Download - POTASH REVIEW - Mineraminera.ca/wp-content/uploads/2017/02/GSP-Newsletter-Mar-1-2017.… · tse:prk Potash Ridge 0.24 0.05 0.50 $29.0 tse:wpx Western Potash 0.19 0.12 0.36 $84.3 52-Week

Key Portfolio

Announcements

March 2017 March 2017

2017-02-23 Arianne Phosphate Secures Favourable Power Agreement with Quebec Government

2017-02-17 Gensource Report

Pegs Vanguard at 144 Million Tonnes Sylvinite 2017-02-16 GrowMax Provides Long Term Strategic Guidance

2017-02-09 Agrium Reports Q4, Foresees Solid Spring Season 2017-02-06 GrowMax Announces Results of Sulfate of Potash Study

MONTHLY

POTASH REVIEW

Double the Expected Resource –

Gensource Continues to Deliver

Palisade Research / www.palisade-research.com 2017-02-27

Chalk another milestone up for Mike Ferguson, Rob Theoret, and their

hardworking team at Gensource Potash.

The last update we released in November 2016, outlined a non-binding

MOU of a transformational JV with the Essel Group. Under the terms of

the JV, Gensource will vend-in a project from its Vanguard area, as well

as its project execution team. In turn, Essel will earn 70% of Vanguard

by paying for the rest of the feasibility study (~C$5 million) and

financing the construction of the project (~C$250 million!).

Gensource is now one step closer to their FS, releasing an updated

resource. And this resource is double than what they have originally

indicated! The report defines a resource in the Vanguard area of 145

million tonnes of indicated potash, and 320 million tonnes of inferred

potash.

With 3D seismic already underway, Gensource plans on releasing a

bankable feasibility study by the end of April or early May. However,

there is an extremely important catalyst in the near-term, being the

finalization of the Essel JV. We expect that news to hit the wire

sometime towards mid March.

Lastly, in macro news, India scared potash producers when the Indian

government ministry proposed slashing potash subsidies by 17% in the

next financial year to reduce fiscal deficit. We believe this is to scare

Canpotex and Uralkali into lower prices when negotiating annual

contracts.

How distribution to farmers normally work is, a major buyer will

negotiate a price with potash exporters, and then will resell to

distributors. By the time fertilizer ends up in the hands of a farmer,

there can be mark-ups as high as 50-100%! The more hands that

handle the potash, the more expensive it becomes. Everyone needs to

be paid.

Essel is positioning itself to buy directly from the source, and will sell

directly to farmers, saving them and end-users significant costs. The

win-win situation is apparent: Gensource receives a guaranteed stream

of income, Essel receives much needed potash, and best of all, the

once disadvantaged farmers of India can breathe a bit easier.

Gensource is up 83% since our last update, but the market has still

been slow to realize its portfolio of assets. We reiterate, the Vanguard

area will be able to produce 6 to 8 more projects. It is a large land

package and Gensource’s modular production plan cookie cutter JV

model could be replicated time and time again. Gensource’s market cap

is currently C$47M and each project is worth at least at C$285.5 million. It is the only potash company that makes sense.

Relative Stock Performance

52-Week and Monthly Stock Performance on page 2.

TSX-V: GSP

Significant Portfolio Announcements

2

MONTHLY POTASH REVIEW

MARCH 2017

Ticker Name

Recent

Price

52 Week

Low

52 Week

High

Mkt Cap

(Million)

tse:agu Agrium 127.58 104.7 146.99 $17,338.8

cve:dan Arianne Phosphate 0.82 0.68 1.25 $79.1

cve:cpm Crystal Peak Minerals 0.50 0.17 0.56 $102.4

cve:epo Encanto Potash 0.10 0.06 0.18 $44.2

cve:gbl Gb Minerals 0.07 0.05 0.10 $59.3

cve:gsp Gensource Potash 0.19 0.04 0.22 $52.3

cve:gq Great Quest Fertilizer 0.22 0.14 0.35 $11.1

cve:gro GrowMax Resources 0.14 0.13 0.22 $28.5

tse:icp IC Potash 0.11 0.05 0.15 $26.0

ipi Intrepid Potash 1.90 0.85 3.04 $138.9

tse:krn Karnalyte Resources 0.69 0.64 4.15 $18.0

mos Mosaic 30.22 22.77 34.36 $10,514.6

tse:pot Potash Corp 22.90 19.93 26.62 $18,910.6

tse:prk Potash Ridge 0.24 0.05 0.50 $29.0

tse:wpx Western Potash 0.19 0.12 0.36 $84.3

52-Week Relative Stock Performance

Potash Portfolio Feb 2017 - Monthly Return

*IPI-US and MOS-US data in US dollars, all others CAD dollars

3


MARCH 2017

Commodity Price Performance

Performance of Key Fertilizer / Ag Commodity Prices

Source: BMO Capital Markets, CRU, Argus, SX Coal, FactSet, Bloomberg.

4


MARCH 2017

Arianne Phosphate (DAN-V) Secures Favourable Power Agreement with Quebec Government

Mkt Cap Projects Type Stage Jurisdiction

$79.1 M Lac a Paul Surface Permitted, Financing Canada (Quebec)

2017-02-23 Arianne Phosphate Inc. has secured a favourable power agreement with the Ministry of Energy and Natural

Resources. This agreement confirms that an additional power bloc of 14 megawatts from Hydro-Quebec will

be made available for the Lac a Paul project's ore processing facilities. This power bloc now totals 129 megawatts. Details of the agreement were laid out in a letter to Arianne dated Feb. 21, 2017.

With this additional power bloc, Arianne will be able to supply all of its processing facilities with hydroelectric

power, making it the apatite concentrate producer with the lowest greenhouse gas (GHG) emissions on the

market. A significant portion of the whole power bloc of 129 megawatts (42 megawatts) will be used for the

electric dryer to dry the apatite concentrate. The innovative technology integrated into the dryer will prevent

the equivalent of 86,000 metric tonnes per year of carbon dioxide emissions. It will also have a positive economic impact on the Lac a Paul project.

"Once again, we would like to thank the Quebec government for the additional power bloc," said Jean-

Sebastien David, Arianne's chief operating officer. "The hydroelectric supply for all of our mining facilities will make the Lac a Paul project the most environmentally responsible phosphate project in the industry."

Gensource (GSP-V) Announces NI 43-101 Report for Vanguard

Mkt Cap Projects Type Stage Jurisdiction

$52.3 M Vanguard & Lazlo Selective Dissolution Prefeasibility Study Canada (Saskatchewan)

2017-02-17

Gensource Potash Corp. has completed an updated National Instrument 43-101 technical report on its 100-

per-cent-owned Vanguard project in central Saskatchewan. The Vanguard area comprises two leases, KL 244

and KL 245, as well as several parcels of freehold encompassed by KL 245 now leased by Gensource. While

other freehold lease negotiations are in progress, a cut-off date of Feb. 1, 2017, has been applied for

reporting purposes. Initial project and resource development work has occurred, as a starting point, primarily within KL 245.

The updated technical report, dated Feb. 16, 2017, supports that the Vanguard project area overlies a rich

and thick potash resource. The report documents the geological work completed by Gensource since the initial NI 43-101 resource report was announced April 28, 2016.

Since that initial resource report, Gensource has completed two exploration wells on the property, which,

when combined with the two existing wells (completed in 2012) and the reinterpreted 2-D seismic, provide the data for the current resource modelling effort.

http://www.arianne-inc.com/en/

http://www.gensourcepotash.ca/

5


MARCH 2017

The technical report defines a resource at Vanguard in the indicated and inferred categories as defined by

CIM Standards 2010. The technical report was completed by Terra Modelling Services Inc., an independent

geological/geostatistical consultant.

Gensource's president and chief executive officer, Mike Ferguson, said: "The updated 43-101 resource

technical report announced today shows an excellent resource, amenable to our planned selective solution

mining method. The results support our earlier estimations of the resource on the Vanguard property and

our decision to commence project development work in the area. The resource defined in this technical

report will now be used as part of the ongoing feasibility study work and will help define the initial mining

area and mine life of the first small 'module' that we plan to construct and operate at Vanguard. Using only

the indicated resource numbers from the technical report, a very long life potash production facility here is

possible. We're very pleased with the results of the technical report and are excited to continue to drive

forward in our project and business development work towards our goal of becoming the next independent producer of potash in Saskatchewan."

Summary of the technical report

The technical report defines a resource in the Vanguard area of almost 145 million tonnes of final potash

product in the indicated category and over 320 million tonnes of final potash product in the inferred

category, based on the baseline 40-per-cent recovery. See the attached tables for a more detailed summary

of the updated indicated and inferred resource at the Vanguard project.

INDICATED RESOURCE

Total

Total

KCl Carnallite Insoluble

sylvinite

grade grade grade Average

tonnage

weight weight weight thickness

weight

Member Submember % % % m

%

Patience Lake member PLM1 39.03 0.75 6.21 4.40

290.00

PLM2 28.91 0.60 7.03 3.65

240.07

PLM3 39.33 0.60 9.24 2.91

145.84

PLM4 36.32 0.67 10.43 1.90

125.48

Subtotal 35.63 0.67 7.67 12.86

801.39

Belle Plaine member BPM1 37.82 0.98 6.20 0.79

35.24

BPM2 41.18 0.44 2.69 2.06

81.79

BPM3 33.36 0.45 2.38 1.27

59.09

BPM4 28.70 0.70 3.58 2.00

130.12

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MARCH 2017

BPM5 35.65 1.40 4.83 1.26

82.05

BPM6 26.53 1.62 2.00 1.70

110.51

BPM7 55.73 1.64 0.63 0.45

8.58

Subtotal 33.00 0.98 3.29 9.53

507.37

Total

INDICATED RESOURCE

Sylvinite Sylvinite Sylvinite

Sylvinite tonnage tonnage tonnage

tonnage (KCl) (KCl) (KCl)

with 30% 40% 50%

deductions recovery recovery recovery

million million million million

Member Submember tons tons tons tons


PLM2 192.06 16.66 22.21 27.76

PLM3 116.67 13.77 18.36 22.94

PLM4 100.38 10.94 14.58 18.23

Subtotal 641.11 68.53 91.37 114.21


BPM2 65.43 8.08 10.78 13.47

BPM3 47.27 4.73 6.31 7.88

BPM4 104.09 8.96 11.95 14.94

BPM5 65.64 7.02 9.36 11.70

BPM6 88.41 7.04 9.38 11.73

BPM7 6.86 1.15 1.53 1.91

Subtotal 405.89 40.18 53.57 66.96

Total 1,047.01 108.70 144.94 181.17

Base case

INFERRED RESOURCE

Total

Total

KCl Carnallite Insoluble

sylvinite

grade grade grade Average

tonnage

weight weight weight thickness

weight

Member Submember % % % m

%


743.30

PLM2 29.59 0.73 8.52 2.82

441.02

PLM3 35.09 0.83 11.58 2.39

296.75

PLM4 36.86 0.65 9.38 2.29

336.86

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MARCH 2017

Subtotal 35.72 0.72 8.40 11.77

1,817.93


70.53

BPM2 27.29 3.82 2.19 2.07

190.20

BPM3 35.02 3.22 4.77 1.23

165.83

BPM4 28.55 0.78 3.68 2.00

343.42

BPM5 32.18 0.56 2.58 1.31

224.79

BPM6 41.04 0.47 2.75 1.61

276.84

BPM7 42.28 1.05 8.20 0.59

40.33

Subtotal 34.28 1.62 3.20 9.64

1,311.95

Total

INFERRED RESOURCE

Sylvinite Sylvinite Sylvinite

Sylvinite tonnage tonnage tonnage

tonnage (KCl) (KCl) (KCl)

with 30% 40% 50%

deductions recovery recovery recovery

million million million million

Member Submember tons tons tons tons


PLM2 330.77 29.36 39.15 48.94

PLM3 222.56 23.43 31.24 39.05

PLM4 252.64 27.94 37.25 46.56

Subtotal 1,454.34 146.12 194.83 243.53


BPM2 142.65 11.68 15.57 19.46

BPM3 124.37 13.07 17.42 21.78

BPM4 257.57 22.06 29.41 36.77

BPM5 168.60 16.28 21.70 27.13

BPM6 207.63 25.56 34.08 42.61

BPM7 30.25 3.84 5.12 6.39

Subtotal 983.96 101.18 134.91 168.63

Total 2,438.31 247.30 329.73 412.17

Base case

The basic assumptions for the resource are as follows:

K2O cut-off grade of 15 per cent (equating to 24.6 per cent KCl);

Maximum carnallite cut-off of 6 per cent;

No insoluble cut-off;

No thickness cut-off, due to the mining methodology (for example, selective solution mining);

8


MARCH 2017

Representative density samples were taken from the new core and yielded an average of 2.10 for the

Belle Plaine member and 2.12 for the Patience Lake member;

2,250-metre radius of influence from existing wells (based on thickness variography) for the indicated

resource and 6,000 m for the inferred radius. This is based on variography for all subunits, as well as

geological continuity;

All relevant anomalies discovered by 2-D seismic have deducted, while a further 20-per-cent

deduction for unknown anomalies was applied within the indicated category and 25 per cent in the

inferred category. A range of recoveries, which are inclusive of mining and plant recoveries, are presented.

The KCl and carnallite cut-offs as well as other assumptions listed in the table were based on cut-offs

common to solution mining projects in Saskatchewan, as well as on the preliminary economic assessment

released in April, 2016.

The estimation of the resource proceeded with kriging, using a grid model in Maptek Vulcan.

The technical report also provides the following recommendations for next-step work in the project area, "... that Gensource complete a feasibility study complete with 3-D seismic work to advance this project."

The company will file this technical report with Canadian securities regulators within 45 days of this release pursuant to NI 43-101 requirements. It will be available on SEDAR and also on the company's website.

The technical information presented in this news release has been reviewed and approved by Louis Fourie,

PGeo, PriSciNat from Terra Modelling Services Inc., who is a qualified person according to NI 43-101

requirements, and an independent consultant to the company.

GrowMax (GRO-V) Provides Long Term Strategic Guidance Mkt Cap Projects Type Stage Jurisdiction

$28.5 M Bayovar 7 Surface PEA Peru

2017-02-16

GrowMax Resources Corp. has provided guidance regarding the company's long-term development strategy.

On Sept. 12, 2016, GrowMax announced its strategic plans for the company which included:

Reducing general and administrative (G&A) expenses and spending in Argentina;

Exiting the Argentine oil and gas assets;

Advancing the Bayovar phosphate project in Peru; Developing plans for early cash flow.

Over the last several months, the company has successfully completed the first two of these initiatives and is now focused on further development of the Bayovar phosphate project and generating early cash flow.

The board of directors of GrowMax recently approved the company's 2017 budget and long-term

development and capital plan that the board believes will allow the company to generate cash flow in the

next several years and successfully develop its existing asset base. The key to this strategy is to focus on

developing small, Peru-focused projects that the company can manage on its own in order establish a

http://www.growmaxcorp.com/

9


MARCH 2017

market for its phosphate resources and to then grow with its larger-scale development plans such that growth is maximized and value dilution is minimized.

Highlights of the strategic plan are as follows.

Projects with low capital, early cash flow potential

SOP pilot project

GrowMax announced on Feb. 6, 2017, the results of a study for a pilot facility for the production of 5,000

tonnes per year of sulphate of potash (SOP), including evaporation ponds and process plant. Two thousand

seventeen will see GrowMax focused on securing the required permits and approvals to initiate construction

of the evaporation ponds. This work will be done with an objective of commencing construction of an SOP

plant in 2018. The company has the required financial resources to develop the project and intends to

provide periodic updates on progress throughout the remainder of 2017 and into 2018. This planned pilot

project is expected to establish the company as a fertilizer producer and allow GrowMax to develop

relationships with buyers of the different products to be produced from the project over the next several years.

SSP plant

In its Sept. 12, 2016, press release, the company announced results of a single super phosphate (SSP) plant

study. The results of this study indicated a strong business case for developing an SSP plant in Peru. The

company's focus for 2017 will be to complete a detailed market study to confirm the market for SSP sales in

Peru and adjoining regions as well as sourcing phosphate and sulphuric acid required to feed the plant. Once

these studies have been completed, a decision is expected to be made regarding the development, in 2018,

of an SSP plant.

Marketing and sales

With a view toward establishing a local market presence where GrowMax will have strategic pricing

advantages and potentially higher margins, GrowMax will be looking to strengthen its fertilizer marketing and sales capabilities in 2017.

Advancing the phosphate project

On Oct. 27, 2016, GrowMax filed a preliminary economic assessment for its Bayovar 7 phosphate project

based on a one-million-tonne-per-annum mine and processing plant producing a 30 per cent phosphorus

pentoxide product. This project is, by far, the most significant project within GrowMax's portfolio and

GrowMax expects to continue to optimize and progress this project over the next several years. The Bayovar

7 phosphate project represents GrowMax's long-term growth and value driver, and with the establishment of

both a market and early cash flow over the next two to three years, the company expects to be best

positioned to develop this important and material asset.

Corporate social responsibility (CSR)

A key to the development of any resource asset is building strong local and community relationships. To that

end, GrowMax and its subsidiary, Americas Potash Peru SA, have initiated a more comprehensive outreach

and development program in the Sechura region, where the company's projects are located. Investments

have been initiated and will continue to focus on education, health and local economic development projects

in partnership with the surrounding communities. The company has continued to build its CSR team and is

10


MARCH 2017

continuing to work with the local community in order to build a strong, long-term relationship and establish the necessary social licence to develop its projects.

Capital spending guidance

As previously announced, the board has approved a 2017 capital budget of approximately $10-million (U.S.)

with associated general and administrative expenses of approximately $3.4-million (U.S.). This will allow for

the first phase of development of the SOP project and brine ponds, further development of the market and

sales initiatives, and continued work on permitting, CSR and studies for the optimization of the phosphate project.

Stephen Keith, company president, commented: "In the context of today's market, combined with the nature

and size of our asset base, I believe that the company's strategy will provide significant upside for investors.

We have the capital resources necessary to develop our smaller-scale projects in the next two or three

years, each of which should provide cash flow to the company and allow GrowMax to become a fertilizer

producer as well as to deepen our experience and knowledge of the local, South American and international

markets. This prudent approach will significantly decrease the risks associated with developing our world-

class phosphate asset and allow GrowMax to generate returns for our shareholders. This plan is manageable,

and we are now focused on obtaining the required permits and community development to allow these projects to become reality."

An updated February, 2017, corporate presentation is now available on the company's website.

Agrium (AGU-T) Reports In-Line Q4 Results: Foresees

Solid Spring Season 2017-02-09

Agrium Inc. has released its fourth quarter 2016 results, with net earnings to equity holders of Agrium of

$67-million (49 cents in diluted earnings per share) compared with net earnings of $201-million ($1.45 in

diluted earnings per share) in the fourth quarter of 2015. The reduction in net earnings was driven primarily

by lower year-over-year nutrient pricing. On an annual basis, 2016 earnings to equity holders of Agrium

were $592-million ($4.29 in diluted earnings per share) compared with $988-million ($6.98 in diluted

earnings per share) in 2015. Amounts are in U.S. dollars unless otherwise indicated.

Highlights:

Fourth quarter guidance relevant earnings were $94-million or 68 cents in diluted earnings per share

(1), in line with the company's guidance. Retail reported record EBITDA (net earnings (loss) before

finance costs, income taxes, depreciation and amortization, and net earnings (loss) from discontinued

operations) (2, 3) for the fourth quarter, supported by strong crop protection product sales and

record international earnings, as Australian operations delivered a 29-per-cent increase in annual

EBITDA in 2016.

Cash provided by operating activities was $1.5-billion in the fourth quarter.

Wholesale achieved record production for nitrogen this year and completed construction of the

610,000-tonne urea plant at its nitrogen facility in Borger, Tex., within the previously disclosed

revised timeline and cost limits. Commissioning is under way, and production is expected to

commence in the first quarter of 2017.

Agrium had a record year for retail small- to mid-sized acquisitions, with over $500-million of

expected annual sales.

http://www.agrium.com/

11


MARCH 2017

Agrium's commitment to operational excellence continued to deliver results this quarter, and on an

annual basis, the company delivered approximately $145-million of EBITDA cash cost savings across

the company. Supporting this was $66-million in fixed-cost savings in wholesale, while retail's cash

operating coverage ratio (3) improved to 61 per cent on an annual basis.

Agrium has announced the company's 2017 annual guidance range of $4.50 to $6 in diluted earnings per share.

"Agrium continued to deliver solid results across our business this quarter, supported by record fourth

quarter results in our retail business and strong wholesale operating performance. We delivered on our

promise of value-added growth in 2016 by successfully bringing our Borger expansion to completion and

growing retail at a record pace through acquisitions," commented Chuck Magro, Agrium's president and chief

executive officer. "We have been encouraged by the recent firming in global nutrient markets, and we

anticipate solid demand for crop inputs in the coming spring application season," added Mr. Magro.

(1) Effective tax rate of 25.5 per cent for the fourth quarter and 27.3 per cent for the year ended 2016 was

used for the adjusted net earnings, guidance relevant earnings and per-share calculations. These are non-

international financial reporting standard measures, which represent net earnings adjusted for certain

income (expenses) that are considered to be non-operational in nature. The company believes these

measures provide meaningful comparison with the earnings of other companies and its guidance by

eliminating share-based payments expense (recovery), gains (losses) on foreign exchange, and related gains

(losses) on non-qualifying derivative hedges and significant non-operating, non-recurring items. These

should not be considered as a substitute for, or superior to, measures of financial performance prepared in

accordance with IFRS and may not be directly comparable with similar measures presented by other companies.

(2) Earnings (loss) from operations before finance costs, income taxes, depreciation and amortization.

(3) This is a non-IFRS measure.

Market outlook

Agricultural and crop input fundamentals:

Crop prices are similar to or higher than where they were a year ago, despite record global crop

production in 2016/2017.

Strong global demand for grains and oilseeds has helped to partly offset the impact from record grain

production. The U.S. Department of Agriculture (USDA) projects that combined global grain and

oilseed demand will grow by over 3 per cent in 2016/2017. Over the past four years, global demand

has grown at an annual rate of 2.8 per cent, which is the highest four-year growth rate in the past 35

years.

The company expects growers will continue to be cautious when making crop input decisions in 2017,

despite improved margins partly associated with lower crop input prices. North American crop input

prepay levels are higher than the same time last year, partly due to strong anticipated spring nutrient

purchases in Canada due to the shortened fall ammonia season in 2016.

The company expects U.S. corn acreage to be between 90 million to 92 million acres in 2017, down

from 94 million acres in 2016. The company anticipates the decline in corn acreage to result in a 1- to

3-per-cent decline in 2016/2017 U.S. crop nutrient demand, as well as lower expenditures on seed.

However, total crop protection expenditures are expected to be relatively stable in 2017.

Nitrogen:

12


MARCH 2017

Global nitrogen prices rallied in late 2016 and early 2017, with benchmark urea and ammonia prices

up between $80 and over $100 per tonne from second half 2016 lows. The rise in nitrogen prices was

primarily in response to reduction in supply and export availability from China and Eastern Europe,

largely due to low global prices earlier in the year.

Chinese coal prices increased by between 40 and 140 per cent between the low and high of 2016,

depending on the type of coal. The increase in costs and relatively low global urea prices resulted in

Chinese urea exports in the fourth quarter declining by more than 65 per cent year over year, while

annual exports declined from 13.8 million tonnes in 2015 to 8.9 million tonnes in 2016. The company

anticipates exports will decline further in 2017 to between six million and eight million tonnes, despite

the recent removal of the Chinese urea export tax in late 2016.

U.S. offshore imports of urea were down more than one million tonnes in the second half of 2016

compared with 2015 levels, which was more than double the estimated increase in domestic

production during the same time period. The shortfall in supply has lent further support to urea prices

in early 2017.

Potash:

Strong potash demand supported global potash prices in the second half of 2016 and into the first

half of 2017 as most potash buyers had relatively low inventories by the end of 2016. The company

expects that global potash shipments will be between 60 million to 62 million tonnes in 2017, up from

59 million tonnes in 2016.

Analysts expect new potash capacity to begin ramping up in the first half of 2017, which would

increase available supply in the second half of 2017; however, much will depend on the rate at which new supplies become available relative to the rate of international demand growth.

Phosphate:

The phosphate market was relatively weak by the end of 2016, in part due to strong exports from

China late in the year; however, exportable supplies from China have tightened in early 2017, and

both global and North American prices have recently increased as a result.

Increased raw material costs are also supportive of phosphate prices, particularly the rise in the price of ammonia.

Annual 2017 guidance

Based on the company's assumptions set out under the heading "market outlook," Agrium expects to

achieve annual diluted earnings per share of $4.50 to $6 in 2017. The company has maintained a range

width encompassing approximately $300-million of EBITDA variability to reflect the risk and opportunity

associated with crop nutrient prices and demand for crop inputs at this time of year. The company is

assuming a normal spring and fall application season, recognizing there is always a risk that inclement

weather could affect the timing and duration of each season. Its earnings-per-share guidance assumes some

recovery from current nitrogen prices during the key application seasons.

Based on these and other assumptions regarding prices and demand for crop nutrients set out under the

heading "market outlook," the company expects retail EBITDA to be $1,125-million to $1,225-million, and retail nutrient sales volumes to range between 10.2 million to 10.6 million tonnes in 2017.

Based on its expected increase in utilization rate for its nitrogen assets, the company anticipates nitrogen

production to total 3.6 million to 3.8 million tonnes. Agrium continues its hedging program for gas

requirements in 2017 and is monitoring the market to mitigate any upward pressure on prices through near-

term hedging. Its earnings-per-share guidance assumes NYMEX gas prices will be between $3.05 and $3.85 per million British thermal units in 2017.

13


MARCH 2017

Agrium's expectation for potash production in 2017 assumes the full ramp-up of production following the

expansion project at the company's Vanscoy mine. The company expects to produce between 2.4 million and

2.8 million tonnes of potash in 2017.

Total capital expenditures are expected to be in the range of $650-million to $750-million, of which

approximately $500-million to $550-million is expected to be sustaining capital expenditures.

Agrium's annual effective tax rate for 2017 is expected to range between 27 to 29 per cent.

This guidance and updated additional measures and related assumptions are summarized in the attached

annual guidance range and assumptions table. Guidance excludes the impact of share-based payments

expense (recovery), gains (losses) on foreign exchange and non-qualifying derivative hedges, and merger-

related costs. Volumetric and earnings estimates assume normal seasonal growing and harvest patterns in

the geographies where Agrium operates.

ANNUAL 2017 GUIDANCE RANGE AND ASSUMPTIONS

Low High

Diluted EPS (in U.S. dollars) $4.50 $6.00

Guidance assumptions

Wholesale

Production tonnes

Nitrogen (millions) 3.6 3.8

Potash (millions) 2.4 2.8

Retail

EBITDA (millions of U.S. dollars) $1,125 $1,225

Crop nutrient sales tonnes (millions) 10.2 10.6

Other

Tax rate 29% 27%

Sustaining capital expenditures (millions of U.S. dollars) $500 $550

Total capital expenditures (millions of U.S. dollars) $650 $750

All comparisons of results for the fourth quarter of 2016 (three months ended Dec. 31, 2016) and for the 12

months ended Dec. 31, 2016, are against results for the fourth quarter of 2015 (three months ended Dec.

31, 2015) and 12 months ended Dec. 31, 2015. All dollar amounts refer to U.S. dollars except where

otherwise stated. This news release should be read in conjunction with the company's audited annual

financial statements and related notes, prepared in accordance with international financial reporting standards, contained in the company's 2015 annual report, available at the Agrium website.

Fourth quarter 2016 operating results

CONSOLIDATED NET EARNINGS:

FINANCIAL OVERVIEW

(millions of U.S. dollars, except per-share amounts and where noted)

Three months ended Dec. 31,

2016 2015

Sales $2,280 $2,407

Gross profit 748 900

Expenses 586 576

Earnings before finance costs and income taxes (EBIT) 162 324

Net earnings 67 200

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Diluted earnings per share 0.49 1.45

Effective tax rate (%) 25% 20%

Retail's sales and gross profit increased in the fourth quarter of 2016 primarily as a result of higher

crop protection product sales due to higher demand for herbicides and glyphosate in the U.S. corn

belt and favourable weather conditions in Australia.

Wholesale's sales and gross profit decreased in the fourth quarter compared with the same period last

year due to lower market prices for all nutrients.

Expenses:

General and administrative expenses decreased by $9-million (12 per cent) as a result of

organizationwide cost control measures.

Earnings from associates and joint ventures increased as a result of the devaluation of the Egyptian

pound that led to a $35-million foreign exchange gain in Mopco, net of tax.

The company's share price increased during the current quarter leading to a higher share-based

payments expense of $18-million.

Other expenses increased during the quarter primarily due to the following:

o Merger and related costs of $14-million;

o Impairment loss of $15-million related to an international investment; o Information technology outsourcing costs of $7-million.

Effective tax rate:

The effective tax rate of 25 per cent for the fourth quarter of 2016 was higher than the tax rate of 20

per cent for the same period in 2015 due to a decrease in the recognition of previously unrecognized tax assets in Canada.

Business segment performance

Retail:

Retail reported record fourth quarter gross profit and EBITDA (1), supported by robust demand for

crop protection products and application services in the United States and Australia. On an annual

basis, retail, and specifically Australia, reported record EBITDA while U.S. operations reported a

record EBITDA to sales margin of 10.4 per cent supported by higher-margin proprietary product sales

and cost savings.

Total retail selling and general and administrative expenses were up $11-million from the fourth

quarter of last year. However, total cash expenses were down by $12-million after adjusting for costs

associated with the retail locations acquired in 2016. The company's cash operating coverage ratio

also improved due to its continued focus on operational excellence, moving down to 61 per cent on a

rolling four-quarter basis from 62 per cent for the same period last year.

Regionally, U.S. EBITDA was up slightly this quarter, while the company's Canadian operations

reported weaker results due to an early winter, which shortened the fall application season. Australia

reported a $20-million increase in EBITDA primarily due to strong crop protection product sales and

accompanying application services. The company's South American retail operations reported slightly higher gross profit but lower EBITDA this quarter.

(1) Net earnings (loss) before finance costs, income taxes, depreciation and amortization, and net earnings (loss) from discontinued operations.

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MARCH 2017

Crop nutrients:

Total crop nutrient sales were 8 per cent lower this quarter compared with the same period last year,

due to significantly lower prices across all nutrients, partly offset by higher crop nutrient volumes.

The increase in crop nutrient volumes was due primarily to a 26-per-cent increase in U.S. sales

tonnes this quarter, partly offset by a slight decline in nutrient volumes in Canada due to some fall

weather challenges.

Total crop nutrient gross profit was 5 per cent lower this quarter due to lower selling prices and

margins. North American nutrient per-tonne margins were down $19 this quarter due to weaker

nutrient prices, but margins as a percentage of sales rose to 19 per cent this quarter compared with 18 per cent in the fourth quarter of 2015.

Crop protection products:

Total crop protection product sales were up 15 per cent this quarter due to strong demand in

Australia, an open window in the U.S. for fall applications and some catch-up in demand for crop

protection products resulting from the reduced sales of these products experienced during the third

quarter.

Gross profit in the fourth quarter was up 10 per cent over last year due to strong volumes and an

increase in proprietary product sales. Crop protection product margins as a percentage of sales were

down slightly this quarter as a result of a higher sales mix to wholesalers and selling higher volumes

of lower-margin products, such as glyphosate, which is used for postharvest burndown.

Proprietary crop protection product sales as a percentage of total crop protection product sales

reached 18 per cent this quarter, up two percentage points over the same period last year. On an

annual basis, proprietary crop protection sales grew 11 per cent in 2016 and represented 24 per cent of total crop protection product sales this year.

Seed:

Total seed sales were 35 per cent higher this period compared with last year due to increased sales of

product to wholesalers in the U.S. and higher demand in Australia. Gross profit declined by 20 per

cent, partly related to the higher sales mix to wholesalers, which traditionally represents lower

margins. As a result, total seed margins as a percentage of sales were 43 per cent this quarter -- a

29-per-cent decrease from the fourth quarter of 2015. On an annual basis, however, seed margins were 20 per cent, the same as in 2015.

Merchandise:

Merchandise sales increased 7 per cent, while gross profit remained in line with the same period last

year. The increase in sales was primarily due to stronger results in Australia and increased merchandise sales in the U.S. due to some of the recent retail acquisitions.

Services and other:

Sales for services and other were up 7 per cent this quarter, while gross profit was 15 per cent

higher. The increase in sales and profit was related to higher crop nutrient and crop protection product applications in the U.S. and Australia this quarter.

Wholesale:

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MARCH 2017

Wholesale earnings this quarter were primarily impacted by lower global fertilizer prices across all

nutrients compared with the same period last year. This was partly offset by lower fixed costs related

to continuing operational excellence initiatives.

Nitrogen:

Nitrogen gross profit was down 54 per cent compared with the same period last year primarily due to

significantly lower global nitrogen prices.

Sales volumes were slightly higher than the same period last year due to strong demand for urea and

nitrogen solutions. Ammonia sales volumes were 11 per cent lower than the same period last year as

a result of the early winter weather in Western Canada and the Northern Plains of the U.S. this year.

Realized selling prices per tonne were down 26 per cent compared with the same period last year due

to lower global benchmark nitrogen prices.

Cost of product sold per tonne increased by 5 per cent compared with the same period last year

partly due to higher natural gas input costs. Partially offsetting this were higher utilization rates and

lower fixed costs at the company's facilities. Average nitrogen margins were $89 per tonne this quarter, while ammonia and urea margins averaged approximately $100 per tonne.

Natural gas prices

Potash:

Potash gross profit declined by 67 per cent compared with the same period last year due to lower

global potash prices.

Sales volumes were 10 per cent lower in the current period primarily due to lower opening inventory

levels this year.

Realized selling prices have declined over the past year with selling prices down 33 per cent

internationally and 25 per cent for North American markets compared with the same period last year.

The company's cost of product sold per tonne was 16 per cent lower than the same period last year

due to a product mix with higher proportion of sales to offshore markets, where freight is excluded

from cost of product sold. A weaker Canadian dollar and fixed-cost savings also contributed to

reduced costs this quarter. Cash cost of product manufactured on an annual basis also declined by 18

per cent to $79 per tonne compared with 2015 due to higher production volumes and lower fixed costs.

Phosphate:

Phosphate gross profit was 78 per cent lower than the same period last year due to continuing

pressure on phosphate benchmark prices. Lower sales volumes also contributed to the decline in

gross profit but were more than offset by lower cost of product sold per tonne.

Sales volumes were 7 per cent lower than the same period last year due to an early winter in Western

Canada this quarter and a shorter window for fall applications of phosphate.

Cost of product sold per tonne was down 9 per cent compared with the same period last year due to

lower input costs and the lower Canadian dollar benefiting the Redwater phosphate facility.

Wholesale other:

Gross profit from wholesale other was lower than the same period last year primarily due to overall

lower realized nutrient prices. This was partly offset by higher sales volumes of ESN and ammonium sulphate this quarter.

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MARCH 2017

Expenses:

Wholesale expenses decreased by $48-million in the current quarter due to higher equity earnings of

$32-million from the company's investments, primarily as a result of the Egyptian pound devaluation

leading to a foreign exchange gain; a 16-per-cent reduction in selling, general and administrative

expenses as a result of the company's continuing operational excellence initiatives; and a $19-million

goodwill impairment on the company's Europe purchased for resale business included in the same

period last year. This was partially offset by a $17-million gain on the sale of the West Sacramento

nitrogen upgrading facility recognized in the same period last year.

Other:

EBITDA for the company's other non-operating business unit for the fourth quarter of 2016 had a net

expense of $115-million, compared with a net expense of $92-million for the fourth quarter of 2015. The variance was primarily due to:

Merger and related costs of $14-million;

An increase of $18-million in share-based payments expense as a result of an increase in the

company's share price;

Impairment loss of $15-million on an international investment;

Partially offset by a $10-million decrease in gross profit elimination as a result of lower intersegment inventory held at the end of the fourth quarter of 2016.

Capital spending and expenditures:

The company's total capital expenditures decreased in the fourth quarter and 12 months of 2016

compared with the same periods last year due to the ramp-up of the company's Vanscoy potash

facility in 2015 combined with decreased spending on the Borger project in 2016.

The company completed the acquisitions of 16 farm centres located in the provinces of Alberta and

Saskatchewan from Andrukow Group Solutions Inc. and 18 farm centres located across the northern

U.S. corn belt region from Cargill AgHorizons (U.S.) in 2016.

Share repurchases

Pursuant to the agreement dated Sept. 11, 2016, with Potash Corp., under which the companies will

combine in a merger of equals, Agrium is restricted from purchasing the company's outstanding shares prior

to completion of the proposed plan of arrangement. No shares were repurchased under the normal course

issuer bid in 2016 or the period from Jan. 1, 2017, to Feb. 18, 2017. During 2015, the company purchased

for cancellation 5,574,331 shares at an average share price of $100.25.

Outstanding share data

Agrium had 138,176,000 outstanding shares at Feb. 3, 2017. At Feb. 3, 2017, the number of shares issuable

pursuant to stock options outstanding (issuable assuming full conversion, where each option granted can be exercised for one common share) was approximately 937,528.

Selected quarterly information

The agricultural products business is seasonal. Consequently, year-over-year comparisons are more

appropriate than quarter-over-quarter comparisons. Crop input sales are primarily concentrated in the spring

and fall crop input application seasons. Crop nutrient inventories are normally accumulated leading up to

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MARCH 2017

each application season. The company's cash collections from accounts receivables generally occur after the

application season is complete, and the company's customer prepayments are concentrated in December

and January.

Other

Agrium is a major global producer and distributor of agricultural products, services and solutions. Agrium

produces nitrogen, potash and phosphate fertilizers, with a combined wholesale nutrient capacity of over

nine million tonnes and with significant competitive advantages across the company's product lines. The

company supplies key products and services directly to growers, including crop nutrients, crop protection

and seed, as well as agronomic and application services, thereby helping growers to meet the ever growing

global demand for food and fibre. Agrium retail distribution has an unmatched network of over 1,400

facilities and over 3,800 crop consultants who provide advice and products to the company's grower customers to help them increase their yields and returns on hundreds of different crops.

GrowMax (GRO-V) Announces Results of Sulfate of Potash Study Mkt Cap Projects Type Stage Jurisdiction

$28.5 M Bayovar 7 Surface PEA Peru

2017-02-06

GrowMax Resources Corp. is providing this update based on the previously announced engagement of

Advisian, the consulting arm of the WorleyParsons Group, to assist the company with the provision of a

design and engineering study for a pilot potash project on the company's Bayovar property. The study

included capital and operating cost estimates for a pilot facility, including evaporation ponds and a process

plant, for the production of 5,000 tonnes per year of soluble sulphate of potash (SOP).

Sulphate of potash

GrowMax has conducted preliminary market investigations which indicate that there is significant local

demand in Peru for soluble SOP, a specialty fertilizer product used in fruit and vegetable irrigation projects,

particularly in arid climates such as the coastal regions of Peru. Government of Peru data show that SOP imports in Peru averaged a landed price of over $600 (U.S.) per tonne in 2016.

Summary assumptions and results

The study assumes that the company's existing test wells can produce sufficient brine with concentrations of

potassium and other minerals to feed the processes as contemplated.

The pilot facility design envisions the production of kainite and carnallite from evaporation ponds covering

approximately 50 hectares, and the processing of those minerals to produce 5,000 tonnes per year of soluble SOP. The production process is also expected to produce 185,000 tonnes per year of sodium chloride salt.

The following are the capital and operating cost estimates developed by Advisian (2016 U.S. dollars) for the pilot project:

http://www.growmaxcorp.com/

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MARCH 2017

Project capex -- $19.8-million (U.S.); Annual opex -- $2.1-million (U.S.).

GrowMax's 2017 budget includes a work program to advance the SOP pilot project by securing the necessary

environmental permits and government approvals required to initiate construction of the initial 50 hectares

of solar evaporation ponds in the second half of 2017. Based upon kainite and carnallite production results from the solar evaporation ponds, the company will plan to start construction of the SOP plant in 2018.

Abby Badwi, executive chairman of GrowMax, commented: "GrowMax management is encouraged by the

results of this study and will pursue the company's vision of generating early cash flow through its fertilizer

business initiatives. This approach will run in parallel with our initiatives to pursue different fertilizer

products, such as SSP [single superphosphate], and the development of the company's phosphate rock mining assets at Bayovar in Peru."

The report includes some of the most significant news from publicly-traded potash companies. Please

email [email protected] for or any comments or suggestions.

Patrick Piette or/and Minera IR Inc hold shares of Gensource Potash. The information contained in such

write-ups is not intended as individual investment advice and is not designed to meet your personal financial

situation. Information contained in this report is obtained from sources we believe to be reliable, but its

accuracy cannot be guaranteed.

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