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REGIONAL NEWS - U.S. & CANADA 8 E&MJ; • MAY 2017 www.e-mj.com PSC: Rocanville Ramp-up Well Underway PotashCorp of Saskatchewan (PCS) said that its potash portfolio optimization and cost reduction strategy, which includes the ramp-up of its low-cost Rocanville mine, contributed to its strong first-quar- ter results. "Potash market fundamentals continued to improve in the first quarter," said Jochen Tilk, president and CEO, PCS. "We expect improved consumption trends and nutrient affordability in key markets to support potash demand and our results through the remainder of 2017. We are well into our Canpotex allocation audit process at Rocanville and anticipate our sales entitlement will increase for the second half of the year." Tilk said the company is also making good progress on its merger of equals with Agrium. "We continue to work through the regulatory process in key jurisdictions and remain confident the transaction will close mid-2017," Tilk said. PCS said lower inventories led to con- sistent buyer engagement in potash during the first quarter. Deliveries increased to most major markets and contributed to modest increases in global spot prices from fourth-quarter 2016 levels. "Despite a continued recovery in global spot prices during the first quarter, our av- erage realized potash price of $166/mt was below the $178/mt realized in 2016's first quarter, as weaker prices in standard-grade markets more than offset higher prices in North America," Tilk said. "Increased pro- duction from our lower-cost mines — in- cluding Rocanville — resulted in average manufactured cost of goods sold for the quarter of $90/mt, down from $128/mt in the same period last year when we incurred suspension-related costs at Picadilly." In the first quarter of 2016 PCS incurred costs of $32 million related to the suspen- sion of production at its Picadilly facility in New Brunswick, Canada. PCS reported first-quarter sales vol- umes of 2.2 million metric tons (mt), which were well above the 1.8 million mt sold in the same period last year. While North American volumes were 10% high- er, offshore shipments increased by 31% due to stronger demand in all key markets. The majority of Canpotex's volumes for the quarter were sold to Other Asian markets outside of China and India (36%) and Lat- in America (24%), while China and India accounted for 20% and 11%, respectively. ERP Named Stalking Horse Bidder for Mountain Pass ERP Strategic Minerals has been selected as the stalking horse bidder by the Chap- ter 11 trustee for Molycorp Minerals and entered into an asset purchase agreement with the trustee to purchase substantial- ly all the assets and the related surface property rights at the Mountain Pass rare earth minerals mine. Located in San Bernardino County, Cal- ifornia, approximately 50 miles south of Las Vegas, Nevada, Mountain Pass is the only mine and processing facility for rare earths minerals in the United States. The mine has an operating history dating back to the 1950s and was most recently placed on care and maintenance after it filed for Chapter 11 bankruptcy protection in 2015. If ERP is successful in purchasing the Mountain Pass mine through the bankrupt- cy sale process, the company said it will work collaboratively with San Bernardino County, the California state agencies and other regulatory stakeholders to complete the necessary technical studies and restart plan to return the mine to sustainable op- erations. Recognizing the Mountain Pass mine as a strategic US mining asset, ERP said it intends to manage its operations as a long-term sustainable business based on high environmental standards. "Our goal is to return the Mountain Pass mine and mineral processing op- eration into a viable, sustainable and environmentally responsible business," said Tom Clarke, CEO of ERP. "We have a strong track record of restarting mines acquired out of US bankruptcy and Cana- dian CCAA situations. ERP is committed to mining operations utilizing best man- agement practices and high environmen- tal standards. This is a complex venture which requires the skills of a reputable, high-quality team with best-in-class tech- nical expertise in the mining sector." To assist with restarting the Mountain Pass mining and processing operations, ERP said it intends to assemble a consor- tium of highly experienced mining experts and professionals to support the restart. ERP is working with Pala investments and Peak Resources, which have deep industry knowledge in the rare earths sector and substantial specialist mining expertise, regarding their involvement in the restart and operation of Mountain Pass. ERP Strategic Minerals is part of the ERP Group of companies, which has suc- cessfully completed five acquisitions out of bankruptcy and insolvency proceedings in the past two years. The ERP Group op- erations include the second largest cok- ing coal producer in North America, mer- chant coke batteries, an iron ore pellet production business, and related mining operations with more than $2 billion in forecasted aggregate revenue in 2017. Pala is a Swiss-based multi-strategy in- Miners at Rocanville load potash onto conveyors underground.