migao presentation 2012 03

7/28/2019 Migao Presentation 2012 03

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G r o w t h b a s e d o n s t r o n g f u n d a m e n t a l s

Investor Presentation

March 2012


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Forward-looking Statements

The contents of this presentation contain statements that may constituteforward-looking statements within the meaning of applicable securitieslegislation. Forward-looking statements may include financial and otherprojections, as well as statements regarding future plans, objectives oreconomic performance, or the assumptions underlying any of theforegoing. Forward-looking information involves significant risks,assumptions, uncertainties and other factors that may cause actual future

results or anticipated events to differ materially from those expressed orimplied in any forward-looking statements and accordingly, should not beread as guarantees of future performance or results.

Actual results, performance or achievement could differ materially fromthose expressed in, or implied by, any forward-looking statements made

and, accordingly, investors should not place undue reliance on any suchforward-looking statements. New factors emerge from time to time, and itis not possible for management to predict all of such factors and to assessin advance the impact of each such factor on Migaos business.


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A Different Kind of Fertilizer Producer

Specialty Fertilizer Production (low-chloride) Potassium Sulphate (SOP)

Potassium Nitrate (NOP)

Specialty Compound NPK + micronutrients and minerals

Serving Chinas High-value Crops

Fruits, Vegetables, Tobacco, Cotton, Flowers

Strong growth profile New production facilities near completion


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Migao At a Glance

Operating facilities in China 7

Employees 1,000

Market cap (TSX: MGO) $200mm

Funds raised since 2006 IPO $140mm

Percent owned by management, directors 35%


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OUR VALUE PROPOSITION

Migao Enables Improved Crop Yields and Quality

Two coreproducts

Potassiumnitrate (NOP)

Potassiumsulphate (SOP)

High-value cropsincluding

Tobacco

Fruits

Cotton

Flowers

Vegetables

Increases yield

Enhances quality

Strengthensresistance todrought, disease

Lowers waterusage

Higher returns forfarmers

ProductsCustomer

ApplicationsAdvantages

Co-products

Ammonium

chloride

Hydrochloric acid

Electroplating

Steel processing

Water treatment


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Average Price per Tonne (Potassium Nitrate)

F2007 F2008 F2009 F2010 F2011

8,000

6,000

4,000

2,000

0

RMB


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Average Price per Tonne (Potassium Sulphate)

F2007 F2008 F2009 F2010 F2011

7,000

5,500

3,500

1,500

0

RMB


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Strong China Fundamentals Drive Industry Growth

Growing demand for higherquality food 150M Chinese moved to

cities higher income

middle class expanding

Central government promotesagriculture growth

Increasing sophistication offarming practices

Drivers

Long growthrunway for Migaoproducts


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Focusing on Higher Growth End Markets

Annual Domestic Consumption Growth in End-markets

Tobacco

~3%

Fruit and vegetables

15-17%


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1. MARKET LEADER

A Leading Player in Our Markets

Supplier ofpotassium nitrate(NOP) in China

#1

Supplier ofpotassium

sulphate (SOP) inChina

#2

Importer ofpotash

into China

#3


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2: OPERATING FACILITIES

Facilities Serve Diverse Geographies / End Markets

Changchun Migao

Liaoning Migao

Shanghai Migao

Sichuan Migao / SQM JV

Guangdong Migao

Zunyi Migao

Tianjin Migao


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4. CONSISTENT MARGINS

Business Model Delivers Consistent Margins

0

10

20

30

2005 2006 2007 2008 2009 2010 2011

22-24%Target profit range

Despite significant fluctuations in raw material costs


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With an Impressive Performance Record

120

380

2006 2011

$58

$317

2006 2011

$8.6

$34.5

2006 2011

Production(000s tonnes)

Revenue($M)

Net Earnings($M)

Last 5 fiscal years (Ferilizer Production)


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5. FINANCIAL RESOURCES

Strong Financial Position

(Third Quarter Ended December 31, 2011)

Working capital $206M

Cash $10M

Unused Credit lines $70M

Long term debt Zero

Net Earnings $4M

Revenue $97M


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Clear Growth Strategy

3

2

4

Continue to grow core fertilizer business in China target new end-markets1

International expansion cautious approach

Leverage customers and distribution channels new products

Pursue vertical integration opportunities


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GROWTH: A CLOSER LOOK

95% Capacity Growth

320

10020

100620

SQM jv

40k tonnes

NOP

completed

$10M

Shanghai

40k tonnes

SOP

completed

$10M

Changchun

40k tonnes

SOP

construction

$5M

All projects advancing on schedule

Production

(000s tonnes)

40

Sichuan

100k tonnes

compoundfertilizer

completed $8M

40

Zunyi

100k tonnes

Compoundfertilizer

construction

$15M

Dec. 2011Dec. 2010 Dec. 2012


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Migao: Corporate Governance Vital for a China-basedcompany in North America

Key financial executives in Toronto with extensivepublic company expertise4 accountants and accounting student fluent in Mandarin andEnglish in Toronto

2 assistants in Beijing fluent in English and Mandarin

Independent board with strong corporategovernance experience

Big-four accounting firm for internal audit and internalcontrol reviews


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3: COMPETITIVE ADVANTAGES

A Different Kind of Fertilizer Producer

Niche market focus develops and markets specialty, potash-based fertilizers to high value crops

Unique characteristics proprietary production process, business model that delivers

consistent margins

Secure supply of potash 10 year agreement for 500,000 tonnes per year

Strong growth profile production set to increase >60% over next 2 years


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G r o w t h b a s e d o n s t r o n g f u n d a m e n t a l s

www.migaocorp.com

migao presentation 2012 03

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