Overbought worked offThe overbought conditions of the chart appear to be worked off quite nicely now. Regardless of what others may think they know, the results were much better than anticipated and will contribute to ,much better economics for the project. Next set of milestones revolve around the resource estimate, which looks to be proving quite significant. We should see the 43-101 resource in a few weeks. Following that, there should be a scoping study within Q1.
Political ramblings South of the border causing major markets in North America to break down. Expect they will continue to be quite fragile. There's almost nothing worse than Fed induced bear-market. The good news is the Amazon story isn't about America, or China, or even Potash for that matter. It's a Brazil story, developing a domestic, tailor made product specifically for Brazil, and Brazil only. Local and National government support thrown behind it, with a couple of Agri funds to boot.
On Pescod comments, it's interesting to note that either Pescod is already waving the white flag (as of Jan. 7th, 2010) on his own ability to pick a winner of the year (Pescod made the call on AMZ being the lottery ticked of the year in late December 2009), he is being missunderstood, or perhaps there's an agenda at work here - and lets face it, there's always an agenda by all the beat writers, analysts, media, etc. One must note however, that he is correct on the gold target being extremely exciting. After all, the company IPO'd the gold project alone in 2007, and it's value at the time when gold was $600-$700 was placed at $1.00 per share - pre-exploration. AMZ hads not raised capital since, suggesting one of it's assets is not being recoginized by the market; i.e., you're getting the gold project for free at this point.
LOTTERY TICKET FOR 2010!
AMAZON MINING (V-AMZ) $1.34 -0.05
It was just a couple of weeks ago that we made our
trip to Brazil and what an eyeopener that was! The country is booming. Take for instance a city like Belo Horizonte...which I had never heard of, it’s got 5 million people folks and yet you’ve never heard of it.
In a city like that you can see wheremuch of it is the one-story type of city you expect and then you find a new area where there are 40 skyscrapers built in just two years. Jobs are plentiful, the economy was not touched by the recent
economic crisis and most important Brazil is becoming a powerhouse in agriculture.
It only makes sense because while American or British farmer gets one crop a year, with the climate in
Brazil you can get up to two and a half crops a year in this area and industrial farming is just booming. Visit a dairy farm that has 750 cows where everything is known about those animals, from the computerized chips on their legs to the fact that for every 500meters they walk they lose a liter of milk production a day. The farm is going from 750 cows to 7500. Brazil is going to feed the world.
But Brazil is missing one big thing and that is because the constant rains leach the soils and they have to import 90%-95% of all the fertilizers they need. Today Amazon announces drilling results, coming up with 45 meters at 11.8% KTO from surface. This is no big surprise as when you tour the property, along it’s 100 km long and 6 km wide structure, you can see showings at surface everywhere. There is little doubt there’s lots of rock there.
What isn’t known yet is how the thermopotash process is going to work...it’s quite different from the traditional potash that is mined deep and expensively in Western Canada.
We catch up with Jed Richardson, COO, of Amazon, and he gives us a bit of a time frame of what to expect over the coming year. Drilling, he suggests, should continue until mid-January and there might be a crude idea of what kind of resource they may have by early February. A preliminary scoping study should be completed on their project by the end of the first quarter of next year.
But the big debate here is on the thermal potash and what kind of cost it is going to be to develop the fertilizer and what they’ll be able to charge for it. Small scale production of the potash should be applied to fields as early as February/March and by July/August the first crop should be giving them an idea of whether it is having the desired effect or not.
The reaction on the 4 month farming season on the soy and corn versus the immense eucalyptus plantations which tend to give you an idea a little bit sooner. Again you have to see the size of agriculture in Brazil to understand the importance of all of this, particularly when you pick up the other little tidbits such as most railways in Brazil are narrow gauged so if you are shipping fertilizers from the coast, it can be very expensive, and then you see the roads that are packed with trucks, so something local could be that important.
It is our nominee for the lottery ticket of the coming year. We feel that within six to eight month so you’ll know whether it is a lottery ticket like so many that are thrown away or cashed in for a nice reward.