What changed in this filing

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Item 1. Business

2024-03-07 compared with 2023-03-07 · 166 added, 152 removed, 293 unchanged (52% of the section changed)

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producer of muriate of potash (sometimes referred to as potassium chloride or potash), which is applied as an essential nutrient for healthy crop development, utilized in several industrial applications, and used as an ingredient in animal feed.

In addition, we produce a specialty fertilizer, Trio ® , which delivers three key nutrients, potassium, magnesium, and sulfate, in a single particle.

In addition, we produce a specialty fertilizer, Trio ® , which delivers three key nutrients, potassium, magnesium, and sulfur, in a single particle.

We also provide water, magnesium chloride, brine and various oilfield products and services.

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We produce Trio ® from our conventional underground East mine in Carlsbad, New Mexico.

We have permitted, licensed, declared and partially adjudicated water rights in New Mexico under which we sell water primarily to support oil and gas development in the Permian Basin near our Carlsbad facilities.

We continue to work to expand our sales of water.

We have permitted, licensed, declared and partially adjudicated water rights in New Mexico.

We sell a portion of water from these water rights to support oil and gas development in the Permian Basin near our Carlsbad facilities.

We continually work to expand water sales.

In May 2019, we acquired certain land, water rights, state grazing leases for cattle, and other related assets from Dinwiddie Cattle Company.

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Our three primary products are potash, Trio ® , and water.

We also sell salt, magnesium chloride, metal recovery salts, brines, and water that are derived as part of our mining processes.

We also sell salt, magnesium chloride, brines, and water that are derived as part of our mining processes.

Product sales as a percentage of total sales for the last three years were as follows:

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We sell potash into three primary markets:

the agricultural market as a fertilizer input, the industrial market as a component in drilling and fracturing fluids for oil and gas wells and an input to other industrial processes, and the animal feed market as a nutrient supplement.

the agricultural market as a fertilizer input, the animal feed market as a nutrient supplement, and the industrial market as a component in drilling and fracturing fluids for oil and gas wells and an input to other industrial processes.

Potash is sold in different product sizes, such as granular, standard, and fine standard.

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We also monitor product inventory levels and overall production costs centrally.

During 2022, we supplied approximately 0.5% of annual world potassium consumption and approximately 3.5% of annual U.S.

potassium consumption.

Substantially all of our potash is sold in the U.S., and many of our potash sales are geographically concentrated in the central and western U.S.

Fertilizer sales are affected by weather and planting conditions in these regions, as well as farmer economics.

For more information, please see "Seasonality." A significant portion of our industrial sales are derived from oil and gas customers and vary based on the price of potash, the availability and price of substitute products, and changes in industry preferences.

Trio ® is our specialty fertilizer that delivers potassium, sulfate, and magnesium in a single particle and has the added benefit of being low in chloride.

During 2023, we supplied approximately 0.4% of global annual potassium consumption and approximately 2.6% of the U.S.'s annual potassium consumption.

Substantially all of our potash is sold in the U.S.

Our domestic potash sales are

geographically concentrated in the central and western U.S.

Weather, planting conditions and farmer economics all affect fertilizer sales.

For more information, please see "Seasonality."

Trio ® is our specialty fertilizer that is low in chloride and delivers potassium, sulfur, and magnesium in a single particle.

This unique combination of nutrients makes Trio ® an attractive fertilizer across diverse crops and geographies.

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Oilfield Solutions

Oil and gas activity and development in southeast New Mexico drives demand for our water and other oilfield related products and services.

We have permitted, licensed, declared and partially adjudicated water rights in New Mexico under which we sell water primarily for industrial uses in the oil and gas services industry.

In May 2019, we acquired certain land, water rights, state grazing leases for cattle, and other related assets from Dinwiddie Cattle Company that support oil and gas development in the Permian Basin in southeast New Mexico.

In May 2019, we acquired Intrepid South, from which we sell products and services to support oil and gas development in the Permian Basin in southeast New Mexico.

Our other oilfield related products and service offerings include, but are not limited to, caliche, right-of-way agreements, surface damages and easements, and a produced water royalty.

We refer to these assets and operations as "Intrepid South." Due to the strategic location of Intrepid South, part of our long-term operating strategy is selling small parcels of land, including restricted use agreements of surface or subsurface rights, to customers, where such sales provide a solution to a customer's operations in the oil and gas industry.

Demand for water and other oilfield related products and services is due to oil and gas activity and development in southeast New Mexico.

We also sell salt, magnesium chloride, metal recovery salts, brines, and water that are derived as part of our mining processes.

Due to the strategic location of Intrepid South, part of our long-term operating strategy is selling small parcels of land, including restricted use agreements of surface or subsurface rights, to customers, where such sales provide a solution to a customer's operations in the oil and gas industry.

We also sell salt, magnesium chloride, brines, and water that are derived as part of our mining processes.

Our salt is used in a variety of markets including animal feed, industrial applications, pool salt, and the treatment of roads and walkways for ice melting or to manage road conditions.

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We also have water pipelines and reservoir ponds that we use to deliver water to our New Mexico facilities and to customers.

As mentioned above, we acquired Intrepid South in May 2019 which increased our water rights and water delivery infrastructure.

When we acquired Intrepid South in May 2019, we increased our water rights and water delivery infrastructure.

Industry Overview

Fertilizer serves a fundamental role in global agriculture by providing essential crop nutrients that help sustain both the yield and the quality of crops.

Potash and Trio ®

Fertilizer serves a fundamental role in global agriculture by providing essential crop nutrients that help sustain both crop yield and quality.

The three primary nutrients required for plant growth are nitrogen, phosphate, and potassium.

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Intrepid's Trio ® product contains the primary nutrient potassium and two secondary nutrients, sulfur and magnesium.

Long-term global fertilizer demand has historically been driven by population growth and global economic conditions with annual demand variations based on planted acreage, agricultural commodity yields and prices, inventories of grains and oilseeds, application rates of fertilizer, weather patterns, and farm sector income.

Historically, population growth and global economic conditions drive long-term global fertilizer demand.

Sustained per capita income growth and agricultural policies in the developing world and other geopolitical factors, such as temporary disruptions in fertilizer trade related to government intervention and changes in the buying patterns of key fertilizer consuming countries, also affect global fertilizer demand.

Annual demand variations are affected by planted acreage, agricultural commodity yields and prices, inventories of grains and oilseeds, application rates of fertilizer, weather patterns, and farm sector income.

Volatility in agricultural commodity prices may impact farmer fertilizer buying decisions.

We expect these key variables to continue to have an impact on global fertilizer demand for the foreseeable future.

Sustained per capita income growth and agricultural policies in the developing world also affect global demand for fertilizer.

Fertilizer demand is affected by other geopolitical factors such as temporary disruptions in fertilizer trade related to government intervention and changes in the buying patterns of key fertilizer consuming countries.

Volatility in agricultural commodity prices also may impact farmer fertilizer buying decisions.

Nameplate production capacities that exceed demand have historically shaped the world potash market.

Nameplate production capacities that exceed demand historically shape the world potash market.

A few potash companies have controlled a significant portion of this capacity, which was magnified in early 2018 with the merger of two Canadian producers.

Generally, these larger producers have managed production levels to approximate world demand.

Several international brownfield and greenfield expansions have also begun potash production, with increases in production rates expected over the next few years.

Sanctions on Belarusian potash and Russia's invasion of Ukraine resulted in a significant decrease in global production and uncertainty of planned expansion projects in Russia.

Production is expected to remain below 2021 levels in 2023 and possibly longer.

As planned expansions come online in future years, potash pricing will likely depend on the larger producers' ability to continue to manage the supply and demand balance through decreased utilization rates.

Increases in world fertilizer demand, due mainly to population growth and limitations on arable land, are expected to eventually lessen the burden on producers, although recent increases in productive capacities and the continued progress of key expansion projects, specifically BHP's approval of the Jansen Stage 1 potash project, add additional uncertainty to the long-term supply and demand balance for the potash market.

The volume of imports to the U.S.

The world potash market experienced a significant decrease in production rates in 2022, due to sanctions on Belarusian potash and Russia's invasion of Ukraine.

In 2022, global production decreased approximately 10 million metric tonnes, compared to record production of approximately 71 million metric tonnes in 2021.

Global production increased in 2023 to an estimated 67 million metric tonnes and is expected to be approximately 70 million metric tonnes in 2024, due to improving production in Belarus and increased production in Canada and other countries.

With planned production expansions anticipated in future years, potash pricing will likely depend on the larger producers' ability to continue to manage the supply and demand balance through decreased utilization rates.

Increases in world fertilizer demand, due mainly to population growth and limitations on arable land, are expected to eventually lessen the burden on producers, although recent increases in productive capacities and the continued progress of key expansion projects, specifically BHP's approval of the Jansen Stage 1 project, which expects first production in late 2026, add additional uncertainty to the long-term supply and demand balance for the potash market.

The volume of potash imports to the U.S.

further impacts the potash market.

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The overall effect of these sanctions on the potash market remains uncertain.

Virtually all of the world's potash is currently extracted from 20 commercial deposits.

The world's potash production is heavily focused on a few producers within a handful of countries.

Twenty commercial potash deposits produce almost all of the world's potash.

According to S&P Global Commodity Insights and data published by potash mining companies, six countries accounted for approximately 87% of the world's aggregate potash production during 2023.

During the same period, the top nine country potash producers supplied approximately 97% of world production.

During the same period, the top nine potash producing countries supplied approximately 95% of the world's potash production.

Two major Canadian producers participate in the Canpotex marketing group that supplied approximately 34% of global potash production in 2023.

Owing to sanctions directed at potash production in Belarus, S&P Global Commodity Insights estimates that Belarus accounted for 6% of global production in 2022, compared to 17% in the prior year, while they estimate that Russia accounted for 21% of global production in both 2021 and 2022.

Hydraulically fractured horizontal wells account for the majority of oil and gas wells drilled in the U.S.

today and are responsible for the record amount of fossil fuels produced in the U.S.

in recent years.

The use of horizontal drilling in oil and gas production allows a well to remain in contact with the targeted formation, increasing production compared to a vertically drilled well.

This process has resulted in longer wells, with some horizontal drilling sections reaching several miles long.

The increase in horizontal drilling has also increased the use of fresh water, with a single frac potentially using millions of gallons.

In the frac process, water and sand are used to move proppant and other frac additives into the targeted rock formation.

Fresh water is important in the fracking process, as impurities in the water can impact the overall effectiveness of the frac.

The majority of water used in fracking is transported by pipeline to the frac site, where it is stored in ponds or storage tanks.

While fresh water remains a key input for many fracs, some operators have switched to using exclusively recycled/produced water or a combination of fresh water and recycled/produced water when completing wells.

We believe this change is due to the growing focus on environmentally friendly operations and a response to the large amounts of produced water that is present in certain basins and formations, such as the Delaware Basin in southeast New Mexico.

By recycling and reusing produced water, operators are able to reduce fresh water purchases and decrease the cost of transporting and disposing of produced water into disposal wells.

Russia accounted for 17% and Belarus accounted for 11% of global potash production in 2023.

Oilfield Solutions

The most productive region in the U.S.

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In addition to producing wells, the Permian Basin also had approximately 800 drilled but uncompleted wells as of December 2023.

The majority of oil and gas wells drilled in the U.S., including the Permian Basin, are hydraulically fractured horizontal wells, which account for the record amount of fossil fuels produced in the U.S.

in recent years.

The use of horizontal drilling in oil and gas production allows a well to remain in contact with the targeted formation thereby increasing production compared to vertically drilled wells.

Horizontal drilling has resulted in longer wells, with some horizontal drilling sections reaching several miles long.

The increase in horizontal drilling has resulted in an increase in the use of fresh water.

A single hydraulically fracked well has the potential to use millions of gallons of fresh water.

In the frac process, water and sand are used to move proppant and other frac additives into the targeted rock formation.

Fresh water is important in the fracking process, as impurities in the water can impact the overall effectiveness of the frac.

Pipelines transport most water used in fracking to the frac site, where it is stored in ponds or storage tanks.

While fresh water remains a key input for many fracs, operators have switched to using more recycled/produced water when completing wells.

We believe this change is due to water conservation efforts, a move towards more environmentally friendly operations, and an increase in the amount of produced water available for fracking.

By recycling and using produced water, operators are able to reduce fresh water purchases and decrease the cost of transporting and disposing of produced water into disposal wells.

In evaluating the hydraulic fluid to use for frac operations, oil and gas operators consider whether to use produced or fresh water and consider the weight of the fluid used.

Operators are using more heavy brines as heavier fluids can drill through salt formations more effectively than lighter weight alternatives.

Competition and Competitive Strategy

We sell our potash and Trio ® into commodity markets and compete based on delivered price, our ability to timely deliver product, and product quality.

We also compete based on the durability, particle size, and potassium oxide content of our potash and Trio ® products.

For potash, we compete with larger Canadian potash producers and, to a lesser extent, producers located in Russia, Belarus, Chile, Germany, and Israel.

We sell our potash and Trio ® into commodity markets in which delivered price and the ability to timely deliver high quality products are essential.

We are a competitive producer in the industry because of our ability to timely deliver high quality potash and Trio ® products with specific particle sizes and with specific potassium oxide contents.

In the potash market, we compete with larger Canadian potash producers and, to a lesser extent, producers located in Russia, Chile, Germany, and Israel.

For Trio ® , we compete with one other producer of langbeinite as well as producers of other specialty nutrients and blended products.

The competitive market for our water resources include other water right holders, which include companies, farmers, and ranchers operating in or near the Permian Basin in New Mexico.

Some of our competitors and potential competitors may have significant advantages over us, including greater name recognition, longer operating histories, pre-existing relationships with current or potential customers, significantly greater financial, marketing and other resources, ownership of more diverse assets and products, geographically and/or access to less expensive mining assets, any of which could allow them to respond more quickly to new or changing opportunities.

The competitive market for our water resources includes other water right holders, which include companies, farmers, and ranchers operating in or near the Permian Basin in New Mexico.

Some of our direct and potential competitors may have significant advantages over us, including greater name recognition, longer operating histories, pre-existing relationships with current or potential customers, significantly greater financial, marketing and other resources, ownership of more diverse assets and products, and/or access to less expensive mining assets, any of which could allow them to respond more quickly to new or changing opportunities.

Our competitive strategy is focused on the following:

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Our per-ton costs are lower for solution mining than conventional mining as solar solution mining requires less labor, energy, and equipment.

Additionally, the North American market is significantly larger than our production capacity and we are advantageously located close to the markets we serve.

Additionally, we are advantageously located close to the markets we serve, with the North American market demand being significantly larger than our production capacity;

therefore, we are able to selectively participate in the markets that we believe will provide the highest average net realized sales price per ton.

We also attempt to leverage our freight advantage to key geographies, our diverse customer and market base, and our flexible marketing approach to maximize our gross margin.

We have optimization and expansion opportunities at our solution mining facilities, that, over time, could further reduce our per-ton costs and increase our potash production.

• Expanding Trio ® sales and maximizing gross margin.

We plan to continue expansion of our sales and marketing efforts for Trio ® in domestic markets and select international markets.

Our efforts include continued crop nutrition education and increased marketing efforts targeting organic agriculture and high-value specialty crop markets.

To maximize gross margin, we are working to optimize our production process to produce more granular-sized product, which is preferred by most markets.

We also maximize our gross margin by leveraging our freight advantage to key geographies, improving our diverse customer and market base, and developing our flexible marketing approach.

We have optimization and expansion opportunities at our solution mining facilities, that, over time, could reduce our per-ton costs and increase our potash production.

• Maximizing Trio ® gross margin and optimizing Trio ® production.

We are working to optimize our production process to produce more granular-sized product, which is preferred by most markets.

Our sales and marketing approach is focused on domestic and select international markets and includes crop nutrition education and increased marketing efforts targeting organic agriculture and high-value specialty crop markets.

We currently operate our Trio ® facility at a reduced production level and expect to continue to do so for the foreseeable future.

• Expanding offerings of oilfield solutions.

We intend to continue expansion of water sales, particularly to service the oil and gas markets near our operating plants in New Mexico.

We have water rights that we sell water for commercial uses in the oil and gas services industry.

Additionally, as described above, in May 2019, we acquired certain land, water rights, state grazing leases for cattle, and other related assets from Dinwiddie Cattle Company in the Permian Basin which we operate as Intrepid South.

We expect to increase the amount of water available for sale on the Intrepid South property over the next few years through additional infrastructure investments.

Our other oilfield related products and services include, but are not limited to, caliche, right-of-way agreements, and a produced water royalty.

The heightened focus on environmentally friendly operations and due to the large amounts of produced water in the Delaware Basin, operators are using increasing amounts of recycled and produced water when completing wells.

We may expand our current oilfield solutions products and services to include water recycling.

We intend to continue our expansion of water and brine sales, particularly to serve the oil and gas markets near our operating plants in New Mexico.

We have water rights from which we sell water for commercial uses in the oil and gas services industry.

We also use a portion of our water rights to produce heavy brines for use in the oil and gas industry.

Additionally, as described above, in May 2019, we acquired certain land, water rights, federal and state grazing leases for cattle, and other related assets from Dinwiddie Cattle Company in the Permian Basin which we operate as Intrepid South.

We expect to increase the amount of water available for sale from Intrepid South over the next few years through permitting additional water rights and infrastructure investments.

Our other oilfield related products and services include, but are not limited to, surface use and right-of-way agreements, a produced water royalty agreement, and caliche sales.

Given the location of Intrepid South, part of our long-term operating strategy is selling small parcels of land, including through the use of restricted use agreements for surface or subsurface rights, to customers.

• Continuing diversification of products and services.

We recover magnesium chloride, salt, brines, and water during the production of potash and Trio ® .

These byproducts diversity our portfolio of product and service offerings.

As we continue to explore and evaluate opportunities to diversify our revenue sources, we may enter into new or complementary businesses that expand our product and service offerings, including an expansion into oil and natural gas exploration and production, or into new products or services in our current industry or other industries.

• Continuing diversification of byproducts and services.

We recover magnesium chloride, salt, brines, and water byproducts during the production of potash and Trio ® .

These byproducts diversify our portfolio of product and service offerings.

As we continue to explore and evaluate opportunities to diversify our revenue sources, we may enter into new or complementary businesses that expand our current product and service offerings, including an expansion into oil and natural gas exploration and production, or into new products or services in our current industry or other industries.

Competitive Strengths

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Our geographic location provides us with a transportation advantage over our competitors for shipping our product to customers.

In general, this allows us to obtain a higher average net realized sales price per ton than our competitors, who must ship their products across longer distances to consuming markets, which increases their costs and reduces their gross margin.

In general, this allows us to obtain a higher average net realized sales price per ton than our competitors, who ship their products across longer distances to consuming markets, which increases their costs and reduces their gross margin.

Our location allows us to target sales to the markets in which we have the greatest transportation advantage, maximizing our average net realized sales price per ton.

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• Solar evaporation operations.

All of our potash production comes from solar solution mines.

Solar evaporation is a cost-efficient production method because it significantly reduces labor and energy consumption, which are two of the largest costs of production.

Our understanding and application of low-cost solution mining, combined with our reserves being located where a favorable climate for evaporation exists, make solar solution mining difficult for other producers to replicate.

All our potash production comes from solar solution mines.

Solar evaporation is a cost-efficient production method because it significantly reduces our labor force and energy consumption, which are two of the largest costs of production.

Our understanding and application of low-cost solution mining, combined with our reserves being located where a favorable climate for evaporation exists, make solar solution

mining difficult for other producers to replicate.

We also have significant reserves for future expansion of our solution mining operations.

• Participation in specialty markets.

Given the greater scarcity of langbeinite relative to potash and its agronomic suitability for certain soils and crops, we believe there is a market for Trio ® outside of our core potash markets.

• Diversity in Secondary Nutrient Markets.

Given the greater scarcity of langbeinite relative to potash, its agronomic suitability for certain chloride-sensitive soils and crops, and the addition of key secondary nutrients in sulfur and magnesium, we believe there is a market for Trio ® outside of our core potash markets.

We also believe that there is a market for Trio ® beyond the U.S., although freight expense and competition from substitute products have made this a difficult market to penetrate.

We also offer Organic Materials Review Institute ("OMRI") listed potash and Trio ® products that provide essential minerals for growing certified organic crops.

Thr ough our existing operations and assets, we also have the potential to grow our offerings of salt, water, and brine with low capital investments.

• Water rights.

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In New Mexico, the New Mexico Office of the State Engineer (“OSE”) administers water rights.

The validity of water rights are ultimately confirmed or denied by a court in an adjudication proceeding.

The validity of water rights is ultimately confirmed or denied by a court in an adjudication proceeding.

Prior to an adjudication, a water right may be acquired through the OSE’s permitting or licensing process.

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A water right claimant must apply to the OSE for a permit to make changes to a water right, including changes in the place or purpose of use.

The validity of water rights are ultimately confirmed or denied by courts in an adjudication process.

The validity of water rights is ultimately confirmed or denied by courts in an adjudication process.

We have permitted, licensed, declared and partially adjudicated water rights in New Mexico under which we sell water primarily for commercial uses in the oil and gas services industry.

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• Diversity of potash markets.

We sell potash into three different markets—the agricultural, industrial, and feed markets.

During 2022, these markets represented approximately 69%, 8%, and 23% of potash sales, respectively, and during 2021, these markets represented approximately 78%, 6%, and 16%, of our potash sales, respectively.

The agricultural market supplies farmers producing a wide range of crops in different geographies.

Because of our geographic proximity to areas that have seen recent increases in oil and gas drilling activity, we believe that we have an opportunity to promote the benefits of potash in drilling activities and to increase our industrial sales volumes.

We sell potash into three different markets—the agricultural, feed and industrial markets.

In 2023, these markets represented approximately 74%, 23%, and 3%, of potash sales, respectively, and during 2022, these markets represented approximately 69%, 23%, and 8%, of our potash sales, respectively.

The agricultural market supplies crop nutrients to farmers producing a wide range of crops in different geographies and the animal feed market supplies feed manufacturers with key nutrients for a wide range of feed blends into various markets such as pet food and cattle feed.

Sales into industrial markets have historically supported drilling activities in oil and gas, although the use of lower-cost potash substitutes in recent years has reduced our sales into those markets.

• Marketing flexibility.

We have the ability to convert all of our standard-sized potash product into granular-sized product as market conditions warrant.

We also produce Trio ® in premium, granular, standard and fine standard sizes.

We produce Trio ® in premium, granular, standard and fine standard sizes.

This provides us with increased marketing flexibility as well as decreased dependence on any one particular market.

• Significant reserve life.

Our potash and langbeinite reserves each have substantial years of reserve life, with remaining reserve lives for our actively mined areas ranging from approximately 24 years to more than 100 years, based on mineral resource and reserve estimates.

• Significant mineral reserve and resource life.

Our potash reserves and resources have substantial years of reserve life and resource life.

Reserve life is based on the current mine plan and estimated at 25 years for all our potash facilities.

Resource life at our potash facilities ranges from 33 years to over 100 years.

In addition to our reserves, we have water rights and access to additional mineralized areas of potash for potential future exploitation.

In December 2023, we recorded an impairment of our long-lived assets at our East facility of $ 31.9 million, which included a $2.3 million impairment of our mineral rights at our East mine.

As such, we no longer show mineral reserves at our East mine, and only include a mineral resource estimate.

Additional information regarding our mineral reserves and resource estimates can be found in Item 2.

Properties and in the updated Technical Report Summaries included with this filing.

• Existing facilities and infrastructure.

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There is a seasonal sales pattern for potash sold into the agricultural market.

Over the last three years, our monthly potash sales volume has been highest in February through May and September through November when purchasers are looking to have product on hand in advance of the spring and fall application seasons in the U.S.

In turn, our monthly potash sales volume has been the lowest in June, July and December.

Over the last three years, approximately 80% of our total annual potash sales volumes occurred in January through May, in anticipation for the spring application season, and September through November, in anticipation of the fall application season.

The specific timing of when farmers apply potash remains highly weather dependent and varies across the numerous growing regions within the U.S.

The timing of potash sales is significantly influenced by the marketing programs of potash producers, as well as storage volumes closer to the farm gate.

Marketing programs of potash producers and storage volumes closer to the farm gate significantly influence the timing of potash sales.

The sales pattern for Trio ® sold into the domestic agricultural market is also seasonal.

Over the last three years, our domestic Trio ® sales volume has been highest in March and April, as Trio ® products are typically applied to crops in the U.S.

Over the last three years, our domestic Trio ® sales volume has been highest in February through May, as Trio ® products are typically applied to crops in the U.S.

during the spring planting season.

Demand for the spring planting season generally runs from December to May, during which we have sold approximately 60% of our domestic Trio ® volumes over the past three years.

Demand for the spring planting season generally runs from December to May, when we have sold approximately 60% of our annual domestic Trio ® volumes over the past three years.

We observed fertilizer dealers in North America instituting practices that are designed to reduce the risk of changes in the price of fertilizer products through consignment-type programs.

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Our solar solution mines suspend potash production activities from early spring through late summer, the peak solar evaporation period.

Accordingly, we manage our inventories during the low demand periods of the year in order to ensure timely product availability during the peak sales seasons, as well as during the summer evaporation period when we have no potash being produced.

The seasonality of fertilizer demand results in our sales volumes being the highest during the spring and our working capital requirements being the highest just before the start of the spring season.

Demand for our oilfield products and services is highly correlated to oil and gas exploration activities and can vary from quarter to quarter and year to year.

Our sales volumes are highest during the spring and our working capital requirements are highest just before the start of the spring season, as a result of the seasonality of fertilizer demand.

Demand of our oilfield products and services is highly correlated to oil and gas exploration activities and can vary from quarter to quarter and year to year.

Major Customers

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We sell into the industrial and feed markets through sales to distributors and directly to end users.

For water, we sell to a diverse set of customers through a combination of spot sales and multi-year contracts.

In 2022, we had one customer, Bill Barr & Company, Inc., which accounted for more than 10% of our total consolidated revenues.

In each of 2021 and 2021, no customer accounted for more than 10% of our total sales.

For water, we sell to a diverse set of customers through a combination of spot sales and a multi-year contract.

For brine, we sell to a diverse set of customers in the spot market.

In 2023 and 2022, we had one customer, Bill Barr & Company, Inc., which accounted for more than 10% of our total consolidated revenues.

In 2021, no customer accounted for more than 10% of our total consolidated revenues.

Environmental, Safety, and Health Matters

We are subject to an federal, state, and local environmental, safety, and health laws that regulate, among other things;

We are subject to federal, state, and local environmental, safety, and health laws that regulate, among other things;

(1) soil, air, and water quality standards for our facilities;

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We employ and consult with professionals who assist in monitoring our compliance with these laws and who work with management to ensure that appropriate strategies and processes are in place to promote a culture that prioritizes safety and environmental responsibility.

In 2022, we had approximately $2.1 million of capital investments and reclamation, and $1.0 million in other expenses, relating to environmental compliance, environmental studies, and remediation efforts.

In 2023, we had approximately $2.6 million of capital investments and reclamation projects, and $1.2 million in other expenses, relating to environmental compliance, environmental studies, and remediation efforts.

We expect to spend $2.0 million to $3.0 million for environmental related capital and reclamation projects in both 2024 and 2025.

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the Clean Water Act ("CWA");

the Resource Conservation and Recovery Act;

the Resource Conservation and Recovery Act ("RCRA");

the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA");

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In 2016, the OSE determined that our East tailing impoundment embankments are considered jurisdictional dams.

We continue to work with the Dam Safety Bureau to determine the hazard level of our dams and the OSE to determine required dam modifications associated with this determination.

We continue to work with the OSE's Dam Safety Bureau to determine the hazard level of our dams and the OSE to determine required dam modifications associated with this determination.

We may be required to spend a significant amount of capital to bring the impoundments into compliance with requirements for jurisdictional dams or modify our operations to no longer use impoundments that may qualify as jurisdictional dams.

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Air and Drinking Water

In the ordinary course of our business, from time to time, we receive notices from the New Mexico Environment Department of alleged air or drinking water quality control violations.

In the ordinary course of our business, we receive notices from the New Mexico Environment Department of alleged air or drinking water quality control violations.

Upon receipt of these notices, we evaluate the matter and take any required corrective actions.

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This team is ready to respond to on-site incidents or assist in local incidents, if needed.

In addition, our New Mexico

facilities participate in a basin agreement with other natural resource and hazardous waste facilities to provide mine rescue support.

Our Utah and our HB mine and plant are subject to OSHA jurisdiction.

In addition, our New Mexico facilities participate in a basin agreement with other natural resource and hazardous waste facilities to provide mine rescue support.

Our Utah facilities and our HB mine and plant are subject to OSHA jurisdiction.

We provide all OSHA required training and other certifications to our employees at these facilities.

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Potash tailings, consisting primarily of salt and fine sediments that remain after potash is removed from ore during processing, are stored in surface disposal sites.

Some of these tailing materials may also include other contaminants, such as lead, that were introduced as reagents during historic processing methods, which may require additional management and could result in the imposition of additional disposal and reclamation requirements.

Some of these tailing materials may also include other contaminants, such as lead, that were introduced as reagents during historic processing methods.

These tailings materials may require additional management and could result in the imposition of additional disposal and reclamation requirements.

For example, at least one of our New Mexico mining facilities may have legacy issues regarding lead in a tailings pile that occurred from production methods utilized prior to our acquisition of these assets.

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The potash, langbeinite, water, and byproducts we produce and sell from leased land may be subject to royalty payments.

We produce and sell from leased land owned by the U.S., the States of New Mexico and Utah, and private landowners.

We produce and sell products from leased land owned by the U.S., the States of New Mexico and Utah, and private landowners.

The terms of the royalty payments are determined at the time of the issuance or renewal of leases.

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Additionally, some of our leases are subject to overriding royalty interest payments paid to various owners.

In 2022, we paid $14.5 million in royalties and other taxes.

In 2023, we paid $11.1 million in federal, state, and

private royalties.

The royalty rates on our state and federal leases in New Mexico are currently set at various rates from 2.0% to 5.0%.

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The royalty rates for the private leaseholds are between 5.0% and 8.0%.

For certain water sales we pay an $0.11 per barrel sold royalty to the State of New Mexico.

In 2023, for certain water sales we paid an $0.11 per barrel sold royalty to the State of New Mexico.

Human Capital Resources

We believe that our employees and contractors are significant contributors to our success and the future success of our Company.

Such success, depends on our ability to attract, retain, and motivate qualified personnel.

We believe that our employees and contractors are significant contributors to the current and future success of Intrepid.

Our ability to attract, retain, and motivate qualified personnel is critical to our operations.

The skills, experience and industry knowledge of key employees significantly benefit our operations and performance.

We value our relationships with our employees and consider our relationships with them to be good.

As of December 31, 2023, we had a total of 485 employees.

Our workforce is experienced, providing invaluable expertise and insight to our operations.

Our workforce is experienced, providing invaluable expertise and insight into our operations.

Location Number of Employees Average Tenure

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We have a collective bargaining agreement with a labor organization representing our hourly employees in Wendover, Utah, which expires on May 31, 2026.

This is the eighth agreement negotiated between us and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Local 867.

We consider our relationships with our employees to be good.

This agreement was negotiated between us and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Local 867, and became effective on June 1, 2023.

Employee Development and Training

We believe in providing opportunities for employees to continue to develop and grow their careers.

We offer a tuition reimbursement program and ongoing support for continuing education for professional certifications and other credentials.

We offer our employees a tuition reimbursement program and ongoing support for continuing education for professional certifications and other credentials.

We also provide a comprehensive career path program for our hourly employees that outlines the proficiencies necessary for each job level and sets forth the development steps to progress through various job levels.

Competitive Pay and Benefits

We have structured our compensation programs to balance incentive earnings for both short-term and long-term performance.

We have structured our compensation programs to balance incentive earnings for both short-term and long-term performance goals.

We provide employee wages that are competitive and consistent with employee positions, skill levels, experience, knowledge, and geographic location.

We align our executives' long-term equity compensation with our shareholders' interests by linking realizable pay with stock performance.

We are also committed to providing comprehensive benefit options to our employees, and our intention is to offer benefits that will allow our employees and their families to live healthier and more secure lives.

Some examples of the benefits we offer are:

health insurance, telemedicine, an employee assistance program, paid and unpaid leave, life insurance, short-term disability insurance and a retirement savings plan with a company match.

We are also committed to providing comprehensive benefit options to our employees.

We offer benefits that will allow our employees and their families to live healthier and more secure lives.

Our employee benefits include health insurance, telemedicine, an employee assistance program, paid and unpaid leave, life insurance, short-term disability insurance and a retirement savings plan with a company match.

We also offer a variety of voluntary benefits that allow employees to select the options that meet their needs, including flexible time-off, adoption assistance, prescription savings solutions, and a wellness program.

Diversity and Inclusion

Diversity and inclusion are core values to Intrepid.

Diversity, Equity, and Inclusion

Diversity, equity, and inclusion are core values to Intrepid.

These values are reflected across our operations, including, but not limited to, recruitment, promotion, transfer, leaves of absence, compensation, opportunities for career support and advancement, job performance and other relevant job-related criteria.

We embrace an approach to hiring and advancement that considers the value of diversity and we are committed to creating opportunities for development available to all employees so their talents can be fully developed to maximize our and their success.

We consider the value of diversity in our approach to hiring and advancement.

We create opportunities available to all employees to develop their talents in order to maximize our and their success.

We seek to create an environment that cultivates a sense of belonging by encouraging employees to continue to educate themselves about each other’s experiences.

We strive to promote the respect and dignity of all persons.

We also believe it is important that we foster education, communication and understanding about diversity, inclusion and belonging.

Finally, in line with our commitments to equal employment opportunity and diversity and inclusion, we expect recruiters operating on our behalf to provide us with a diverse pool of candidates.

We believe it is important to foster education, communication and understanding about diversity, equity, inclusion and belonging.

Finally, in line with our commitment to diversity, equity and inclusion, we expect recruiters operating on our behalf to provide us with a diverse pool of candidates for job positions.

Health and Safety

The health and safety of our employees is our highest priority, which is consistent with our operating philosophy.

We are committed to providing a safe, functional, and effective work environment for anyone who comes on our properties.

The health and safety of our employees is our highest priority and is embodied in our operating philosophy.

We are committed to providing a safe, functional, and effective work environment for anyone who comes to our properties.

Environmental, Social, and Governance

We are committed to a goal of providing consistent returns to our shareholders while maintaining a strong sense of good corporate citizenship that places a high value on the welfare of our employees, the communities in which we operate, the customers we serve, and the world as a whole.

We believe that prioritizing, improving, and managing our Environmental, Social, and Governance (“ESG”) goals will allow us to better create long-term value for our investors.

We have made our ESG program a key initiative for our management team and we are committed to a plan to provide focused reporting on those ESG issues that we believe are the most relevant to our business and important to our stakeholders.

We understand that clearly disclosing the goals and metrics related to our ESG programs will allow our stakeholders to be informed about our progress and we look forward to expanding our disclosures in future periods.

A summary of our ESG goals under the United Nations Sustainable Development Goals framework is available on our website at intrepidpotash.com.

An update on recent ESG highlights and initiatives is shown below.

Commitment to the Environment

We rely on the environments, resources and ecosystems surrounding our locations in all segments of our business.

We work closely with our communities and make it a priority to protect the natural resources surrounding our operations.

– Solar solution mining potash - All of our potash is currently produced at solar solution mines, one of the most environmentally friendly and energy efficient mining techniques.

We inject a naturally occurring, salt saturated brine solution into underground caverns or previously shuttered mine workings.

We are committed to providing consistent returns to our shareholders while being a good corporate citizen that values the welfare of our employees, the communities in which we operate, the customers we serve, and the world.

In prioritizing, improving, and managing our environmental, social, and governance (“ESG”) goals, we will create long-term value for our investors.

We have made ESG initiatives a priority for our management team and are committed to providing focused reporting on the ESG issues that are the most relevant to our business and stakeholders.

We published our Inaugural Sustainability Report in 2023 to clearly disclose the goals and metrics related to our ESG programs, as we believe this information will allow our stakeholders to be informed about our progress.

We intend to publish a sustainability report annually.

We encourage you to read our Inaugural Sustainability Report to learn more about our strategy, efforts, and goals relating to ESG initiatives.

Commitment to the Environment (Protecting Our Resources)

We rely on the environments, resources and ecosystems that comprise and surround our locations.

Working closely with our communities, we make it a priority to protect the natural resources at and surrounding our operations.

We have developed a comprehensive set of policies and procedures regarding emissions, energy, water use, and waste management that guide our operations and uphold our commitment to the environment.

– Solar solution mining potash - All our potash is currently produced from solar solution mining, one of the most environmentally friendly and energy efficient mining techniques.

In this process, we inject a naturally occurring, salt saturated brine solution into underground caverns or previously shuttered mine workings.

This brine selectively dissolves the remaining potash, which is then pumped back to the surface and into evaporation ponds.

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– Salt laydown at the Bonneville Salt Flats - We are committed to helping maintain the environments in which we operate, one of which is the Bonneville Salt Flats near our Wendover, Utah mine.

Since 2005, we have donated free of cost to the BLM nearly 7 million tons of salt that has been deposited on the racetrack to help preserve this unique attraction in northwest Utah.

We drilled an additional brackish well in 2021 to increase the brine available for the salt laydown project.

Since 2005, we have donated nearly seven million tons of salt to the Bureau of Land Management ("BLM") that has been deposited on the racetrack to help preserve this unique attraction in northwest Utah.

We drilled an additional brackish well in 2021 to increase the brine available for this salt laydown project.

– We are the only OMRI-listed potash and langbeinite producer in the U.S.

We became OMRI-listed in 2007 for our langbeinite, or Trio ® product, and in 2018 for our potash products at our Moab and Wendover operating facilities.

We are also registered in the Organic Input Material Program through the California Department of Food and Agriculture, a program which registers fertilizers that can be used in organic crop and food production.

– We work closely with the Bureau of Land Management ("BLM") and other government and regulatory agencies to preserve historical sites near our operations such as the Maroon Cliffs in Carlsbad, New Mexico and petroglyphs near our Utah operations.

We are also registered in the Organic Input Material Program, through the California Department of Food and Agriculture, a program that registers fertilizers approved for use in organic crop and food production.

– We work closely with the BLM and other government and regulatory agencies to preserve historical sites near our operations such as the Maroon Cliffs in Carlsbad, New Mexico and petroglyphs near our Utah operations.

We also work with and have supported agencies dedicated to studying and protecting endangered species near our operations, such as the sand dune lizards in New Mexico.

Our Social Impact and Supporting our Communities

Our employees live and work in small, tight-knit communities and we are deeply involved in volunteering and being active community members.

Our Social Impact (Getting Involved Within the Community)

We support and promote the health, safety, and well-being of our employees, and are committed to creating a diverse, equitable, and inclusive work environment that enables our employees to thrive.

We are committed to being a responsible community member and contribute to the communities in which we operate.

Our New Mexico operations have partnered with the United Way of Carlsbad and South Eddy County since 2004, participating in a variety of community-focused events and activities such as United Way's annual Day of Caring event.

We encourage all our employees to volunteer in their communities and we offer all our full-time employees three paid volunteer days each year to support either a charitable organization of their choosing or participate in an Intrepid sponsored volunteer project.

Our Commitment to a Diverse Workforce

We are committed to a recruitment and hiring process that emphasizes and embraces diversity.

As previously mentioned, we are committed to a recruitment and hiring process that emphasizes and embraces diversity.

We believe a diverse workforce leads to greater collaboration, innovation, and improves shareholder returns and we celebrate the great value the differences in our people bring to our organization.

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Our Commitment to Safety

Safety audits are conducted across all our locations to ensure a thoughtful approach can be taken that increases the safe execution of all tasks.

Through our audits and dialogue, we educate ourselves and understand the potential hazards present, create best practices that can be shared, and address areas where improvements can be made.

Prior to each task, employees are

assemble the proper personal protection equipment, tools, permits, etc., ensure the area is safe for employees and contractors, discuss the task with all stakeholders, and understand how the task is related to the overall business.

We conduct safety audits of our operations on a monthly basis.

We conduct monthly safety audits across all our locations to inform our employees and provide a thoughtful approach to safety that increases the safe execution of all tasks.

The data from these safety audits is collected to analyze where, what, and why gaps exist, and to provide meaningful information that results in safer work for our employees.

Through our audits and dialogue, we educate ourselves and understand existing potential hazards, create best practices to address these hazards, and address areas to be improved.

Prior to each task, employees are required to:

Our East Mine operation in Carlsbad, New Mexico received the National 2020 and 2021 Sentinels of Safety Award in the large underground nonmetal category.

The Sentinels of Safety Award is presented by the National Mining Association each year to recognize the outstanding safety achievements of mining operations across a variety of categories.

Business Ethics

Since inception, Intrepid has placed the highest emphasis on conducting its business with honesty and integrity.

These standards are expected of management and employees alike, and we continuously strive to create a corporate culture of honesty, integrity, and trust.

Governance (Honest Business Practices)

We develop and implement robust, sound, and effective corporate governance practices.

Since our inception, we have placed the highest emphasis on conducting our business with honesty, trust, and integrity, and we expect all of our employees to adhere to these standards.

We continuously strive to create a corporate culture of honesty, integrity, and trust.

The policies we have developed are intended to:

– Maintain and communicate our core value of integrity and disseminate our core values and the legal requirements applicable to good business conduct and ethical behavior.

– Annual refresher training on company policies, values, interpreting laws, and handling a variety of potential company-related issues and situations.

– Maintain and communicate our core values and the legal requirements applicable to good business conduct and ethical behavior.

– Annual refresher training on company policies, values, laws, and handling a variety of potential company-related issues and situations.

– Resources for employees to report any suspected violations of our company policies, including an anonymous employee hotline via phone and internet.

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These reports are available free of charge on our website at www.intrepidpotash.com as soon as reasonably practicable after they are electronically filed with or furnished to the SEC.

These reports also can be obtained at www.sec.gov.

These reports can also be obtained at www.sec.gov.

We routinely post important information about us and our business, including information about upcoming investor presentations, on our website, www.intrepidpotash.com, under the Investor Relations tab.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business