43-101 scoping study

NI 43-101 Preliminary Economic Assessment Cerrado Verde Potash Project

Minas Gerais, Brazil

Prepared for: Amazon Mining Holding Plc

19 Cedar Road Sutton, Surrey SM2 5DA UK

Prepared by:

7175 W. Jefferson Ave.

Suite 3000 Lakewood, Co 80235

SRK Project Number: 343500.010

Effective Date: March 1, 2010 Report Date: December 13, 2010

Endorsed by Qualified Persons: Neal Rigby, CEng, MIMMM, PhD

Rob Bowell, Ph.D, C.Chem MRSC, C. Geol FGS Bret Swanson, MAusIMM, BE (Mining)

Jerry Aiken, P.G., MSc Gielson Coutinho, MSAIMM, BSc

Antonio Carlos Girodo, MSAIMM, BSc

Amazon Mining Holding Plc i Cerrado Verde Project NI 43-101 Preliminary Economic Assessment

SRK Consulting (U.S.), Inc. December 13, 2010 Cerrado Verde_NI 43-101 PEA_343500 010_Final_20101213_013.docx

Table of Contents 1 INTRODUCTION (ITEM 4) ........................................................................................... 1-1

1.1 Terms of Reference and Purpose of the Report ................................................... 1-11.2 Qualifications of Consultants ............................................................................... 1-1

1.2.1 Site Visit................................................................................................ 1-21.3 Reliance on Other Experts (Item 5) ..................................................................... 1-2

1.3.1 Sources of Information ......................................................................... 1-21.4 Effective Date ...................................................................................................... 1-21.5 Units of Measure .................................................................................................. 1-2

2 PROPERTY DESCRIPTION AND LOCATION (ITEM 6) ........................................... 2-12.1 Property Location................................................................................................. 2-12.2 Mineral Titles ....................................................................................................... 2-12.3 Location of Mineralization .................................................................................. 2-52.4 Royalties, Agreements and Encumbrances .......................................................... 2-52.5 Environmental Liabilities and Permitting ............................................................ 2-5

3 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY (ITEM 7) ...................................................................................................... 3-1

3.1 Topography, Elevation and Vegetation ............................................................... 3-13.2 Climate and Length of Operating Season ............................................................ 3-13.3 Physiography........................................................................................................ 3-13.4 Access to Property ............................................................................................... 3-23.5 Surface Rights ...................................................................................................... 3-23.6 Local Resources and Infrastructure ..................................................................... 3-2

3.6.1 Access Road and Transportation .......................................................... 3-23.6.2 Power Supply ........................................................................................ 3-33.6.3 Water Supply ........................................................................................ 3-33.6.4 Buildings and Ancillary Facilities ........................................................ 3-53.6.5 Potential Processing Plant Sites ............................................................ 3-53.6.6 Potential Tailings Storage Area ............................................................ 3-53.6.7 Manpower ............................................................................................. 3-63.6.8 Other Surface Rights ............................................................................. 3-6

4 HISTORY (ITEM 8) ........................................................................................................ 4-14.1 Ownership ............................................................................................................ 4-14.2 Past Exploration and Development ...................................................................... 4-14.3 Historic Mineral Resource and Reserve Estimates .............................................. 4-14.4 Historic Production .............................................................................................. 4-1

5 GEOLOGICAL SETTING (ITEM 9) .............................................................................. 5-15.1 Regional Geology ................................................................................................ 5-15.2 Local and Project Geology ................................................................................... 5-1

5.2.1 The Verdete Unit................................................................................... 5-15.2.2 Structure ................................................................................................ 5-15.2.3 Elevation and Erosion Level ................................................................. 5-2

6 DEPOSIT TYPE (ITEM 10) ............................................................................................ 6-16.1 Geological Model ................................................................................................. 6-1

Amazon Mining Holding Plc ii Cerrado Verde Project NI 43-101 Preliminary Economic Assessment


7 MINERALIZATION (ITEM 11) ..................................................................................... 7-17.1 Mineralized Zones ............................................................................................... 7-17.2 Surrounding Rock Types ..................................................................................... 7-1

8 EXPLORATION (ITEM 12) ........................................................................................... 8-19 DRILLING (ITEM 13) .................................................................................................... 9-1

9.1 Type and Extent of Drilling ................................................................................. 9-110 SAMPLING METHOD AND APPROACH (ITEM 14) ............................................... 10-1

10.1 Reverse Circulation (RC) Sampling .................................................................. 10-110.2 Logging .............................................................................................................. 10-110.3 Bulk Density ...................................................................................................... 10-1

11 SAMPLE PREPARATION, ANALYSES AND SECURITY (ITEM 15) .................... 11-111.1 Sample Security ................................................................................................. 11-111.2 Sample Preparation and Analysis ...................................................................... 11-111.3 Adequacy of Procedures .................................................................................... 11-111.4 Sample Preparation and Assaying Methods ...................................................... 11-111.5 Quality Controls and Quality Assurance ........................................................... 11-1

12 DATA VERIFICATION (ITEM 16) ............................................................................. 12-112.1 Bureau Veritas Pulp Duplicates ......................................................................... 12-212.2 Adequacy of Procedures .................................................................................... 12-212.3 Limitations ......................................................................................................... 12-2

13 ADJACENT PROPERTIES (ITEM 17) ........................................................................ 13-114 MINERAL PROCESSING AND METALLURGICAL TESTING (ITEM 18) ........... 14-1

14.1 Summary of Proposed Process ........................................................................... 14-114.1.1 Overview ............................................................................................. 14-114.1.2 Project Scenarios and Capital Costs ................................................... 14-214.1.3 Product specification and application ................................................. 14-314.1.4 Results of Agronomic Testwork ......................................................... 14-314.1.5 Summary, Residual issues and recommendations .............................. 14-6

15 MINERAL RESOURCES (ITEM 19) ........................................................................... 15-115.1 Introduction ........................................................................................................ 15-115.2 Geological Modeling ......................................................................................... 15-115.3 Block Model Development ................................................................................ 15-115.4 Statistical Analysis ............................................................................................. 15-215.5 Variography ....................................................................................................... 15-2

15.5.1 Introduction ......................................................................................... 15-215.6 Grade Estimation ............................................................................................... 15-315.7 Resource Reporting ............................................................................................ 15-5

15.7.1 Validation ............................................................................................ 15-716 OTHER RELEVANT DATA AND INFORMATION (ITEM 20) ............................... 16-117 ADDITIONAL REQUIREMENTS FOR DEVELOPMENT PROPERTIES AND PRODUCTION (ITEM 25) ....................................................................................................... 17-1

17.1 Mining Operations ............................................................................................. 17-117.1.1 Pit Optimization .................................................................................. 17-117.1.2 Whittle Parameters .......................................................................... 17-1

Amazon Mining Holding Plc iii Cerrado Verde Project NI 43-101 Preliminary Economic Assessment


17.1.3 Pit Optimization Analysis ................................................................... 17-317.1.4 Pit Design ............................................................................................ 17-417.1.5 Production Schedule ........................................................................... 17-5

17.2 Mining Method .................................................................................................. 17-617.2.1 Recoverability ..................................................................................... 17-7

17.3 Markets .............................................................................................................. 17-817.3.1 Introduction ......................................................................................... 17-817.3.2 Methodology ....................................................................................... 17-917.3.3 Determining the crop portfolio and formulas ..................................... 17-917.3.4 Formula optimization process ........................................................... 17-1017.3.5 ThermoPotash Pricing Process ......................................................... 17-1117.3.6 Process to determine the potential market for ThermoPotash .......... 17-12

17.4 Contracts .......................................................................................................... 17-1217.5 Environmental Considerations ......................................................................... 17-12

17.5.1 Remediation ...................................................................................... 17-1217.5.2 Reclamation ...................................................................................... 17-12

17.6 Taxes and Royalties ......................................................................................... 17-1317.7 Capital Costs .................................................................................................... 17-14

17.7.1 Payback ............................................................................................. 17-1517.8 Operating Costs ................................................................................................ 17-1517.9 Economic Analysis .......................................................................................... 17-17

17.9.1 Sensitivity ......................................................................................... 17-1817.9.2 Mine Life .......................................................................................... 17-18

18 INTERPRETATION AND CONCLUSIONS (ITEM 21) ............................................ 18-119 RECOMMENDATIONS (ITEMS 22) .......................................................................... 19-1

19.1 Recommended Work Programs ......................................................................... 19-119.1.1 Resources ............................................................................................ 19-119.1.2 Metallurgical ....................................................................................... 19-119.1.3 Mining ................................................................................................. 19-119.1.4 Costs .................................................................................................... 19-2

20 REFERENCES (ITEM 23) ............................................................................................ 20-121 GLOSSARY .................................................................................................................. 21-1

21.1 Mineral Resources ............................................................................................. 21-121.2 Mineral Reserves ............................................................................................... 21-121.3 Glossary ............................................................................................................. 21-2

List of Tables Table 1: Indicative Economics ..................................................................................................... IV

Table 2.2.1: Cerrado Verde Potash Project Tenement Schedule ................................................ 2-2

Table 9.1.1: Cerrado Verde Potash Project Summary Drilling Statistics ................................... 9-1

Table 12.1: Standards Utilized by Bureau Veritas .................................................................... 12-2

Amazon Mining Holding Plc iv Cerrado Verde Project NI 43-101 Preliminary Economic Assessment


Table 14.1.2.1: Results of Carbon Speciation Analysis on Two Samples from the Scoping Level Pilot Plant ....................................................................................................................... 14-3

Table 14.1.4.1: K content in soil (Mehlich 1) After 60 Days of Incubation with Different Sources of Potassium in a Clay Soil. ............................................................................. 14-4

Table 14.1.4.2: K Content in Soil (Mehlich 1) After 60 Days of Incubation with Different Sources of Potassium in a Sandy Soil. ........................................................................... 14-4

Table 14.1.4.3: Exchangeable Ca in the soil after 60 days of incubation with different sources of potassium in a clay soil. ................................................................................................. 14-5

Table 14.1.4.4: Exchangeable Ca in the soil after 60 days of incubation with different sources of potassium in a sandy soil. .............................................................................................. 14-5

Table 14.1.4.5: Exchangeable Mg in the soil after 60 days of incubation with different sources of potassium in a clay soil. ............................................................................................. 14-5

Table 14.1.4.6: Exchangeable Mg in the soil after 60 days of incubation with different sources of potassium in a sandy soil. .......................................................................................... 14-6

Table 15.3.1: Block Model Summary ....................................................................................... 15-2

Table 15.4.1: Summary Statistic 2m Composites .................................................................. 15-2

Table 15.5.1.1: Cerrado Verde Deposit Unweathered and Weathered Mineralized Domain Variogram Models ......................................................................................................... 15-3

Table 15.7.1: Cerrado Verde Project Confidence Levels of Key Categorization Criteria ....... 15-6

Table 15.7.2: Cerrado Verde Deposit 27 February 2010 Inferred Resource Grade Tonnage Report Ordinary Kriging Estimate 100mE x 100mN x 5mRL Selective Mining Unit . 15-7

Table 17.1.2.1: Whittle Block Model Dimensions ............................................................... 17-2

Table 17.1.2.2: Whittle Parameters ....................................................................................... 17-3

Table 17.1.3.1: Whittle Results ............................................................................................. 17-4

Table 17.1.4.1: Pit Design Parameters ...................................................................................... 17-4

Table 17.1.5.1: First 10 years of 1.1Mtpa production schedule. .............................................. 17-5

Table 17.1.5.2: First 10 years of 2.2Mtpa production schedule. .............................................. 17-6

Table 17.2.1: 1.1Mtpa Product Mine Fleet and Annual Estimated Cost .................................. 17-7

Table 17.2.2: 2.2Mtpa Product Mine Fleet and Annual Estimated Cost .................................. 17-7

Table 17.3.3.1: Example of fertilizing System Adopted for Each Crop Analyzed. ............... 17-10

Table 17.3.4.1: Price Composition of Raw Materials at the Uberaba Center. ........................ 17-11

Table 17.3.4.2: Raw Material Nutrient Levels ....................................................................... 17-11

Table 17.3.4.3: Content Used and Status of Products Evaluated............................................ 17-11

Table 17.7.1: Summary Capital Cost by Facility in Reals and United States Dollars, Including Applicable Taxes for a 1.1Mtpa Operation. ................................................................. 17-14

Amazon Mining Holding Plc v Cerrado Verde Project NI 43-101 Preliminary Economic Assessment


Table 17.7.2 Summary Capital Cost by Facility in Reals and United States Dollars, Including Applicable Taxes for a 2.2Mtpa Operation .................................................................. 17-15

Table 17.8.1: Summary of Operational Costs, 1.1Mtpa using Petroleum Coke ...................... 17-16

Table 17.8.2: Summary of Operational Costs, 2.2Mtpa using Petroleum Coke ...................... 17-17

Table 17.9.1: Indicative Economics ........................................................................................ 17-17

Table 17.9.1.1: Sensitivity Analysis ....................................................................................... 17-18

Table 19.1.4.1: Recommended Prefeasibility Work Program Cost Estimate (US$000s) ....... 19-2

Table 21.3.1: Glossary .............................................................................................................. 21-2

Table 21.3.2: Abbreviations ...................................................................................................... 21-3

List of Figures Figure 2-1: Location Plan of Cerrado Verde Potash Project ...................................................... 2-7

Figure 3-1: Cerrado Verde Project Site ...................................................................................... 3-1

Figure 3-2: Cerrado Verde Project Site Schematic ..................................................................... 3-2

Figure 5-1: Cerrado Verde Regional Setting .............................................................................. 5-3

Figure 5-2: Cerrado Verde Project Geology ............................................................................... 5-4

Figure 8-1: Tenements Drilled by Amazon ................................................................................ 8-2

Figure 8-2: Drillhole Location Plan ............................................................................................ 8-3

Figure 11-1: RC Drilling Flowchart ......................................................................................... 11-3

Figure 12-1: Field Duplicates All Sample Data (Includes NQ and HQ Core 0.3 to 5m) ...... 12-3

Figure 14-1: Conceptual Flowsheet for Cerrado Verde ThermoFertilizer Project ................... 14-7

Figure 15-1: Vertical Sections Location ................................................................................... 15-9

Figure 15-2: Cross Section (Section 4) ................................................................................... 15-10

Figure 15-3: Cross Section (Section 5) ................................................................................... 15-11

Figure 15-4: Weathered (Transition Zone) Domain 3 Dimensions ..................................... 15-12

Figure 15-5: Unweathered Domain 3 Dimensions .............................................................. 15-13

Figure 15-6: Sample Length Distribution ............................................................................... 15-14

Figure 15-7: Basic Statistics 2m Composite Unweathered K2O ......................................... 15-15

Figure 15-8: Basic Statistics 2m Composite Weathered K2O ............................................. 15-16

Figure 15-9: K2O % Estimation Steps Plan View ............................................................... 15-17

Figure 15-10: Block Model Domains High and Weathered ................................................... 15-18

Figure 15-11: Grade Tonnage Curve Domain Unweathered - Inferred Resource ............... 15-19

Amazon Mining Holding Plc vi Cerrado Verde Project NI 43-101 Preliminary Economic Assessment


Figure 15-12: Grade Tonnage Curve Weathered- Inferred Resource ................................... 15-20

Figure 15-13: Comparative Statistics Unweathered % K2O ................................................... 15-21

Figure 15-14: Comparative Statistics % K2O Weathered ....................................................... 15-22

Figure 17-1: Preliminary Pit Design ....................................................................................... 17-19

List of Appendices

Appendix A Certificate of Author Forms

Amazon Mining Holding Plc I Cerrado Verde Project NI 43-101 Preliminary Economic Assessment


Summary (Item 3) Property Description and Location The Cerrado Verde Potash Project is located in the Alto Paranaiba region of Minas Gerais State, Brazil (Figure 2-1). The boundaries of the concessions have not been surveyed as this is not a requirement of Brazil's mining code. The tenement boundaries are defined by UTM coordinates with the datum of SAD69 (Centered around coordinates 394,525 East and 7,856,531 North).

Ownership Cerrado Verde mineral rights were originally requested by the company, by means of applications for exploration licenses filed with DNPM between 2008 and 2010. Several Cerrado Verde mineral rights have been granted exploration licenses as presented in this report.

The company applied for the mineral rights directly to the DNPM. There was no prior ownership of mineral rights.

Geology and Mineralization The region is mainly underlain by Neoproterozoic and Cretaceous rock units, which are partly covered by Cenozoic sandstones, lateritic sediments and soils. The oldest rocks, occurring in the southwestern portion of the region, are represented by a nucleus of calcoschists and diamictites of the Ibi Formation (Arax Group) surrounded by an undivided domain of the Canastra Group (quartzites, phyllites and micaschists). A model age of 1,000m.y. (207Pb/ 206Pb) has been determined for the Canastra Group, which was metamorphosed together with the Arax Group during the Brasiliano Orogeny (600m.y.). The sequence is followed by the Bambui Group (600-550m.y.), which comprises the marine deposits of the Paraopeba Formation, the Santa Helena Formation and the Serra da Saudade Formation, including the Verdete unit, all these units being dominated by variegated slates, and the overlying arkoses of the Trs Marias Formation. After deposition of the Bambui Group, and the Brasiliano Orogeny, the region was exposed to erosion during the Paleozoic, Triassic and Jurassic periods, giving rise to the development of a remarkable peneplane. On top of that flat lying surface, the terrigenous sediments of the Areado Group was deposited during the Lower Cretaceous. The next stratigraphic phase is recorded by the extensive and dominantly piroclastic kamafugitic volcanism of the Mata da Corda Group of Upper Cretaceous age.

With some exceptions the Verdete unit are dominantly lying on top of the Serra da Saudade Formation and underlying the Areado sandstone. Its apparent thickness varies from approximately 20m in the southernmost domain to over 50m in the northern half of the Serra da Saudade and up to 80m on the northern end where it started to be covered by younger sediments. The lower contact with the slates and metapelites of the Santa Helena Formation is transitional.

Glauconite is considered a diagnostic element indicative of continental shelf marine depositional environments with slow rates of accumulation. It develops as a consequence of diagenetic alteration of sedimentary deposits, bio-chemical reduction and subsequent mineralogical changes affecting iron-bearing micas such as biotite, and is also influenced by the decaying process of organic matter degraded by bacteria in marine animal shells. Glauconite forms under reducing conditions in sediments.

Amazon Mining Holding Plc II Cerrado Verde Project NI 43-101 Preliminary Economic Assessment


Exploration Amazon Mining has completed remote sensing targeting exercise followed by regional mapping and grab samples. In addition, Amazon completed a preliminary survey using an Innov-X portable XRF unit. The portable XRF unit was then correlated to pulp standards and showed good precision although returned a positive bias in the order of

Amazon Mining Holding Plc III Cerrado Verde Project NI 43-101 Preliminary Economic Assessment


It is predicted that a capital cost of US$155M will be required in order to construct an operation with a production rate of 1,170,000t/y of Verdete fertilizer. This equates to a unit cost of $133/t for capital cost allowance. For the 2.2Mtpa operation the overall capital cost is predicted to be US$218M and this equates to a unit cost of $187/t for capital cost allowance.

For the 1.1Mtpa pellet production rate, operating costs are estimated at US$36.93/t of pellets produced. For the 2.2Mtpa production rate operating costs are estimated at US$32.09/t of pellets produced. It should be noted this operating cost relates to a fertilizer containing approximately 8 to 10wt percent K2O.

The potassium source is only sparingly water soluble so recovery is anticipated to be better than 90% of the 8% retained potassium as K2O. Agronomic testwork indicates that Thermo-K provides a potentially superior source of nutrient enrichment in soils not only for potassium but also calcium and magnesium as well. In addition, the source of potash is a non-chloride, non-sulfate source of potash and thus will not adversely impact soil pH or salinity components. In addition, Amazon mining conducted mass balance procedures that indicate that nutrient release is not water soluble and requires a weak acid for leaching.

Resources Mineral resources were estimated by Coffey at a range of cut-off grades. Estimates ranged from 160Mt @8.75% K2O at a zero cut-off grade to 64Mt @11.17% K2O at a 10% cut-off grade. The resource estimate has been classified as inferred mainly due to the low confidence in the Bulk Density determinations, data density of distribution and the limited QAQC program provided by Amazon Mining. The actual model shows relative homogeneity and is a simple geological model.

Mining Operations Mining operations at Cerrado Verde will consist of small mining equipment liberating potentially minable resources hosted in gently undulating topography over a wide surface extent.

It is expected that mining will be conducted by a local 3rd party mining contractors with Amazon staff acting as mine owners. Initial static costing for mining operations is based a combination of track excavators; support equipment and 20t haul trucks.

Resource grades vary physically from an Unweathered zone on the western extent to a lower grade zone in the east. The grade distribution suggests two pits and multiple working faces can be open at all times for blending purposes feeding the process plant at a consistent 8.5% K2O.

Two production scenarios were considered by SRK whereby 1.1Mtpa and alternately 2.2Mtpa of product would be produced annually. SRK conducted a pit optimization, pit design and production schedules to independently test the assumptions made in mine costing and reported in the economic model.

Given the course nature of the resource model, the ability to sensitize or understand potential challenges to future mining operations is difficult to quantify. With a more refined and detailed block model containing lithology, grade and product distribution, the confirmation that the mine will produce the appropriate process plant feedstock can be verified and accurately costed.

This Preliminary Economic Assessment is preliminary in nature. It includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources

Amazon Mining Holding Plc IV Cerrado Verde Project NI 43-101 Preliminary Economic Assessment


that are not mineral reserves do not have demonstrated economic viability. There is no certainty that the preliminary assessment will be realized.

To accurately predict grade and quality of plant feedstock provided by the mine, a more complete understanding of the resource is required. In particular, the effect of K2O grade and mass yield calculations will effect what part of the mine is mined when and in what quantities.

With a detailed infill drill program, continuation of metallurgical testing and further engineering studies SRK recommends additional work be dedicated to effect of mine dilution, possible effect of deleterious elements, construction of mining costs from first principles, ROM production targets, waste dump design and haul profiles for contractor estimation. This can be included as part pre-feasibility study and will be required for any reserve generation in the future.

Indicative Economics The indicative economics for the 1.1Mtpa and 2.2Mtpa production rates are presented in Table 17.10.1. This clearly demonstrates the very encouraging economics for the Cerrado Verde Projects based on the cost projections and price assumptions as presented in this PEA.

However, readers are cautioned that this analysis is only a preliminary assessment based on inferred mineral resources, which are considered to be highly speculative geologically. Since there is no estimate of proven or probable reserves for the Cerrado Verde Potash Project, this assessment cannot include cash flow forecasts on an annual basis.

Table 1: Indicative Economics Production Rate 1.1Mtpy 2.2Mtpy NPV (10%) US$445.5M US$844.1M NPV (12%) US$331.6M US$642.0M IRR 32.7% 40.0% Opex US$41.80/t US$36.36 Initial Capex US$155.3M US$218.4M Contingency (15%) US$23.3M US$32.8M Pre-construction US$18.2M US$18.2M Total Capex US$196.8M US$269.4M Payback 2.38yrs 1.87yrs

*Note: The above figures include a sustaining capital provision of 2% per annum of direct capital costs commencing in year 4.

Recommendation The indicative economics from this scoping study and PEA are encouraging. It is therefore recommended that the project be advanced to the prefeasibility level of evaluation for which an outline work program is identified in this report.

Amazon Mining Holding Plc 1-1 Cerrado Verde Project NI 43-101 Preliminary Economic Assessment


1 Introduction (Item 4) 1.1 Terms of Reference and Purpose of the Report SRK Consulting (U.S.), Inc. (SRK) were mandated by Amazon Mining Holding Plc (Amazon) to coordinate the preparation of a National Instrument 43-101 (NI 43-101) Preliminary Economic Assessment (PEA) on the Cerrardo Verde ThermoFertilizer Project (or the Project) located in Minas Gerais, Brazil. The contributors and areas of responsibility are shown below.

Mineral Resource Estimation: Initially undertaken by Coffey Mining Pty (Coffey) and reviewed by SRK

Process and Infrastructure: ECM

Mine Planning: SRK

Metallurgical Review: SRK

Markets: AgroConsult

Environmental: Amazon

Indicative Economics: Amazon, ECM, AgroConsult and SRK

The requirements of a PEA are defined in the NI 43-101 Standards of Disclosure for Mineral Projects.

1.2 Qualifications of Consultants Neal Rigby of SRK Consulting is the Principal author of the Technical Report and incorporated the results of the Resource Estimate prepared by Porfirio Cabaleiro Rodrigues of Coffey Mining. SRK subsequently reviewed the resource estimate prepared by Coffey and made a number of recommendations for improved procedures and additional work. All persons are Qualified Persons, independent of Amazon Mining within the meaning of section 1.4 of NI 43-101.

The preliminary assessment is based on inferred mineral resources only that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

SRK Consulting is an independent, international consulting practice that provides focused advice and solutions to clients, mainly from earth and water resource industries. For mining projects, SRK offers services from exploration through feasibility, mine planning, and production to mine closure. Formed in 1974, SRK now employs more than 1,000 professionals internationally in 38 permanent staffed offices on 6 continents.

ECM, founded in 1984, is a Brazilian engineering company with extensive experience in developing multidisciplinary industrial projects of all sizes, including project design for the minerals and mining industry, from feasibility studies to plant commissioning. ECM has about 550 employees and has been involved in significant mining projects over the past decade in Brazil.



AgroConsult Consultoria & Marketing is a leading consulting company focused on agribusiness founded in 2000. Clients include: BHP Billiton, Bunge, Fosfertil, Petrobras, Heringer, Bayer, Santander, Citibank, John Deere, Banco do Brasil and Syngenta. AgroConsults team is comprised of a multi-disciplinary group of professionals who follow the market closely, prepare in depth analyses on the various agribusiness segments with a view to formulating short, medium and long term market trend reports on the main agricultural commodities as well as to developing customized studies and projects.

1.2.1 Site Visit Gielson Coutinho and Antonio Carlos Girodo both Qualifed Persons (QPs) with SRK visited the Cerrado Verde project site on 11th and 12th of December 2010. The other QPs did not visit the site since the Cerrado Verde Project is a Greenfield project with very little to gain or observe from a site visit. In addition, the QP from Coffey Mining, Beau Nicholls visited the site on 10th and 11th of July, 2009, in connection with the NI43-101 Report on resources prepared by Coffey Mining.

1.3 Reliance on Other Experts (Item 5) SRK has relied on and has reviewed the NI43-101 Technical Report on the Cerrado Verde Potash Project, Brazil, dated 1 March, 2010.

1.3.1 Sources of Information Information presented in this report has been provided by Amazon and its consultants. SRK has accepted this information in good faith and has provided comment and review of the data and information provided.

1.4 Effective Date The effective date of this report is March 1, 2010.

1.5 Units of Measure This report provides units of measurement in the standard metric set of units, unless otherwise specified.



2 Property Description and Location (Item 6) 2.1 Property Location The Cerrado Verde Potash Project is located in the Alto Paranaiba region of Minas Gerais State, Brazil (Figure 2-1). The boundaries of the concessions have not been surveyed as this is not a requirement of Brazil's mining code. The tenement boundaries are defined by UTM coordinates with the datum of SAD69 (Centered around coordinates 394,525 East and 7,856,531 North).

2.2 Mineral Titles The Cerrado Verde Potash Project comprises sixty seven (67) tenements, covering an aggregate area of 112,366ha as shown in Table 2.2.1 and Figure 2-1.



Table 2.2.1: Cerrado Verde Potash Project Tenement Schedule

1 831006/2009 FVS 4,79 Exploration License valid until 21/7/2013

-- Phosphate


FVS informed the existence of potassium rocks at the area on 28/01/2010.

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Comments MineralProcess Holder Size Status of Mining Right





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There is an administrative process aiming at DNPMs declaration that the Exploration License is null. (2)

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1.1.1 FVS informed the existence of potassium rocks at the area on 28/01/2010.

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65 830824/2010 APMM 1308,66Exploration License valid until 30/7/2013 -- Phosphate




Once an exploration license is granted, the Company must make annual fee payments to maintain the license, as explained in Section 17.6 of this report.

2.3 Location of Mineralization The potash mineralized zones of the Cerrado Verde Project are located within Verdete Slates of the Serra da Saudade Formation. The known mineralization is located in the concessions owned by the Company.

2.4 Royalties, Agreements and Encumbrances The tenements are owned 100% by FVS Minerao Ltda. that is a subsidiary of Amazon Mining. The Cerrado Verde Project was staked in the third quarter of 2008. The Companys subsidiary Amazon Pesquisa Mineral e Minerao Ltda (APMM) entered into a discovery contract (the Cerrado Verde Project Discovery Contract) dated September 29, 2008 (with retroactive term for July 26, 2008) with Ysao Munemassa (Ysao) pursuant to which Ysao performed, at the Companys expense, preliminary geological surveys and research studies on the Cerrado Verde Project area and the Cerrado Verde Project. The Cerrado Verde Project Discovery Contract was subsequently amended on July 27, 2010 to provide that APMM shall pay to Ysao: (a) 100,000 Stock Options one year after the application for exploration permits over the Cerrado Verde Project area to the National Department of Mineral Production (DNPM), (b) US$500,000 upon approval of a bankable feasibility study, and (c) a 3% royalty on the net result of production. APMM has the right to purchase the royalties due to Ysao at a cost of US$1,000,000 for each 1% of the protected right of royalty to Ysao.

2.5 Environmental Liabilities and Permitting The exploration program of the company foresees the implementation of the necessary work to obtain the environmental licenses, in due course.

Mining concessions can be applied for following a final exploration report to be submitted to, and approved by the Brazils Department of Mines and Energy (DNPM) by the final expiry date of the exploration license. The report must conclude and demonstrate that an economic mineral resource has been delineated and measured. Normally, a mining plan and feasibility study must be presented within a year. That is the moment for the environmental licenses.



Those of installation and a license of operations are then issued by the applicable environmental agency as a prerequisite to the granting of the mining concession. A mining concession is granted for a period covering the mine life until the mineral reserves of the deposit are exhausted. A mining concession does not convey title to a mineral deposit but provides the holder with the right to extract, process, and sell minerals extracted from the deposit in accordance with a plan approved by the DNPM and environmental authorities.

Environmental Regulation General environmental rules and obligations are relatively similar to those applicable in Canada. The Brazilian environmental policy is the responsibility of the Ministry of the Environment and is executed at three levels: federal, state, and municipal.

SRK performed an independent review of the current regulatory context of exploration activities in Brazil. SRK also consulted with Silva Martins, Vilas Boas, Lopes e Frattari Advogados (SMVBLFA), a law firm with prior knowledge of the environmental permitting activities of Amazon.

Based on the SRK review and consultation with SMVBLFA, the requirements stipulated in the environmental legislation for the mining activities, when the company is in this stage, is basically consolidated in the following:

Study of Environmental Impacts ("EIA");

Previous License ("LP");

Installation License ("LI");

Operational License (LO); and

Rehabilitation Plan for Degraded Areas ("PRAD"). An EIA is required as a condition for obtaining the LP for any activity which potentially causes substantial environmental impact. The LP, LI and LO are mandatory for installing, expanding, and operating any mining activity, except exploration, under the systems of mining concession or licensing. A PRAD requires suitable technical solutions to rehabilitate the soil and other aspects of the environment that might be degraded by mining operations. In recognition that the preparation of an EIA can represent a substantial financial burden for a smaller projects, a company can undertake a less detailed form of EIA called an "Environmental Diagnostic Report" in certain cases.

Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renovreis, the federal environmental agency, is in charge of the licensing of activities with environmental impacts in more than one state or in federal waters, while SUPRAM is in charge of the licensing of activities with environmental impacts within the State of Minas Gerais. The determination of competence between the two environmental bodies may cause overlap which may result in some cases in problems and delays for mining companies.

The proposed project, while in this phase of exploration, at first, will not require an environmental license. Parallel, the environmental reports are going to be prepared (EIA).

As of the date of this report, Amazon has not filed new environmental applications for the proposed exploration activities.

SRK did not perform a formal assessment of the environmental compliance history of the property. Based on records available for review, Amazon operates in accordance with Brazil legislation.

All licenses for the Cerrado Verde Potash Project have already been granted as shown in Table 2.2.1.

SRK Project No.: 343500.010

File Name: Figure_2-1.docx Date: 12/13/10 Approved: NR Figure: 2-1

Cerrado Verde Potash Project Minas Gerais, Brazil Location Plan of Cerrado Verde

Potash Project



3 Accessibility, Climate, Local Resources, Infrastructure and Physiography (Item 7)

3.1 Topography, Elevation and Vegetation The peneplane developed by the Verdete unit, i.e., the ground over which the Areado Formation was deposited, undulates between the altitudes of 1.000m and 850m. Higher values are found in the southern part of the Serra da Saudade. In the middle portion of the ridge, the peneplane is placed between 880m and 920m. Therefore, all the surface exposures of the Verdete unit were the result of the Tertiary erosion cycles that stripped off the Mesozoic rocks (Mata da Corda and Areado groups).

3.2 Climate and Length of Operating Season The climate of the region is classified, according to IBGE (2002) as half-humid warm tropical, with annual average temperatures of 22C and annual precipitation of 14.000mm.

Annual rainfall in the area averages between 1,300mm and 1,800mm, 84% of which falls during the rainy season between October and March. December and January present the most intense precipitation. The annual average temperature is slightly above 20C. The operating season is year round.

The local vegetation shows relicts of the primitive savanna ("cerrado") amid the farming area which includes soya and coffee, and industrial forests of eucalyptus and pine trees. The farms are mainly confined to the fertile soil of the Mata da Corda Formation that underlines the flat tops of the mountain range with altitude levels between 1,000m to 2,000m.

3.3 Physiography The region is inserted in the hydrographic basin of Indai River, a tributary river in the left margin of So Francisco River. According to SECTES Secretaria do Estado de Cincia e Tecnologia de Minas Gerais (1938), Indai River basin is part of the geomorphological unit So Francisco Plateau where the planning surfaces, the edges of the hills and the crests point dip to NE, with high structural control (COSTA-FILHO et al, 2007).

The main drainages are the rivers Indai, Abaet, Borrachudo and their tributary. The morphology of those rivers is the meandering channels and the drainage style is dendritic, mainly when installed over the pelites. In the north of the area is the Trs Marias dam, main mouth of the region rivers. The water depth of the dam oscillates between the altitudes of 560 and 575m (LIMA, 2005).

The geomorphology is characterized by mountains, being the main called Serra da Saudade. The landscape is determined by the rock types and by the topography and can be separated in three domains correlated to the South American Surfaces (King, 1956) according to Lima, 2005:

Upper Surface: Older stage of the planning that expose the Areado Formation Rocks and Mata da Corda Group;

Intermediate Surface: Refer to the second stage of the planning after de dissection of the Upper Surface, triggered by the resumption of the erosive process. The average altitude is of 750 to 850m. They are irregular surfaces stretched in N-S strike, developed over the



Serra da Saudade Formation represented by psamitic lithotypes. Matches to the South American Surface I, mio-pliocene; and

Basal Surface: the youngest, bordering the San Francisco River, with elevations from 570 to 630m. Exposure occurs in pelites of the Serra de Santa Helena Formation and Serra da Saudade.

3.4 Access to Property Patos de Minas city can be reached by vehicle from Belo Horizonte in 3 hours, via a good quality sealed road (BR-262). From Patos de Minas city the project is accessed via a number of secondary gravel roads that connect the farming region. The others important roads in the region are the BR-354 and the MG-235.

Patos de Minas is the nearest major settlement, but the cities of So Gotardo and Matutina are the nearest settlements. The project can be accessed by plane from Rio de Janeiro to Belo Horizonte, and then by vehicle from Belo Horizonte to So Gotardo (approximately 300 km), via a good quality sealed road (BR-262). From Matutina village the project is accessed via a number of secondary gravel roads that connect the farming region.

The principal access to the property are; the BR-262, the BR-354, and the MG-235 roads. Primary access is by gravel roads that connect the farming region. The unpaved roads are in regular condition and in some portions require upgrading for better access. The road upgrade costs are imbedded within the mine capital and operating costs.

3.5 Surface Rights The Project is at the exploration phase and surface rights have yet to be acquired. Discussions with land owners have been initiated and are ongoing and Amazon consider that the required surface rights are likely to be obtained.

The Company wishes to clarify that it has an agreement with the appropriate land owner to allow it to drill on permits 833,306/2008 and 833,280/2008.

3.6 Local Resources and Infrastructure Belo Horizonte is the capital and also the largest city in the state, with a population in excess of four (4) million. It is the major centre for the Brazilian mining industry. A large commercial airport with domestic and international flights services Belo Horizonte, which hosts several state and federal government agencies and private businesses that provide services to the mining industry. Skilled labor is readily available in Belo Horizonte and the local city of Patos de Minas.

So Gotardo has a good infrastructure. Its estimated population in 2009 is 32,580 inhabitants according to the IBGE. The main economic activity is agriculture, followed by livestock, trade and industry.

3.6.1 Access Road and Transportation The principal access to the property are; the BR-262 and BR-354, MG-235. Primary access is by gravel roads that connect the farming region. The road upgrade costs are imbedded within the mine capital and operating costs.



3.6.2 Power Supply (Extracted from ECM executive summary, sheet 39) Cerrado Verde Project at So Gotardo is scheduled to be powered by CEMIG 138kV system, connected through an exclusive transmission line 23km long, from a substation close to the town of So Gotardo.

In electrical terms the development of the beneficiation shall be considered middle size, with an estimated demand of around 25MW similar to a small town such as the So Gotardo and the surrounding places.

The configuration set for the factory system, has the main 138kV receiving substation, lowers to 13.8kV and distributes to the substations that will serve each of the main project areas.

It is observed that over 70% of the demand will be concentrated in three areas, grinding, calcination kiln, and pellets quenching systems and as a result, the location of the main substation shall be as close to the grinding and regrinding substations.

For the main substation two 138-13.8kV transformers are provided with 25/40MVA estimated power, with the load distributed between both, and if one of them fails to work, the other remaining transformer shall still supply the total demand at the forced ventilation stage.

According to CEMIG (governmental electrical energy agency) regulations harmonic compensation and power factor systems shall be forecasted so that the operational performance of large equipment/heavy loads do not affect the basic system network and other consumers.

From the main substation power will be distributed to area substations through 13.8kV feeders, by means of radial-type simple system, and according to the need cable racks may be used for beneficiation, aerial lines for distant facilities and piping network at the operational and administrative support areas or where for safety reasons the use of aerial systems is not possible.

The area substation will be constructed in its majority at masonry buildings, and there will be a few armored substations, housing all the electrical equipment to receive power at 13.8kV, lowers it and feed all the electrical charges of the area (s) and / or buildings served by it.

To meet the equipment electrical supply that cannot stop operating in case of electrical failure, emergency power supply system is provided with diesel generator and an automatic generator group, mainly targeting the auxiliary grinding systems, some pumps, a compressor for pneumatic conveying, for emergency lighting and the noble parts of the supervision, control and communication systems.

3.6.3 Water Supply (Extracted from ECM executive summary, sheet 38) Essentially, the water system that serves the beneficiation shall be divided into the following parts:

Process Water - is part of raw water intended for industrial use, which will be stocked at the reservoir located on the site highest plateau, next to the raw water reservoir and then distributed as make up water for burnt pellets quenching system at the cooling tower tank, to process route consumption, for services and general cleaning, including the central maintenance workshop; and

Raw Water - is the new water which intake will be performed from Indai River and stored at a tank; the intake from the river will be at dry well, with horizontal pumps, sand



filter box and is located approximately 9km from the raw water reservoir. The raw water will be used for the following purposes:

For pumps sealing; For pellets quenching system make up; For circulating at the heat exchangers of equipment refrigeration systems; For dust removing systems; For pelletizing; For fresh water generation by the Water Treatment Station; and For firefighting system.

(Extracted from ECM executive summary, sheet 16) Rainwater Drainage The drainage system shall be designed to comprise all devices designed to intercept, intake and dispose of run-offs that flow to the plateaus, terraces, accesses and buildings, leading them to the point of final release.

The plateaus, berms and access designed in different elevations, will be drained and its contribution will be sent to a sedimentation basin and damping.

The embankment stools slopes (cut / landfill) will be cross slope to collect contributions from longitudinal discharge and sections with concrete gutters, unloading at water flowing downhill sent for intake boxes and sequentially to the drainage system.

Hydraulic Sizing The following criteria and methods shall be considered in establishing the methodology of the hydraulic design of the devices:

Physical characterization of the Area - Location, type of relief, occupation and land cover;

Climate Characterization - climate is classified according to the International System of Kppen;

Studies of heavy rainfall - shall be used Gumbel statistical methods and CETESB rain disaggregation;

Surface runoff studies - comprising the analysis of the physiographic features of the basin and its coverage;

Determination of the Project Flow - shall be developed according to the Rational Method;

Surface Runoff Coefficient - shall be considered depending on the type of area to be drained and surface coverage;

Concentration Time - shall be calculated using the Kirpich formula;

Rainfall intensity - shall be calculated for the rainfall post of the region;

Rainfall Calculation - rain duration (tc) = 2.0 hours shall be adopted;

Precipitation per square meter - the duration of rain (tc) = 2.0 hours shall be adopted;



Precipitation per square meter that drains - the runoff coefficient = 0.90 shall be adopted; and

Time Period of Return and Recurrence - (TR) = 10 years. 3.6.4 Buildings and Ancillary Facilities There are no buildings or other facilities on the property, besides a rented small shelter for field activities support in the city of Matutina, and the main office in Brazil in Belo Horizonte. Plant, Mill, office, and mine building will be constructed as part of the mine development in the area.

3.6.5 Potential Processing Plant Sites Among the several possibilities for site location, Amazon is considering to install the plant close to Matutina, a small town close to the City of Sao Gotardo, which is a local pole. Two sites are being considered, Fazenda Pirapitinga and Funchal Norte. The potential plant site is shown below in Figures 3-1 and 3-2.

3.6.6 Potential Tailings Storage Area Tailings from process are generated due to:

Inadequate particle size, as the product has to be produced in a 2-4mm diameter range. Tailings are those materials which do not comply with such specification, mainly dust from pellet handling; and

Unburned or not sufficiently burned material, produced mainly from flushes during kiln operation.

Both are to be stored in Storage & Reclaiming stockpile, to be reprocessed. Therefore, no tailing accumulation or landfilling is foreseen for tailings. The Storage & Reclaiming stockpile area has not yet been defined.

Potential Waste Disposal Area

(Extracted from ECM executive summary, sheet 15) Landfills. The design criteria adopted for the landfill areas (location not yet defined), shall include the implementation of the materials deposit, whether from cuts, or loan, within the limits of design sections ("offset") at the project influence areas facilities.

Confirmation of geotechnical condition will provide evaluation of classification, distribution and quantification of material to be selected from the 1st and 2nd categories, with the quality and the allocation provided, during elaboration of detailed earthworks design.

Preliminarily, the following criteria were adopted for the classification, distribution and geometry of the landfill slopes, until geotechnical surveys geotechnical surveys campaigns to be programmed are carried out:

Compacted landfills at a minimum 95%: 70%;

Compacted landfills at a minimum 100%: 30%;

degree of blistering: 30%;

Landfill slopes: V=1 / H=1,5;



Berms balance width: 4,0m, with cross slope of 5% and 0.5% longitudinal; and

Maximum height between stools: 5.0m. The basic design shall present forms for plant restoration, as well as methods of restoration and / or protection of exposed areas (slopes, areas of loans, stools, water cuts, gutters, ditches, etc.) as per erosion resistance conditions.

3.6.7 Manpower So Gotardo and Matutina are the closest towns with a significant population to provide manpower for a mining operation, having population around 40,000 combined.

Also, the project is very close to Patos de Minas, main city in Alto Paranaiba area which has strong economic, cultural, educational and social environment.

3.6.8 Other Surface Rights The project is at the exploration phase and surface rights for processing plant site, tailing storage and waste disposal areas have yet to be acquired.



Cerrado Verde Potash Project Minas Gerais, Brazil Cerrado Verde Project Site



Cerrado Verde Potash Project Minas Gerais, Brazil Cerrado Verde Project Site

Schematic



4 History (Item 8)

Cerrado Verde Mineral Rights were originally requested by the company, by means of applications for exploration licenses filed with DNPM between 2008 and 2010. Several Cerrado Verde Mineral Rights have already been granted exploration licenses.

The company applied for the mineral rights directly to the DNPM. There was no prior ownership of mineral rights. The areas were free and the company just had to make the necessary applications.

4.1 Ownership The company does not have data with respect to past owners or any prior exploration work. The company is not aware of any historical resource estimation work on the property. There has been no historical mining on the property.

4.2 Past Exploration and Development The Verdete Slate has been known as a potential Potash resource since the 1960's although only regional mapping has been undertaken in the area of the permits held by Amazon.

4.3 Historic Mineral Resource and Reserve Estimates No historical resource estimates have been released.

4.4 Historic Production No historical mining of the Verdete slate has been undertaken.



5 Geological Setting (Item 9) 5.1 Regional Geology The region is mainly underlain by Neoproterozoic and Cretaceous rock units, which are partly covered by Cenozoic sandstones, lateritic sediments and soils. The oldest rocks, occurring in the southwestern portion of the region, are represented by a nucleus of calcoschists and diamictites of the Ibi Formation (Arax Group) surrounded by an undivided domain of the Canastra Group (quartzites, phyllites and micaschists). A model age of 1,000m.y. (207Pb/ 206Pb) has been determined for the Canastra Group, which was metamorphosed together with the Arax Group during the Brasiliano Orogeny (600m.y.). The sequence is followed by the Bambui Group (600-550m.y.), which comprises the marine deposits of the Paraopeba Formation, the Santa Helena Formation and the Serra da Saudade Formation, including the Verdete unit, all these units being dominated by variegated slates, and the overlying arkoses of the Trs Marias Formation. After deposition of the Bambui Group, and the Brasiliano Orogeny, the region was exposed to erosion during the Paleozoic, Triassic and Jurassic periods, giving rise to the development of a remarkable peneplane. On top of that flat lying surface, the terrigenous sediments of the Areado Group was deposited during the Lower Cretaceous. The next stratigraphic phase is recorded by the extensive and dominantly piroclastic kamafugitic volcanism of the Mata da Corda Group of Upper Cretaceous age.

5.2 Local and Project Geology 5.2.1 The Verdete Unit With some exceptions the Verdete unit are dominantly lying on top of the Serra da Saudade Formation and underlying the Areado sandstone. Its apparent thickness varies from approximately 20m in the southernmost domain to over 50m in the northern half of the Serra da Saudade and up to 80m on the northern end where it started to be covered by younger sediments. The lower contact with the slates and metapelites of the Santa Helena Formation is transitional.

5.2.2 Structure The slates of the Paraopeba, Santa Helena and Serra da Saudade formations, including the Verdete unit, develop a pervasive structure of concentric and chevron folding, lacking axial plane foliation, with one-to three-meter long wave lengths and amplitudes and vertical to steep westward dips of the axial plane. This overall structural behavior implies a sub-horizontal folding envelop. The dominant rock type is a centimetric bedded slate, with varying proportions of silt. The more argillaceous varieties show a characteristic slate cleavage parallel to the perfectly planar bedding planes. An increase in the proportion of silt-size quartz produces slightly thicker bedding and the rocks tend to split along a sub-conchoidal cleavage. Two complementary sets of fracture cleavages are responsible for the fragmental nature of the outcrops. In most exposures, chemical weathering along theses fractures removes de green color and whitens the slates to light yellowish shades. The dense nature of the folding system was welcome in increasing by a factor of two to three the thickness of the Verdete beds. The northward dip and east-west strike of the Verdete beds in the southern edge of the Serra da Saudade is suggestive of a conical fold closure of a regional syncline plunging a few degrees to the north. The syncline axis would run approximately coincident with the Indai River.



5.2.3 Elevation and Erosion Level The peneplane developed by the Verdete unit, i.e., the ground over which the Areado Formation was deposited, undulates between the elevation of 1,000m and 850m. Higher values are found in the southern part of the Serra da Saudade. In the middle portion of the ridge, the peneplane is placed between 880m and 920m. Therefore, all the surface exposures of the Verdete unit was the result of the Tertiary erosion cycles that stripped off the Mesozoic rocks (Mata da Corda and Areado groups).


File Name: Figure_5-1.docx Date: 12-13-10 Approved: NR Figure: 5-1

Cerrado Verde Potash Project


Cerrado Verde Regional Setting


File Name: Figure_5-2.docx Date: 12-13-10 Approved: NR Figure: 5-2

Cerrado Verde Potash Project


Cerrado Verde Project Geology



6 Deposit Type (Item 10) Normally, Glauconite is considered a diagnostic element indicative of continental shelf marine depositional environments with slow rates of accumulation. It develops as a consequence of diagenetic alteration of sedimentary deposits, bio-chemical reduction and subsequent mineralogical changes affecting iron-bearing micas such as biotite, and is also influenced by the decaying process of organic matter degraded by bacteria in marine animal shells. Glauconite forms under reducing conditions in sediments.

6.1 Geological Model Until now there is no geological model developed for the potash-rich glauconitic slate. It is a unique type of mineralization that is known only in the Serra da Saudade Formation in the western part of the Minas Gerais State. The Verdete is not at the present time a commercial source of potash.

The rock-type Verdete was baptized by the local farmers of the Serra da Saudade region due to its beautiful and typical green color. It crops out intermittently along the both sides of the Indai River for about 120km. No attention has been given until now by the geological community to map in detail and characterize the Verdete in terms of origin, mineralogy, etc.



7 Mineralization (Item 11) The Potash mineralization is associated with the Glauconite mineral which gives the Verdete Slate its distinctive green color. Glauconite is an iron potassium phyllosilicate (mica group) mineral of characteristic green color with very low weathering resistance.

This Preliminary Economic Assessment is preliminary in nature. It includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability. There is no certainty that the preliminary assessment will be realized.

7.1 Mineralized Zones As stated previously, potash mineralization occurs associated with the glauconite mineral that is a constituent of verdete.

The Verdete slate held within the Amazon tenements can be traced for the entire 120km strike length with a potential width up to 500m wide. Grab samples along the entire strike length range from 5% to 12% K2O. The potential tonnage is therefore very large, and could reach the magnitude of Billons of tons.

7.2 Surrounding Rock Types The Verdete unit is partially covered by a thin layer of sandstone of Cretaceous age in its central part. To the east it is intercalated with red to yellow metapelites (argillites, rhythmites and siltstones), which forms the transition zone. The transition zone is the basal part of the Verdete unit and crops out by a combination of folding and erosion. To the west the Verdete is eroded by a N-S running creek which exposes the underlying carbonatic slate. To the north the Verdete unit is again intercalated with metapelites. To the south the Verdete is abruptly eroded, occurring only as the metapelites and slates.

The rock-types in the property display a sub-horizontal pattern and were submitted to a two folding events. The first event developed a complicated system of chevron folding which thickened the Verdete unit. The second phase folded the sequence sub-horizontally. Therefore the Verdete unit has a gently folded monoclinal structure.

The Verdete unit has a N-S strike length of 3100m, an average width of 200m and thickness varying from 25m to 64m. The average thickness is 40m.



8 Exploration (Item 12) Amazon Mining has completed remote sensing targeting exercise followed by regional mapping and grab samples. In addition, Amazon completed a preliminary survey using an Innov-X portable XRF unit. The portable XRF unit was then correlated to pulp standards and showed good precision although returned a positive bias in the order of



Cerrado Verde Potash Project Minas Gerais, Brazil Tenements Drilled by Amazon



Cerrado Verde Potash Project Minas Gerais, Brazil Drillhole Location Plan



9 Drilling (Item 13) 9.1 Type and Extent of Drilling The principal methods used for exploration drilling at Cerrado Verde have been reverse circulation drilling (RC). Table 9.1.1 summarizes pertinent drilling statistics. The main zone has been drilled at a nominal spacing of 100m to 400m.

Table 9.1.1: Cerrado Verde Potash Project Summary Drilling Statistics

Company/Year Drillholes Meters Contractor Drill Rig Diameter

Amazon Mining / 2010 19 997

9.1.1.1.1.1.1 Fuad Rassi Engenharia Indstria e Comercio Ltda

Prominas R1-H 4.5

All drillholes have been drilled vertical to an average of 52m deep. No downhole surveys have been completed due to the short vertical holes and scale of mineralization. The drilling has been completed perpendicular to mineralization and as such all intercepts reflect the true thickness.

Drillhole collars were surveyed by Amazon Mining surveyors using a portable GPS with accuracy of +/-5m.

Accuracy of the survey measurements (downhole and surface) meets acceptable industry standards for the style of mineralization.

Further drilling should be done using core (at least NC in diameter) that could be split for assay, and detailed logged for mineralogical variations, structure within the unit, and other sedimentary features that could affect grade controls across the deposit. Several (2or3) of the present reverse circulation drill holes should be twinned for comparison of geology, mineralogy and assay collaboration within the present inferred resource.

The drilling completed has been compiled into a 3D geological model as defined in section 15, Mineral Resources, interpretation of drilling is also covered in this section.



10 Sampling Method and Approach (Item 14) 10.1 Reverse Circulation (RC) Sampling The samples were taken on 2m intervals and riffle split down to 3kg samples. Sample weights were not recorded but recoveries were reported as good. The RC method of sampling is not optimal and SRK would recommend that a Jones Riffle Splitter be utilized in future RC sampling programs. Although the quartering technique used by Amazon is not optimal the homogenous nature of the verdete slate will remove any sampling bias created.

10.2 Loggi

43-101 scoping study

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