Amazon Mining Holding Plc
TSX VENTURE : AMZ

Amazon Mining Holding Plc

November 24, 2008 11:46 ET

Amazon Stakes Major Brazilian Potash Opportunity

TORONTO, ONTARIO--(Marketwire - Nov. 24, 2008) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Attention Business Editors:

Amazon Mining Holding Plc (TSX VENTURE:AMZ)("Amazon" or the "Company") is pleased to announce it has staked a large mineral occurrence of a potash bearing rock known as verdete slate ("Verdete"), which is believed to be uniquely suited to Brazil's fertilizer needs. The Cerrado Verde project ("Cerrado Verde") consists of 84 claims covering 165,069 hectares and is located on the western part of Minas Gerais state, in the heart of the country's agricultural region.

The Cerrado Verde development focus is to achieve the economic recovery of potash from sedimentary deposits of the Serra da Saudade Formation. The main potassium-bearing minerals of Verdete are glauconite (a hydrated potassium-iron silicate) and sericite (a monoclinic, basic potassium aluminosilicate of the mica group), with K(2)O contents ranging from 5% to 14%.

VALE (formerly CVRD) controls a significant block of exploration licenses adjacent to Cerrado Verde. VALE's properties were staked shortly after Amazon's claims. The accompanying map shows each company's titles holdings; Amazon's claims are labelled FVS for the Brazilian operating subsidiary. Amazon controls the majority of the Verdete outcrop. (see http://files.newswire.ca/760/cerrado_verde.pdf)

Thermo-Potash and Agricultural History

Amazon is investigating the viability of applying a pyrometallurgical treatment process to deliver a semi-soluble thermopotash product or directly combining the Verdete with a phosphate rock to create thermophosphate potash. Pyrometallurgical treatment is commonly used in the production of high quality phosphate. Amazon has been able to access 25 years of agronomical and metallurgical studies from Brazilian Universities and Technological Centers that suggest thermopotash is the ideal fertilizer product for Brazil's nutrient poor, well drained acidic soils. Thermophosphate is a premium product in Brazil and one that has been successfully marketed locally for over 40 years. It is recognized for its long retention time in soils, which is important in an environment where heavy tropical rains often wash away, or significantly dilute, highly soluble product nutrients such as KCl (potassium chloride, most commonly used potassium mineral for fertilizer).

Research by Dr. Eichler (1983), Agronomic Engineer, showed that a mixture of 50% Verdete and 50% magnesian limestone, heated at 1,100 degrees C ("TKL") is an efficient source of potash. Importantly, TKL and KCl (which is imported into Brazil from international markets), had equivalent yield impacts despite the lower concentrations of potassium in the former. The thermopotash product also had a longer residual impact on crops over successive plantings.

Studies made by Dr. Leite (1985), Agronomic Engineer and Dr. Valarelli et al. (1993), Mineralogist, which included pilot plant and agronomic tests, showed the development of Thermophosphate Potash Calcium-Magnesium ("TKP") from a mixture of Verdete, phosphate rock, and magnesian limestone. Both TKL and TKP not only provided potash but also assisted correcting soil acidity; a problem in Brazil's savannah region and many tropical soils globally.

The availability and low cost of imported potash from evaporite deposits through the 1980's and 1990's discouraged the development of Brazil's Verdete as a potassium source. Amazon plans a technical re-evaluation in the context of increased and changing agricultural demands in Brazil and technological advancements.

Brazil's Potash Market

Brazil is one of the world's leading exporters of agricultural products and this sector is a large and growing contributor to Brazil's GDP. Examples of major exported cash crops include soybean, corn, sugar, and coffee. It is also a world leader in renewable energy through sugarcane and eucalyptus. All of these agricultural products require usage of fertilizers in order to ensure optimum yields.

With its large and growing agricultural sector, Brazil is currently the world's second largest importer of potash behind China. Out of a total annual potash consumption of 4.3MM T in 2007 (Brazilian Government Statistics), imports accounted for 90% of the country's needs. High KCl prices which reached $1100 per ton in 2008 and logistic costs make Brazil one of the most expensive places in the world to buy potash, which erodes profits for the farmers and tax revenues for the government. Brazilian farmers customarily use sub-optimal concentrations of fertilizer for their crops because of the high costs of imported product. In addition there is a vast region of arable savannah land in Brazil known as the Cerrado that is only partially planted because the soil lacks the nutrients needed to support cash crops, and the quantity of imported fertilizer required discourages investments.

Due to the above, Amazon believes the potential attractiveness of a semi-soluble thermopotash product will provide financing opportunities from government, land funds, growers associations, and established fertilizer distributors and joint ventures. Sticking to its stated goal, Amazon is exploring options for advancing Cerrado Verde with minimal use of its capital.

President and Chief Executive Officer Cristiano Veloso said, "Thermofertilizers are a logical home grown solution to Brazil's increasing fertilizer needs and hold significant potential to reduce the country's dependence on expensive imports. Given the significance of agriculture as an integral part of the Brazilian economy, utilizing Verdete as a potash source could materially strengthen the sector. Amazon's strong base in Brazil should afford the Company advantage in generating support to develop Cerrado Verde."

Amazon Broadens Scope Beyond Gold

The Company believes potash in Brazil is in a unique position to receive financing from government and other alternative sources, and because of the link between potash and food supply it will continue to have strong pricing through an economic downturn. In the current economic environment, it is prudent to assess opportunities to build shareholder value beyond the core focus of gold.

About Amazon

Amazon is engaged in creating shareholder value via cost effectively advancing the Madeira Gold Project and the Cerrado Verde Potash Project, while diligently assessing merger and acquisition opportunities. Given the current and foreseeable economic climate, Amazon is preserving cash and adopting a highly conservative approach to assessing opportunities.

Competent Person

As required by Canadian National Instrument 43-101, Amazon's designated qualified person required for review of the technical and scientific information herein contained is Dr. Joao Batista G. Teixeira, Chief Geoscientist of the Company.

On behalf of the Board of Directors of Amazon Mining Holding Plc,

Cristiano Veloso, President & Chief Executive Officer

Cautionary Language and Forward Looking Statements

THIS PRESS RELEASE CONTAINS CERTAIN "FORWARD LOOKING STATEMENTS", WHICH INCLUDE BUT IS NOT LIMITED TO, STATEMENTS WITH RESPECT TO THE FUTURE FINANCIAL OR OPERATING PERFORMANCE OF THE COMPANY, ITS SUBSIDIARIES AND ITS PROJECTS, STATEMENTS REGARDING USE OF PROCEEDS, EXPLORATION PROSPECTS, IDENTIFICATION OF MINERAL RESERVES, COSTS OF AND CAPITAL FOR EXPLORATION PROJECTS, EXPLORATION EXPENDITURES, TIMING OF FUTURE EXPLORATION AND PERMITTING, REQUIREMENTS FOR ADDITIONAL CAPITAL, GOVERNMENT REGULATIONS OF MINING OPERATIONS, ENVIRONMENTAL RISKS, RECLAMATION EXPENSES, TITLE DISPUTES OR CLAIMS, AND LIMITATIONS OF INSURANCE COVERAGE. FORWARD LOOKING STATEMENTS CAN GENERALLY BE IDENTIFIED BY THE USE OF WORDS SUCH AS "PLANS", "EXPECTS", OR "DOES NOT EXPECT" OR "IS EXPECTED", "ANTICIPATES" OR "DOES NOT ANTICIPATE", OR "BELIEVES", "INTENDS", "FORECASTS", "BUDGET", "SCHEDULED", "ESTIMATES" OR VARIATIONS OF SUCH WORDS OR PHRASES OR STATE THAT CERTAIN ACTIONS, EVENT, OR RESULTS "MAY", "COULD", "WOULD", "MIGHT", OR "WILL BE TAKEN", "OCCUR" OR "BE ACHIEVED". FORWARD LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SAID STATEMENTS. THERE CAN BE NO ASSURANCES THAT FORWARD-LOOKING STATEMENTS WILL PROVE TO BE ACCURATE, AS ACTUAL RESULTS AND FUTURE EVENTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN SAID STATEMENTS. ACCORDINGLY, READERS SHOULD NOT PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS.

Readers are cautioned not to rely solely on the summary of such information contained in this release and are directed to the complete set of drill results posted on Amazon's website (www.amazonplc.com) and filed on SEDAR (www.sedar.com) and any future amendments to such. Readers are also directed to the cautionary notices and disclaimers contained herein.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release and the information contained herein.

Contact Information

  • Amazon Mining Holding Plc
    Cristiano Veloso
    President & Chief Executive Officer
    +44 (0) 20 8133 7607
    +44(0)20 7405 7773 (FAX)
    Email: cv@amazonplc.com

    Amazon Mining Holding Plc
    Jed Richardson
    VP Corporate Development
    (416) 866-2966
    (416) 866-8829 (FAX)
    Email: jed@amazonplc.com
    Website: www.amazonplc.com