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Gerardo Del Real Editor Photo 110Gerardo Del Real: This is Gerardo Del Real with The Outsider Club. Joining me today is CEO of Arianne Phosphate (TSX-V: DAN)(OTC: DRRSF), Mr. Brian Ostroff. Arianne is developing the world-class Lac à Paul Phosphate project in Quebec. Brian is a graduate of the University of Toronto and in 1987 he joined RBC Dominion Securities, where his focus was on smaller cap special situations as well as alternative investments. In 1999 Brian joined the M&A advisory firm Goodrich Capital where he was the Canadian managing partner.

In 2004 Brian moved over to the trading side of the business where he spent a year as a proprietary trader with a large Canadian bank and subsequently on his own for four years prior to joining Windermere Capital as managing director. His area of focus is the junior and mid-tier mining sector. Mr. Ostroff has sat on Arianne Phosphate's board since 2014. Brian, I want to thank you very much for joining me today.Brian Ostroff Arianne Phosphate

Brian Ostroff: Thank you for having me.

Gerardo Del Real: I provided a brief introduction there, Brian, but could you please share with us how and why you got involved with Arianne Phosphate?

Brian Ostroff: Sure. As you had mentioned I am a managing partner over at Windermere Capital. It's a group that has the responsibility of managing a couple of resource-based funds. Quite a few years back we did come across Arianne and really thought that it was a pretty interesting situation. It was in a commodity that I don't think people really appreciated. Like many of the investments that Windermere makes it's something that we believed with a little bit of time and effort, and a bit of money, we could progress to something pretty special. Little did I know back at the end of 2010 that six years later I would wind up becoming CEO of this company. But it really is a project that I strongly believe in and certainly Windermere and some of our current partners really think the world of.

Gerardo Del Real: I want to talk about the Lac à Paul project. I described it as world class and it truly is because it presents frankly a very compelling opportunity. But before that I'd like to talk a bit about the fertilizer sector. You mentioned that it's a market that I don't believe a lot of investors and speculators understand, and it's not on the radar frankly of a lot of speculators in this business. Could we talk about the fertilizer sector as a whole? Then maybe we can get more specific about the opportunity that Arianne’s Lac à Paul phosphate project presents?

Brian Ostroff: Sure. I think that you are correct in your assessment. At best, people know fertilizer. Fertilizer is made up primarily of three major components. That's potash, nitrogen, and phosphate. I think where investors tend to do themselves a disservice is they don't understand that the three components are different and they have their own supply/demand dynamics. They just assume that they're all the same and they really aren't.

Most people have seen a pretty precipitous decline in potash over the last few years and they've just assumed that the entire industry, all the components, has been to that degree a train wreck. While potash has been soft, certainly, I think that phosphate and phosphate rock has held up a little bit better. Certainly if you take a look at projections going forward, I think phosphate is the one that most people can agree has the brightest outlook.

Why would that be? First, you need to understand that most of the world runs a deficit when it comes to phosphate. Although there is not at the moment a global deficit, North America runs a deficit as does South America and Western Europe and most places in Asia. That deficit today is made up by the Middle East and North Africa. You do have your largest player being Morocco. An interesting statistic, Morocco today is almost four times bigger in the phosphate market than Saudi Arabia is in the oil market.

Gerardo Del Real: Wow.

Brian Ostroff: Yeah, it's a pretty amazing number. Beyond that, Tunisia used to be number two but Arab Spring has taken out a lot of that production. Syria used to be a producer and, well, we know what's going on there. Egypt, Algeria, today Jordan is the second largest producer for the export market. I think that it's important to realize where this stuff comes from and understand that, bringing it back to North America specifically, we do run a deficit. We need four million tonnes a year to come in from outside our borders and this is the bulk of where it comes from. It is important.

The industry itself, 85% of it, is integrated. That is, the guys who actually own the phosphate mines are the ones that are integrating it, making it the fertilizer. The example I always like to give is that, think of the fellow who has wool. He has that wool and he'll charge $50 to the suit maker to buy it. That suit maker, it costs him $25 to turn into a suit and he sells it on to his wholesaler for $275. All of a sudden the guy with the wool says, "Actually I should be the one making the margin," and now he charges $200 for that wool. The suit maker's not making very much.

At the end of the day the reason that this industry is so integrated is because there is a tremendous challenge. If you need to source your phosphate rock elsewhere and then turn it into fertilizer, your profitability and your end product is going to be very challenged. Today, although Agrium and Potash Corp and Mosaic all do have their own phosphate supplies, they are not adequate, they all import and it has a big, big effect.

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