash
o 3.3 m thick of 21.64% K2O equivalent
• 1st K2O Resource Estimate
o Conducted by Bayfield O&G Ltd.
o Determined pre-mature
o 100,000,000 tonnes of carnallite (for 2,000-acre property) containing and surrounding
petro drill hole VCO # 15
A Brief Overview
Potash in Alberta
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2. Infrastructure
• Highly developed both within the province and the Properties
o Roads
o Paved highways and roads
o Gravel secondary roads
o Roads received regular clearing of snow during winter
o Train
o Access to CN and CP on the outskirts of Provost, Alberta
o Lines provided access to shipment facilities across Canada and the United States
o Service Lines
o Power Lines
o Gas Lines
o Various other lines are available
o Workforce
o Knowledgeable, and experienced workforces are available in the surrounding areas.
o The Properties are located:
o 250 km from Edmonton and 272 km away from Saskatoon
o Towns
o Provost, Alberta is located at the North-West corner of the property
o Suitable for immediate accommodation, supplies, services and workforce
3. Tax & Royalties
• Alberta was ranked the No. 1 jurisdiction for Mining and Exploration by the Fraser Institute (March 2011)
• The Alberta Department of Energy (Mineral Development Division) advised that the royalty on potash would be similar
to that of salt:
o Potash in Alberta would be $.45/tonne compared to Saskatchewan’s royalty of $6.00/tonne.
A Brief Overview
Potash in Alberta (con’t)
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Regional Geology
Known Potash in East AB and West SK occurs in the Devonian Prairie
Evaporite Formation (DPEF)
o Near flat-lying sequences of interbedded mineralization
featuring Halite, Sylvite, Carnallite and Clay
Prairie Evaporite Formation (PEF)*
o Evaporitic: land-locked saltwater basins
o Beds of mineral enriched deposits (i.e., oil, coal and potash)
o Area stretches from North Dakota, East to Manitoba, and West
o into Saskatchewan and Eastern Alberta*
o Depth Range: 1,000 m to 1,450 m
o The uppermost unit in the Elk Point Group: upper 60 m
o Four distinct members with potash beds up to 7 m thick
o Patience Lake, Belle Plaine, White Bear and Esterhazy
PRAIRIE EVAPORITE
12 Sources: Fuzesy, 1982; Eccles et al., 2009; Klarenbach, 2009; Yang et al., 2009 *Notes: DPEF not currently known to outcrop at or near the property* and not yet identified in Alberta.
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The Properties
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Location
• Provost, Alberta, near the Saskatchewan Border (250 km Southeast of Edmonton)
• 45 km West of the prolific Unity Potash Mine
Region
• Devonian Prairie Evaporite Formation (DPEF)
• Elk Point Group: Patience Lake Member
Package
• 100% Interest Option Agreement
• Two (MAIM) permits: 17,781 hectares (43,938 acres) of claims
Access
• Paved highways, roads and secondary gravel roads
• Year-round access to nearly every part of the property
• Canadian National and Canadian Pacific Railway
Infrastructure
• Highly developed local potash mining industry
Water
• Multiple sources (steady flow, year round)
Power
• Network of power, gas and various service lines
Exploration Season
• Year round (in snowfall or precipitation)
Compliance
• Geological Technical Report:
• Dahrouge Geological Consulting Ltd (NI 43-101 commissioned)
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100% Owned Provost Potash Property
The Properties
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Location
• Provost, Alberta, near the Saskatchewan Border (250 km Southeast of Edmonton)
• 45 km West of the prolific Unity Potash Mine
Region
• Devonian Prairie Evaporite Formation (DPEF)
• Elk Point Group: Patience Lake Member
Package
• 50:50 Interest Ownership Agreement with Grizzly Discoveries
• 213,269 hectare (527,000 acres) in claims
Access
• Paved highways, roads and secondary gravel roads
• Year-round access to nearly every part of the property
• Canadian National and Canadian Pacific Railway
– Infrastructure
• Highly developed local potash mining industry
– Water
• Multiple sources (steady flow, year round)
– Power
• Network of power, gas and various service lines
– Exploration Season
• Year round (in snowfall or precipitation)
– Compliance
• Geological Technical Report:
• Dahrouge Geological Consulting Ltd (NI 43-101 commissioned)
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50:50 Joint Venture Property
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Geothermal gradient of the area map shows a ―hot spot‖, located near
the Provost Potash Property.
• Such a hot spot may indicate conditions favorable to solution
mining.
• The PEF near the Saskatchewan border indicates that the PEF near
the Provost Potash Property could be 3m – 6m thick or more.
Past Exploration
Historic Gamma Ray and Geothermal Tests
Well #1
PVR Provost (No. 4-18-38-1) on the Provost claim
Very pronounced potash responses (top of PEF) #1) Gamma ray response of 375 API
• Peak value of 25% K2O over 2.25 m #2) 1 m below the first - response of 230 API
• Peak value of 15.3% K2O over 1.75 m
Well #2
Murphy Ccts Lk (No. 7-30-36-28) 1 km E of Provost claim
Two pronounced potash gamma ray responses (top 20 m of PEF)
#1) 255 API = 17% K2O over 2.25 m (approximately)
#2) 120 API = 8% K2O
Notes: Meters and % are approximations based on correlation of the gamma ray responses at a ratio of 15 API ≈ 1% K2O [gamma ray log] response, corrected for borehole effect, is practically proportional to the K2O content. Sources: geoSCOUT™ database, Schlumberger (1974) and Table 3 and Appendix 1 of 43-101 Technical Report and seismic data library of Divestco Inc., Calgary, AB.
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Geothermal gradient of the area map shows a ―hot spot‖, located near
the Provost Potash Property.
• Such a hot spot may indicate conditions favorable to solution
mining.
• The PEF near the Saskatchewan border indicates that the PEF near
the Provost Potash Property could be 3m – 6m thick or more.
Past Exploration
Historic Gamma Ray and Geothermal Tests
Well #1
PVR Provost (No. 4-18-38-1) on the Provost claim
Very pronounced potash responses (top of PEF) #1) Gamma ray response of 375 API
• Peak value of 25% K2O over 2.25 m #2) 1 m below the first - response of 230 API
• Peak value of 15.3% K2O over 1.75 m
Well #2
Murphy Ccts Lk (No. 7-30-36-28) 1 km E of Provost claim
Two pronounced potash gamma ray responses (top 20 m of PEF)
#1) 255 API = 17% K2O over 2.25 m (approximately)
#2) 120 API = 8% K2O
Notes: Meters and % are approximations based on correlation of the gamma ray responses at a ratio of 15 API ≈ 1% K2O [gamma ray log] response, corrected for borehole effect, is practically proportional to the K2O content. Sources: geoSCOUT™ database, Schlumberger (1974) and Table 3 and Appendix 1 of 43-101 Technical Report and seismic data library of Divestco Inc., Calgary, AB.
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Provost Potash Property
Historical Interpretations
Up to 4% K20 Hole: Provost No. 2
25% K20 2.25 m Hole: PVR Provost 4-18-38-1W4
17% K20 2.25 m Hole: Murphy Cds Lk 7-30-36 28W4
17 Sources: Cole, 1948; Golden, 1965; Hamilton, 1971; Mossop & Shetson, 1994; Klarenbach 2009 Notes: Assay data not available – DPEF not currently known to outcrop at or near the Property.
100% Owned Provost Potash Property
Geological Unit Of Interest
Devonian Prairie Evaporite Formation (DPEF)underlies the property Interbedded halite, sylvite, carnallite and clay ect. Potash usually occurs in the upper 60 m, in four distinct members separated by salt beds
Target Mineralization Potash – Potassium Carbonate K2CO3 Halite (NaCl); Carnallite (KMgCL3-6H2O) and Sylvite (KCl)
Historical Interpretations Two key drill sites have penetrated the PEF and have reported K2O intercepts Strong gamma ray logs indicate potash
Hole: PVR Provost 4-18-38-1W4 Interpreted 25% K2O across 2.25 m
Hole: Safe et al Provost 11-20-37-1W4 Pronounced gamma response, no scale was provided
Hole: Murphy Cds Lk 7-30-36 28W4 Interpreted 17% K2O across 2.25 m
Hole: Provost No.2 Up to 4% K2O Provost No. 2 intersect has been listed as a viable Potash showing
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Provost Potash Property
Current Drill Program
19 Sources: Cole, 1948; Golden, 1965; Hamilton, 1971; Mossop & Shetson, 1994; Klarenbach 2009 Notes: Assay data not available – DPEF not currently known to outcrop at or near the Property.
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Drill Site 1
• Location
o North-East of the Sage et al Provost 11-20-37-1W4 historical drill
hole
• Commencement
o Monday October 24th 2011
• Depth
o ~1450 m
• Compliance
o Dahrouge Geological Consulting Ltd.
o Barlon Engineering
o Taylor Land Services
Drill Site 2
• Location
o North-East of the PVR-Provost
4-18-38-1W4 historical drill hole
• Commencement
o Pending the conclusion of Drill Site 1
• Depth
o ~1450 m
• Compliance
o Dahrouge Geological Consulting Ltd.
o Barlon Engineering
o Taylor Land Services
The company plans to drill an additional two holes pending the results of drill sites 1
and 2 on the 50:50 Joint Venture Property with Grizzly Discoveries.
Solution Mining
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• Mineral solubility is heightened by increasing temperatures
o PEF depth at Provost is ideal for solution mining
• Reduced development costs, timeline and mining risks
o No underground workings, access or personnel needed
o Development and production is easily scalable
o Faster timeline to production compared to
conventional mining
o Absence of flooding risk
o Lower technical risk
o Reduced environmental footprint
• Ability to mine deep or irregularly shaped deposits
• Reduced CAPEX
o Shorted Payback Period
o Higher IRR
Solution Mining Diagram
Operating Solution Mine
The Advantages
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Highlights
• First mover K2O exploration in AB
o Alberta is ranked #1 jurisdiction in the world for exploration*
o Multiuse provincial MAIM policy in Alberta: coexistence of potash and oil and gas project permits
o Established potash mining industry
o Excellent Infrastructure and access (e.g., major rail lines and highways)
• Potential economic grade K2O from gamma ray test study:
o PVR Provost 4-18-38-1 (on the Property)
#1: Peak value of 25% K2O over 2.25 m
#2: Peak value of 15.3% K2O over 1.75 m
• The Company is currently trading at cash value, and at less than break-up value
• The Properties share the same geological formation (PEF) with the prolific Unity Potash Mine
• Extension of the Western Salt Flat Boundary
• Production shortfall vs. rising global market demand
• Single largest export region of Potash
• Expansion of markets in Eastern Asia and India
• Solution Mining: low CAPEX vs. dry shaft
Key Value Drivers
*Source: Frasier Institute, 2011 19
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Global Production
Production Capacity
• Current production capacity will result in shortfall by 2017
• Canada supplies a majority of the world’s demand for potash
Growing Global Demand
• World’s population will reach 9.3 B by the year 2050
• Total arable land in use in 1950 will be reduced by 70%
• Global market will require an estimated 1.5 M Mt more potash EVERY
YEAR to satisfy growing world demand
• Canada produces almost 25% of the world’s potash
o 87% of exported potash from Canada goes to the United States
o Canadian potash mines produced 9,500 metric tonnes in 2010
• China is the world's largest potash importer
o Potash Dependency Ratio = 68%
• There are NO substitutes for potash (potassium)
o It is an essential plant nutrient and an essential nutritional
requirement for animals and humans.
o Manure and glauconite (greensand) are low-potassium-content
sources that can be profitably transported only short distances to
the crop fields.
Production Shortfall vs. Market Demand
20
Capacity
Demand
Sources: Production vs. Demand Chart – Potash Corp 2007; Statistics – USGS Potash Study 2011
Production Capacity vs. Market Demand
Arable Land Per Capita
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Commodity Prices
Comparative Chart
23 Sources: Silver Institute, Gold.org, Inflation Data for Oil, Nasdaq, Dow Jones
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Do
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Val
ue
(U
.S.D
)
YEAR
Commodity Prices (1976 – 2010)
Potash (per tonne)
Oil (per barrel)
Gold (per ounce)
Silver (per ounce)
FSE: P9P
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Contact Us
Pacific Potash Corporation
Suite #602 – 595 Howe Street
Vancouver, British Columbia
V6C 2T5
Toll Free (North America): 1.855.629.7095
Office: 604.629.7083
Fax: 604.629.7084
Website: www.pacificpotash.com
Toronto Stock Exchange - Venture
TSX-V: PP
Frankfurt Stock Exchange
FSE: P9P
Richard L. Tremblay
Manager of Corporate Development
Toll Free (North America): 1.855.629.7095
Office: 604.629.7095
Email: [email protected]
Dan Patience
Investor Relations
Toll Free (North America): 1.800.499.2388
Office: 403.262.7111
Email: [email protected]
Legal Counsel
Anfield Sujir Kennedy and Durno Law
1600-602 Granville Street
Vancouver, British Columbia, Canada
V7Y 1C3
Phone: 604.669.1322
Fax: 604.669.3877
Transfer Agent
Computershare Trust
2nd Floor – 510 Burrard Street
Vancouver, British Columbia, Canada
V6C 3B9
Phone: 604.661.9400
Auditor
Manning Elliot
1050 West Pender Street
Vancouver, British Columbia
V6E 3S7
Office: 604.714.3600
Fax: 604.714.3669