So it means that it will stick to the plant for a long period
of time and it will be a slow release fertilizer which is important
in farming in general and critical in Brazil where
you have all this rainfall. This loss is measured by a term
called agronomic-efficiency. Some of the estimates on this
trip that I have heard were that the agronomic-efficiency of
Amazon’s product is 20% to 40% greater than KCL because
of the chemical nature of this material measured in
K2O. So it’s revolutionary for Brazil.
D.P: How safe is it to think that this product is the right
product or could be made for the right price?
P.G: That is the challenge. We are in the process right
now in this company of creating value and the value is
going to be created by ensuring that we produce it at a
cost that is competitive and we accurately define the exact
benefits for farmers in terms of the agronomic-efficiency.
D.P: What is the time frame for the company on the project
looking forward?
P.G: This is one of these projects where there are lots of
loose ends and lots of things to be done, but essentially,
we are moving along well.. First of all, you have to look at
the ore and do the metallurgical work to determine what
route is to be followed to produce a product that can be
put on the fields. So we have to do a number of different
metallurgical tests to do that. The company has recently
signed (just last week) a very important contract with a
research company (rather like Lakefield in Canada) that
has a small pilot plan with a rotary kiln. This will enable us
to move from theory to results.. From there, it will be relatively
straight forward to determine the costs. So I would
think that within a few months, we will be at a position to
be very clear on which metallurgical route we follow and
what the economic consequences of that will be in terms
of operating costs for the operation. Then there is the
agronomic work. The product as developed in the pilot
plant t will be applied on a sample basis onto fields and
the growth in the plants will be measured and the amount
of potassium in the plants would be monitored so you can
see what the effect of this product is on growth.
All this work was done, interestingly enough in the 1970’s,
but at that point the price of potash was too low to accommodate
this particular mineral. So how long will all this
take? It will take awhile because of course you need to
develop the material and apply it to seedlings. You have
to grow the plants and the cycle is about 120 days to find
out the outcome. It is a little difficult to answer specifically
at this point but we are talking about months not
years to determine fully the potential of what we have. As
you know from this trip, we see growers who are very anxious
to get the material so that they can try it themselves.
D.P: Are we not getting ahead of ourselves here? We don’t
know how much of a resource we have, how big it is, what
the grade is, etc.
P.G: We have done a lot of geological work and we have
done mapping. Potash deposits are generally fairly consistent
in terms of ore grade. Mining costs should be minimal.
As an example, there are open pit limestone mines nearby
and they sell limestone for $3.00 a ton. So I think that mining
is the trivial part of it...I will be surprised if we have any
surprises in this area.
What will take longer to understand will be the agronomical
effect of the product on plant growth. But it’s not a 20-year
project or anything.
D.P: Now the question that had been answered some time
ago, is this a story that’s appropriate for a retail/speculator
at this time, or what would be your advice?
P.G: This is a typical junior mining story. I don’t like to use
the word speculators because I think you can make an investment
in this kind of company based upon your knowledge
of what is going on and I think that we are going to
create value as junior mining companies do. We are doing
research into the mineral deposit and trying to determine
what the net present value of a possible reserve is. That will
depend on some marketing assumptions which depend on
agronomic assumptions. So, as we go along, it will be like
any other junior mining investment play. In the beginning,
people will take more investment risk coming into it, but the
returns will be, if it works out very large. As we go along,
there will be more certainty as to what the company can do
and how much money the company will make. So it’s a
question of how retail investors view their junior mining
investments and lots of people have perhaps 10 of them – 9
of them are no good and one of them goes up 20 times. So
I think that’s the nature of what we are involved in here as I
see it for retail investors. It took me personally a year to
get involved in this thing and I am pleased that I did. I’m
glad I’m doing it because I like what I see and I’ve been
down here for a week and I still like what I see. In fact, I like
it more.
D.P: We like to end these interviews with our favorite question…
if you could only buy one stock, other than Amazon
Mining, and other than something that would have a conflict
of interest, what would it be?
P.G: I am going to key in on the agricultural sector. I like