Azucar Minerals Ltd T.AMZ

Pescod and JED

[Rocketred500]

POTASH CORP OF SASK. (T-POT) $154.86 +3.11

AMAZON MINING (V-AMZ) $2.65 unch.

GREAT QUEST METALS (V-GQ) $1.43 +0.02

Amongst the interesting people we've gotten to know over

the last while, there is one who stands out and that’s former

Sprott mining analyst Jed Richardson. He left the job with

Sprott to take over the Vice President role at Amazon Mining and

over the last year or two, he’s given us some interesting stock

picks.

Of note, is that when he was doing some research for Amazon,

he came across Great Quest Metals, a company he helped

a bit and ended up becoming a director on after he had given it

as a stock pick. That stock pick has since become a fourbagger

since he suggested it.

He finally has time to e-mail us a comment from Brazil, this is

what he writes:

“Life has comeback in a strong way to the fertilizer and agriculture

sectors. My two favourite companies Amazon Mining

and Great Quest Metals have begun to benefit. The catalysts are

more macro than the achievement of company specific milestones,

though our successful nutrient availability test at Amazon

is good reason for renewed investor confidence. Drought in

Russia, has prompted that government to halt exports of wheat

to ensure the country can feed its populace, with Ukraine

threatening to curtail export quotas for the same reason. By

2009 estimates Russia was the world’s third largest exporter of

wheat and Ukraine was the 6th largest. To add insult to injury

Australia the world’s 4th largest wheat exporter announced lack

of rain could reduce their wheat for export by 33% this year.

Share prices across the sector have climbed, as savvy investors

gobbled up their favourite agriculturally related investments

to help them pay for groceries this fall. Prompting the

most exciting development of all BHP’s bid for Potash Corp.

This is great news for Amazon and our shareholders. BHP

was planning to build the largest new potash project in the

world, the capital investment a staggering $10BB with production

expected late this decade. I see BHP’s bid as an admission

that building a new conventional mine is not a feasibly economic

way to enter this sector as a major player. Confirming

what Bill Doyle, CEO of Potash Corp has been saying all along

and our thinking at Amazon, that new conventional potash

mines are not good investments, the thinking that lead us to

embark on our lower CapEx shorter build time Cerrado Verde

ThermoPotash project. I do expect BHP will be successful in

acquiring Potash Corp, but they will have to increase the bid.

Potash Corp. of Saskatchewan

Amazon Mining

David Pescod T: 780.408.1750 Debbie Lewis T: 780.408.1748 Fax: [phone] Page 2

However don’t hold out for a white knight Vale is the

only company that has the firepower and appetite to compete

for PCS and after the mess their takeover of Inco has

caused Prime Minister Harper would be committing political

suicide if he didn’t stop a Vale takeover of another major

Canadian asset. While investors may be rooting around

for the next takeover, the surest way to make money after

one these multi-billion dollar pure plays are gobbled up is

to position yourself for the back draft created in the Canadian

market. Upwards of $43 billion of capital is currently

tied up in Potash Corp all of it wants to be invested in fertilizer

and exposed to agriculture. After the company is swallowed

into BHP a diversified mega-miner most of that capital

will be looking for a new home. The purchase of Inco

made Sherritt and FNX Mining must have equities for institutional

investors across Canada, in the same Rio Algom

then Noranda/Falconbride, was a boon for shareholders of

First Quantum and Teck Resources. Even more recently

Red Back Mining’s merger with Kinross has institutions

scrambling for a new exposure to West African gold in

names like Semafo, Keegan and Golden Star. At Amazon

we want to position ourselves as an emerging potash producer

worthy of some of that capital as investors look for

new ways to participate in fertilizer and agriculture.”

Disclosure: Potash Corp. of Sask: Canaccord Genuity covers this stock and has a Buy rating on it. (Buy: The stock is expected to generate

risk-adjusted returns of over 10% during the next 12 months.)

DEB’S DITTY:

My boyfriend has no trouble committing...adultery.