Pescod:


AMAZON MINING (V-AMZ) $1.34 -0.04
Sometimes you just have to see things to get a
feel...although we admit, sometimes that feel could be totally
wrong.
Our trip to Albania over a year ago to see Bankers Petroleum
first-hand at the depths of the financial crisis was one
of those eye-opening experiences. If there was a future for
the world, given the time, Bankers had something enormous.
It’s a ten-bagger since that time and we suspect the
story only gets bigger.
Another experience like that was visiting Brazil. You
have to go to Brazil to experience an economy that is absolutely
booming, based on agriculture which it looks like Brazil
could frankly feed the world. We realize there are commentators
out there like Don Coxe that suggest you have to
be in agricultural products, but one trip to Brazil where their
agricultural lands are ever increasing and where they get
three crops a year, and you understand the implications.
Ironically, what Brazil doesn’t have is fertilizer and they
have to import 92% of it (the bulk of it from Canada and Russia
and the Brazilians aren’t too happy about it).
First of all they find the prices excessive and then once
the fertilizer is to Brazil, their transportation system is lacking.
The railway systems in the main are narrow gauge and
the roads are chalk-full of trucks. If something could be
found that works in Brazil, it could have huge implications.
As we mentioned, we went to Brazil to see first-hand what
Amazon may or may not have and they’ve certainly got the
mineral deposit, now too see if their thermal potash process
works…and it’s way, way behind schedule.
We ask Jed Richardson to write us a note and brief update
on what’s going on and he jokes, “Can you imagine
trying to get anything done in Brazil at a time like this? In
the middle of World Cup madness?”
These are Jed’s notes: The former Sprott Securities analyst
writes, “It has been an interesting few months at Amazon.
Things are progressing slower than we had initially
hoped for with the scoping study but we are continuing to
make significant advances on our potash project. Our scoping
study should finally be started in the next couple of
weeks. The main hold up has been personnel on our side.
We’ve had engineering companies cueing up to take the job,
but we haven’t had the in house expertise in Brazil to direct
the process.

That has all changed a couple of weeks ago with the hiring of
Mauricio Sampaio, our new VP Operations. He brings a wealth
of experience in fertilizer markets and technical expertise.
Mr. Sampaio was Bunge Fertilizantes Operations and Marketing
Director. Bunge (BG:NYSE) is South America’s largest supplier
and distributor of fertilizers and the world’s largest oilseed
processor. Mr. Sampaio served as business director for the
company’s Bunge Fertilizantes IAP/Ouro Verde divisions, where
he was responsible for marketing and operations, growing
brand sales by 60%. He was on Fosfertil’s (FFTL:BOVESPA)
commercial committee as Bunge’s representative. Fosfertil is
Brazil’s main raw materials and phosphate supplier. Prior to
Bunge he also held the position of Operations Director at Fertiza
(acquired by Mosaic/Cargill) from 1996 to 2000, where he
was responsible for planning, logistics, sales and supply. Mr.
Sampaio was President of the Brazilian Agribusiness Association
from 2006 to 2009. He graduated in Agronomy Engineering
and earned his MBA in Agribusiness from USP - Universidade
de São Paulo. He did his post-graduate studies in Business
Administration at Fundação Getulio Vargas, São Paulo. Not a
bad guy to have on our side as we build a fertilizer business in
Brazil. We initially asked Mauricio to complete a marketing
study on our product on a contractual basis. He was so impressed
by the prospects he agreed to join the company.
For a little company, Amazon has put together a pretty impressive
team. Alongside Mr. Sampaio, we’ve got Dr. Fonseca and
Dr. Cavalcanti, two former ministers and Peter Gundy as Chairman,
who built the Potash Corp of Saskatchewan.
From the questions I get from anxious shareholders, I can see
there has been a lot of speculation that the delays are technically
related, and that is not the case. The process has been
working really well. The challenge with our material is making a
non-soluble potash source soluble so plants get the nutrients
and we are getting 96% solubility with the material we’ve processed.
Our confidence continues to build in respect to our operating
costs. Looking at cement producers in our area, we have investigated
their cash costs, and on average they produce their
product for US$53/t. They use the same process as us, a petroleum
coke fired rotary kiln. They heat to 1400 degrees Celsius
compared to our 1100 degrees. Our work with our pilot plant
suggests the cost is even lower. At that operating cost, we
could potentially sell our product profitably on just the potassium
content without factoring in any additional benefit for
being slow-release, multi-nutrient and non-chloride.”