Why Invest

Muriate of potash (“potash” or “potassium chloride”) and Trio® (potassium, magnesium, and sulfate in a single particle) are essential fertilizers for plant growth, with potash also being used in various other applications. Farmers in the United States and around the world rely on these fertilizers to boost the quality and yield of their crops. With the world’s population projected to increase to 8.5 billion by 2030¹, products like potash and Trio® that can increase crop yields will be vital for the world’s food supply.

The pandemic helped drive curtailments in investments in the commodity sector, supply chains continue to see widespread disruption, and turmoil in Eastern Europe has further complicated the outlook for potash supply, with an estimated 30%-40% of the world’s supply either off the market or in question. As a result, potash prices are close to record highs. Moreover, crops that consume high amounts of potash (like corn, soybeans, wheat, and palm oil) are also trading close to record highs, which is helping drive strong farmer economics and continued demand for our key products. As a company with higher fixed costs, lower variable costs, and lower royalty rates, when fertilizer prices are high and demand remains steady, the result can be a significant, positive bottom-line impact – this was a key reason why our first quarter 2022 adjusted EBITDA of $50.2 million was the highest in almost a decade.

There is a heightened focus in the Western world for having reliable, secure supplies of natural resources, and we are proud to be the only producer of potash in the United States. In 2021, we supplied approximately 3.5% of the United States’ total potassium consumption. Moreover, our mines in New Mexico and Utah provide us with transportation advantages over our competitors for shipping our products, which generally allows us to obtain a higher average net realized sales price per ton.

Our potash and langbeinite reserves each have extensive remaining years of reserve life; remaining reserve lives for our actively mined areas ranging from approximately 24 years to more than 100 years, based on proven and probable reserve estimates.

All of Intrepid’s potash production comes from solar solution mines in Carlsbad, New Mexico; Moab, Utah; and Wendover, Utah. Solar solution mining is a safe, cost efficient, and environmentally friendly production method. Unlike conventional underground potash mining, which can require a significant amount of energy produced from hydrocarbons to mine the potash ore and recover the potash, Intrepid’s potash is crystallized from solar energy as the brine evaporates from surface ponds, with the water we use also being returned to the atmosphere. Solar solution mining significantly reduces the labor needed and energy consumed, which are two of the largest inputs in production. In periods of high inflation, rising labor costs, and disrupted supply chains, the solar evaporation advantage becomes even more pronounced.

Intrepid has no long-term debt on our balance sheet, a rarity in the natural resources space. This offers protection during downcycles, while allowing the Company to take full advantage of upcycles. A debt-free balance sheet also creates capital optionality, with the excess cash being available for growth projects or capital return to shareholders.

In the backdrop of high cash flow generation, Intrepid is currently investing in multiple higher return, organic growth projects. In New Mexico, at our Carlsbad East Langbeinite mine, we have been operating extra shifts and have two new continuous miners on order for delivery in over the next few quarters. At the HB Solar facility, we have a new injection pipeline in the works designed to maintain higher flow rates and increase brine storage underground. In Utah, at Moab, we have permitted, engineered, and are preparing to drill another cavern, while at Wendover, upgraded brackish and deep-brine wells should add production volume as early as the spring of 2023. The key strategy around these growth projects is to capitalize on what we think will be a sustained period of higher commodity prices, which should improve our productions costs per ton, margins, and cash flow in the years ahead.

As of March 22, 2022, on a combined basis, Intrepid’s management team and board of directors owned approximately 18% of Intrepid’s common shares outstanding.