Please see below for John Kaiser's latest comments on Amazon:

Spec Value Hunter Comment - April 25, 2011: Amazon changes name to Verde Potash Plc

Amazon Mining Holding Plc has suffered two sharp down days following a bungled news release which represents a fresh buying opportunity for Spec Value Hunters. On April 21 Amazon published an official looking announcement that on Tuesday April 26, 2011 it would begin trading under the new name Verde Potash Plc (NPK-T). Most readers probably stopped there, but those who kept reading found tucked beneath the name change an update on the agronomic trials by Grupo Sekita involving carrots which stated that ThermoPotash trials provided inconclusive results. Testing "implemented in order to compare the agronomic efficiency of granular ThermoPotash with potassium chloride (KCl) on the productivity and quality of carrot crops" indicated that "there was no statistical difference in productivity and quality of carrot between treatments using ThermoPotash and potassium chloride and combined application of these two sources, and also compared to the control treatment". That sounds very much like the sort of clinical trial news about a new wonder drug being no more effective than a placebo that sends a biotech stock crashing, and some shareholders did bail last Thursday sending the stock down $1.53 to $9.24. What was not very clear was that neither the application of ThermoPotash nor conventional potash of the sort that comes from Saskatchewan in nutrient equivalent amounts resulted in any statistically measurable difference with the carrots grown in the control portion of the study, namely unfertilized soil. On Monday April 25 Amazon published "additional details" which clarified in what way these argonomic trials were "inconclusive", but the stock lost another $2.48 to $6.76 helped no doubt by the headline Stockwatch unilaterally assigned to the news release: "Amazon's ThermoPotash trials show inconclusive results". The result is a mini "flash crash" likely exacerbated by traders who these days can sell stock short on a downtick without having already borrowed stock; all they need is the intent to borrow or deliver stock, an intent that becomes moot if the downdraft they created spooks long shareholders into selling. We will probably see a sharp reversal of the downtrend during the next few days, similar to what happened to Neo Material Technologies Inc (NEM-T) in March when the shorts leaned on the downstream rare earth products fabricator.

There are two conclusions that can be drawn from the "inconclusive" outcome of the Sekita carrot trials: 1) the soil still carried a sufficient baseload of nutrients from the prior crop cycle that the extra ThermoPotash and potassium chloride was not needed, similar to all that extra vitamin C in pills which ends up urinated into the toilet bowl, or, 2) potash as a fertilizer is in fact a long running fraud foisted upon farmers by Potash Corp of Saskatchewan and other KCl producers. The first conclusion is plausible and begs the question as to why Amazon felt it was material to make this announcement about a poorly designed argonomic study. If the KCl fertilized carrots had outperformed the ThermoPotash fertilized carrots, then Amazon would have a problem on its hands, but this simply was not the case. When I spoke to Amazon's Cris Veloso on Monday he justified the need to make a disclosure about the Sekita carrot trials because a fair number of shareholders had focused on these trials and built up expectations. He indicated that results for agronomic studies involving cotton and coffee were expected in Q3 of 2011 and would be unlikely to have "inconclusive" results because of the longer growing cycle of these crops. He admits that these studies should have controlled for existing nutrient levels, which will be done in the more important studies that Brazilian regulators will conduct as part of the certification of ThermoPotash as a fertilizer supplement. Since initiating these agronomic studies Amazon has changed its marketing strategy from trying to sell a direct application product to farmers to one of selling ThermoPotash to fertilizer blenders as a supplement. The switch reflected the reality that farmers were unlikely to bear the cost spreading a fertilizer whose volume was six times that of equivalent K2O content KCl.

The second conclusion is patently ridiculous for reasons I hope I do not need to explain, which turns the pullback in Amazon's stock price into what will be a temporary buying opportunity for Spec Value Hunters. I am confirming Verde Potash Plc (Amazon) as a Good Absolute Spec Value Buy at $6.76 with a $10-$20 price target premised on the viability of ThermoPotash as a fertilizer blend supplement that could supply up to 15% of Brazil's potash demand, and much higher if the junior's patent pending process for converting glauconite into conventional potash products proves to be feasible as a replacement for Brazil's entire potash import needs.

Amazon did mention that the Sekita trials confirmed an already recognized problem with the granular nature of the ThermoPotash pellets in that they did not disintegrate quickly enough during contact with soil due to a hardness attributable to a design error. This problem can be readily addressed, especially now that Amazon's engineers have redesigned the initial ThermoPotash production flow sheet included in the December 10, 2010 technical report. This flow sheet involved crushing the glauconite and mixing it with limestone before grinding the mixture into a powder and then pelletizing it with an agglomerant to form ThermoPotash. The next step involved "calcining" the pellets, in effect heating them to a high temperature in a rotary kiln in order to alter the crystal structure of the potash bearing silicate so that the potassium becomes accessible as a fertilizer. (If the potassium were not locked up in the silicate lattice of the "verdete slate" the 15 billion tonnes of glauconite at surface on Amazon's Cerrado Verde project would have leached out long ago.) After calcining the pellets have be cooled quickly which was being done by quenching them in water; otherwise, if the pellets cool slowly the glauconite reverts to its original crystal structure. After various optimization studies Amazon has changed the flow sheet so that a glauconite powder is calcined first, air cooled, reground, and then pelletized with limestone. The junior had concluded that the moisture incorporated into the pellets through the agglomeration added more to the energy consumption cost than regrinding the material after calcining and cooling. Tradeoff studies also indicated that the quenching stage would require considerable water resources whose cost was higher than using air to cool the calcined "powder", especially after recycling the resulting hot air to pre-heat the glauconite powder before calcining. Pelletization of the ThermoPotash after calcining gives Amazon considerably more control over the granularity of the product, which is why the granularity "problem" observed in the Sekita carrot trial is not a problem at all, just a screwup that could perhaps have been anticipated and avoided. Amazon expects to publish a new preliminary economic assessment (PEA) in Q3 of 2011 which incorporates the new ThermoPotash flow sheet. Amazon expects to publish a new 43-101 resource estimate for Cerrado Verde based on a 15,000 m drill program by the end of Q2 of 2011 which demonstrates at least 50 years of production capacity. Amazon plans to have an initial 43-101 resource estimate done by the end of Q3 of 2011 for its Apatita phosphate discovery west of its belt of glauconite rocks. The junior is also hinting that it may have latched onto a significant local limestone deposit with the characteristics required for its ThermoPotash and which may be large enough to serve as feedstock for Brazil's cement making industry.

However, the most important update during the next few months will involve the status of the process developed by Dr. Derek Fray of Cambridge University for the conversion of glauconite into conventional potash products such as potassium sulphate and muriate of potash. This process for which Amazon has filed a patent is a potentially huge game changer for the potash industry, because if the process developed by Dr Fray in his laboratory can scale to commercial levels while remaining cost competitive with the current landed price of imported potassium chloride, Amazon and its glauconite resource will be the key to ending Brazil's 90% dependency on imported potash. According to Cris Veloso the company is very pleased with numerous optimization tests done internally and will shortly announce the start of a formal independent study by a well known metallurgy and process engineering company. Whether or not this process works is completely unrelated to the viability of ThermoPotash as an N-P-K supplement (NPK - the new stock symbol and the elemental symbols for nitrogen-phosporus-potassium). Amazon did neither itself nor its shareholders a favor with the way that it handled the news about the "inconclusive" carrot trials, but it has certainly done a huge favor for speculators who thought they had missed the boat on a story whose success will have very big implications for agriculture in Brazil and anywhere else that similar glauconite deposits exist. I expect the stock to rebound quickly to the $10 level and then trend higher as the milestones below are achieved.



Regards,

Iwona Zakrzewski
Investor Relations

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