Mr. Cristiano Veloso reports
DRILLING CONFIRMS EXTENSIVE PHOSPHATE MINERALIZATION AT THE APATITA PROJECT, BRAZIL
AmazonMining Holding PLC has released the results for the initial drillingcampaign at the Apatita phosphate project located adjacent to itsCerrado Verde potash project in Minas Gerais state, Brazil. The programconsisted of 12 holes for a total of 1,022 metres of HQ-sized diamondcore.
The company is encouraged by success on two of three phosphate prospectstested at Apatita. Phosphate values at the Alto da Serra and Nau deGuerra prospects warrant further drilling, with substantial tonnagepotential defined. Drilling in the two prospects identified mineralizedphosphate between 0.01 per cent and 9.57 per cent phosphorus pentoxidewith widths of between one metre and 22 m. The company plans to continuedrilling, targeting a 43-101-compliant resource estimate. In addition,Amazon will continue its exploration on five other prospects that havebeen identified along a 30-kilometre strike length by theregional-mapping and surface-grab-sampling program (see Amazon's pressrelease in Stockwatch on Nov. 8, 2010). Drilling at the Matutinaprospect, located over five km away from the Alto da Serra and Nau deGuerra prospects, only encountered low-grade mineralization. Nine drillholes were completed in this prospect.
Brazil is the world's second largest importer of phosphate. In 2008,more than 45% of the 3.2Mt of P2O5 consumed was imported. Early in 2010Vale S.A. spent nearly 6 Billion US dollars acquiring seven mainphosphate assets. Six of which are located less than 250km away fromAmazon's Cerrado Verde Potash project. The P2O5 grade for Vale'srecently acquired Brazilian phosphate assets range from 5.45% to 11.12%P2O5.
The initial drilling at Apatita was primarily planned to definethe width of mineralized phosphate within the Areado group (Sequence offlat lying sediments which unconformably overlie the Verdete Slate unit(The Verdete Slate hosts the Cerrado Verde Potash mineralization)).Table 1 shows a summary of Alto da Serra and Nau de Guerra prospectsdrilling results with a 1.5% P2O5 cut off applied.
-------------------------------------------------------------------------Table 1Apatita ProjectAlto da Sera and Nau de Guerra Prospects-------------------------------------------------------------------------Hole_ID Prospect from to width P2O5(1.5 % cut off)-------------------------------------------------------------------------AP-MA-02 Alto da Serra 34m 52m 18m 3.00%-------------------------------------------------------------------------including Alto da Serra 35m 40m 5m 6.09%-------------------------------------------------------------------------Including Alto da Serra 37m 39m 2m 9.49%-------------------------------------------------------------------------AP-MA-05 Nau de Guerra 4m 26m 22m 2.64%-------------------------------------------------------------------------Including Nau de Guerra 10m 26m 16m 3.00%-------------------------------------------------------------------------and Nau de Guerra 35m 36m 1m 8.43%-------------------------------------------------------------------------AP-MA-06 Nau de Guerra 83m 90m 7m 3.88%-------------------------------------------------------------------------Including Nau de Guerra 87m 90m 3m 6.35%-------------------------------------------------------------------------(ii) The drillholes were not sampled from surface.
Alto da Serra prospect surface mapping and grab sampling have identifieda mineralized surface expression of 4.5km2 and the 48 surface grabsamples taken in this prospect averaged 8.2% P2O5. AP-MA-02 drill holecompleted in this prospect highlights high grade potential (2m at 9.49%P2O5) and low grade bulk tonnage potential (18m at 3.00% P2O5).
Nau de Guerra prospect surface mapping and grab sampling have identifieda mineralized surface expression of 4.8km2 and the 64 surface grabsamples taken in this prospect averaged 6.45% P2O5. Drill holescompleted have intercepted high grade sedimentary units with drill holeAP-MA-06 returning 7m at 3.88% P2O5 including 3m at 6.35% and drill holeAP-MA-05 returning 16m at 3% P2O5 and 1m at 8.43%. These two holes arelocated approximately 2km apart in flat lying sedimentary beds.
All mineralized phosphate identified to date has been from the mappingof the sides and tops of the 50m to 200m high hills. These hills whichrepresent the sedimentary rocks of the Areado group will present minimalstripping ratio from an open pit mining perspective. The Areadosedimentary package is also a very soft and permeable package of rocksthat will be amenable to "free dig" and/or minimal blasting along withpotential in situ leaching methods of mining.
President & CEO Cristiano Veloso commented "Given the favourablemining factors combined with the positive initial metallurgicaltestwork (reported in the November 8, 2010 press release), Amazon willexplore the possibility of producing conventional fertilizers such asSSP, STP, MAP and DAP from the phosphate at Apatita. In addition, theCompany will pursue the possibility of producing an innovativeThermoPotash Phosphate product. Mitsui has been selling ThermoPhosphatein Brazil since the 1960's. The combination of phosphate withThermoPotash could substantially increase the potential market forAmazon's proposed product. Potentially, manufacturing this P-K productwould also represent limited additional capital and operationalexpenditures as both potash and phosphate rocks would be processed inthe same rotary kiln already required for ThermoPotash."