Santana Pea (Sedar Copy)

Preliminary Economic Assessment Santana Phosphate Project, Para State,
Brazil
On Behalf of - MBAC Fertilizer Corp
Effective Date
22 September 2011
Beau Nicholls
Consulting Geologist (Amazon Geoservices Ltda)
BSc (Geo) MAIG
Carlos Guzman
Consulting Mining Engineer (NCL Brasil Ltda)
Mining Engineer, Registered Member of the

Chilean Mining Commission
Qualified Persons:
Version / Status:
FINAL
Path & File Name:
D:\P Drive\Projects\MBAC\Reports\43101 Sanatana Res est July 2011\PEA_MBAC_43-101 Santana_22Sept2011_FINAL.docx
Amazon GeoServices Ltda ABN 52 065 481 209

Preliminary Economic Assessment - Santana Phosphate Project, Para State, Brazil MBAC
Effective Date 22 September 2011
6005 Australia
Page: 1
Table of Contents
1
S u m m a ry ............................................................................................................................... 11
1.1
Introduction................................................................................................................. 11
1.2
Location...................................................................................................................... 11
1.3
Ownership .................................................................................................................. 11
1.4
Geology and Mineralization......................................................................................... 11
1.5
Mineral Processing and Metallurgical Testing.............................................................. 11
1.6
Mineral Resources ...................................................................................................... 12
1.7
Mining Operations....................................................................................................... 13
1.8
Indicative Economics .................................................................................................. 13
1.9
Conclusions and Recommendations ........................................................................... 16
In trodu c tion ........................................................................................................................... 17

2.1
Scope of Work ............................................................................................................ 17
2.2
Forward Looking Information....................................................................................... 17
2.3
Principal Sources of Information.................................................................................. 18
2.4
Qualifications and Experience ..................................................................................... 18
2.5
Units of Measurements and Currency ......................................................................... 18
2.6
Abbreviations.............................................................................................................. 19
Re lia n c e o n Oth e r Exp e rts .................................................................................................... 20
P ro p e rty De s c rip tion an d Lo c a tio n ...................................................................................... 21
4.1
Project Location .......................................................................................................... 21
4.2
Tenement Status ........................................................................................................ 22
4.3
Royalties and Agreements .......................................................................................... 23
4.4
Environmental Liabilities ............................................................................................. 23
4.5
Permitting ................................................................................................................... 23
Ac c e s s ib ility, Clim a te , Lo c a l Re s ou rc e s , In fra s tru c tu re a nd Ph ys iog ra ph y ...................... 24

5.1
Project Access ............................................................................................................ 24
5.2
Physiography and Climate .......................................................................................... 24
5.3
Local Infrastructure and Services ................................................................................ 24
His to ry ................................................................................................................................... 25
Ge o lo gic a l S e ttin g a nd Min e ra liza tio n ................................................................................. 25

7.1
Regional Geology ....................................................................................................... 25
7.2
Local and Property Geology........................................................................................ 26
7.3
Mineralization ............................................................................................................. 28
De p o s it Typ e s ....................................................................................................................... 29
Exp lo ra tion ............................................................................................................................ 30

9.1
Ground Magnetic Survey ............................................................................................ 30

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10
9.2
Ground Penetrating Radar .......................................................................................... 30
9.3
Auger Drilling .............................................................................................................. 31
9.4
Bulk Density Determinations ....................................................................................... 31
Drillin g ................................................................................................................................... 32
10.1
RC Drilling .................................................................................................................. 32
10.1.1
11
10.2
DC Drilling .................................................................................................................. 34
10.2.1
DC Drilling Results and Quality ............................................................................. 34
10.3
Drilling Results............................................................................................................ 34
S a m p le P rep a ra tion , An a lys e s a n d S e c u rity ....................................................................... 35

11.1
12
13
MBAC Sampling Method............................................................................................. 35

11.1.1
Diamond Core ....................................................................................................... 35
11.1.2
Reverse Circulation ............................................................................................... 35
11.2
Sample Security ......................................................................................................... 36
11.3
ALS Laboratory Sample Preparation and Analysis ...................................................... 36
11.4
Adequacy of Procedures............................................................................................. 36
Da ta Ve rific a tio n .................................................................................................................... 37

12.1
Geological Database .................................................................................................. 37
12.2
QAQC ........................................................................................................................ 37
12.2.1
Certified Standards and Blanks ............................................................................. 37
12.2.2
Field Duplicates ..................................................................................................... 40
12.2.3
Data Quality Summary .......................................................................................... 42
Min e ra l P ro c e s s ing an d Me ta llu rg ic a l Te s tin g..................................................................... 43

13.1
13.2
14
RC Drilling Results and Quality ............................................................................. 32
Samples Preparation and Methods ............................................................................. 43

13.1.1
Outcrop Samples................................................................................................... 43
13.1.2
Drill Core Samples ................................................................................................ 44
Results and Discussion ............................................................................................... 47

13.2.1
Outcrop Samples................................................................................................... 47
13.2.2
Drill Core Samples ................................................................................................ 50
13.3
Concentrate Characteristics ........................................................................................ 54
13.4
Recovery Evaluation ................................................................................................... 54
13.5
Solubility Tests ........................................................................................................... 55
13.6
Conclusion.................................................................................................................. 56
Min e ra l Re s o u rc e Es tim a te s ................................................................................................. 57

14.1
Introduction................................................................................................................. 57
14.2
Geological Modeling ................................................................................................... 57
14.3
Block Model Development .......................................................................................... 60
14.4
Statistical Analysis ...................................................................................................... 61
14.5
Variography ................................................................................................................ 61
14.6
Grade Estimation ........................................................................................................ 61

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14.7
Model Validation ......................................................................................................... 62
14.8
Mineral Resource Reporting ....................................................................................... 62
15
Min e ra l Re s e rve Es tim a te s ................................................................................................... 66
16
Mining Me tho d s ..................................................................................................................... 66

16.1
Mineral Resource Block Model.................................................................................... 66
16.2
Operating Parameters................................................................................................. 67
16.3
Parameters for Mine Design ....................................................................................... 67
16.4
17
Base Parameters................................................................................................... 67
16.3.2
Lerch-Grossman Economic Shells Results ........................................................... 69
Pit and Mine Design Phase ......................................................................................... 71

16.4.1
Final Pit Design ..................................................................................................... 71
16.4.2
Tabulation of Pit Contained Resources ................................................................. 72
16.5
Mine Production Schedule .......................................................................................... 73
16.6
Mine Equipment.......................................................................................................... 75
16.7
Mine Personnel........................................................................................................... 76
16.7.1
Salaried Staff ......................................................................................................... 76
16.7.2
Hourly Labor .......................................................................................................... 78
Re c o ve ry Me th od s ................................................................................................................ 80
17.1
18
16.3.1
Production Plants ....................................................................................................... 80

17.1.1
Mine Site ............................................................................................................... 80
17.1.2
Industrial Site ......................................................................................................... 85
P ro je c t In fra s tru c tu re ............................................................................................................ 92

18.1
Background ................................................................................................................ 92
18.2
Project Scope ............................................................................................................. 92
18.3
18.4
18.5
18.6
18.7
18.2.1
Production Units .................................................................................................... 92
18.2.2
Mine Site ............................................................................................................... 93
18.2.3
Industrial Site ......................................................................................................... 93
Project Location Characteristics .................................................................................. 93

18.3.1
Mine Site ............................................................................................................... 93
18.3.2
Industrial Site ......................................................................................................... 95
Access........................................................................................................................ 96
18.4.1
Road Access ......................................................................................................... 96
18.4.2
Waterway Access .................................................................................................. 97
Infrastructure Aspects ................................................................................................. 98

18.5.1
Mine Site ............................................................................................................... 98
18.5.2
Industrial Site ......................................................................................................... 99
Industrial Utilities ........................................................................................................ 99

18.6.1
Electrical Power Networks..................................................................................... 99
18.6.2
Water Supply ....................................................................................................... 102
Logistic Aspects........................................................................................................ 102

18.7.1
Raw Materials and Products ............................................................................... 102

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18.8
19
Ma rke t S tud ie s a nd Co ntra c ts ............................................................................................ 106

19.1
20
19.1.1
Agribusiness ........................................................................................................ 106
19.1.2
Fertilizer ............................................................................................................... 106
Region of Project Influence ....................................................................................... 109
19.3
Competitors .............................................................................................................. 110
19.4
Project Santana Competitive Advantage ................................................................... 111
En viro m en ta l S tud ie s , P e rm itting s an d S o c ial o r Com m u n ity Imp a c t.............................. 112

20.1
Environmental Requirements .................................................................................... 112
20.2
Protected Areas ........................................................................................................ 113
20.3
Physical Environment ............................................................................................... 113

20.3.1
Climate and Weather........................................................................................... 113
20.3.2
Soils..................................................................................................................... 113
20.3.3
Hydrography ........................................................................................................ 113
20.3.4
Hydrology ............................................................................................................ 114
20.3.5
Flora .................................................................................................................... 115
20.3.6
Pasture Area ....................................................................................................... 117
20.3.7
Fauna .................................................................................................................. 118
20.3.8
Mammals ............................................................................................................. 119
20.3.9
Avifauna .............................................................................................................. 119
20.3.10
Herpetofauna (Reptiles and Amphibians) ........................................................... 120
20.3.11
Biota .................................................................................................................... 120
20.3.12
Anthropic - Social Indicators................................................................................ 121
20.3.13
HDI ...................................................................................................................... 121
Infrastructure ............................................................................................................ 122

20.4.1
Electricity ............................................................................................................. 122
20.4.2
Sanitation ............................................................................................................ 122
20.4.3
Trade ................................................................................................................... 122
20.4.4
Public Safety ....................................................................................................... 124
20.4.5
Anthropic considerations ..................................................................................... 124
Ca p ita l a n d Op e ra tin g Co s ts .............................................................................................. 126

21.1
21.2
22
Brazilian Market Overview ........................................................................................ 106
19.2
20.4
21
Project Implementation Schedule .............................................................................. 105
Capital Costs ............................................................................................................ 126

21.1.1
Mine Capital Costs .............................................................................................. 126
21.1.2
Mine & Industrial Sites Capital Costs .................................................................. 128
Operating Costs (OPEX) ........................................................................................... 129

21.2.1
Mine Operating Costs.......................................................................................... 129
21.2.2
Mine & Industrial Sites Operating Costs.............................................................. 132
21.2.3
Extra Operating Costs ......................................................................................... 135
21.2.4
Total SSP Annual Cost ........................................................................................ 135
Ec o no m ic An a lys is ............................................................................................................. 136

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22.1
SSP Long term price................................................................................................. 136
22.2
Valuation model ........................................................................................................ 136

22.2.1
Assumptions ........................................................................................................ 136
22.2.2
Economics ........................................................................................................... 137
22.2.3
Sensitivity Analysis .............................................................................................. 138
23
Ad ja c e n t P rop e rtie s ............................................................................................................ 140
24
Oth e r Re le van t Da ta an d In fo rm a tio n ................................................................................. 140
25
In te rp re ta tion a nd Co n clu s io n s .......................................................................................... 140
26
Re c o m m e n d a tio n s .............................................................................................................. 141

26.1
Exploration and Resources ....................................................................................... 141
26.2
Mining ...................................................................................................................... 141
26.3
Mineral resource and Evaluation Budget ................................................................... 142
27
Re fe re n c e s .......................................................................................................................... 143
28
Da te a n d S ig n a tu re P a g e .................................................................................................... 144
29
Ce rtific a te s o f Qu a lifie d P e rs on s ....................................................................................... 145
List of Tables
Table 1_1 Grade Tonnage Report
12
Table 1_2 Indicative Economics
15
Table 1_3 Santana Project - Proposed Resource and Evaluation Budget
16
Table 2.6_1 List of Abbreviations
19
Table 4.2_1 Summary of MBACs Permit Status in the Santana Region
22
Table 9_4 Summary Bulk Density
31
Table 10_1 Summary Drilling Statistics
32
Table 12.2.1_1 Standards Utilized by MBAC
37
Table 13.1.1_1 Exploratory flotation tests with 1.5 kg outcrop samples
43
Table 13.1.2_1 Criteria used to classify the drill core samples.
44
Table 13.1.2_2 Expected Chemical Characteristics of the several types of material
44
Table 13.1.2_3 Composite samples tested
45
Table 13.1.2_4 Main conditions of the flotation tests
46
Table 13.2.1_1 Mineralogical composition of three outcrops samples
47
Table 13.2.1_2 Mineralogical identification of three outcrops samples
48
Table 13.2.1_3 Chemical Characterization of three outcrops samples
48
Table 13.2.1_4 Weight and P2O5 distribution in selected sizes of the outcrop samples crushed to minus 2mm
49

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Table 13.2.1_5 Exploratory flotation results with sample RK 72833
49
Table 13.2.1_6 Bond Work index determinations in outcrop samples
49
Table 13.2.2_1 Chemical composition of selected drill core samples for mineralogical identifications
50
Table 13.2.2_2 Mineralogical identification of selected drill core samples
50
Table 13.2.2_3 Size distributions of several types of materials crushed to minus 2mm
51
Table 13.2.2_4 Summary of flotation tests results with drill core samples
53
Table 13.3_1 Chemical composition of typical concentrate. Fluorine analysis by Celqa. Other elements by prosolo
54
Table 13.4_1 Estimation of the overall deposit recovery
54
Table 13.5_1 SSP characteristics with outcrop sample and flotation concentrates after 15 days
55
Table 13.5_2 Chemical characterization of a phosphoric acid produced with a flotation concentrate
55
Table 14.2_1 Domains Wireframes
60
Table 14.3_1 Block Model Summary
60
Table 14.4_1 Summary Statistics 3m Composites
61
Table 14.6_1 Grade Estimation Parameters
61
Table 14.8_1 Confidence Levels of Key Categorisation Criteria
63
Table 14.8_2 Grade Tonnage Report
64
Table 16.3.1_1 Lerch-Grossman Optimization Parameters
68
Table 16.3.2_1 Lerch-Grossman Optimization Results
69
Table 16.4.1_1 Pit Design Parameters
71
Table 16.4.2_1 Resources Contained in Final Pit at Various Cut-off Grades
72
Table 16.5_1 Waste dump design parameters
74
Table 16.5_2 Mine Production Schedule
74
Table 16.6_1 Peak Fleet Requirements for Commercial Production
75
Table 16.7.1_1 Salaried Staff Requirements
77
Table 16.7.2_1 Hourly Labour Requirement
79
Table 19.1.1_1 Soybean export evolution
106
Table 21.1.1_1 Summary of Mine Capital Costs (US$000)
127
Table 21.1.1_2 Equipment Unit Costs (US$000)
127
Table 21.2.1_1 - Summary of Mine Capital Costs (US$000)
129
Table 21.2.1_3 Summary of Mine Operating Costs - Total Dollars
131
Table 21.2.1_4 Summary of Mine Operating Costs US$ per tonne
132
Table 21.2.2_1 Reagent Consumption and Vendor
134

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Table 21.2.2_2 Consumables Summary
134
Table 21.2.2_3 Raw Material Summary
134
Table 21.2.2_4 CAPEX factor for each project area
135
Table 22.1_1 Real SSP Prices
136
Table 22.2.3_1 NPV at Q3 2013 Sensitivity Analysis by SSP and Sulphur prices
138
Table 22.2.3_2 NPV at Q3 2013 Sensitivity Analysis by SSP Price and Total CAPEX
139
Table 22.2.3_3 NPV at Q3 2013 Sensitivity Analysis by SSP Price and Total OPEX
139
Table 22.2.3_4 NPV at Q3 2013 Sensitivity Analysis by SSP Price and WACC
139
Table 26.3_1 Santana Project - Proposed Resource and Evaluation Budget
142
List of Figures
Figure 4.1_1 Project Location
21
Figure 4.2_1 Permit Location
22
Figure 7.1_1 Regional Geology Map
26
Figure 7.2_1 Project Geology Map
27
Figure 7.2_2 Outcrop showing main lithological units
27
Figure 7.2_3 Diamond Core Hole
28
Figure 7_1 Apatite mineralization along fracture
28
Figure 9_1 Ground Magnetic Survey
30
Figure 10.2.1_1 Wet RC samples
32
Figure 11.1.2_1 and 2 Recommended riffle splitters
35
Figure 12.2.1_1 Blank material review
38
Figure 12.2.1_2 Standard PFA review
39
Figure 12.2.1_3 Standard PFM review
39
Figure 12.2.1_4 Standard PFB review
40
Figure 12.2.2_1 Field Duplicate Data
41
Figure 14.2_1 Plan of Vertical Sections
57
Figure 14.2_2 Supergene Saprolite Domain
59
Figure 14.7_1 Block Model Visual validation
62
Figure 14.8_1 Grade Tonnage Curve
65
Figure 16.3.2_1 Tonnes and Grades versus optimization price
69
Figure 16.3.2_2 Final pit shell General Review
70

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Figure 16.4.1_1 Plan View Final Pit and Dump Designs
71
Figure 17.1.1_1 Process Flow Sheet
80
Figure 17.1.1_2 Beneficiation Flow Chart
83
Figure 17.1.1_3 Dam Project
84
Figure 17.1.2_1 Sulphuric Acid Flow Sheet
87
Figure 17.1.2_2 Acidulation Plant Flow Sheet
89
Figure 17.1.2_3 Granulation Flow Sheet
91
Figure 18.2.3_1 Industrial Site
93
Figure 18.3.1_1 Mine Site
94
Figure 18.3.2_1 Industrial Site
95
Figure 18.4.1_1 Location Plan
96
Figure 18.4.2_1 Water Access
98
Figure 18.6.1_1 High Tension Electricity
100
Figure 18.6.1_2 Electrical Power
101
Figure 18.7.1_1 Freight Route
103
Figure 18.8_1 Project Implementation Schedule
105
Figure 19.1.2_1 Brazilian P2O5 Market Scenario
106
Figure 19.1.2_2 Domestic Nutrients Consump
108
Figure 19.2_1 Project Area Immediate Market
109
Figure 19.3_1 Competitors
110
Figure 19.4_1 Competitors Distances to Santana Project Area
111
Figure 20.3.4_1 Farms in the project area
114
Figure 20.3.5_1 Area Comprised of small individuals
115
Figure 20.3.5_2 Vegetation Composed by pioneer species
116
Figure 20.3.5_3 Palm species identified in the study area
116
Figure 20.3.6_1 Pasture Area
117
Figure 20.3.6_2 Cleaning Areas of pastures
117
Figure 20.3.6_2 Streams in Permanent Preservation Areas
118
Figure 20.3.9_1 Avifauna
119
Figure 20.3.13_1 Health in So Flix do Xingu
121
122
123
Figure 20.4.3_3 Streets in So Flix do Xingu
123

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Figure 20.4.3_4 Roads in So Flix do Xingu
124
Table 21.3.2_1 Capital Cost Breakdown
128
Figure 21.2.1_2 Hourly Cost per Equipment
129
Figure 21.2.4_1 SSP Annual Costs
135
List of Appendices
No table of figures entries found.

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SUMMARY
1.1
Introduction
Amazon Geoservices Ltda (Amazon Geoservices) and NCL Brasil Ltda (NCL) have been
commissioned by MBAC Fertilizer Corp (MBAC) to prepare a preliminary economic assessment (PEA)
for the Santana Phosphate Project, in Para State, Brazil.
Amazon Geoservices and NCL are collectively referred to in this report as Amazon/NCL
The PEA has been prepared under the guidelines of Canadian Institute of Mining (CIM) National
Instrument 43-101 and accompanying documents 43-101.F1 and 43-101.CP (NI43-101).
1.2
Location
The Santana Phosphate Project is located in the southeast of Par State near the state border of Mato
Grosso and Para. Santana is located approximately 200km from the cities Santana do Araguaia, (Para
State) and Vila Rica (Mato Grosso State). The topographical coordinates of the project are 417882
East and 8967784 North (Datum SAD69 Zone 22 South).
1.3
Ownership
MBAC, through its 100% owned Brazilian subsidiary Itafos Mineracao Ltda (Itafos), is the sole
registered and beneficial holder of eight exploration properties with an additional three exploration
permits under application for a total of 97,949ha.
1.4
Geology and Mineralization
The Santana property is located within the Iriri Group of hydrothermally-altered volcaniclastic and
carbonate rocks of Precambrian age. The hydrothermally-altered volcaniclastic rock consists of lapilli
and crystal tuff, with clasts varying considerably in size from very coarse sand-size clasts to cobblesized particles (agglomerate, volcanic breccia).
The phosphate mineralization occurs in a hydrothermally altered (or more correctly metasomatic) lapilli
tuff, consisting mainly of carbonate and/or silica. A higher grade supergene enriched zone has been
interpreted to lay sub-horizontally within close proximity to the saprolite / fresh rock boundary. Lower
grade mineralization has been intercepted in the deeper fresh rock drilling but has not been interpreted
due to lack of data.
1.5
Mineral Processing and Metallurgical Testing
MBAC has commenced preliminary metallurgical testwork which has defined a preferred process route.
Testwork has focussed on 3 outcrop samples along with 9 composite samples from 22 diamond core
holes. All testwork has been undertaken at the MBACs process facilities located at their Itafos
phosphate mine in Brazil.
Mineralogical identification of outcrop and drill core samples indicated that main phosphate mineral is
apatite and the main gangue minerals are quartz, iron oxides and clay minerals.
Flotation tests showed that the Santana samples responded well to the process with high grade
concentrates easily obtained.
The following preferred process route has been defined by MBAC:
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Primary crushing of the ROM material;
Classification of the ore into two size fractions;
Grinding of the coarse product to 80% passing 100 microns;
Flotation of the grinded product;
Regrind of the rougher concentrate to 80% passing 44 microns;
Flotation of the regrinded rougher concentrate;
High intensity magnetic separation of the cleaner concentrate; and
Concentrate dewatering.
1.6
Mineral Resources
The Santana Inferred mineral resource estimate is based on 53 diamond holes (2,386m) and 6 RC
holes (238m) drilled at a spacing of approximately 200m by 200m. Only data received as at 31 July
2011 has been used in this estimate. MBAC have an ongoing infill and extensional drillhole program
underway.
The mineral resource estimate has focused on the main supergene enriched oxide mineralization with 2
flat lying mineralized domains defined using the saprolite and fresh geological boundary along with a
3% P2O5 grade cut-off to guide the wireframing process. An independent inferred mineral resource has
been estimated comprising 33.5Mt with an average P2O5 content of 12.39% (using a preferred 3% P2O5
Cut-off). (Table 1_1 below)
The statement has been classified by Qualified Person Beau Nicholls (BSc (Geo) MAIG) in accordance
with the Guidelines of NI 43-101 and accompanying documents 43-101.F1 and 43-101.CP. It has an
effective date of 31 July 2011.
Table 1_1
Santana Deposit
Inferred Mineral Resource Grade Tonnage Report 31 July 2011
Inverse Distance Weighted Power 2 (IDW2)
12.5E x 12.5mN x 3mRL
Lower Cutoff Grade
(%P2O5)
Million Tonnes
P2O5
%
CaO
%
Fe2O3
%
Al2O3
%
SiO2
%
3
10
20
33.5
17.2
5.8
12.39
17.6
24.3
16.7
23.8
35.1
17.6
15.32
10.6
8.8
6.42
4.1
27.5
22.18
11.8

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1.7
Mining Operations
An open pit mine plan was developed by NCL for the Santana Phosphate Project to produce 300 k
tonnes of phosphate concentrate at a grade of 34% P2O5 per year, with a peak total material movement
rate of 4.2 M tonnes per year. This scenario results in the processing of approximately 1.5 M tonnes per
year of ore with an average grade of 12.4 % P2O5. The expected mine life for this project is 24 years.
The reader is cautioned that the open pit mining study is a preliminary economic assessment that is
preliminary in nature and includes inferred mineral resources that are considered too speculative
geologically to have economic considerations applied to them that would enable them to be categorized
as mineral reserves. There is no certainty that the preliminary assessment will be realized. No Mineral
Reserves have been estimated. Mineral resources that are not mineral reserves do not demonstrate
economic viability.
1.8
Indicative Economics
This document provides a report on the results of resources, mining, processing and a preliminary
economic assessment of the potential project development. The preliminary economic assessment is
based on the mineral resource estimate for the Santana Target as of 31 July 2011.
The indicative economics for the production of 300Ktpa (Base Case) of phosphate concentrate at a
grade of 34% P2O5 is presented in Table 1_2 below. This demonstrates encouraging economics for the
Santana Phosphate Project based on the cost projections and price assumptions as presented in this
PEA.
However, readers are cautioned that the preliminary economic assessment is preliminary in nature and
includes inferred mineral resources that are considered too speculative geologically to have economic
considerations applied to them that would enable them to be categorized as mineral reserves. There is
no certainty that the preliminary assessment will be realized. No Mineral Reserves have been
estimated.
Based on project assumptions preliminary financial model indicates robust project economics with a
NPV of US$423 million as at Q3 2013 (the estimated start of construction). This figure does not include
US$20 million required for exploration and engineering development during 2011 and 2012.
The following economic results were obtained from the financial analysis:
Capital cost of US$ 385 M, including US$ 73 M of contingencies and US$ 23 M of

working capital.
Sustaining capital of US$78 M, including:
Sustaining Capital US$ 1 M each year and additional of US$ 2 M every 3

years;
Mine Equipments - US$ 23.3 M starting in 2016 and expend during the whole
mine life;
Closure Cost - US$ 20 M, being US$ 10 M in 2037 and US$ 10 M in 2038.
Operating cash costs - of $127 per tonne SSP.
Internal Rate of Return (IRR) - 26.27% pa.
Net Present Value: US$ 423M @ 10% WACC (Weighted Average Cost of Capital).
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Table 1_2
Indicative Economics

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1.9
Conclusions and Recommendations
Amazon/NCL considers that the proposed exploration and development strategy is entirely appropriate
and reflects the potential of the Santana Phosphate Project.
Amazon/NCL has made a number of recommendations within this report to increase the mineral
resource confidence and project development.
The Santana Phosphate Project demonstrates encouraging economics based on the scoping study
concepts, cost projections and price assumptions as presented in this PEA.
Amazon/NCL recommends that the Project be advanced in one phase of work to the prefeasibility level
of evaluation and design.
The cost estimate for the recommended work program is shown in Table 1_3 below
Table 1_3
Santana Phosphate Project
Proposed Resource and Evaluation Expenditure
Activity
Total (US$)
DC and RC drilling
Assaying and Characterization
Geology
Pre-Feasibility Work
Travel and accommodation
Field supervision and support
Administration
Sub-total
$ 3,000,000
$ 200,000
$
50,000
$ 500,000
$
30,000
$ 150,000
$
70,000
$4,050,000

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INTRODUCTION
2.1
Scope of Work
Amazon Geoservices Ltda (Amazon Geoservices) and NCL Brasil Ltda (NCL) have been
commissioned by MBAC Fertilizer Corp (MBAC) to prepare a preliminary economic
assessment (PEA) for the Santana Phosphate Project, in Para State, Brazil.
Amazon Geoservices and NCL are collectively referred to in this report as Amazon/NCL
The PEA has been prepared under the guidelines of Canadian Institute of Mining (CIM)
National Instrument 43-101 and accompanying documents 43-101.F1 and 43-101.CP (NI43101).
2.2
Forward Looking Information

This report contains "forward-looking information" within the meaning of applicable Canadian
securities legislation. Forward-looking information includes, but is not limited to, statements
related to the capital and operating costs of the Santana Phosphate Project, the price
assumptions with respect to phosphate materials, production rates, the economic feasibility
and development of the Santana Phosphate Project and other activities, events or
developments that the MBAC expects or anticipates will or may occur in the future. Forwardlooking information is often identified by the use of words such as "plans", "planning",
"planned", "expects" or "looking forward", "does not expect", "continues", "scheduled",
"estimates", "forecasts", "intends", "potential", "anticipates", "does not anticipate", or "belief",
or describes a "goal", or variation of such words and phrases or state that certain actions,
events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking information is based on a number of factors and assumptions made by the
authors and management, and considered reasonable at the time such information is made,
and forward-looking information involves known and unknown risks, uncertainties and other
factors that may cause the actual results, performance or achievements to be materially
different from those expressed or implied by the forward-looking information. Such factors
include, among others, obtaining all necessary financing, licenses to explore and develop the
project; successful definition and confirmation based on further studies and additional
exploration work of an economic mineral resource base at the project; as well as those factors
disclosed in MBACs current Annual Information Form and Management's Discussion and
Analysis, as well as other public disclosure documents, available on SEDAR at
www.sedar.com.
Although MBAC has attempted to identify important factors that could cause actual actions,
events or results to differ materially from those described in forward-looking information, there
may be other factors that cause actions, events or results not to be as anticipated, estimated
or intended. There can be no assurance that forward-looking information will prove to be
accurate. The forward-looking statements contained herein are presented for the purposes of
assisting investors in understanding MBACs plan, objectives and goals and may not be
appropriate for other purposes. Accordingly, readers should not place undue reliance on
forward-looking information. MBAC does not undertake to update any forward-looking
information, except in accordance with applicable securities laws.
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2.3
Principal Sources of Information

In addition to site visits undertaken by Mr. Beau Nicholls (Amazon Geoservices) and Mr.
Carlos Guzman (NCL) to the Santana Phosphate Project between 25th and 27th July 2011, the
authors of this report has relied extensively on information provided by MBAC along with
discussions with MBAC technical personnel. A full listing of the principal sources of
information is included in Section 27 of this report and a summary of the main documents is
provided below:
MBAC (June 2011) - Internal Technical Report on Santana Phosphate Project, Par
State, Brazil.
MBAC (15th August 2011) - Internal Metallurgy Report on Santana Phosphate Project,
Par State, Brazil.
Letter dated 20 September 2011 - Magma Servicos de Mineracao Ltda, of Brasilia, Brazil
Geomma Consulting (2011) - Preliminary Environmental Assessment
ATS Engineering (2011) - Infrastructure review
Amazon/NCL have made enquiries to establish the completeness and authenticity of the
information provided and identified. Amazon/NCL have taken all appropriate steps in their
professional judgement, to ensure that the work, information or advice contained in this report
is sound and Amazon/NCL do not disclaim any responsibility for this report.
2.4
Qualifications and Experience

The qualified persons (as defined in NI 43-101) for this report are Mr. Beau Nicholls and Mr.
Carlos Guzman.
Mr. Nicholls is the principal consulting geologist for Amazon Geoservices with 17 years
experience in exploration and mining geology. Mr. Nicholls is also a Member of the Australian
Institute of Geosciences (MAIG) and is responsible for sections 4 to 12, 14 and jointly
responsible for sections 1 to 3 and 23 to 29.
Mr. Guzman is the principal consulting mining engineer for NCL with 17 years experience in
Mining engineering. Mr. Guzman is a registered Member of the Chilean Mining Commission
and is responsible for Sections 13 and 15 to 22 and jointly responsible for Sections 1 to 3 and
23 to 29.
Neither Amazon/NCL nor the authors of this report has or has had previously any material
interest in MBAC or related entities or interests. Our relationship with MBAC is solely one of
professional association between client and independent consultant. This report is prepared in
return for fees based upon agreed commercial rates and the payment of these fees is in no
way contingent on the results of this report.
2.5
Units of Measurements and Currency

Metric units are used throughout this report unless noted otherwise.
States dollars ("US$").
Currency is United

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2.6
Abbreviations
A full listing of abbreviations used in this report is provided in Table 2.6_1 below.
Table 2.6_1
List of Abbreviations
Description
Description
2
United States of America dollars
l/hr/m
litres per hour per square metre
Inches
Microns
M
m
million
metres
3D
AAS
three dimensional
atomic absorption spectrometry
Ma
Mg
thousand years
Magnesium
Au
bcm
Gold
bank cubic metres
ml
mm
millilitre
millimetres
CC
cm
correlation coefficient
Centimetre
Mtpa
N (Y)
million tonnes per annum

northing
Co
Cobalt
Ni
nickel
CRM
Cu
certified reference material or certified standard

Copper
NPV
NQ2
net present value

Size of diamond drill rod/bit/core
CV
DDH
coefficient of variation
diamond drillhole
C
OK
degrees centigrade
Ordinary Kriging
DTM
E (X)
digital terrain model

Easting
P80 -75
Pd
80% passing 75 microns

palladium
EDM
Fe
electronic distance measuring

Iron
ppb
ppm
parts per billion

parts per million
G
3
g/m
Gram
grams per cubic metre
psi
PVC
pounds per square inch

poly vinyl chloride
g/t
HARD
grams per tonne of gold

Half the absolute relative difference
QC
QQ
quality control
quantile-quantile
HDPE
High density poly ethylene
RC
reverse circulation
HQ2
Hr
Size of diamond drill rod/bit/core

Hours
RL (Z)
ROM
reduced level
run of mine
HRD
ICP-AES
Half relative difference

inductivity coupled plasma atomic emission spectroscopy
RQD
SD
rock quality designation

standard deviation
ICP-MS
ISO
inductivity coupled plasma mass spectroscopy

International Standards Organisation
SG
Si
Specific gravity
silica
kg
kg/t
Kilogram
kilogram per tonne
SMU
t
selective mining unit

tonnes
km
2
km
Kilometres
square kilometres
t/m
tpa
kW
kWhr/t
Kilowatts
kilowatt hours per tonne
UC
w:o
tonnes per cubic metre

tonnes per annum
Uniform conditioning
waste to ore ratio

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RELIANCE ON OTHER EXPERTS

Amazon/NCL has relied on the independent lawyers Magma Servicos de Mineracao Ltda, of
Brasilia, Brazil for their opinion on the title for the Santana mineral permits and Amazon/NCL
have received a memorandum from them dated 20 September 2011, supporting MBACs
claims.
MBAC is utilizing a number of experts in respects to the Santana Phosphate Project. They are
listed below:
Metallurgy undertaken by Jose Ignacio Senior Metallurgist MBAC (Section 13 of this

report).
Environmental review Geomma Consulting (Section 20 of this report).
Engineering Review - ATS Engineering Projetos (Section 18 of this report).

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PROPERTY DESCRIPTION AND LOCATION
4.1
Project Location
The Santana Phosphate Project is located in the southeast of Par State near the state
border of Mato Grosso and Para. Santana is located approximately 200km from the cities
Santana do Araguaia, (Para State) and Vila Rica (Mato Grosso State) (Figure 4.1_1). The
topographical coordinates of the project are 417882 East and 8967784 North (Datum SAD69
Zone 22 South). Palmas city in Tocantins is the most convenient major city with commercial
flights and light aircraft from Palmas takes approximately 1 hour to reach Santana.
Figure 4.1_1
Project Location

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4.2
Tenement Status
MBAC, through its 100% owned Brazilian subsidiary Itafos Mineracao Ltda (Itafos), is the sole
registered and beneficial holder of eight exploration properties with an additional three
exploration permits under application for a total of 97,949ha. Details of MBAC permits in the
Santana region are found in Table 4.2_1 and Figure 4.2_1.
The exploration permits are valid for three years and are renewable for an equal period.
MBAC are required to pay $ 2.02 Brazilian Reais per hectare per year to the DNPM for permit
annual maintenance fee.
Table 4.2_1
Summary of MBAC Permits Status in the Santana Region
Permit
Type
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Date Granted
851090/2008
24 September 2010
Itafs Minerao Ltda
9,828.91
850335/2010
850381/2010
850382/2010
850383/2010
850384/2010
850385/2010
850386/2010
850387/2010
850388/2010
850567/2010
25 November 2010
Under application
Natanael Rodrigues da Silva

Itafs Minerao Ltda
Itafs Minerao Ltda
Itafs Minerao Ltda
Itafs Minerao Ltda
Itafs Minerao Ltda
Itafs Minerao Ltda
Itafs Minerao Ltda
Itafs Minerao Ltda
Itafs Minerao Ltda
9,932.69
8,667.90
9,731.39
9,850.34
9,946.74
9,900.64
9,995.82
9,857.65
9,862.03
374.72
97 948.83
Under application
15 December 2010
15 December 2010
15 December 2010
15 December 2010
15 December 2010
15 December 2010
Under application
Holder
Area
(Ha)
Permit No.
Total
Comments
Transf. to
Itafos.
priority
priority
priority
Figure 4.2_1
Permit Location

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4.3
Royalties and Agreements

Based on information supplied to Amazon/NCL by independent lawyers Magma Servicos de
Mineracao Ltda, of Brasilia, MBAC has the following royalties and agreements:
Brazilian government royalty for phosphate is 2%
MBAC has a verbal agreement with three landowners in which MBAC has been granted
full access to the properties in exchange for ongoing minor maintenance including
fences, gates and repairs to a farm house
MBAC has exercised an option agreement with Natanael Rodrigues da Silva (dated 2
June 2010) to acquire 100% of permit numbers 851090/2008 and 850335/2010.
Ongoing obligations are:
Biannual progress reports describing work completed and results obtained
1% Net Smelter Royalty (NSR)
4.4
Environmental Liabilities
MBAC filed an Environment Drilling Permit (Relatrio de Controle Ambiental- RCA) at the
Secretaria Estadual de Meio Ambiente SEMA although it should be noted that drilling is
currently only being undertaken in privately owned farms with no clearing of access required.
Amazon/NCL is unaware of any environmental liabilities to which the Santana Phosphate
Project is subject.
4.5
Permitting
No additional permits are required at the current stage of exploration.
Amazon/NCL is unaware of any other factors risking the development of the exploration
works.

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ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE

AND PHYSIOGRAPHY
5.1
Project Access
Access to the Santana Phosphate Project is via approximately 125km of all weather gravel
roads and 80km of paved roads from the regional city centres of Santana do Araguaia, in
Para State (northeast of Santana) or via Vila Rica city in Mato Grosso State (southwest of
Santana)
The Project is located on a large cattle station called Fazenda Santa Luzia. A nearby cattle
station has a well maintained gravel airstrip which MBAC utilise with small airplanes requiring
approximately a one hour flight from Palmas city in Tocantins state.
5.2
Physiography and Climate

The climate is tropical with an annual rainfall of around 2,000mm and seasonal variations with
a drier period between June and November and a wetter period between December and May.
The average annual temperature is approximately 27.5C with minimal month to month
variations.
Exploration is undertaken at the Project all year round. Drilling activities are intensified during
the drier season, from May to November, and continues with adequate equipment during the
rainy season. At the peak of the rainy season drilling and mapping are paralysed for two to
three weeks, when floods cover the bridges.
The region dominated by igneous massifs separated by alluvial lowlands. The lowlands lie at
about 300 m ASL, with the tops of the massifs and tablelands at about 480 m ASL.
5.3
Local Infrastructure and Services

Santana is an exploration camp utilising the Fazenda Santa Luzia cattle station basic
infrastructure which includes a house and sheds. All electricity is supplied by diesel
generators and all consumables are brought in from the nearest major cities located over
200km away.
MBAC is in the process of moving the sample preparation and geological base to the small
city of Vila Mandi which has electricity and medical services available.
The local economy consists mainly of cattle ranches.
A comprehensive review of local infrastructure and services is included in section 18 of this
report.

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HISTORY
In June 2010, MBAC through its wholly owned Brazilian subsidiary, Itafos Minerao Ltda.
(Itafos), acquired, via an option agreement, two Exploration Licenses numbers 850.335/2010
and 851.090/2008 from Mr. Natanael Rodrigues da Silva. These claims have been transferred
to MBAC by the Federal Mines Department (DNPM).
In the same year, MBAC applied for nine Exploration Licenses, of which six were granted by
the DNPM, and the remaining three have priority.
Mr. da Silva initially claimed the first area for lateritic nickel, but had identified the area as
prospective for phosphate via discussions with local farmers who had returned anomalous
phosphate levels in agricultural soil sampling.
Prior to MBAC involvement there had been no material exploration or mining activities
undertaken on the project or the region.
GEOLOGICAL SETTING AND MINERALIZATION
7.1
Regional Geology
The Santana Phosphate Project is located within the Tapajs District (Figure 7.1_1) situated
in the south-central portion of the Amazon Craton which became tectonically stable at the end
of the Late Proterozoic period. The Craton is generally divided into the Guyana Shield north of
the Amazon River and the Brazil Shield south of the Amazon River. The provinces have a
northwest trend across the shields. The Brazil Shield has, as its nucleus, the Archaean
granitoid - greenstone terranes of the Carajs-Imataca province in the east. The structural
provinces become younger towards the west and are dominantly granitic rocks of
Paleoproterozoic age. There is a general agreement that in this region, initial oblique collision
tectonism was associated with crustal shortening linked to subduction and or accretion of
magmatic arcs and early continental nucleation.
The main units that form the basement of the Tapajs Gold Province are the Paleoproterozoic
Cui-Cui Metamorphic Suite (2.0 to 2.4Ga old), and the Jacareacanga Metamorphic Suite,
also of possible Paleoproterozoic age (>2.1Ga), regionally mapped as Xingu complex. The
Cui-Cui Suite comprises gneisses, migmatites, granitoid rocks and amphibolites. The
Jacareacanga Suite comprises a supra-crustal sedimentary-volcanic sequence, which has
been deformed and metamorphosed to greenschist facies. Both Suites are intruded by
granitoids of the Parauari Intrusive Suite consisting of a monzodiorite dated at 1.9 to 2.0Ga.
These form the basement of the extensive felsic to intermediate volcanic rocks of the Iriri
Group, dated at 1.87 to 1.89Ga, including co-magmatic and anorogenic plutons of the
Maloquinha and Rio Dourado Suite with intrusive events dated at 1.8 to 1.9Ga. The IririMaloquinha igneous event is associated with a strong extensional period. Regional structural
analysis in the Tapajs area has identified important lineaments that trend mainly northwest to
southeast with a less well defined transverse east to west set.
The Santana Phosphate Project represents the first phosphate occurrence in the region.

6005 Australia
Page: 25
Figure 7.1_1
Regional Geology Map
7.2
Local and Property Geology

The Santana property is located within hydrothermally-altered volcaniclastic and carbonate
rocks, possibly belonging to the Iriri Group. The hydrothermally-altered volcaniclastic rock
consists of lapilli and crystal tuff, with clasts varying considerably in size from very coarse
sand-size clasts to cobble-sized particles (agglomerate, volcanic breccia).
The rock has undergone weak to very strong carbonatization. Where carbonate has not been
the principal hydrothermal process, then the rock may have been silicified (and/or albitized).
Less extensive, but important locally are hematitization, chloritization, the introduction of
manganese and possibly sericitization. Disseminated pyrite may occur up to an estimated
15%.
Karstification and solution weathering has resulted in the development of dolines (sink holes)
that may be seen at surface and expressed as large depressions at least 15 m in diameter.
Meteoric weathering of this hydrothermalite led to the formation of a phosphate resource in
the saprolite overlying bedrock (Pau Seco target).

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Figure 7.2_1
Project Scale Surface Geology
Figure 7.2_2
Outcrop showing main hydrothermal unit with overlying Tuff

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Figure 7.2_3
Diamond Core - 6m of fresh Hydrothermalite contained within the saprolite unit
7.3
Mineralization
The phosphate mineralization occurs in a hydrothermally altered (or more correctly
metasomatic) lapilli tuff, consisting mainly of carbonate and/or silica. MBAC refer to this as a
hydrothemalite. There is a basalt unit identified in the footwall, but this has not been
intercepted in drilling to date.
The highest grade mineralization occurs in the saprolite. This residual mineralization was
formed by the downward and lateral movement of meteoric waters that have weathered the
crystalline carbonate bedrock to material that is often gritty in texture at the base, becoming
more argillaceous vertically. However, the gritty passages may occur in any interval where the
weathering has been less intense. There are manganiferous units, and units consisting of
buff-coloured clay, interpreted as having once been more carbonatic.
The saprolite overlies the bedrock forming essentially tabular bodies, the geometry of which is
controlled by the bedrock topography.
The thickness of the saprolite varies considerably from less than a metre overlying bedrock to
greater than 75m. Limited drilling suggests that bodies are thicker near the base of the
volcanic massifs becoming shallower outwards (15 to 20 m) towards the central parts of the
alluvial plains.
Limited X-ray diffraction studies of 15 core samples from eight of the first 12 drillholes showed
the most common phosphate-bearing mineral species in the saprolite to be Hydroxyapatite
Ca5(PO4)3(OH) followed by Crandallite CaAl2(OH)6(PO3(O0.5(OH)0.5))2. Hydroxyapatite also
occurs in the bedrock. Wavellite Al2(PO4)2(OH)3(H2O)5 and Goiazite SrAl3(PO4)2(OH)5 are
present in minor amounts.

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Figure 7_1
Apatite mineralization along fracture within diamond core
DEPOSIT TYPES
The Santana Geological model which is described in more detail in section 14 of this report, is
a post-tectonic hydrothermal related phosphate deposit with supergene enrichment. The
origin of phosphate mineralization is currently unknown.
Amazon Geoservices is unaware of any similar occurrences of phosphate in Brazil.
The basis of which the exploration program is being planned by MBAC is covered in section 9
of this report.

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EXPLORATION
MBAC commenced exploration in December 2010 and has included project scale mapping, 20
line kilometres of ground magnetic surveys, a ground penetrating radar test survey along with
Auger, Reverse Circulation (RC) and Diamond Core (DC) drilling.
9.1
Ground Magnetic Survey

MBAC undertook a total of 20km of Ground Magnetics at 100m spacing on east-west lines.
The survey is displaced to the southwest of the current mineralization.
The E-W direction of the lines is also incorrect at this latitude, due to the proximity of the
magnetic equator. Given these two factors, the result of the magnetic survey was considered
to be of low quality and did not assist in interpretation or target definition.
The figure below shows the results of the survey relative to the location of the modeled ore
body at the Pau-Seco target.
Figure 9_1
Santana Ground Magnetics Survey - TMI
9.2
Ground Penetrating Radar

A 5km trial ground penetrating radar survey was undertaken by Groundradar Measured
Resources (Canada) using the Ultra GPR developed in-house. The aim of the trial was to
verify if the equipment was capable of defining the base of saprolite (which represents the
higher grade material defined by drilling).
The survey was partially successful in defining this boundary. It correlated well with the drilling
were the GPR signal managed to penetrate the saprolite, but there are several gaps where
6005 Australia
Page: 30
the signal was 100% absorbed before reaching the target. It is believed that this is due to the
local compact nature of the clay. The trial survey covers only parts of two lines in the target
area.
9.3
Auger Drilling
MBAC has completed a total of 131 Auger holes for 1040m. Vertical holes were completed on
a 50m by 700m grid utilising a trado Auger unit which takes a 30 50cm sample which is
then recovered by pulling out all the rods. Minor contamination from wall material falling to the
base of the hole occurs using this method of drilling. Holes were drilled between 5 and 10m in
depth.
The Auger drilling has defined a regional anomalous zone which was then utilised in planning
follow-up RC and DC drilling.
RC and DC drilling has been covered in the following section.
9.4
Bulk Density Determinations

MBAC has taken a total of 452 bulk density determinations from weathered and fresh DC.
Bulk Density measurements were undertaken by MBAC technicians using the following
procedure:
20cm full core is wrapped in plastic film on the drill rig
Sample is weighed wet and then dried in a small oven
Dry core sample is weighed on electronic scale to determine mass of dry core and then
weighed immersed in water to determine the volume (Archimedes method)
Both wet and dry bulk densities are then determined
Amazon Geoservices revised the density data and removed outlier data prior to determining
the average bulk density. The Dry bulk density used in the resource estimation is summarized
in the following table:
Table 9_4
Bulk Density for Santana Phosphate Project
Density g/cm3
Material
Oxide 368 samples
Fresh 59 samples
1.62
2.68

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10
DRILLING
Drilling has been completed at the Santana Phosphate Project, as summarized in Table 10_1
below.
Table 10_1
Summary Drilling Statistics for Santana Phosphate Project
As of 31 July 2011
Item
Company
Auger Drilling
Reverse Circulation Drilling
Diamond Core Drilling
Diamond Core Drilling
Total
MBAC
Servitec Sondagens
Geosonda Sondagens
Servitec Sondagens
Number of
Drillholes
Metres
Drilled
131
57
12
60
1,040
2,432
883.64
2,398.12
260
6,753.86
All drilling has been undertaken and/or supervised by MBAC technical personnel.
RC and DC drilling and data collection methods applied by MBAC have been reviewed by
Amazon Geoservices during the site visit. Auger drilling was complete and as such has not
been assessed in operation by Amazon Geoservices, and is not included in the resource
estimate.
10.1
RC Drilling
Drilling was contracted to Servitec Sondagens. RC Drilling equipment used on the project
included a Explorak R50 RC rig and a 5.5 inch face sampling hammer.
Holes were drilled vertical and have not been surveyed downhole. Amazon Geoservices does
not consider that these holes would deviate enough to make a material difference.
Observations:
10.1.1
Samples taken and weighed on meter by meter basis
Cyclone is cleaned on a rod by rod basis
Samples split to around 3kg via a single tier splitter
Logging of alteration, lithology and weathering
Hole collar coordinates picked up utilising a hand held GPS (accuracy +/- 10m)
RC Drilling Results and Quality

During the site visit Amazon Geoservices noted the drilling of hole SAN-RC-0050. The hole
was in dry material at 50m but the intervals 10 to 25m were saturated.
On further inspection of the bag farm it was noted that a large number of RC samples were
saturated (Figure below). The exact amount is not known at this stage as the sample humidity
has not been clearly identified in the database (This is now in progress as it has been
recorded on paper) Amazon Geoservices estimates that around 20% of RC samples are wet.

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Figure 10.2.1_1
Wet RC Samples at Bag Farm
Figure 9_1
Wet RC Drilling
This is a material issue as wet RC samples in the saprolitic material can ultimately create a
sample bias. Amazon Geoservices has seen examples of phosphate being washed out of the
sample (such as Apatite mineralisation along fractures) which ultimately can result in
underestimation of the phosphate grade.
A total of 8 twin holes (RC and DC holes within 5 meters) have been undertaken to allow a
comparative analysis of the results to determine the precision of the RC versus the DC.
Results are pending.
Amazon Geoservices considers the wet RC samples should be avoided in RC drilling as this
causes both downhole smearing and also washing. Until the twin hole results are available
Amazon places a low confidence on the wet RC results to date.

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10.2
DC Drilling
Drilling was initially conducted by Geosonda who utilised a Chinese rotary drill called Drill XY4. Productivity was poor after less than 900m drilled, so MBAC changed contractors to
Servitec Sondagens. Servitec utilised a Boart Longyear DB-525 and a Maquesonda FS-320.
Both Geosonda and Servitec drilling is dominantly HQ sized core with minor NQ sized core
utilised on holes greater than 100m in depth and HW utilised to collar some holes.
Holes were drilled vertical and have not been surveyed downhole. Amazon Geoservices does
not consider that these holes would deviate enough to make a material difference. Core has
not been oriented as all holes are vertical.
Observations:
10.2.1
Storage of all core in wooden core boxes at drill site and then transported to the base for
logging and sampling
Run markers with metal tags indicating drilled depth and recovery
Measurement and recording of core recovery for each drilling run
Photography and detailed logging of core before splitting
Detailed logging of alteration, lithology, structures and sulphides
Hole collar picked up utilising a hand held GPS (accuracy +/- 10m)
DC Drilling Results and Quality

From observations of drilling in progress and 4 drillholes reviewed during the site visit,
Amazon Geoservices noted that MBAC DC procedures are to high quality with > 90%
recovery returned in both saprolite and fresh material.
Amazon Geoservices considers the DC drilling procedures to be of an acceptable industry
standard.
10.3
Drilling Results
Significant drill results have not been individually reported as this is a mineral resource
estimate and would involve an extensive table that is summarised in the mineral resource
section of this report. Drilling was orientated to enable perpendicular intercepts of the main
trend of mineralisation but once again the three dimensional modeling has ensured that this is
accounted for.

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11
SAMPLE PREPARATION, ANALYSES AND SECURITY
11.1
MBAC Sampling Method
11.1.1
Diamond Core
MBAC geologists supervised all core sampling undertaken. Core samples were normally
taken on 1m intervals with some taken between 0.75m and 1.25m intervals based on the
geological logging.
Core is split in half using a blade in the weathered material and via a diamond saw in the fresh
material. The core is bagged and sent for preparation and the remaining core is returned
to the core box and a ply wood lid is nailed on and the box is stored for future reference.
Amazon Geoservices recommends that the practice of irregular sample intervals should not
be continued. The mineralization in Santana is often subtle with no clearly defined visible
geological controls and as such a regular 1m sample interval for all the drillcore is
recommended.
11.1.2
Reverse Circulation
MBAC utilise a single tier riffle splitter and pass the dry sample approximately 3 times to get a
3kg sample. Amazon Geoservices have recommended that MBAC purchase or fabricate a 3
tier riffle splitter to reduce the work load and reduce potential error. The single tier splitter
MBAC was utilising was of poor design.
Figure 11.1.2_1
Single Tier Splitter currently used
Figure 11.1.2_2
Typical 3 Tier Splitter Recommended
For wet RC samples MBAC are drying the full sample in the sun (on a flat galvanised tin
surface) and then using a quartering technique to determine a 3kg sample. During the site
visit Amazon Geoservices recommended that they utilise the riffle splitter for all samples with
the exception of saturated samples (they were drying moist samples that passed through the
riffle splitter). Amazon Geoservices also recommended utilising a spear technique to sample
the wet samples, but more importantly Amazon Geoservices recommended that the wet
samples be removed from contention by increasing the drill rigs air capacity (by either

6005 Australia
Page: 35
employing a bigger compressor or adding a booster unit). The wet samples will be reviewed in
conjunction with the twin holes completed.
11.2
Sample Security
Core is currently stored at the farm house MBAC has rented. After logging, core samples are
marked for splitting and sampling by MBAC geologists. Each core sample is placed in a
plastic bag which in turn is placed in a nylon bag for transporting via truck to the ALS sample
preparation laboratory located in Campos Belos. The laboratory is approximately 500km by
road from Santana.
MBAC is currently changing the sample preparation area from the rented farm house to the
new base at Vila Mandi city located around 3 hours drive from Santana. Core transport will
need to be done carefully as there is a risk of mixing up core during transport if not properly
packaged.
Amazon Geoservices considers the core sampling security to meet current industry best
practice.
11.3
ALS Laboratory Sample Preparation and Analysis

Sample preparation of samples taken by MBAC was performed by ALS Sample Preparation
Laboratory located in Campos Belos, Goias State, Brazil. Sample preparation procedures are:
Drying and weighing of whole sample
Crushing of sample to -2mm
Sample homogenization and splitting to a 1kg sub-sample
Pulverization to 95% passing -150 mesh
Splitting of pulverized material to 50 gram pulp
Sample pulps are air freighted to the ALS analytical laboratory in Lima, Peru for oxide
analysis. Sample pulps are analysed for phosphate using a using a lithium tetraborate fusion
followed by XRF analysis (0.01% Detection limit).
The ALS analytical procedures are ISO 9001 certified and are in accordance with ISO/IEC
17025.
11.4
Adequacy of Procedures
The sampling methods, chain of custody procedures, and analytical techniques are all
considered appropriate and are compatible with accepted industry standards.

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12
DATA VERIFICATION
12.1
Geological Database
Amazon Geoservices validated the Santana MBAC access database using the Gemcom
Surpac Software System Database Audit tool with no inconsistencies noted.
A comparison of hardcopy assay and geological logging versus the digital database was
performed on a total of 10% of the MBAC drillholes. No errors were identified with the original
log and the digital database.
12.2
QAQC
MBAC has set in place a QAQC programme that included the submission of blanks, field
duplicates and standards.
MBAC undertakes quality control on approximately 10% of the total samples prepared. This
includes three blanks, three duplicates and three certified standards for every 90 rock
samples submitted. The first QAQC sample in each batch is a blank to check that the system
was clean.
12.2.1
Certified Standards and Blanks

MBAC utilized a total of 3 standards (These standards have been prepared and certified by
SGS- Geosol) and one blank material (locally sourced and not certified). The results have
been analysed by Amazon Geoservices and are summarised in the table below.
Table 12.2.1_1
Standards Utilized by MBAC
Submitted Blanks and Standards
Standard
Name
Expected
Value (EV)
(%)
+/- 2SD
(EV)
(%)
Date range
0.01
0.009 to
0.011
Feb 2011 to
Aug 2011
12.69 to
13.28
2.44 to
2.54
10.84 to
11.33
Apr 2011 to
Aug 2011
Apr 2011 to
Jul 2011
Apr 2011 to
Aug 2011
No of
Minimum
Analyses
(%)
Maximum
(%)
Mean
(%)
% Within
+/- 2 SD
of EV
0.44
0.018
41.8
MBAC Submitted Blanks

Blank
98
0.005
SGS Certified Standards

PFA
12.99
PFB
2.49
PFM
11.09
31
12.9
13.2
13.04
100
30
2.5
2.65
2.54
73.30
51
10.95
11.65
11.18
96.08

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The blank material was sourced by MBAC from un-mineralized granite material. There are
results for blanks up to 0.44% P2O5 with the average of the results being 0.018%. The causes
for the low level values returned from the blank material are potentially related to the actual
un-certified granite material utilised containing low levels of phosphate.
Figure 12.2.1_1
Blank
Mbac Blank
0.5
0.45
P2O5 (%)
0.4
0.35
0.3
0.25
0.2
Results
0.15
2 DL
0.1
Zero
0.05
0
Date

6005 Australia
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Figure 12.2.1_2
Standard PFA
P2O5 (%)
Mbac Standard - PFA

13.4
13.3
13.2
13.1
13
12.9
12.8
12.7
12.6
12.5
12.4
12.3
Results
EV
2 SD
Date
Figure 12.2.1_3
Standard PFM
Mbac Standard - PFM

11.8
P2O5 (%)
11.6
11.4
Results
11.2
EV
11
2 SD
10.8
10.6
10.4
Date

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Page: 39
Figure 12.2.1_4
Standard PFB
Mbac Standard - PFB
2.7
2.65
P2O5 (%)
2.6
2.55
Results
2.5
EV
2 SD
2.45
2.4
2.35
2.3
31-Mar-11
30-Apr-11
31-May-11
Date
30-Jun-11
It can be seen for the results of Standard PFB above, that 27% of all standards analysed have
failed the tolerance test.
12.2.2
Field Duplicates
The field duplicate data has been analysed by Amazon Geoservices using a number of
graphical comparative analyse methods. The objective of this is to determine relative
precision levels between various sets of assay pairs and the quantum of relative error. This
directly reflects on the precision of the sampling technique utilised.
MBAC completed field duplicate by splitting the crush reject and resubmitting for analysis.
Based in the analysis, Amazon Geoservices concludes that the precision of field duplicates is
acceptable as shown in the figure below.

6005 Australia
Page: 40
Figure 12.2.2_1
Field Duplicate Data (Crushed reject resubmitted)

6005 Australia
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12.2.3
Data Quality Summary

The standards data has shown a high accuracy (within 2 standard deviations) as reported by
the SGS Geosol laboratory for PFA and PFM of the 3 certified standards utilised.
The third standard, PFB, returned 26 samples outside the tolerance limit. This poor result with
PFB is potentially related to the quality of the standard as the other two standards returned
acceptable precision, although additional umpire analysis of this standard will be required to
qualify this issue.
For a period of time MBAC did not proactively reviewed the QAQC data on a batch by batch
basis, and the failed PFB standards were not queried with the laboratory immediately after
results arrived. Problems detected with the standard PFB, which is the only low level standard
utilised, can either be caused by the standards poor quality or by the laboratory accuracy and
the latter results in a low confidence on the results around this grade.
Amazon Geoservices has recommended to MBAC to review these failed standards with the
laboratory and also to undertake umpire assays at a separate laboratory.
The field duplicate data has returned acceptable precision. No issues have been identified
with the current conventional sampling method.

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13
MINERAL PROCESSING AND METALLURGICAL TESTING
13.1
Samples Preparation and Methods
13.1.1
Outcrop Samples
The first study was completed by ALS laboratories on three outcrops samples. (Samples
MO1, M1 and M3). A quantitative mineralogical composition was completed on these three
samples.
At the end of 2010, an additional three outcrop samples we sent for testwork at MBACs Itafos
mine. The samples were crushed to minus 2mm and homogenised with the following testwork
undertaken:
Size distributions
Chemical analysis
Mineralogical identifications
Work index determinations
Flotation response of the sample RK 72833
Three Flotation tests were completed on sample RK 72833 at a batch scale with variation on
the grinding size and keeping the following conditions constant:
Table 13.1.1_1
Operation
Conditioning 1
Exploratory flotation tests with 1.5 kg outcrop samples

Time
Impeller speed
(min)
(rpm)
Reagent
3
1200
Conditioning 2
1200
flotation rougher/
cleaner
6/3
1000
Cell
volume (l)
Corn starch (1.67%) - 30 ml
4.3
NaOH (5%) until pH = 10
4.3
Soy bean oil (5%) - 20 ml
4.3
4.3/2.3
Samples were not de-slimed.

6005 Australia
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13.1.2
Drill Core Samples

The samples used for the main test work were collected from the first 22 bore holes samples.
The drill core samples after excluding the ones with a P2O5 grade less than 3% were
classified according the chemical composition as follows:
Table 13.1.2_1
Criteria used to classify the drill core samples. LR= low relationship CaO/ P2 O5 <1.18
Types
Meters of Core
% of total
P2 O5 (%)
CaO/ P2 O5
High grade
61.22
17.23
22.1 a 35
1.18-1.4
apatite
22.3
6.5
> 35
1.3-1.4
Medium grade
63.59
18.08
7.8 to 22
1.18-1.4
Medium grade LR
23.2
3.11
10.5 to 22
<1.18
High grade LR
11.3
6.50
22 to 27
<1.18
Fresh rock low

grade
71.0
20.06
3 a 6.2
7.8 a 18.6
Low grade rich soil
50.6
14.97
3 to 15
<1.18
Low grade
19.19
4.80
3 to 7
1.18-1.44
Low grade LR
31.07
8.76
3 to 12
<1.18
TOTAL
353.4
100.00
The samples used for the main test work were collected from the first 22 bore holes samples.
The drill core samples after excluding the ones with a P2O5 grade less than 3% were
classified according the chemical composition as follows:
For each type of material it was collected approximately 30 kg from several drill core samples.
Table 13.1.2_2 presents the expected grades of the samples as per the ALS grades used for
mineral resource estimations.
Table 13.1.2_2
Expected Chemical Characteristics of the several types of material classified according criteria on table 3.1
Assays(%)
Type
P2 O5
Al2 O3
CaO
Fe2 O3
SiO2
CaO/ P2 O5
apatite
37.11
1.12
50.76
2.72
0.96
1.37
high grade
29.42
3.46
38.47
8.17
11.21
1.31
high grade LR
24.64
9.61
26.69
16.39
7.16
1.08
medium grade
14.44
5.51
18.89
13.97
38.12
1.31
medium grade LR
15.78
13.34
15.43
19.91
19.41
0.99
Low grade rich soil
7.41
16.73
1.86
30.13
23.28
0.23
Fresh rock low grade
3.92
0.30
49.26
1.41
1.35
12.94
Low grade
5.10
10.52
6.58
15.68
52.84
1.29
Low grade LR
5.26
12.72
2.92
18.27
47.31
0.57
Material from each one of the types presented on table 13.1.2_3, excluding the apatite that
was considered final product and the fresh rock that will not be mined was crushed to minus
2mm, homogenized and distributed into 1.5 kg plastic bags for the metallurgical tests.
The following tests were done:
Size distributions
Mineralogical identifications on selected drill core samples

6005 Australia
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Chemical characterizations of material types and concentrates
Flotation tests
All the testwork was done in bench scale in the mineral processing laboratory of Itafos in
Campos Belos, Goiais state. The following equipment was used:
One set of tyler mesh screens
One laboratory rod mill
One desliming unit composed of one pump box, one pump and one hidrocyclone 25mm
diameter. Slurry was fed to the cyclone at 15% solids at a pressure around 220 kPag
One laboratory flotation cell with different tanks sizes
One laboratory attrition cell
The flotation tests 1 until 18 were done with the medium grade material type, tests 19 to 22
with the low grade material type and tests 23 to 27 with the other types. Tests 28 to 32 were
done with composite samples with the following proportion:
Table 13.1.2_3
Composite samples tested
Test
28- Composite
29-Composite LR
30-Global
32 Global2
Level
Weight (%)
High grade
70%
Low grade
30%
Low grade LR
30%
Medium grade LR
30%
High grade LR
20%
Rich soil
20%
High grade
35%
Low grade
15%
Low grade LR
15%
Medium grade LR
15%
High grade LR
10%
Rich soil
10%
High grade
15%
Low grade
35%
Low grade LR
15%
Medium grade LR
15%
High grade LR
10%
Rich soil
10%
The samples were screened on the specified size; the coarse product was ground until reach
the desired size, mixed with the fine product and then scrubbed with NaOH in an attrition cell
during 15 minutes before being deslimed in the desliming unit. The cyclone underflow was
floated in the laboratory cell. In some tests the rougher concentrates were reground and in
some tests the material was not deslimed or scrubbed.
Reagents were diluted to 5% weight before being fed. Starch and soy bean oil (collector) were
prepared with NaOH in a concentration of 15% weight. Conditioning time was 3 minutes for
6005 Australia
Page: 45
depressor and 2 minutes for collector. Table 13.1.2_4 summarizes the main conditions.
Detailed conditions are presented on annex 1- Batch flotation tests conditions and results.
Table 13.1.2_4
Main conditions of the flotation tests. Attrition was done with soda, except for test 20
FLOTATION CONDITIONS
Test
GRINDING
80%<#
pH
SOY
BEAN g/t
STARCH
g/t
65
10
340
100
10
150
Na2 SiO3
g/t
Desliming
Attrition
Cleaners
Regrind
350
no
no
no
340
350
no
no
no
10
340
350
no
no
no
65
10
340
350
yes
no
no
100
10
340
350
yes
no
no
150
10
340
350
yes
no
no
65
7.5
340
350
no
no
no
65
340
350
no
no
no
65
10
340
350
no
no
no
10
65
11
340
350
no
no
no
11
65
340
no
no
no
12
65
340
no
no
no
13
65
340
no
no
no
14
65
340
no
no
no
15
65
340
340.0
no
no
no
16
65
10
340
430.0
yes
yes
yes
17
150
10
340
430.0
yes
yes
yes
18
270
10
340
430.0
yes
yes
no
19
270
10
340
430.0
yes
yes
yes
20
150
10
340
430.0
yes
yes
yes
21
150
10
340
430.0
yes
no
yes
22
150
10
340
430.0
yes
yes
no
23
150
10
340
430.0
yes
yes
yes
24
150
10
340
430.0
yes
yes
yes
25
150
10
340
430.0
yes
yes
yes
26
150
10
340
430.0
yes
yes
yes
27
150
10
340
430.0
yes
yes
yes
28
150
10
340
430.0
yes
yes
yes
29
150
10
340
430.0
yes
yes
yes
30
150
10
340
430.0
yes
yes
yes
31
150
10
340
430.0
yes
yes
yes
32
150
10
340
430.0
yes
yes
yes
170
170
430
451.0

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13.2
13.2.1
Results and Discussion

Outcrop Samples
Mineralogical characterization
The mineralogical composition is presented in table 13.2.1_1:
Table 13.2.1_1
Mineralogical composition of three outcrops samples
Minerals
Wt%
Sample MO1
Sample M1
Sample M3
61.09
0.08
2.38
Iron_Oxide_Ti
3.19
0.01
Rutile
0.01
0.01
Manganosite
0.03
1.04
Iron_oxide
Gohetite
3.71
0.03
1.63
Apatite
17.64
88.84
20.42
Gorceixite
0.34
0.32
Kulanite
0.35
0.48
0.84
Childrenite
0.94
2.88
0.03
Trolleite
0.08
0.1
0.05
Cheralite
0.18
0.02
Monazite
0.09
4.08
0.08
Illite
0.04
0.01
Glauconite
0.05
Quartz
0.03
0.32
70.6
Mix_Iron_Oxide-Apat
12.82
1.05
2.34
Mix_Kulanit_Mangano
00
0.27
0.02
Apatite_Qz 0
0.01
0.24
0.21
Total
100
100
100
Sample MO1 was mainly composed of iron oxides, sample M1 with apatite and sample M3
with quartz. The main phosphate mineral was identified as apatite, secondary phosphates
identified as Gorceixite, Kulanite, Childrenite and Trolleite presented minor proportion. Some
association of apatite-iron oxides and apatite-quartz were also identified on some microscopic
photos. Sample M1 presented a high grade of Monazite, 4.08%.

6005 Australia
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Another mineralogical identification was done on three outcrop samples send by the geology
team to Itafs mine at the end of 2010. Results are shown in Table 13.2.1_2.
Table 13.2.1_2
Mineralogical identification of three outcrop samples
Sample
Minerals
RK 72831
Hidroxiapatite, Hematite, Goethite
RK 72832
Hidroxiapatite
RK 72833
Quartz, Hidroxiapatite, Goethite , Crandalite
RK 72833CONC CLEANER
Hidroxiapatite, Quartz
Chemical Characterization
Tables 13.2.1_3, 13.2.1_4, 13.2.1_5 and 13.2.1_5 present the results obtained with the three
outcrop samples.
Table 13.2.1_3
Chemical Characterization of the three outcrop samples
SAMPLE
RK 72831
RK 72832
RK 72833
RK
72833CONC
CLEANER
P2O5
24.4
36.9
6.2
28.8
Solubility citric acid 2%

(1:100)- P2 O5
5.3
5.8
2.7
4.0
CaO
30.7
53.2
8.0
38.1
MgO.
0.10
0.087
0.083
0.066
Na2O
0.15
0.13
0.061
0.219
K2O
0.060
0.10
0.138
0.036
MnO.
0.56
1.02
0.983
0.848
Cu.
0.059
0.050
0.041
0.038
Co.
0.010
0.004
0.007
0.003
Fe2O3
2.55
1.75
8.23
4.36
Al2O3
1.1
1.0
1.5
0.90
SiO2
1.2
0.80
68.9
23.0
F.
0.55
0.68
0.57
0.69
As.
< 0.10
< 0.10
< 0.10
< 0.10
mg/kg
Cd.
20.0
15.0
6.2
10.0
mg/kg
Pb.
300.0
175.0
175.0
250.0
mg/kg
Cr.
45.0
25.0
100.0
20.0
mg/kg
Hg.
< 0.10
< 0.10
< 0.10
< 0.10
mg/kg
Ni
117.5
420.0
82.5
60.0
mg/kg
Se.
< 0.10
< 0.10
< 0.10
< 0.10
mg/kg
ORGANIC MATER
0.65
0.60
0.85
0.62
UMIDITY 100 C.
0.45
0.32
0.70
0.33
LOSS IGNITION 460 C.
1.3
1.1
1.8
1.4
LOSS IGNITION 1.050 C.
2.4
3.0
3.0
2.3

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Page: 48
Size and P2O5 distributions
Table 13.2.1_4
Weight and P2 O5 distribution in selected sizes of the outcrop samples crushed to minus 2mm
RK 72831
Size (mm)
RK 72832
Weight
(%)
P2 O5
P2 O5
(%)
Distr(%)
Weight
(%)
RK 72833
P2 O5
P2 O5
Weight
(%)
Distr.
(%)
(%)
P2 O5
P2 O5
(%)
Distr(%)
+2
14.71
26.16
15.00
18.65
34.64
18.60
15.38
8.91
32.27
-2+0.21
24.90
24.7
23.00
33.11
36.62
34.90
26.06
4.17
29.63
-0.21+0.037
13.78
19.11
10.27
14.39
35.43
14.68
28.74
2.20
17.27
-0.037
46.61
28.45
51.73
33.85
32.66
31.82
29.82
2.55
20.73
TOTAL
100.00
25.64
100.00
100.00
34.74
100.00
100.00
3.67
100.00
Flotation tests
Table 13.2.1_5
Exploratory flotation results with sample RK 72833
Grinding
size 85%
passing
% weight
%P2 O5
% weight
%P2 O5
% weight
% P2 O5
65#
81.25%
2.05%
11.22%
26.02%
11.22%
58.70%
100#
81.72%
2.16%
10.90%
27.65%
10.90%
58.29%
150#
86.56%
2.20%
9.26%
29.47%
9.26%
56.40%
Test n
Rougher Tailings
Cleaner Concentrate
Flotation recovery
Bond Work Index

Table 13.2.1_6
Bond Work index determinations in outcrop samples
Sample
test screen
(mm)
% passing of
the feed in
test screen
F80
(mm)
P80
(mm)
Gbp
(g/rev)
WI
(kWh/st)
WI
(kWh/t)
RK 72831
0.149
50.5
1.00
0.096
5.549
4.9
5.4
RK 72832
0.149
43.8
1.26
0.112
3.040
8.5
9.4
RK 72833
0.149
58.8
1.00
0.090
8.143
3.4
3.7
Bond work index presented low values, from 3.7 to 9.4 kWh/t. A value of 10kWh/t was used in
the preliminary assessment study to size the mill.

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13.2.2
Drill Core Samples

Chemical Characterizations
After the results of the first drilling campaign some drill core samples were chosen for
mineralogical identification based on the chemical compositions. Table 13.2.2_1 and 13.2.2_2
below present the results.
Table 13.2.2_1
Chemical composition of selected drill core samples for mineralogical identifications
Drill hole
depth (m)
P2 O5
Al2 O3
CaO
Fe2 O3
MgO
MnO2
SiO2
CaO/
P2 O5
SAN-DD-0001
29.8
2.09
40
2.58
1.93
19
1.33
SAN-DD-0001
10
11
17.6
15.8
14
25.1
0.3
3.26
9.3
0.78
SAN-DD-0001
19
20
4.14
13.2
18.6
0.2
0.63
47
0.49
SAN-DD-0001
49
50
3.49
0.08
55
0.45
0.9
0.47
0.2
15.82
SAN-DD-0001
108
109
3.04
0.09
55
0.21
0.8
0.41
0.4
18.03
SAN-DD-0002
30.7
4.6
40
11.9
0.1
2.14
2.2
1.31
SAN-DD-0005
25
26
14.7
6.89
20
8.15
0.4
43
1.39
SAN-DD-0007
26.7
9.43
30
17.8
0.2
1.46
8.3
1.10
SAN-DD-0008
17.8
11.2
17
22.5
0.2
1.42
20
0.93
SAN-DD-0010
36
37
20.9
4.33
28
6.42
0.1
1.76
34
1.32
SAN-DD-0010
57
58
4.43
6.98
5.4
13.9
0.3
1.28
62
1.22
SAN-DD-0011
12.1
18.5
1.8
28.2
0.1
9.73
11
0.15
SAN-DD-0011
13
14
35.9
1.56
49
3.77
2.42
1.5
1.36
SAN-DD-0012
21
22
6.27
13.3
7.9
13.1
0.6
1.03
50
1.26
SAN-DD-0012
34
35
32.2
0.35
43
3.66
1.72
17
1.34
Mineralogical Identifications
Table 13.2.2_2
Mineralogical identification of selected drill core samples
Drill hole
SAN-DD-0001
Depth (m)
3
Minerals
hidroxiapatita,quartzo,Crandalita
SAN-DD-0001
10
11
hidroxiapatita, Crandalita, Goetita,Muscovita, Hematita, Caulinita, Enstatita,

Anatasio, Goiazita
SAN-DD-0001
19
20
Quartzo,ortoclsio,hematita
SAN-DD-0001
49
50
Calcita,hidroxiapatita,dolomita
SAN-DD-0001
108
109
Calcita,hidroxiapatita,dolomita
SAN-DD-0002
hidroxiapatita, crandalita, hematita, goetita, caulinita
SAN-DD-0005
25
26
Quartzo, hematita, caulinita, muscovita,anatasio, hidroxiapatita
SAN-DD-0007
hidroxiapatita, quartzo, hematita,crandalita
SAN-DD-0008
hidroxiapatita, quartzo, hematita, goetita, wavelita, muscovita, anatsio.
SAN-DD-0010
36
37
hidroxiapatita, quartzo, hematita, caulinita
SAN-DD-0010
57
58
quartzo, hematita, hidroxiapatita, goetita, muscovita caulinita
SAN-DD-0011
hematita, quartzo, goiazita, magnetita, goetita, piroxmangita
SAN-DD-0011
13
14
hidroxiapatita, quartzo, goiazita
SAN-DD-0012
21
22
quartzo, hematita, hidroxiapatita,caulinita, muscovita
SAN-DD-0012
34
35
hidroxiapatita, quartzo, hematita
The main phosphate mineral identified was the hidroxiapatite followed by some secondary
phosphates as crandalite, goiazite and wavelite. Iron minerals identified were goetite,
6005 Australia
Page: 50
hematite and magnetite. Silicates found the quartz, ortoclasio, muscovite, caulinite, and
enstatite. Titanium and manganese oxides were identified as anatasio and piroxmanguite.
Only at the bottom of the deposit were calcite and dolomite found.
Size distributions
Table 13.2.2_3
Size distributions of several types of materials crushed to minus 2mm
% weight accumulated on size
size
(mm)
apatite
High
grade
Medium
grade
Low
grade
High
grade LR
Medium
grade LR
Rich
soil
Low
grade
LR
+2
15.49
2.09
3.19
2.43
2.35
1.53
3.13
2.70
+0.21
43.93
13.74
15.75
19.90
16.18
12.72
18.13
19.89
+0.037
62.03
30.33
29.86
36.43
29.42
27.49
31.24
33.17
-0.037
39.77
69.67
70.14
63.57
70.58
72.51
68.76
66.83
The very rich material, classified as apatite presented around 40% of the weight finer than
37 microns but all other types were much finer and presented from 64% to 73% of the weight
finer than 37 microns.
Flotation tests
The type medium grade was chosen to study the main flotation variables. After this definition
these conditions were used to estimate the recovery and the concentrate qualities that could
be gotten with other types. Results are shown on Table 13.2.2_4.
Effect of grinding size

Tests 1 to 6 were done with variations on the grinding size, being tests 1 to 3 without
desliming and tests 4 to 6 with desliming. All other variables were kept constant. In the first
three tests the grinding size was varied from 85% < 65# to 85% < 150# without desliming the
sample. The results did not show any improvement in grinding finer than 65#. Concentrates
presented a grade around 29% P2O5 and recovery stay around 73%.
Tests 3 to 6 the samples were deslimed after grinding each sample from 85% < 65# to 85%<
150#. Results show an increasing global P2O5 recovery, from 68.6% to 73.1%. It is Interesting
to note that flotation recovery of the deslimed ore (85.4% test 6) is higher than the recovery
without desliming (72.3% test 3), as shown on annex 1, although global recovery is similar.
Desliming showed to be important to reduce the mass going to flotation and to eliminate iron
and aluminium from flotation feed. Grinding size of 85% passing 150# showed to be the best
grinding size.
Effect of the pH
Tests 7 to 10 pH was varied from 7.5 to 11. All other variables were kept constant. Results
show a strong effect of the pH. P2O5 Recovery increased from 13.6% at pH 7.5, test 7 to
79.5% at pH 11, test 10.

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Effect of depressor type and concentration

Tests 11 to 15 tested the corn starch against the sodium silicate in two concentrations. All
other variables were kept constant. Better P2O5 grade and recovery, respectively 32.2% and
69.7 was received with sodium silicate at a concentration of 430 g/t.
Effect of attrition with soda and concentrate regrind

The concentrates received up to and including test 15 presented high grades of Fe2O3 and
Al2O3 that could be deleterious for the acidulation in order to get a minimum of 18% solubility
in citric acid (SSP specifications). Tests 16 to 18 the ground samples to 80% less than 150#
were scrubbed with NaOH before desliming and the rougher concentrates were reground and
then floated twice. It was possible to obtain concentrates with high P2O5 grades and lower
Al2O3 and Fe2O3 grades. Based on these results, these conditions were used to evaluate
other material types. Tests 19 to 22 were done with the low grade type material with variations
on attrition and regrind steps showed a positive effect of these two variables to obtain low
aluminum and iron grades in the concentrates.

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Table 13.2.2_4
Summary of flotation tests results with drill core samples.
CONCENTRATES
Types of
Materials
P2O5 grade(%)
test
#
Assay(%)
P2 O5
CaO
Fe2 O3
Al2 O3
SiO2
Weight
(%)
P2 O5
recove
ry (%)
kgR2 O
3 /t
P2 O5
kgFe2
O3 /t
P2 O5
29.7
33.6
7.0
1.8
14.1
43.3
73.2
297.17
236.40
29.4
33.3
6.4
1.4
14.2
42.1
70.3
265.99
217.69
29.5
43.1
4.3
6.3
11.6
44.7
72.5
357.06
144.71
30.3
33.9
6.0
1.1
13.6
38.4
68.6
235.22
197.89
29.5
40.6
5.4
5.5
14.1
41.8
71.1
369.05
182.88
29.1
32.7
8.2
1.4
16.8
42.2
73.1
329.52
282.05
32.1
41.0
8.3
1.7
3.7
13.5
13.6
310.59
258.26
31.8
46.5
4.7
5.6
8.9
32.2
61.3
323.74
147.03
29.2
42.8
5.8
5.0
12.1
43.9
73.7
371.11
199.98
10
27.9
31.8
5.5
2.0
16.3
51.9
79.5
268.63
198.00
11
31.6
40.6
4.1
1.3
12.2
34.9
66.2
169.98
129.82
12
31.0
39.4
4.8
1.5
12.4
36.2
66.0
203.52
154.53
13
32.2
38.3
5.2
1.2
11.6
36.6
69.7
198.55
160.17
14
31.6
40.6
4.1
1.3
12.2
36.4
66.2
169.98
129.82
15
32.1
41.1
4.2
1.6
11.1
36.2
67.8
180.52
130.86
16
35.1
45.74
2.4
0.40
10.54
27.8
57.9
80.82
69.44
17
35.8
47.5
2.1
0.4
8.2
27.6
59.1
69.43
59.05
18
34.1
43.4
2.4
0.4
11.1
28.6
56.7
82.92
71.53
19
35.4
45.0
2.4
0.6
6.4
4.4
31.8
84.58
67.89
Low grade
20
34.0
42.0
2.8
0.7
10.1
5.7
40.1
101.94
82.26
5-6
21
33.7
42.2
2.8
0.7
9.6
6.1
43.3
105.11
83.14
22
33.8
45.2
3.0
1.4
9.4
6.4
44.6
131.32
88.73
23
33.6
35.3
7.6
4.4
2.6
22.3
46.2
357.61
225.92
24.3
24
33.7
37.5
3.6
3.5
10.6
30.1
44.1
211.55
106.64
Low grade LR 4.5
25
33.6
31.1
4.8
6.8
9.0
2.5
18.3
344.65
142.98
High grade 29.2
26
36.92
48.00
1.60
0.20
6.84
57.0
72.0
48.75
43.34
Rich soil 6.6
27
35.0
18.8
4.8
18.4
6.1
1.0
5.4
661.71
137.14
Composed 21.7
28
34.15
44.81
2.51
0.44
10.40
47.0
74.1
86.48
73.65
Composed LR
12.1
29
35.65
42.28
5.20
3.38
3.12
13.0
36.7
240.67
145.86
Medium grade
16.5-18
Medium grade LR
16.2
High grade LR
Global
17.1
30
35.91
45.22
2.80
1.15
6.29
28.0
57.1
110.00
77.97
Composed 2 12.2
31
34.36
45.80
2.57
0.54
8.93
24.3
68.4
90.52
74.88
Global 2 12.4
32
35.88
45.92
3.20
1.77
5.68
17.2
49.9
138.52
89.19

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13.3
Concentrate Characteristics
Table 13.3_1 shows the chemical composition of the concentrates obtained in the several
tests. A typical concentrate is the one from test 18.
Table 13.3_1
Chemical composition of typical concentrate. Fluorine analysis by Celqa.
Other elements by pro-solo
Assay(%)
13.4
P2 O5
CaO
Fe2 O3
Al2 O3
SiO2
34.1
43.4
2.4
0.4
11.1
1.7
Recovery Evaluation
Tests 19 to 32 evaluated the concentrates chemical characteristics and the P2O5 recovery of
the several types of materials to estimate the deposit overall recovery to be used in this PEA.
Flotation conditions were the same as the ones for tests 16 to 18.
Although it was obtained good concentrate grades for all material types, the iron and the
aluminium of the concentrates of the material types classified as medium grade LR, Low
grade LR and rich soil were very high and as so, these types of materials were considered
as non recoverable material. It can be observed in table 4.3 that the amount of these
materials are very low and represent only 11.45% of the total P2O5 of the deposit. Table
13.4_1 below presents an estimation of the overall deposit P2O5 metallurgical recovery based
on the estimation of the proportion of each type of material and the metallurgical recovery of
each one.
Table 13.4_1
Estimation of the overall deposit recovery
TYPES
% of total
Grade
P2 O5 (%)
P2 O5
distribution
(%)
P2 O5
recovery
(%)
P2 O5
recovered
(%)
apatite
6.50
37.11
13.69%
100.00
13.69
High grade
17.23
29.42
28.77%
72.02
20.72
Medium grade
18.08
24.64
25.28%
50.90
12.87
Medium grade LR
3.11
14.44
2.55%
0.00
0.00
Low grade fresh rock
6.50
3.92
1.45%
0.00
0.00
High grade LR
20.06
15.78
17.97%
44.10
7.92
Low grade rich soil
14.97
7.41
6.29%
0.00
0.00
Low grade
4.80
5.10
1.39%
43.30
0.60
Low grade LR
8.76
5.26
2.61%
0.00
0.00
TOTAL
100.00
17.62
100.00%
55.80
55.80
Based on this, a metallurgical recovery of 55% of the total P2O5 contained in the mineral
resource estimation was found.
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13.5
Solubility Tests
Several acidulation tests with sulphuric acid were done at the Celqa laboratory in order to
confirm the possibility to obtain Single Super Phosphate from the Santana material. Table
13.5_1 summarizes the results. It is possible to observe that the products met the SSP
specifications, minimum of 18% solubility in citric acid (CNA) + water and 16% in water.
Table 13.5_1
SSP characteristics with outcrop sample and flotation concentrates after 15 days of the acid attack. Products of
tests 3, 4 and 5 were dried in an oven at 65 C.
H2SO4 (g)
Water
(g)
P2 O5
Total
(%)
P2 O5
CNA
+water
(%)
P2 O5
sol
water (%)
Free
acidity
(H3PO4) (%)
F
(%)
Moisture
(%)
RK72832
70
35
21.5
20.2
19.1
5.6
0.83
RK72832
69
32
21.5
20.1
19.0
5.6
0.83
Conc. 16
62
29
21.7
20.4
19.6
5.0
0.83
0.0
Conc. 17
60
28
21.7
20.6
19.3
4.6
0.82
0.0
Conc. 18
54
25
21.0
20.0
18.6
4.4
0.84
0.0
test
Sample
(100g)
6
7
A preliminary test for phosphoric acid characterization was done with a 2kg flotation
concentrate obtained using the same conditions of test 16. Results are shown on Table
13.5_2.
Table 13.5_2.
Chemical characterization of a phosphoric acid produced with a flotation
concentrate
Compounds (%)
Flotation concentrate
Phosphoric acid produced
P2O5
36.60
54
16.27
24
CaO
48.00
1.03
Ca
34.29
0.74
SiO2
4.00
Al2O3
0.23
0.18
Fe2O3
1.10
0.37
SO3
<0.10
0.02
K2O
0.24
0.02
TiO2
<0.1
<0.01
MnO
0.55
0.02
SrO
0.15
<0.01
MgO
<0.01
0.01
ZnO
<0.01
0.01
ZrO2
<0.01
<0.01
Y2O3
<0.01
<0.01
BaO
0.22
<0.01
2.5
0.41
3
The concentrate was attacked with 98% sulphuric acid at a rate of 2.42m /td. P2O5 under
75C, the slurry was filtrated; the cake was washed with water at a rate of 0.65 parts of water

6005 Australia
Page: 55
to each part of slurry and the liquor was evaporated at 78C. At this stage the liquor was not
defluorinization.
The acid produced after elimination of the fluorine presents optimum quality to produce dicalcium phosphate.
13.6
Conclusion
Concentration of great part of the material from the deposit using anionic flotation was shown
to be technically feasible. High P2O5 with low Fe2O3 and Al2O3 grades concentrates are easily
obtainable by the process after attrition with soda, desliming and regrind of the first
concentrate.
Material classified as low grade rich soil must be considered as waste since very low
recovery was obtained. Concentrates generated from the material types low and medium
grades LR presented high Fe2O3 and Al2O3 grades and were not considered as recoverable
in this study. Mining studies must evaluate the possibility to waste this material. If this is
possible, the average grade of the mineable material would increase with a consequent
reduction of the capacity of the concentrator reducing the capital and operating costs of this
unit. The metallurgical recovery of the deposit based on the first 22 bore holes was estimated
as 55%.
The concentrator must have all the facilities and utilities to:
Crush the ore to minus 150mm.
Classify it in screens to 6mm.
Scrubber the minus 6mm fraction in attrition cells
De-slime the scrubbed fraction to eliminate the natural slimes, below 5 microns to
improve flotation responses.
Grind the plus 6mm and the de-slimed fraction to 80% less than 150 microns.
Float in column cells the ground material.
Regrind the rougher concentrate
Float in column the reground rougher concentrate
Use a High Intensity Wet Magnetic Separation on the cleaner concentrate.
Dewater the concentrate in a thickener and a filter.

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14
MINERAL RESOURCE ESTIMATES
14.1
Introduction
Amazon Geoservices along with Leandro Silva (MBAC resource geologist) have estimated
the Mineral Resource for the Santana Phosphate Project utilising drilling data as of 31st July
2011. All grade estimation was completed using inverse distance weighted to the power 2
(IDW2) for P2O5. This estimation approach was considered appropriate based on review of a
number of factors, including the quantity and spacing of available data, the interpreted
controls on mineralization, and the style of mineralization. The estimation was constrained
within the saprolite domain. There is not sufficient data to interpret the fresh material.
The mineral resource estimate is based upon 53 diamond holes (2,386m) and 6 RC holes
(238m). Auger holes were utilised only in the geological model and 3D wireframing.
14.2
Geological Modeling
At this stage no lithology model has been defined as the majority of drilling has been
completed mainly within the saprolite of the hyrothermalite unit. A Saprolite/Fresh boundary
has been constructed utilizing the geological logging and is an important grade control
boundary (along with being utilised to determine the bulk densities) as the highest grade
mineralization is constrained within the supergene enriched saprolite.
Amazon Geoservices and MBAC have interpreted a saprolite domain utilizing a 3% P2O5
lower limit to guide the interpretation. A total of 20 oblique vertical sections have been created
snapping to drillholes. Two separated mineralized domains were defined reflecting the lack of
drilling amidst them. Additional drilling will potentially join these two domains together. The
interpretation and wireframe models have been developed using the Gemcom mine planning
software package.

6005 Australia
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Figure 14.2_1
Plan view of Block Model
The figure below shows a cross section of the main mineralized domain. The fresh rock has
not been modelled due to lack of drill data but highlights a consistent large tonnage potential
with grades between 1% to 3% P2O5.

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Page: 58
Figure 14.2_2
Supergene Saprolite Domain

Page: 59
6005 Australia
The block model has been assigned the following attributes to allow filtering and reporting.
Table 14.2_1
Domains Wireframes
Domain
Block Attribute - Geology
Saprolite Supergene domain
Saprolite Supergene domain Above topo (Air)
14.3
1000
Block Model Development

A three-dimensional block model was defined for the Santana deposit, covering the
interpreted supergene saprolite domain and including suitable additional waste material to
allow later pit optimisation studies.
A parent block size of 12.5mE x 12.5mN x 3mRL has been used. No sub-blocking occurs in
Gemcom. The attributes coded into the block models included mineralization, grade and
weathering. A visual review of the wireframe solids and the block model indicates robust
flagging of the block model. Bulk density has been coded to the block model based on the
defined density values listed in section 9.4 with oxide material having a bulk density of 1.62
g/cm3. No fresh material has been estimated due to lack of drillhole data.
Table 14.3_1 below shows the summary of the block model created.
Table 14.3_1
Blo ck Mo d e l S um m ary
Minimum Coordinates
Maximum Coordinates
User Block Size
Rotation
Extension
8965500
8968000
12.5
2000
412500
414500
12.5
2500
155
350
3
320
195

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14.4
Statistical Analysis
The drillhole database was composited to a 1m down-hole composite interval, recording the
geological model. The 1m composites were used for all statistical, geostatistical and grade
estimation studies.
Statistical analysis of the composite saprolite supergene domain is presented in Table 14.4_1.
Table 14.4_1
Summary Statistics 1m Composites inside Saprolite Supergene Domain
P2O5 (%)
Supergene Saprolite Domain
Count
514
Minimum
0.01
Maximum
38.7
Mean
13.93
Std. Dev.
CV
10.76
0.77
A top cut was applied to the composite P2O5 data based on the 99.28% percentile which
effectively cut one sample back to 35% P2O5. This has minimal effect on the final mineral
resource estimate.
14.5
Variography
Variography was attempted but lack of data (>200m drill spacing) resulted in poor variograms.
14.6
Grade Estimation
The interpolation method used was inverse distance weighted to the power 2 (IDW2) for P2O5,
and the same parameters were also applied to other oxides reported. The selection of
samples used in the interpolation is made by an ellipsoidal search without octants. The search
ellipse was configured as shown in the table below. As selection criteria, samples used for the
interpolation was limited on minimum 2 samples being maximum 1 per hole.
Table 14.6_1
IDW2 Grade Estimation Parameters
X
Y
Z
Min Nr octants
Max per octant
Min N Comp.
Max N Comp
Nr of discretizations
Classification
Pass 1
250
250
60
2
16
Inf
Ellipse Axis Direction
Azimuth
0
320
0
Dip
0
0
0

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The search ellipse was configured to match the main mineralization direction, which is subhorizontal. The dimension of the search ellipse radii was 250x250x60m.
14.7
Model Validation
In order to check that the estimation has worked correctly, the model has been validated
through a visual comparison through the generation of validation plots.
An example of the visual validation is shown below with a cross section of the block model
compared against the drillhole results.
Figure 14.7_1
Block Model Visual Validation
14.8
Mineral Resource Reporting

The grade estimates have been classified as inferred mineral resource in accordance with NI
43-101 guidelines based on the confidence levels of the key criteria that were considered
during the mineral resource estimation. Key criteria are tabulated below.
A summary of the estimated resources for the Santana deposit is provided in Tables 14.8_2.
The mineral resource was classified to include all material within the saprolite supergene
domain as this domain is flat lying and located entirely within the top 80m from surface.
6005 Australia
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Table 14.8_1
Confidence Levels of Key Categorisation Criteria
Items
Discussion
Drilling Techniques
Logging
Drill Sample Recovery
Sub-sampling Techniques &
Sample Preparation
Quality of Assay Data

Verification of Sampling and
Assaying
Location of Sampling Points
Data Density and Distribution

Audits or Reviews
Database Integrity
Geological Interpretation
Estimation and Modelling
Techniques
Cutoff Grades
Mining Factors or
Assumptions
Confidence
Diamond drilling is Industry standard approach. RC

drilling has been wet but has minimal assays at the time
of this estimate
Standard nomenclature and apparent high quality.
Good recovery recorded.
Sampling to industry standard for DC. RC wet samples
will require twin holes to attain high confidence in the
future
Blank samples returned low level P2O5. The cause of
this needs resolving. One standard has failed 2SD for
27% of assays. This needs resolving via additional
Umpire sampling and analysis..
No umpire samples taken to date.
Collar surveys need high accuracy surveying. (Currently
hand held GPS) Topography requires higher accuracy
as currently SRTM data.
Approximately 200m spaced drilling which is somewhat
sparse given the generally poor continuity of grade that is
evident.
Amazon Geoservices is unaware of external reviews.
No Material errors identified.
Geological interpretation is excellent given the limited
drill data to date. A high quality geological team is
continually improving the 3D geological model
IDW2
High
High
High
Moderate
Moderate to
low
low
Moderate to
Low
Low
N/A
High
Moderate
Moderate
Lower Cutoff Grade of 3% P2O5 defines the saprolite

supergene domain well.
10mE by 10mN by 2.5mRL SMU.
High
High

6005 Australia
Page: 63
The statement has been classified by Qualified Person Beau Nicholls (MAIG (CP)) in
accordance with the Guidelines of National Instrument 43-101 and accompanying documents
43-101.F1 and 43-101.CP. It has an effective date of 31 July 2011. Mineral resources that are
not mineral reserves do not have demonstrated economic viability. Amazon Geoservices and
MBAC are not aware of any factors (environmental, permitting, legal, title, taxation, socioeconomic, marketing, political, or other relevant factors) that have materially affected the
Mineral Resource Estimate. The Santana deposit is a greenfield site and therefore is not
affected by any mining, metallurgical or infrastructure factors.
Table 14.8_2
Santana Deposit
Inferred Grade Tonnage Report
Inverse Distance Weighted Power 2 (IDW2)
12.5E x 12.5mN x 3mRL
Lower Cutoff Grade
(% P2 O5)
Million Tonnes
P2O5
%
CaO
%
Fe2O3
%
Al2O3
%
SiO2
%
3
10
20
33.5
17.2
5.8
12.39
17.6
24.3
16.7
23.8
35.1
17.6
15.32
10.6
8.8
6.42
4.1
27.5
22.18
11.8
(1) The effective date of the Mineral Resource is July 31, 2011
(2) The Mineral Resource Estimate for the Santana deposit was constrained within lithological and grade based
solids (Saprolite Supergene Domain) within the top 80m from surface. No optimisation studies have been applied
to this simple flat lying mineralization.
(3) Mineral Resources for the Santana deposit has been classified according to the CIM Standards on Mineral
Resources and Reserves: Definitions and Guidelines (December 2005) by Beau Nicholls (BSc (Geo) MAIG) an
independent Qualified Person as defined by National Instrument 43-101.
In total, Amazon Geoservices has derived an Inferred Mineral Resource of 33.5. Mt with a
grade of 12.39% P2O5, (3% P2O5 cut off applied)

6005 Australia
Page: 64
The following grade tonnage curve for Santana is shown below in Figure 14.8_1
Figure 14.8_1
Grade Tonnage Curve Santana Phosphate Project

6005 Australia
Page: 65
15
MINERAL RESERVE ESTIMATES

No mineral reserves have been estimated for the Santana Phosphate Project.
16
MINING METHODS
16.1
Mineral Resource Block Model

NCL was provided with the 31 July 2011 mineral resource block model, developed by Amazon
Geoservices as described in section 14.
The following corresponds to the list of variables contained in the received block model data:
Lithology code
Bulk density assigned by lithology type constant values (t/m3)
% P2O5
%CaO
CaO to P2O5 ratio
MBAC personnel provided the initial topography.

NCL did not audit the sampling data or the block model used for this project.
It is becoming common in the industry to develop mineral resource models (particularly where
nonlinear estimation techniques are applied), which essentially take into account potential
dilution within the blocks, or adopt selective mining unit (SMU) as part of the resource
modelling process. NCL did not add additional dilution to the provided block model as it was
considered to be already diluted. Furthermore, the relationship between the recommended
mining fleet and the block models block size allows for selective mining when proper mining
practice is followed.
The 31 July 2011 block model considers all material as inferred mineral resources. All
optimization and mine planning work considers inferred mineral resources material as
potential ore, depending on its rock type and economic attributes. No material can be
converted to mineral reserves.
The reader is cautioned that the open pit mining study is a preliminary economic assessment
that is preliminary in nature, includes inferred mineral resources that are considered too
speculative geologically to have economic considerations applied and therefore be
categorized as mineral reserves and there is no certainty that the preliminary assessment will
be realized. No Mineral Reserves have been estimated. Mineral resources that are not
mineral reserves do not demonstrate economic viability.

6005 Australia
Page: 66
16.2
Operating Parameters
A mine plan was developed for the Santana Phosphate Project to produce 300 k tonnes of
phosphate concentrate at a grade of 34% P2O5 per year, with a peak total material movement
rate of 4.2 M tonnes per year. This scenario results in the processing of approximately 1.5 M
tonnes per year of ore with an average grade of 12.4% P2O5. The expected mine life for this
project is 24 years. Given that the mineralization outcrops to surface, no major pre-stripping is
scheduled. The mine is scheduled to work seven days per week or 365 days per year. Each
day will consist of three 8-hour shifts. Four mining crews will cover the operation.
The study is based on operating the open pit mine with excavators of 3.5 cubic meter
capacities for ore and excavators of 4.6 cubic meter capacities for waste, both with trucks of a
capacity of 39 tonnes. This type of equipment is able to develop the require productivity to
achieve a maximum annual total material movement of 4.2 M; and also to have good mining
selectivity with the excavators as defined by the grade control activities.
It is becoming common in the industry to develop resource models (particularly where
nonlinear estimation techniques are applied), which essentially take into account potential
dilution within the blocks, or adopt selective mining unit (SMU) as part of the mineral resource
modelling process. The Santana mineral resource model has been assessed to achieve this
outcome and hence considered to be a diluted model.
16.3
16.3.1
Parameters for Mine Design

Base Parameters
The table below summarizes the base case economic parameters used for the LerchGrossman economic shells analysis and mine design.
The mining cost estimate for the pit optimization process is based on NCL experience on
similar projects developed in Brazil. The estimated average mining cost resulted in US$1.50
per tonne of mined material, as only a small proportion of material will require drilling and
blasting (Table 16.3.1_1).
The product prices, processing costs and processing recoveries were provided to NCL by
MBAC personnel, based on their own estimates and test work.

6005 Australia
Page: 67
Figure 16.3.1_1
Lerch-Grossman Optimization Parameters
Prices
Super Simple Phosphate (SSP)
350
US$/tonne SSP (18% P2O5)
Recoveries by product
P2O5
55.0%
Concentrate Grades
P2O5
34.0%
Costs
Mining
1.50
US$/mined tonne
Plant
36.0
US$/tonne SSP
G&A
5.9
US$/tonne SSP
Others
9.2
US$/tonne SSP
Sulphuric Acid
55.3
US$/tonne SSP
Granulation
43.3
US$/tonne SSP
Total processing cost
149.7
US$/tonne SSP
Pit Slope angle
31
considers an allowance for ramping

6005 Australia
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16.3.2
Lerch-Grossman Economic Shells Results

The following tables show the results of the optimization runs for the Santana Phosphate
Project. Pit shells were generated for several revenue factors, from 0.44 to 1.0. The following
figures show graphically those results. Inferred mineral resources are used, but they cannot
be converted to reserves.
Table 16.3.2_1
Lerch-Grossman Optimization Results
Revenue
Factor
Pit
Optimization
Total
Waste
Total Ore
Price
Material
USD/Tonne SSP
Ktonnes
Ktonnes
Ratio
Strip
ktonnes
% P2O5
Rec. P2O5
Ktonnes
0.44
154
4,482
573
0.15
3,908
22.3
478
0.46
161
38,127
16,659
0.78
21,467
14.5
1,708
0.48
168
54,257
26,950
0.99
27,308
13.5
2,022
0.50
175
59,884
30,887
1.07
28,998
13.1
2,094
0.52
182
63,442
33,661
1.13
29,782
13.0
2,129
0.54
189
69,526
38,701
1.26
30,825
12.8
2,173
0.56
196
76,324
44,386
1.39
31,938
12.6
2,217
0.58
203
77,923
45,763
1.42
32,160
12.6
2,225
0.60
210
79,486
47,142
1.46
32,344
12.6
2,233
10
0.62
217
80,739
48,251
1.49
32,487
12.5
2,238
11
0.64
224
81,999
49,386
1.51
32,613
12.5
2,243
12
0.66
231
82,664
49,993
1.53
32,671
12.5
2,245
13
0.68
238
83,317
50,590
1.55
32,727
12.5
2,248
14
0.70
245
86,393
53,430
1.62
32,963
12.5
2,256
15
0.72
252
86,850
53,854
1.63
32,996
12.4
2,258
16
0.74
259
87,129
54,109
1.64
33,020
12.4
2,258
17
0.76
266
87,363
54,329
1.64
33,034
12.4
2,259
18
0.78
273
87,493
54,452
1.65
33,040
12.4
2,259
19
0.80
280
87,649
54,598
1.65
33,051
12.4
2,260
20
0.82
287
87,942
54,878
1.66
33,064
12.4
2,260
21
0.84
294
88,020
54,953
1.66
33,067
12.4
2,260
22
0.86
301
88,231
55,150
1.67
33,081
12.4
2,261
23
0.88
308
88,383
55,296
1.67
33,087
12.4
2,261
24
0.90
315
88,457
55,365
1.67
33,092
12.4
2,261
25
0.92
322
88,655
55,556
1.68
33,098
12.4
2,261
26
0.94
329
88,697
55,596
1.68
33,100
12.4
2,262
27
0.96
336
88,776
55,671
1.68
33,105
12.4
2,262
28
0.98
343
88,889
55,781
1.68
33,108
12.4
2,262
29
1.00
350
89,016
55,904
1.69
33,112
12.4
2,262

6005 Australia
Page: 69
100
25.0
90
80
20.0
70
60
P2O5 grade (%)
Mass (M tonnes)
Figure 16.3.2_1
Tonnes and Grades versus optimization price
15.0
50
40
10.0
30
20
5.0
10
0.0
1.00
0.96
0.92
0.88
0.84
0.80
0.76
0.72
0.68
0.64
0.60
0.56
0.52
0.48
0.44
Pit shell optimization price (USD/tonne SSP)

Total Material
Total Ore
%P2O5
Figure 16.3.2_2
Final pit shell General Review

6005 Australia
Page: 70
Physically analyzing the obtained shells, a single sector can be identified. The final pit shell is
roughly tabular with a depth between 30 and 100m. The main axis has a NW orientation and a
strike of approximately 1.9 km, the minor axis strike varies between 0.4 and 1.5 km.
It is important to note that the parameters are initial estimates, done at the beginning of the
study, for the purpose of starting the design process.
16.4
16.4.1
Pit and Mine Design Phase

Final Pit Design
The final pit design was based on the economic shell generated at a revenue factor equal to
1.0 and a minimum cut-off grade of 3% P2O5, with constant 31.0 inter ramp angle. Table
below shows the key open pit design parameters.
Table 16.4.1_1
Pit Design Parameters
Bench Height
12 m (four stacked 3m benches)
Berm Width
10 m
Batter Angle
50.0
Inter-ramp Angle
31.0
Ramp Width
15 m
Ramp Gradient
10%
Detailed Geotechnical information is not available, but these are very conservative
parameters. MBACs Arraias Tocantins project located in Brazil has similar characteristics to
the Santana Phosphate Project and uses more aggressive parameters. The adopted
parameters are deemed adequate and conservative by NCL for the current stage of the
Project.
The ramps width of 15m can accommodate up to 39 tonne trucks. NCL used a 10% road
gradient, which is common in the industry for this type of trucks.
The current mine plan is designed with 3m benches stacked to 12m (i.e. four stacked
benches).
For the required mining rate the appropriate loading equipment is medium size hydraulic
excavators, ranging between 4 to 6 cubic yards capacities. The minimum operating widths to
achieve the required productivities with this equipment is about 25m.
The Figure below shows the final pit, designed according to the obtained pit shell of the
optimization process. The lower pit bottom is at 194 m RL. The total area disturbed by the pits
is about 1.7 km2.

6005 Australia
Page: 71
Figure 16.4.1_1
Plan View Final Pit and Dump Designs
West
Dump
East
Dump
16.4.2
Tabulation of Pit Contained Resources

Table 16.4.2_1 summarizes the pit contained inferred mineral resources for the final design pit
at several different P2O5 cut-off grades.
Table 16.4.2_1
Resources Contained in Final Pit at Various Cut-off Grades
Total Ore
Waste
TOTAL
Cut-Off
(%P2O5)
Ktonnes
(%)
P2 O5
Ktonnes
Ktonnes
Strip
ratio
Total
33,045
12.4
61,274
94.319
1.9
Waste
61,274
>3%
33,045
12.4
>6%
26,307
14.4
>9%
19,287
16.9
>12%
13,712
19.5
>15%
9,929
21.8

6005 Australia
Page: 72
16.5
Mine Production Schedule

A mine production schedule was developed to show the ore tonnes, grades, total material and
waste material by year throughout of the life of the mine. The distribution of ore and waste
contained inside the final pit was used to develop the schedule, assuring that criteria such as
continuous ore exposure, mining accessibility, and consistent material movements were met.
NCL used an in-house system developed to evaluate several potential production mine
schedules. Required annual ore tonnes and user specified annual total material movements
are provided to the algorithm, which then calculates the mine schedule. Several runs at
various proposed total material movement schedules were done to determine a good
production schedule strategy. It is important to note that this program is not a simulation
package, but a tool for calculation of the mine schedule and haulage profiles for a given set of
phases and constraints that must be set by the user.
The mine plan developed by NCL does not include any special provisions for dilution because
the mineral resource block model is considered as already diluted.
Nevertheless, careful grade control must be carried out during mining to minimize misplaced
ore due to the important effect of head grade on phosphate concentrate production. These
efforts should include, among others, the following standard procedures:
Implement an intense and systematic program of sampling, mapping, laboratory

analyses, and reporting.
Utilize specialized in-pit bench sampling drills for sampling well ahead of production.
Use of excavators and benches no higher than 3 m (as presently planned) to selectively
mine ore zones.
Maintain proficient laboratory staff, equipment, and procedures to provide accurate and
timely assay reporting.
Utilize trained geologists and technicians to work with excavator operators in identifying,
marking, and selectively mining and dispatching ore and waste.
Maintain an adequate communication and control system between excavator and truck
operators and the mine dispatcher to ensure that the materials are sent to the
appropriate destination.
According to initial estimates for processing costs, metallurgical recovery and long term price
for obtained products, the marginal cut-off which defines the separation between ore and
waste is calculated as 3% P2O5.
Table 16.5_2 shows the mine production of ore for each mining year. The schedule is based
on 1.5 M tonnes maximum per year to the processing plant and a production of 300 K tonnes
of phosphate concentrate at 34% P2O5. The table also shows the total material movement
from the mine by year, which peaks at 4.2 M tonnes per year during commercial production.
Show in Figure 16.4.1_1 are the East and West dumps where the waste mined will be stored.
These dumps have enough capacity to store all the mine waste. Table 16.5_1 shows the
waste dump design parameters.
6005 Australia
Page: 73
Table 16.5_1
Waste dump design parameters
Lift height
5m
Berm with
10 m
Batter angle
35
Overall angle
16
Waste density
1.3 t/m3
Given that the mineralization outcrops to surface, no substantial preproduction movements

are expected.
The plant feed is also shown on Table 16.5_2. It shows that the plant feed is close to 1.5 M
tonnes per year to produce constantly 300 K tonnes of concentrate. Given the favourable ore
distribution there is no need for a long term stockpile.
Table 16.5_2
Mine Production Schedule
Ore
Period
Waste
Total
Mass
ktonnes
P2 O5
Conc. Mass
ktonnes
CaO
CaO / P2O5
(%)
(%)
Ratio
1.7
1,500
12.4
300
10.7
0.86
4,117
1.8
1,489
12.5
300
14.3
1.15
4,096
1.8
1,484
12.5
300
11.0
0.88
4,043
1.7
1,481
12.5
300
13.5
1.08
1.29
Mass
ktonnes
P2 O5
Y01
1,500
12.4
2,608
4,108
Y02
1,489
12.5
2,628
Y03
1,484
12.5
2,611
Y04
1,481
12.5
2,562
(%)
Plant Feed
Strip
Ratio
Mass
Mass
ktonnes ktonnes
Y05
1,472
12.6
2,565
4,037
1.7
1,472
12.6
300
16.3
Y06
1,510
12.3
2,603
4,113
1.7
1,510
12.3
300
17.9
1.46
1.39
Y07
1,480
12.5
2,626
4,105
1.8
1,480
12.5
300
17.4
Y08
1,474
12.6
2,636
4,110
1.8
1,474
12.6
300
24.7
1.96
1.71
Y09
1,500
12.4
2,614
4,114
1.7
1,500
12.4
300
21.2
Y10
1,496
12.4
2,639
4,135
1.8
1,496
12.4
300
21.2
1.71
Y11
1,480
12.5
2,577
4,057
1.7
1,480
12.5
300
17.3
1.38
Y12
1,504
12.3
2,589
4,093
1.7
1,504
12.3
300
17.5
1.42
Y13
1,438
12.9
2,619
4,058
1.8
1,438
12.9
300
17.6
1.37
1.37
Y14
1,451
12.8
2,647
4,098
1.8
1,451
12.8
300
17.5
Y15
1,423
13.0
2,701
4,124
1.9
1,423
13.0
300
18.7
1.43
1.19
Y16
1,450
12.8
2,655
4,104
1.8
1,450
12.8
300
15.2
Y17
1,426
13.0
2,696
4,122
1.9
1,426
13.0
300
15.8
1.21
1.33
Y18
1,443
12.9
2,680
4,123
1.9
1,443
12.9
300
17.1
Y19
1,446
12.8
2,647
4,093
1.8
1,446
12.8
300
16.7
1.30
Y20
1,467
12.6
2,562
4,029
1.7
1,467
12.6
300
16.9
1.33
Y21
1,512
12.3
2,623
4,136
1.7
1,512
12.3
300
18.6
1.52
Y22
875
9.8
3,165
4,040
3.6
875
9.8
139
12.9
1.32
Y23
1,061
8.5
2,743
3,804
2.6
1,061
8.5
145
9.8
1.16
Y24
183
9.8
278
461
1.5
183
9.8
29
9.9
1.01
Totals
33,045
12.4
1.9
33,045
12.4
6,612
16.6
1.34
61,274 94,319

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16.6
Mine Equipment
The study is based on operating the Santana mine with backhoe excavators each of 3.5 cubic
meters capacity for ore and 4.6 cubic meters capacity for waste and 40 tonne conventional
haul trucks. The current situation at mines in Brazil is that contractors are using this type of
equipment at lower costs for material movement up several times the schedule mining rate.
Auxiliary equipment includes bulldozers (type CatD9T), motor graders (type Cat160M) and
water truck (type 20,000 litres).
Mine equipment requirements were calculated based on the annual mine production
schedule, the mine work schedule, and equipment annual production capacity estimates, and
maintenance downtime.
Table 16.6_1 provides a summary of the peak number of units required for commercial
production. This represents the equipment necessary to perform the following duties:
Construct haul and access roads to the initial mining areas as well as to the crusher,
waste storage areas, and leach pads. Construct additional roads as needed to support
mining activity
Perform the pre-production development required to expose ore for initial production
Develop new mining areas for ore extraction
Mine and transport ore to the crusher. Mine and transport waste material from the pit to
the appropriate storage areas
Maintain all the mine work areas, in-pit haul roads, external haul roads, and maintain the
waste storage areas
Load and transport topsoil to topsoil storage areas
Table 16.6_1
Peak Fleet Requirements for Commercial Production
Equipment Type:
Required
Additional
Fleet
Fleet
Atlascopco Explorac R50
Volvo EC460B (3.5 cu m)
Volvo EC700B (4.6 cu m)
Scania Truck (39mt)
CATD9T Track Dozer
CAT160M Grader
Scania Water Truck (20000 liter)
Additional equipment, beyond what is needed to fulfill production requirements, was deemed
necessary to ensure reliable production. These are an extra EC460B excavator, CATD9T
track dozer, CAT160M grader and a Scania Water Truck. It was considered that when these
equipments are out of service due to planned or unplanned maintenance for anything more
than short periods of time the effect on the mine is unacceptable.
This equipment was included in the capital estimation but no extra costs were included in the
operational expenses.
6005 Australia
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16.7
16.7.1
Mine Personnel
Salaried Staff
Mine salaried staff requirements over the project life are shown in Table 16. The staff consists
of 26 persons through the life of mine. The salaried staff requirements are commensurate with
the complexity of a mine the size of Santana.
Annual costs for the personnel, including fringe benefits, are also shown on Table 16.7.1_1.
The personnel costs used for this project were provided by MBAC personnel and correspond
to actual Brazilian costs obtained from bench marking of other operations.

6005 Australia
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Table 16.7.1_1
Salaried Staff Requirements
Annual
Cost
($US)
MINE OPERATIONS:
Mining Engineer
Supervisor - Operations
Mine Clerk
Mine Operations Total
MINE MAINTENANCE
Maintenance Manager
Mechanical Engineer
Maintenance Supervisor
Planner Supervisor
Maintenance Clerk
Mine Maint. Total
MINE ENGINEERING:
Senior Mine Engineer
Chief Surveyor
Surveyor Helper
Dispatch Operator
Mine Engineering Total
MINE GEOLOGY:
Mine Geologist
Junior Geologist
Technician/Sampler
Mine Geology Total
TOTAL PERSONNEL
TOTAL COST
Y01
Y02
Y03
Y04
Y05
Y06
Y07
Y08
Y09
Y10
Y11
Y12
Y13
Y14
Y15
Y16
Y17
Y18
Y19
Y20
Y21
Y22
Y23
Y24
65,000
47,109
13,424
188,059
124,079
67,299
67,299
13,424
124,079
40,319
13,424
48,759
56,046
40,319
40,319
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
26
1,475
23
1,328
22
1,315
15
965
US$
x1000
Annual Cost includes Fringes Benefits

Page: 77
6005 Australia
16.7.2
Hourly Labor
Mine total hourly personnel requirements are shown in Table 16.7.2_1. The maximum number
of persons during commercial production is 69 in Year 21. Year 24 personnel requirements
reduce significantly due to reduction of pit operations.
Table 16.7.2_1 also shows the annual cost for hourly personnel, including fringe benefits. The
personnel costs used for this project correspond to actual Brazilian costs used by NCL during
2010 for similar projects. Exchange rate 1.60 R$/US$ was considered.
As shown on Table 16.7.2_1, the majority of persons in mine operations are equipment
operators. The number of operators for major equipment was calculated based on equipment
operating requirements.
Additional mine persons are assigned to perform the following tasks:
Pumpman. Set pumps and pipe as required and use small excavators for building sumps.
General labourer. The general labourer is an unskilled worker who assists with many of
the mine support activities such as moving and setting pumps, road maintenance,
general mine cleanup, etc.
Table 16.7.2_1 also shows the number of maintenance personnel required for each time
period. It can be seen that the ratio of maintenance personnel to operations personnel is
about 60% during the mine life. This is above industrial average, and is caused because of
the low amount of equipment on site and the minimum number of personnel required servicing
a piece of equipment.
An additional allowance in the manpower is required to cover vacations, sick leave, and
absenteeism (VS&A). The 10% VS&A allowance is based on 30 vacation days plus 6 sick
days out of 365 scheduled days per person per year.

6005 Australia
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Table 16.7.2_1
Hourly Labour Requirement
Annual
Cost
($US)
Y01
Y02
Y03
Y04
Y05
Y06
Y07
Y08
Y09
Y10
Y11
Y12
Y13
Y14
Y15
Y16
Y17
Y18
Y19
Y20
Y21
Y22
Y23
Y24
Grade Control Drilling
35,949
Loading
35,949
Hauling
35,949
15
16
16
18
19
19
17
19
20
18
18
19
20
19
19
18
18
19
20
19
21
19
20
Dozer
35,949
Grader
26,812
Grade Control
19,502
Water truck
26,812
Laborer
19,502
Pump man
19,502
34
35
35
37
38
38
36
38
39
37
37
38
39
38
38
37
37
38
39
38
40
38
39
17
MINE OPERATIONS
Total Operators
MINE MAINTENANCE
Mechanic
35,949
Mechanic's helper
19,502
Welder
35,949
Electrician
35,949
Fuel Man
19,502
Laborer
19,502
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
23
16
16
US$x1000
1,604
1,640
1,640
1,712
1,748
1,748
1,676
1,748
1,784
1,712
1,712
1,748
1,784
1,748
1,748
1,712
1,712
1,748
1,784
1,748
1,819
1,748
1,581
10%
184
185
185
186
186
186
185
186
187
186
186
186
187
186
186
186
186
186
187
186
187
186
188
Maintenance Total
Hourly Labor Cost
VS&A Allowance
VS&A Cost
US$x1000
Total Labor requirement

Total hourly labor cost
Maint./Operations Ratio
US$x1000
63
64
64
66
67
67
65
67
68
66
66
67
68
67
67
66
66
67
68
67
69
67
61
1,788
1,824
1,824
1,897
1,934
1,934
1,861
1,934
1,970
1,897
1,897
1,934
1,970
1,934
1,934
1,897
1,897
1,934
1,970
1,934
2,006
1,934
1,769
68%
66%
66%
62%
61%
61%
64%
61%
59%
62%
62%
61%
59%
61%
61%
62%
62%
61%
59%
61%
58%
61%
41%
Vacations, Sick leave and Absenteeism (VS&A) is based on 30 vacation days and 6 sick days/person out of 365 scheduled days/person per year.
Annual Cost includes Fringes Benefits

Page: 79
6005 Australia
845
3
87
36
931
94%
17
RECOVERY METHODS
17.1
Production Plants
17.1.1
Mine Site
Beneficiation Plant
The mineral processing plant was designed based on the metallurgical test work and
considering the following design parameters:
Total ROM feed to the plant: 1.5 million tpy
Feed grade Ore: @ 12.5% P2O5
Production of concentrate: 300,000 tpy @ 34% P2O5 (dry basis)
Metallurgical recovery from flotation: 55%
Total plant availability: 89%
The process adopted consists of the following steps, as shown in the figure below:
Primary crushing of the ROM material
Classification of the ore into two size fractions
Grinding of the coarse product to 80% passing 100 microns
Flotation of the grinded product
Regrind of the rougher concentrate to 80% passing 44 microns
Flotation of the regrinded rougher concentrate
High intensity magnetic separation of the cleaner concentrate
Concentrate dewatering
All the tailings are combined and pumped to the tailings dam. See figure below.

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Figure 17.1.1_1
Process Flow Sheet
Process Summary
Due to the friable characteristics of the ROM material, the maximum lump size will be limited
to 600 mm approximately; as a consequence, the crushing section will be simpler.
The ROM ore is discharged directly into a 160m3 feed bin, prior to screening on a 150 mm
opening vibrating screen.
The oversize material is directed to the crusher; the undersize product, combined with the
material from the crusher, is discharged on a single belt conveyor.
A second belt conveyor with a stacker will deliver the rock to two homogenization stockpiles of
30,000 m3 capacity, each.
This will provide an operation autonomy of about 12 days.
A reclaimer will be used to feed the ore from the stockpiles to the Beneficiation plant, through
a belt conveyor equipped with a weight scale which records the throughput rate to the grinding
mill.
The material is then discharged onto a three deck vibrating screen.

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The undersize material (less than 6.35 mm) is directed to an attrition scrubber fitted with two
agitators; the pulp overflow is directed by gravity into a slurry hopper and then, pumped to a
pre-classification hydro cyclone cluster.
The combined material from the three screen decks (over 6.35 mm), is directed a belt
conveyor which will feed the SAG mill.
The SAG mill discharge material, passes through a screening trommel, with an oversize
material (> 6.35 mm) recirculation circuit.
The trommel undersize material is discharged into the SAG mill hopper; where is combined
with the underflow material from the pre classification hydro cyclones. Additional process
water is added to the hopper; the material is finally pumped to the grinding circuit classification
hydro cyclone cluster.
The underflow of this circuit is directed to the SAG mill inlet.
The overflow of the pre classification hydro cyclones is discharged via gravity into another
slurry hopper and then pumped to a bank of slimes dewatering hydro cyclones.
The overflow of the fines dewatering hydro cyclones is them directed to a hopper and pumped
to the tailings pond whilst the under flow is returned to SAG mill discharge hopper.
The overflow from the grinding circuit hydro cyclones is directed to a slurry hopper and then
pumped to two conditioning tanks and in sequence, by gravity, to a slurry hopper.
Flotation
This material is them pumped to a conventional flotation circuit employing two roughing
flotation cells in series.
The concentrate rock is then reground and floated again. And the tailings are directed to the
tailings pond.
Magnetic Separation
The cleaner flotation concentrate will be directed, to a slurry tank and will be pumped to the
magnetic separation circuit.
The magnet material from the magnetic separator reports via gravity to the tailings dam. The
non-magnetic material then flows to a slurry tank via gravity and is then pumped to the main
concentrate thickener.
Thickening and Filtration

The overflow from the main concentrate thickener flows by gravity to a tank and is combined
with the natural fines thickener overflow and filtrate water. Filtrate water from the main

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concentrate filter system is then combined into a single tank and pumped to the process water
system tank. The main thickener underflow is pumped to a conditioning tank fitted with a
mechanical agitator and then pumped to a conventional press filter. A belt conveyor deliver
the filter cake to the phosphate rock concentrate stockpile.
Rock Stock pile & Expedition

The output of the filtration section is a concentrate rock with a 15% average. moisture content.
This material will be directed to a stockpile dimensioned for 10,000 t.
This material will be reclaimed by a FEL and sent to the Industrial site utilizing 27 tonne
trucks. See flow chart in the figure below.
Figure 17.1.1_2
Beneficiation Flow Chart
Water Accumulation and Tailings disposal

The tailings area will be positioned at the north of the mine deposit taking advantage of a
natural slop. See figure below.
The purpose of this reservoir is to receive the waste coming from the refining plant, while
accumulating water available during the rainy season, thus compensating the eventual lack of
water during the dry season.

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The dam project, will allow a convenient solids flow setting distribution, thus promoting the
adequate water recirculation.
As reference, the location of the dam axis is S 9 18 4,1 and W 514754.
Figure 17.1.1_3
Dam Project
The advantage of geographic tailings disposal in this area are:
Adequate distance from the Beneficiation plant (4,0 km)
Adequate reference level related to Beneficiation Unit
Contribution of small water streams
Easy access
Low volume of compacted massif
A preliminary evaluation indicates that three raisings are foreseen for the Dam project.
The crest of the initial Dam will be at 266m elevation, corresponding to a deposit volume of
3
12.0 million m .
The final Dam crest elevation will be at 272m corresponding to a final volume of 29.0 million
3
m . This will allow about 24 years of useful life for the reservoir.

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The final volume of the compacted massif is estimated to be 220,000 m3.

The reservoir inundation area will be around 720 ha (final); the grassland vegetation is
dominant but some natural flora will be suppressed; for this reason, a specific study will be
needed.
The difference level between the refining plant and the reservoir inlet will be of about 6.0m
which indicates the possible need of a buster to avoid waste deposit in the feeding pipe.
17.1.2
Industrial Site
Rock Concentrate Stockpile
Rock received from the mine site is stored in an open area with an estimated capacity of
15,000t.
This raw material will be transported to the Industrial site, to feed the Acidulation Unit.
Sulphuric Acid Plant

The sulphuric acid plant will have capacity to produce 750 tpd. The technology adopted for the
study is the MECS double absorption route.
Process phases are as follows:
Sulphur melting and filter
Sulphur burning in reaction with air
SO2 conversion into SO3 in catalytic beds using Vanadium Pentoxid catalyst
SO3 gases scrubber and absorption in appropriate tower
Cooling and storage of acid product
The plant will be continuously monitored to assure both the emission of SOx and the sulphur
mist meet the requirements of the applicable law.
In the sulphuric acid production process several chemical reactions occur: the sulphur
combustion in a special Burner; SO2 conversion into SO3 (inside the converter), and SO3
absorption (in the Acid Towers). See flow chart below.
Process Summary
The oxidation and absorption steps in the manufacture of sulphuric acid from sulphur are all
highly exothermic. The excess heat generated at each step of the process is recovered in the
waste heat boiler, superheater, and economizers. The recovered heat is in the form of high
pressure superheated steam which will be used to generate electric power in a turbogenerator. The process is designed to give a conversion of sulphur dioxide to sulphuric acid of

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99.7% in the acid plant as well as a high conversion of process heat to steam. The only
normal plant effluent streams are the blowdown streams from the boiler and stack.
The principal steps in the process consist of burning sulphur (S) to form sulphur dioxide (SO2),
combining the sulphur dioxide with oxygen (O2) to form sulphur trioxide (SO3), and combining
the sulphur trioxide with water (H2O) to form a solution containing sulphuric acid (H2SO4).
Atmospheric air is drawn through an air filter and air silencer and is compressed in the main
compressor which provides the motive force to move the gases through the downstream
equipment. The gas leaving the main compressor goes to the dry tower where the water
vapors in the air are removed by contacting a stream of 98% H2SO4 which flows down through
the tower. From the dry tower the gas enters a horizontal spray-type sulphur furnace where
the temperature of the SO2 gas from the sulphur furnace is higher than is required for inlet to
the conversion system. Therefore, the gas is cooled in a waste heat boiler which recovers the
surplus heat as high pressure saturated steam. The gas temperature from the boiler is
controlled by a gas-side bypass. The boiler steam temperature is a function of the boiler
steam pressure.
From the waste heat boiler, the gas flows to the first pass of the converter system where it is
partially converted to sulphur trioxide gas in the presence of vanadium catalyst. The
conversion reaction produces heat. The gases must be cooled to improve the yield of the
sulphur dioxide oxidation in the next catalyst pass. Gases leaving the first converter pass flow
to a superheater where they are cooled by heating the export steam. The temperature of the
export steam and pass 2 inlet gas temperature is controlled in the proper range by bypassing
a portion of the steam flow around the superheater. The cool gas stream flows from the
superheater to the second converter pass where additional conversion of the suphur dioxide
to sulphur trioxide takes place accompanied by the generation of additional heat. Hot gases
leaving the second converter pass are cooled to improve the yield in the next catalyst pass by
sending them through the hot interpass gas heat exchanger. Exit gas temperature is
controlled by a bypass.
Cooled gases leaving the heat exchanger flow to the third converter pass where additional
conversion of sulphur dioxide to sulphur trioxide takes place. Hot gases leaving the third
converter pass are cooled by sending them through the cold interpass heat exchanger and
the economizer 3B.
In the interpass tower the SO3 is removed from the gas stream by contacting the gas with
circulating 98-99% sulphuric acid.
From the cold interpass heat exchanger, the gas stream flows to the hot interpass heat
exchanger where it is further heated by hot gases leaving the second converter.
From the hot interpass heat exchanger, the gas stream flows to the fourth converter pass
where final conversion of SO2 to SO3 is accomplished. The temperature to the fourth

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converter pass is controlled by bypassing a portion of gas around the cold and hot interpass
heat exchangers.
The gas stream leaving the fourth pass enters the split water flow economizer 4A/4C where it
is cooled by boiler feedwater. Water side bypasses are used to control the exit temperature
from economizers 4A and 3B. The exit gas temperatures can be regulated to prevent
economizer drip acid formation normally associated with variable hydrocarbon content in
sulphur feed.
Gas leaving the economizer 4A/4C enters the final absorbing tower prior to exhausting to the
atmosphere through a stack.
In the final absorbing tower, SO3 in the gas stream reacts with water in the 98-99% circulating
acid. The temperature of the strong acid circulated over the final absorbing tower increases
due to the heat of formation and the sensible heat of the gas stream entering the tower. The
acid from the bottom of the final absorbing tower flows into the pump tank.
The 98% acid produced in the absorbing tower is pumped through a product acid cooler and
then to a storage, tank.
The designed Sulphuric Acid plant will generate 33t/h of superheated steam @ 40 kg/cm
which will feed the turbo generator.

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Figure 17.1.2_1
Sulphuric Acid Flow Sheet
Co-generation
The Sulphuric Acid plant will export superheated steam at 40 kg/cm2 pressure and 473C
temperature which will feed the Co-generation unit which is designed to produce a total of 8.0
MWh of electric power @ 13.8 Kv.
The turbo-generator unit will generate electrical energy in a condensing turbine. A small
portion of low pressure steam @ 7.0 Kg/cm2 will be extracted from the turbine casing. This
low pressure steam at will be used for the sulphur melting and Granulation Unit. The balance
of the steam flow will be condensed at the exit of the turbo-generator and returned as makeup to the deaerator.
Acidulation Plant
Process Summary
The Acidulation plant is designed to produce 500 Mtpy of SSP. This process will utilize the
slurry route for the sulphur acid attack.
The phosphate rock from the stockpile will be reclaimed by a FEL to a belt conveyor to feed
the re-pulping tank.
After being re-pulped, the slurry will be pumped to the intensive mixer where sulphuric acid
(H2SO4) will be introduced. The reactional slurry product from the intensive mixer will direct to
the curing belt (DEN).

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After 10 to 15 minutes residence time, the reactional slurry will solidify and it will pass through
a lump breaker before being transferred to the cure warehouse by a belt conveyor.
During the chemical reaction in the DEN, silicon tetrafluoride (SiF4) will be released. The
gases with fluorine content will be transferred to the absorption system where it will transform
into fluosilicic acid (H2SiF6) and hydrated silica (SiO2.2H2O) by counter current contact with
water.
The concentration of this suspension will be 18% to 20% H2SiF6 and it will be withdrawn from
the gas treatment system to the surge tank.
The scrubbers will be fitted with sealing tanks and liquor circulation pumps. Reposition water
will be fed onto the final stage tank and a chimney will release the gases to the atmosphere
after being treated according to relevant environmental standards.
Subsequently, the suspension with 3% to 6% solid content will be pumped to the press filter to
remove the hydrated silica. The silica cake will combine with the acidulate material from the
DEN and both will be transferred to the cure warehouse. The filtered fluorosilicic acid will be
collected in the reservoir tank and then to shipment and/or neutralization. See flow chart
below.
Figure 17.1.2_2
Acidulation Plant Flow Sheet

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Granulation
Process Summary
The granulation plant will be able to produce up to 500.000 tpy of SSP.
The single superphosphate powder (SSP) from the cure warehouse will be transferred trough
a belt conveyor, to the granulator drum where water and slurry from the gas treatment system
will be introduced. The gases produced in the granulator will direct to the gas treatment
system while the product will direct to the rotary dryer.
Heat from the combustion chamber which burns firewood will be used in the dryer. The ashes
from the furnace will be disposed accordingly.
The gas generated when granulated SSP passes through the dryer will be treated in the gas
treatment system consisting of a pneumatic cyclones and venturi scrubber before being
released to the atmosphere.
When drying operation is completed, the granulated SSP will report to the hot screening. The
oversize from the hot screening will direct to the cold screening after passing through the
rotary cooler. Gases produced in the cooler will report to a bag filter to remove the particulate
material, which will return to the process. Conveyors will withdraw the undersize from the hot
screening and feed the recycle bin as circulating load.
The cold screening screens will be fitted with two decks. The oversize from the upper decks
will feed a chain mill and the product will be delivered to the recycle bin. The undersize from
the upper decks will combine with the oversize from the lower decks and will be stockpile in
the granular product pile.
The undersize from the lower decks will combine with the hot screening undersize and chain
mill product in the recycle bin. The material from the bin will be the circulating load to feed the
granulator.
All dust collecting points located along the granulation plant will report to the bag filter. Then
the clean air will be released to the environment after passing through an exhaust fan and
chimney. Conveyors will transport the powder retained in the filtering process to the recycle
bin. See flow chart below.

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Figure 17.1.2_3
Granulation Flow Sheet

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18
PROJECT INFRASTRUCTURE
18.1
Background
Santana Phosphate Project is located in the South-eastern region of Par State, in the
Northern Brazil. The DNPM concession area for mineral evaluation, is of about 86.0 km2
located in a farmland deforested area, showing a savannah aspect.
The Santana inferred mineral resource estimate is based on 53 diamond holes (2,386m) and
6 RC holes (238m) drilled at a spacing of approximately 200m by 200m. MBAC has an
ongoing infill and extensional drillhole program underway.
An independent inferred mineral resource has been estimated comprising 33.5Mt with an
average P2O5 content of 12.39% (using a preferred 3% P2O5 Cut-off).
The stripping ratio is estimated to be 1.8:1.
Bench scale metallurgical test work on rock samples collected from outcrops in the Project
area, Indicated that a high grade (34% P2O5) phosphate concentrate with a good reactivity,
can be generated utilizing a simple beneficiation process (MBAC).
The mineral deposit is strategically located, considering the growing fertilizer market in the
project region of influence (Mato Grosso and Par State).
Those facts encouraged the Company to develop a Project to produce low concentration
fertilizers, mainly oriented to soya bean crops.
18.2
Project Scope
18.2.1
Production Units
The Santana Phosphate Project takes into account the favorable geographic position of the
mine allied to the good rock characteristics, resulting in a lower production and logistics costs.
The Project aims the implementation of the following production Units:
Ore Beneficiation Plant
300 kty
Sulphuric Acid Unit
245 kty
Acidulation Unit (SSP)
500 kty
Granulation Unit (GSSP)
500 kty
Cogeneration Unit
8.0 MWh
Utilities and Auxiliary Plants
Water & Tailings Reservoir

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Due to the non-existent social infrastructure in the proximity of the Mine area, in addition to
the difficulty of access, the best approach for the whole Project will be to locate the production
facilities in two sites as shown in the figure below.
18.2.2
Mine Site
It will contemplate the operation of the open pit Phosphate mine; the rock Concentration Unit;
and the Water & Tailings deposit.
18.2.3
Industrial Site
This site will be dedicated to the Chemical Units and should be located close to BR 158, at
approximately 20 km from Santana do Araguaia.
Figure 18.2.3_1
Industrial Site
18.3
Project Location Characteristics
18.3.1
Mine Site
The Mine is located in the Southern of Par State in the Brazil northern region at an
elevation of 309m and geodesical coordinates: S 9 40.23 W 51 47.23.
The area is located at 229 km west from Santana do Araguaia (near Araguaia river) and
at about 25 km from the Xingu river, on the east side.
The topography is relatively flat with gentle slopes.

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The climate is tropical with a well defined dry season (May October), followed by a wet
summer.
Typical rainfall is of 1800 mm during the summer period and temperature may vary from
20 to 36C.
The original forest vegetation was drastically reduced and substituted by grassland for
cattle pasture; as a consequence, the hydrography of the region was seriously affected
by the reduction of water streams.
Water for the Project will come from Capivara river located 15 km from the site.
Figure 18.3.1_1
Mine Site

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18.3.2
Industrial Site
This site was positioned 200 km from the mine, in a flat area of 200 ha (existing farm), not far
from Santana do Araguaia (20 km) and close to the BR 158. The position was defined,
considering the logistic aspects related to raw materials input and product distribution to Mato
Grosso and Par state. See figure below.
Figure 18.3.2_1
Industrial Site

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18.4
18.4.1
Access
Road Access
Par State road structure is very poor currently; this creates some logistic difficulties for this
Project; however, this situation will improved in the coming years, with the implementation of
PAC (Government Infrastructure Program) which contemplates the paving of BR 158 by the
end of 2012.
This important highway will cross the south east of Mato Grosso up to the north, reaching the
city of Redeno in Par state. See figure below.
Figure 18.4.1_1
Location Plan
Mine Site
Currently, access to Mine site is very difficult even utilizing the shorter route. Starting from
Santana do Araguaia (PA), you must travel 94 km on paved road (BR 158) up to Vila Mandi,
and them the Mine site is approximately 141 km drive on an unpaved road, mainly used by
farmers to transport cattle.
This is a country route, not adequate for heavy trucks due to its limited width, and 40 small,
primitive wood bridges.
In the dry season, the distance from the Mine up to Vila Mandi, can be covered by a small
truck in about 5 hours. However is difficult to estimate travelling time during the rainy season.
Considering the importance of this route for the Project, it is recommended that MBAC
considers an investment of about R$ 12.0 million to update these road from the Mine Site up

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to Vila Mandi, to support the traffic of 27 tonne trucks to transport concentrate to the Industrial
site.
In addition, a negotiation with farmers will be needed for their permission to improve and
upgrade this road.
It must be emphasized however, that this situation can be radically improved in the future if
the Government implements the road BR 235 scheduled for the five years plan.
Analyzing the road map from DNIT (Figure 18.4.1_1) we can notice that this new road BR
235 is planned to cross the Par State from east (Caximbo) to West (Santa Maria das
Barreiras) connecting the BR 153 (Xingu basin) to BR 158 (Araguaia basin).
Industrial Site
The route of the concentrate from the Mine Site will be on the existing unpaved 141 km to Vila
Mandi and then 97 km over paved road to the Industrial Site, for a total 238 km. A closed loop
truck transport shall be utilized for this service.
The access to and from the Industrial site will be straightforward, utilizing the BR158 which is
an important road going from south to north Brazil connecting Mato Grosso State to Par
State, up to the city of Redeno, and other alternative routes linking to the Araguaia river
water way.
This road still has some unpaved sections but work is underway and is expected to be
completed by the end of 2013 (PAC program). It will be an important logistic alternative for the
Project.
18.4.2
Waterway Access
The waterway flow utilizing the AraguaiaTocantins river system is considered in the
government plan (PAC 2). It will be part of an integrated intermodal platform (Marab) to
improve the logistic approach to the center region of Brazil, with a total extension of 2,794 km.
This route will be an important link between the Vila do Conde port (Belm) in the northern of
Par to the east-center of the country, allowing the flow of raw materials and products for
export (grains), at a lower transportation cost.
Work is underway with an estimated completion date by the end of 2013. This will be an
alternative route, which will reduce the inland freight cost for the imported sulphur by about
20%. (Figure 18.4.2_1).

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Figure 18.4.2_1
Water Access
18.5
18.5.1
Infrastructure Aspects
Mine Site
Livestock is the economic driver for this region (Par State), having the highest cattle
concentration in Brazil. The Project region is completely occupied by cattle farms with no
social infrastructure.
The closest village (80 km) is Garimpinho which has only 200 inhabitants and absolutely no
social infrastructure.
Vila Mandi (141 km) with approximately 1,000 inhabitants has a very poor infrastructure. It is
the place where the farmers meet for cattle negotiation. Vila Mandi is likely too far from the
mine and cannot be considered as a support for human resources and services.
Human Resources
Based on the above considerations, there is very little availability of human resource with
basic technical knowledge. As well no professional schools were identified in this first survey.
As a recommendation, a plan to create manpower for the Project should be considered,
utilizing professionals to set up a training program for the operation of each specific plant.

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Housing
Mine site will utilize 160 workers including direct and indirect people.
This will require the building of accommodations, including a basic infrastructure to enable a
normal living.
This site will be built in the outer limits of the plant.
18.5.2
Industrial Site
The Industrial site will be located near Santana do Araguaia which will provide the adequate
social support. However, the service infrastructure is poor specifically for technical services.
MBAC intends to implement training facilities in Santana do Araguaia in agreement with the
local authorities to develop a Training Program for both sites.
18.6
18.6.1
Industrial Utilities
Electrical Power Networks
Due to the enormous distances required to be covered, the integration of high tension power
transmission in Brazil is not complete specifically in the State of Amazonas and Par. In
addition, the high tension power distribution in Par is not well balanced with a concentration
in the north and eastern portions of the state.
As a consequence, 40 thermoelectric power stations were installed to provide power to small
cities (under 15,000 inhabitants).
Within the Mine Area, only a low tension distribution line for farmers utilization exists.
The nearest available high tension point is located in Miracema, (Tocantins state)
approximately 370 km from the Project site. CELPA (Centrais Eltricas do Par) is the power
distribution company, which receives energy from Tucurui, a hydroelectric power Company
which generates 8,370 MWh and is located in the north of Par State.
However, the distribution network (1,840 km) is mostly oriented to the northern part of Par
and Maranho State.

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Figure 18.6.1_1
High Tension Electricity
As seen in Figure 18.6.1_1 the center and southeast of Par state, as well as the north of
Mato Grosso, are not presently included in the high tension distribution grid. This fact brings a
new challenge to Santana Phosphate Project, for both sites.
Mine Site
Due to its geographical location the operation will be directly affected by the situation
mentioned above.
The Mine site is about 370 km from the closest high tension facility located in the city of
Miracema.
The electric power consumption in this facility is estimated to be 5.0 MWh.
A possible solution will be to negotiate with CELPA the launching of a new high tension.
power line (138 Kv) from Santana do Araguaia up to the Mine site.
CELPA belongs to GRUPO REDE which also controls CELTIN in Tocantins State, which is
working with MBAC on the Itafos-Arraias Project.

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Initial discussions between MBAC and GRUPO REDE were held in order to develop a project
which will contemplate to set up a new 138 KV line coming from Miracema (TO) up to
Santana do Araguaia (215 km) and then, continuing up to the Mine Site (184 km).
The implementation of this project will have an enormous positive social impact, enabling the
development of the south east region of Par State (Figure 18.6.1_2).
Figure 18.6.1_2
Electrical Power
The investment needed to implement 184 km of power line from Santana do Araguaia to the
Mine site should be assumed by MBAC and will be compensated in ten years by a reduction
of project power bills. This investment has included in the CAPEX estimate.
Industrial Site
The solution mentioned above will also be adequate for this facility due to its convenient
location very close to the new power line.
The total estimated electric consumption for this facility is 12.5 MWh being a part of this
cogenerated internally, though the Sulphuric Acid Operation (8,0 MW).

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18.6.2
Water Supply
Mine Site
The total estimated water needed for this site will be 1,100 m3/h. A major part of this, will be
recirculated from the water and tailings reservoir. However due to the high evaporation index,
it will be necessary a make-up of 360 m3/h of clear water.
The Project will take this new water from Capivara river wich is at approximately 15 km from
the Beneficiation Plant.
Due to the difference level of 103m between the Plant and the river, a compensation water
tank was considered.
This investment related to fresh water impoundment was included in CAPEX estimates.
A drilling survey to evaluate the potential for ground water will be undertaken in the near
future
Industrial Site
3
With regards to process water, the chemical plants will demand approximately 260m /h which
will be provided by an intake station located in a river, close to the site and 9 km aqueduct to
the site.
In this case, the difference of elevation between the two points in less than 15m.
A pond for raw water is included in the Project.
In addition, the company will undertaken an underground water survey will take place.
18.7
18.7.1
Logistic Aspects
Raw Materials and Products
Concentrate Rock Feed to Industrial Site
The poor access from the Industrial Mine, to the Industrial Site creates a challenge that may
be solved in the coming years if the construction of a new federal road (BR 235) is completed
as planned linking the east to the west side of the Par State. This road will have an extension
of 522 km and will go from the Araguaia River, an important water way up to BR 080, near to
Xingu River passing at about 40 Km from the Mine Site.
An investment of R$ 12 million was included in the Capex to support this action.
It was also taken in account as an addition in the OPEX due to the related increment in the
rock concentrate transportation cost.

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Sulphur
This material is imported and utilized to produce Sulphuric Acid. The annual need for this
Project will be of 82.2 ktpy.
The present logistic plan is to receive this input via Itaqui port in Maranho State, taking
advantage of the synergy between the two plants (Itafos and Santana), thus reducing the sea
freight cost.
Sulphur will travel 850 km from Itaqui to the Santana Industrial Site by Carajs railway up to
Parauapebas (Par State), followed by truck, through roads PA 275 and PA 150 and finally
road BR 158 to the Industrial facility, covering a total of 1,267 km at an estimated inland
freight of US$ 100.00/t.
Another alternative would be to use the port of Vila do Conde (Belem-PA) and the Araguaia
Tocantins system waterway up to Santa Maria das Barreiras 980 km then by road BR 158
(84 km) up to the Chemical Plants.
The total inland freight cost, utilizing this alternative should be certainly lower. (Figure
18.7.1_1).
Figure 18.7.1_1
Freight Route

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Fuel & Biomass

Wood chips or brickets to be utilized in the drying process of the Granulation Plant are
available in the Par State.
Final Products
The products from Santana will be mainly delivered to customers located in southern Par
and the northeastern region of Mato Grosso which will account for approximately 90% of the
total production.
The flow of finished products will be easy, utilizing mainly the road BR 158 which will be totally
paved up to the end of 2012.
This will enable MBAC to provide products up to 500 km radius, reaching the central region of
Mato Grosso in a highly competitive basis.

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18.8
Project Implementation Schedule
Figure 18.8_1
Project Implementation Schedule

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19
MARKET STUDIES AND CONTRACTS
19.1
Brazilian Market Overview
19.1.1
Agribusiness
Brazil is one of the most important players in the international trade of agricultural
commodities, with a leading position for the production and export of soybean, corn, sugar,
coffee and orange juice, other than chicken and beef.
For this reason, it is being considered the most important source of grains to support the
enormous world food demand increase, foreseen for the next decades. It must be
emphasized also that Brazil has one of the worlds largest agricultural area, sufficient to
support the growing global demand for food and biofluel.
The forecast soybean export for 2011 will follow the tendency of 5.2% yearly increase, and is
estimated to be 32.0 million tonnes. This volume represents approximately 47% of the country
production for this year.
Table 19.1.1_1
Soybean export evolution
Year
2005
2006
2007
2008
2009
2009
2010
Volume
(000 t)
22,400
24,900
23,700
24,500
28,100
29,000
32,000
The importance of agribusiness in Brazilian economy has consolidated the farming activities
as the main driver for country development.
A new and important agriculture frontier is represented by the gradual substitution of the cattle
pasture by soybean plantations on the northern east side of Mato Grosso State.
In this scenario, Mato Grosso will consolidate its importance in the development of Brazil
agribusiness.
19.1.2
Fertilizer
Brazil is not independent of fertilizers imports; currently, almost 67% of nutrients are imported.
Besides, the continuous growth of agriculture (~5.0% py) will tend to increase the need of
fertilizers imports, even considering the new fertilizer plants to be implemented in the coming
years.
According to the National Association for the Promotion of Fertilizers (ANDA), in 2010, Brazil
produced 9.3 million tonnes of fertilizers and has imported 15.0 million tonnes.

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Figure 19.1.2_1
Brazilian P2O5 Market Scenario
Also according to the ANDA, the consumption of fertilizers is distributed fairly evenly in the
three regions of Brazil. The North Center of the country consumes 33% of the supply of NPK,
the South 29% and the Southeast 28%. The Northeast region accounts for 9% of the
consumption of fertilizers.
Despite the even distribution between the areas North Center, Southeast and South, the
consumption of NPK is differentiated.
The state of Mato Grosso is responsible for 16% of national consumption of NPK and for 48%
of the consumption in the North Center area of the country. Gois consumes 9% of the
national supply and 28% of this area. Mato Grosso do Sul absorbs 5% of the total and 15% of
the supply in the region.
The total consumption by Southeast area, So Paulo absorbs 52% and Minas Gerais 43%. At
the national total the same states participate with 15% and 12%, respectively.
In the South of the country, the State of Paran accounts for 50% of the regional
consumption, Rio Grande do Sul by 40% and 10% in Santa Catarina. In the Brazilian demand
they account for 15%, 12% and 3%, respectively.
In the Northeast, the State of Bahia stands with consumption of 68% of the region. In the
national demand, the consumption of this state is 6% of the total.

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In the last 23 years, Brazil has recorded a yearly increase 5.2% in fertilizer production; the
evaluation of domestic consumption of nutrients is demonstrated in the figure below.
Figure 19.1.2_2
Domestic Nutrients Consumption

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19.2
Region of Project Influence

Santana Phosphate Project is strategically located in relation to the target area for the Project
taking in account the development of the new agricultural frontier. Project Target region is: (i)
the northern east of Mato Grosso, (ii) south Par; and (ii) west limits of Tocantins.
Figure 19.2_1
Project Area Immediate Market
This market will represent in 2015, as a conservative approach, an additional of 150 ktpy of
P2O5, being at least 110 ktpy as single superphosphate or 550 ktpy of product.
In addition, we are also considering the potential market of the east-central of MT. Where,
there will be a clear competitive advantage of Santana CIF product due to its lower freight
costs, if compared with product coming from Goias or even from Santos/Paranagu.
The distance covered by products coming from the South east region is about 2,000km and
for those coming from Goias is 1,500km, with an estimate freight cost of US$ 90.00/t.
As an average, we estimate a CIF freight cost advantage of US$ 40.00/t for the Santana
products.
Considering soybean production the existing logistic structure will not support the estimated
volumes forecasted for the next 5 years; besides, consider that in the period of January to
July 2011, the fertilizers imports through Itaqui port reached 345 kt, being 118% higher if
compared with the same period of 2010.

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In the near future a convenient alternative for the products directed to export, will be the
utilization of Araguaia-Tocantins system then enabling to direct this flow to Itaqui, by rail,
taking advantage of the new TERGRAN site planned to absorb 5.0 million tons of grains;
the first phase of this important logistic investment will be operational by the end of 2013.
19.3
Competitors
Currently, there is no alternative to P2O5 required at the target area, resulting the requirement
of import fertilizer from other domestic regions or abroad.
Figure 19.3_1
Competitors
The mainly supplement of the P2O5 consumed at the target region came from (i) Port of Itaqui
(imported); (ii) Port of Santos (imported); (iii) Port of Paranagu (Imported); and (iv) southern
Minas Gerais and Goias states (Domestic), where there are some competitors.
The principal product route is via Port of Itaqui, because it is the closest port of the region and
domestic producers are more competitive in other domestic regions, for example, south
eastern Brazilian region.

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19.4
Project Santana Competitive Advantage

Santana Phosphate Project has a significant competitive advantage resulting from strategic
location.
The distance covered by products coming from the South east region of Brazil (Port of
Paranagu and Port of Santos) is about 2,000km; for those coming from Goias and Minas
Gerais states is 1,000km; and 1,500 km from Itaqui Port.
Those large distances results in a large freight costs comparing to Santana Phosphate Project
product, giving the project a large competitive advantage.
Figure below shows Santana Phosphate Project location and the location of their main
competitors.
Figure 19.4_1
Competitors Distances to Santana Phosphate Project Area

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20
ENVIROMENTAL STUDIES, PERMITTINGS AND SOCIAL OR

COMMUNITY IMPACT
20.1
Environmental Requirements
The environmental requirements for a project implementation at the Para state consists of
acquiring three series of Licenses: Preliminary License, Installation License and Operating
License.
An Environmental Impact Study (EIS) with a detailed Operations Plan is required by the
Environmental State Agency from the Par state for the Preliminary License issuance. The
Operations Plan consists of the basic mine plan, infrastructure, and operational aspects of the
Project. The Environmental Study consists of a comprehensive study on the Plan of
Operations for historical concerns, environmental and cultural issues and impacts. An Impact
Report (RIMA) is also required and it consists of a document that summarizes the content of
the Environmental Study and it should be written in a colloquial language in order to be easily
understood by the population, especially those affected by the project.
A Public Hearing, in accordance with Federal CONAMA 009 / 1987, is also mandatory for the
Preliminary License issuance. The Hearing has the objective to show the direct and indirect
influences of the project to all the people living in the area. At the Public Hearing there will be
opportunity for the company to answer all questions from the population, and collect
comments and suggestions about the project. The company pursuing the project has the
responsibility to facilitate the location and transportation to the proposed site.
The Installation License is mandatory before any construction and mine operations can begin,
and it can be obtained shortly after the issuance of the Preliminary License (LP), given that
any condition or adjustment requested upon LP issuance has been performed.
The last step on the licensing process would be the issuance of the Operating License, and it
can only be obtained on completion of the construction, at the plant commissioning, when all
the project aspects listed on the LP and LI can be checked by the Environmental Agency.
At the current project stage, MBAC has hired Geomma consulting to perform an initial
Environmental assessment at the mine area, where the largest impacts are expected. It is not
possible at this stage to evaluate or quantify the impacts, but the summary of the findings is
shown in the next paragraphs. MBAC shall also start the preparation of a complete
Environmental Impact Study shortly.

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20.2
Protected Areas
Protected areas are those areas considered restricted, where there are limitations to the full
exploitation of the mineral industry. There are two of them around the project: Indigenous
Lands and Badjonkore e Menkragnoti, which are located at a distance of about 11.6 km and
16 km northwest and west of the ADA respectively. At this distance there will be no impact for
the project and preliminary there cannot be forecasted any related issues that should be
considered in the project relating to the impacts of the project upon these areas.
20.3
20.3.1
Physical Environment
Climate and Weather
The municipality of Sao Felix do Xingu belongs to the southeastern region of Par and the
micro-region of Sao Felix do Xingu. The relative humidity values recorded average of 70%
during the year.
The region is characterized by having a hot sub-tropical climate having a mean annual
temperature around 30.5 C. The rainfall is as high as 1370.3 mm / year, somewhat irregular
during the year.
20.3.2
Soils
The area is home to two major types of soils: Acrisol + dystrophic Oxisol and Udorthent
dystrophic and eutrophic.
The clay soil + dystrophic red-yellow sandy clay loam soil, which represents 70% of the
project area, has a deep soil, porous and strophic, where there may be conditions for root
growth in depth, otherwise it will take place featuring dystrophic or limitation of a chemical in
depth, especially if the phosphorus content is low. The Oxisol soil has limited porosity and low
nutritional potential, and it is probable a problem for compression. This type of soil is related to
the occurrence of the acidic granitic rocks of the Xingu Complex.
20.3.3
Hydrography
The mesh covers the region's watershed tributaries of the Xingu River basin, which covers the
grid coordinates Latitude 08 30'0 "to 09 35'0" S Longitude 52 to 30'0 "to 52 0'0" W, and
west of the Igarap do Jacar and east river da Paz and Capivara, within the municipality of
So Felix do Xingu.
The project area is located in the basin between the rivers Rio da Paz and Capivara, both
tributaries of the right bank of the Xingu River,Both riversare born in the high mountain ranges
that divide the municipalities of San Felix, Cumaru do Norte. The river Capivara springs about
130 km in a northwesterly direction until it reaches the Xingu River, where the project is
located, on its right bank tributaries. The Rio da Paz has its trajectory until it flows into the
Xingu River near 120 km in the northwest, and the applicant's areas near the springs.

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The Xingu River in Mato Grosso is born in the junction of the rivers Seven and Culuene
September, which, in turn, have their origin in the Serra do Roncador. Its main tributaries are
the rivers Culuene, Curisevo, or Tamitatoala Batovi, Ronuro, Manissau-Miu, Iriri Acara and
Jaraucu, the left margin, and Seven of September, or Sui-Miu Suiazo, Commander
Fontoura, Fresh and Bacaj, the bank right.
The Xingu River basin covers the states of Mato Grosso and Para, being bounded to the
south and east by the basin of the river Tocantins / Araguaia andto the west by southwest of
the Tapajs River and the Paraguay River basin. It is situated between the parallels 15 and
1 south latitude and meridians 50 and 56 west longitude.
His contribution basin has a total area of approximately 509,000 km2 and has an elongated
shape, with maximum width of 550 m, running in the south-north direction before flowing into
the Amazon River, representing 7.8% of the basin, which covers about 6.1 million square
kilometers, ranking among the largest in the Brazilian Amazon.
20.3.4
Hydrology
There are few remaining perennial streams within the area surrounding the project, including
those presenting only a small volume of water. The study shows the devastation of the
vegetation for use as pasture land, a fact that is now common in the Amazon region and
causing changes in local water resources. Among human activities, those that most stand out
are cattle ranching and timber extraction for commercialization.
The region is part of the municipality of Sao Felix do Xingu, which was strongly influenced by
human actions, with damage to the vegetation types by deforestation, to carry out activities
as: grazing, mining and logging, among others with consequences to the flora and fauna that
resulted in the gradual loss of biodiversity.
One has to consider that the actual colonization process in southeast Par imposed a known
use on natural ecosystems, well beyond the carrying capacity of these systems, causing a
collapse of these structural and functional, leading to succession types, highly impoverished in
refers to biological and genetic resources.
The modified environments dominate the local scene, including large extensions of land, as
the lower areas of flooded forests (riparian), and its altered systems, characterized by strong
presence of more generalist species of greatest plasticity and environmental requirements.

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Figure 20.3.4_1
Farms in the project area
20.3.5
Flora
According to the text of Resolution CONAMA No. 10, 01.10.93 secondary or succession
vegetation is the result of natural processes of succession, after the canceling of all or part of
the primary vegetation by anthropogenic or natural causes..
Currently, it is known that the floristic composition of secondary forests, known as capoeira, is
usually compounded predominantly of pioneer species, little shade tolerant and adapted to
low fertility conditions or low demand in relation to nutrients. The plants are extremely
aggressive when it comes to physical occupation of space, allowing the formation of a less
hostile environment and suitable for larger species that require better shade to settle and
reproduce.
The vertical structure of vegetation is considered high, with an average height of 8.31m, with
values reaching up to 10 or 30m. The landscape vegetation type, the discontinuous canopy is
uniform, with trees of different sizes, ranging from small to medium. There was sort of
economic use of timber as Eschweilera ovata (kill kill), Mezilaurus Itauba (itaba) and
Socrates exorrhiza (paxiba) as remaining species of primary education. It is also found
individuals of the genus Cecropia (trumpet trees), which denote human action, in which the
withdrawal of the original vegetation has given way to ecological succession to species of fast
growth and good adaptability to environments considerably degraded.
Regardless of its stage, virtually all forest fragments present some degree of degradation,
mainly at the border, with an imbalance of populations of lianas and invasion of grasses such
as Panicum maximum, Brachiaria sp. and Mellini minutiflora. This goes so far as to prevent
the evolution of forest succession and may decrease the supply of food and shelter for
wildlife. Another aggravating factor is that in these situations, the fire can spread more easily,
as the mentioned grasses are highly flammable. The occurrence of fire and hunting are the
major threats to these forests, where biodiversity is being lost each year gradually, as shown
in Figure below.

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Figure 20.3.5_1
Area Comprised of small individuals
The area looks much degraded in some places, mostly due to edge effects and fire, but it was
classified as late stage because a portion of the area is still preserved and also because,
legally, it does not lose this feature. In most parts of the fragment the tallest trees remain,
reaching 25-30 feet high, highlighting the Jequitib pink (Cariniana legally), Peroba-rosa
(Aspidosperma polyneuron) and Jatoba (Hymenaeae courbaril). Forming the forest canopy,
between 15 and 18 meters, the highlights are white Jequitib (Cariniana estrellensis) and
Cedro-rosa (Cedrela fissilis).
Figure 20.3.5_2
Vegetation Composed by pioneer species

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Figure 20.3.5_3
Palm species identified in the study area
20.3.6
Pasture Area
Livestock is the main use for land in southeast Par, therefore, the area is predominantly of
pasture use, abandoned or fallow.
Figure 20.3.6_1
Pasture Area
In pasture areas, the main forage grass identified is the grass Brachiaria sp., and, eventually,
isolated individual trees are found. In some abandoned or fallow areas, the formations of
individual trees of small dense tangles congregate where there is a predominance of a few
tree species. Both environments have a significant non-timber income. There is the
occurrence also of species of palm trees scattered throughout the pasture with or without the
association of tree species.

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Figure 20.3.6_2
Cleaning Areas of pastures
Periodically, "dirty" pastures, invaded by weeds, (locally known as "Juquir") and species of
secondary succession, are "cleaned." To clean them ranchers use fire, whose control and
extension are not always well managed.
Figure 20.3.6_2
Streams in Permanent Preservation Areas
20.3.7
Fauna
Among terrestrial vertebrates, birds, mammals and reptiles are the groups that contribute to a
more efficient characterization of environmental conditions in a particular area, because,
besides being quite diverse in their habits and ecological requirements, they are generally
active throughout the year and can be recorded by direct methods (contact) or indirect (tracks,
feces, shelters) with relative safety.
The inventory carried out has obtained 21 species of mammals, 26 birds and 12 reptiles, 59
species, in total number of surveys.

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The group of birds is the richest in species and represents 44% of the fauna identified,
followed by mammals that correspond to 36% and 20% reptiles.
20.3.8
Mammals
In the surveyed area, 23 related mammal species, represented in 12 families and seven
orders, were found. Among the mammals there is great diversity of habits and therefore the
standards body that require the application of various methods for the determination of
ecological parameters (VOSS, Emmons, 1996).
20.3.9
Avifauna
In the study area were diagnosed 26 bird species, classified in 10 orders and 17 families.
These taxa correspond to the populations that remain in different environments fragmented
forest birds as well as some more requirements for environmental conditions.
In this light, one can consider the birds as an indicator of the presence of wildlife in the area
due to the ease of observation of this segment and its better adaptation to changing
environments and human occupation.
Figure 20.3.9_1
Avifauna

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20.3.10 Herpetofauna (Reptiles and Amphibians)

Considering the methodology applied in the study, based on records obtained from field
observations and interviews with residents, it were diagnosed 14 species, including two
species of frogs grouped in two families of reptiles and 12 species distributed in three orders
and eight families.
Representatives of the herpetofauna play an important role in ecosystems due to their
position in food webs (second-order consumers), controlling populations of vertebrates and
invertebrates, especially land, and constitute the food source for numerous species of wildlife.
As a result of deforestation, species of reptiles and frogs of open areas have expanded
geographically its limits, at the expense of more demanding species. The forest reptiles are
more difficult to visualize due to their habits, while the snakes are found more randomly, and
their records based primarily on interviews with the community.
Amphibians were not specific targets of this diagnosis, but its occurrence may be recorded in
the area across species.
20.3.11 Biota
Vegetation with a worrying stage of conservation was identified in the area, containing
invasive species and presenting low potential for the timber sector, thus, found in some
sampling sites, a characteristic of secondary vegetation, from anthropogenic factors.
The field survey data indicate the occurrence of 61 species of terrestrial vertebrates in 26
birds, 21 mammals, 12 reptiles and 2 amphibians, although these preliminary figures
represent a slowdown in wealth compared to other areas already studied in the region .
It can be said that the project area is home to a wildlife species characteristic of disturbed
habitats, while still allowing the occurrence of some species more demanding as the demand
for environmental and ecological resources.
The main causes of the reduced number of species should be related to fragmentation of the
site, with destruction of the original forest and replacement with areas of scrub and
anthropized environments, with a decreasing trend in the presence of wildlife species and
individuals.
It is difficult to precisely measure the level of threat facing the emerging knowledge of the
distribution, habitat use and biology, requiring further studies, not only because of the variety
of environments found, but mainly to the degree of environmental characterization.
However, one can conclude that the studied area was dramatically changed with great loss of
biodiversity, mainly due to widespread deforestation, burning, and livestock.

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20.3.12 Anthropic - Social Indicators

According to the Secretary of State for Planning, Budget and Finance (Sepof) in 2000, the
number of people living in the municipality of Sao Felix do Xingu was 34,621, with 19,087 men
and 15,534 women. In 2007, that number rose significantly, totaling 59,238 inhabitants
(31,993 men and 26,828 women). In surveys conducted in 2010, the population of Sao Felix
do Xingu rose to 1.08 inhabitants / km, which means a total of 90,908 inhabitants.
This study does not indicate what possible changes that the implementation of the project
could lead to population growth of Sao Felix do Xingu, as the municipality is part of one of the
areas destined to the mine project and other mineral projects and may thus be constituted in
an attractive hub for migrating population, sprawl, violence, disease, among others.
20.3.13 HDI
The Human Development Index (HDI) and Index Firjan Municipal Development (IFDM) were
raised to support public policies in order to implement improvements in the quality of life of
local people.
The HDI was created by the United Nations (UN) and it aims to analyze data on life
expectancy, education and income.
According to the UNDP, the figures for 2007 and published in 2009, Brazil ranked 75th in the
HDI ranking. In the balance held in 182 countries, Brazil had a score of 0.813, remaining in
the group of developing countries considered to be high, ie, HDI greater than 0.800.
To make up the HDI, it is customary to use economic and social data ranging from zero (no
human development) to 1 (total human development). The closer to 1, more developed the
country, region, or municipality.
Figure 20.3.13_1
Health in So Flix do Xingu

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20.4
20.4.1
Infrastructure
Electricity
The federal government, through the Luz no Campo Program has enabled the population
living in rural areas to have access to electricity, thus increasing the consumption of the
municipality.
The distribution of electricity is the responsibility of the concessionaire Celpa Network,
however, it fails to meet the needs of the entire population, because in several parts of cities
the illegal capture of energy can be observed.
20.4.2
Sanitation
Considering the supply of water, sewerage and garbage collection, the municipality of Sao
Felix do Xingu has the worst regional results.
The water supply system does not have a network of efficient distribution of treated water,
causing the locals to do the uptake of water in an irregular manner, usually through wells
totally precarious and without any quality.
Some homes have artesian well or the abstraction is done via specialized dealer. Another
method of water collection, usually held in areas furthest from the urban core, is through the
opening of wells such as Amazon.
The system of garbage collection in the municipality studied, serves only urban center of the
core, not meeting the demand of the population that grows more and more.
20.4.3
Trade
The commercial center of Sao Felix do Xingu presents very diverse businesses.
A trade more targeted to meet the demand for agricultural products helps to characterize the
region of Sao Felix as a potential rancher area.
The city has clothing stores, appliance and electronics, and gas stations, network banking,
pharmacies, etc. (Figures below)

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Figure 20.4.3_1
Commercial Streets in So Flix do Xingu
Figure 20.4.3_2
Comercial Shops in So Flix do Xingu
Figure 20.4.3_3
Streets in So Flix do Xingu

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Figure 20.4.3_4
Roads in So Flix do Xingu
20.4.4
Public Safety
According to map the violence of Brazilian cities, Sao Felix do Xingu is in the Para region with
the highest rates of homicide, where most deaths are caused by conflicts related to land
tenure.
As for the agrarian structure, the study indicates that the municipality of Sao Felix do Xingu
are peasant units, farms and estates business, unregulated land tenure, aggravating
problems with squatters and squatting.
Among the most serious crimes committed in the county, according to the military police of the
municipality, are: those linked to land conflicts, armed robbery, theft of animals, vehicles and
motorcycles.
20.4.5
Anthropic considerations
The enterprise and its structure will be deployed in an area devoid of communities and
villages.
Surveys of primary and secondary data demonstrated the serious shortage of places in the
city and areas of influence of the project. Sao Felix do Xingu indicates serious weaknesses in
the services and utilities.
Within this perspective, despite the emergence of new economic activities often cause
damage to the environment, on the other hand are responsible for stimulating the economy
and consequently the improvement of life of local people by increasing employment and
income.

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The council will appoint a strong tendency for agriculture, with the economy, especially
employment and income by turning in large part to this sector.
In health and education, the limited number of establishments and professionals is one of the
most serious problems faced by local people. The infrastructure is also quite fragile, with
respect to the availability of sanitation, housing, electricity, trade, etc.
The locations shown total lack of resources in all sectors surveyed, i.e., they are totally
dependent on the services of neighboring municipalities.
Therefore, the lifting of economic and demographic dynamics, as well as the use and
occupation of a municipality or a community is critical to achieve positive results on the
negative impacts that may result in a new activity.

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21
CAPITAL AND OPERATING COSTS
21.1
Capital Costs
21.1.1
Mine Capital Costs

The estimated mine capital cost includes the following items:
Major mine equipment
Mine support equipment
Shop tools
Initial spare parts
Engineering and geology equipment
This estimate does not include the following mine physical structures:
Fuel and lubricant storage facilities
Explosive storage facilities
The mine shop, offices, and warehouse
It is anticipated that the vendors will provide storage for fuel, lubricants, and explosives as part
of their contract of work and that the prices for these items are included in the delivered price.
The mine shop and warehouse are included in the infrastructure capital cost prepared by ATS
Projetos for this study.
Table 21.1.1_1 summarizes the mine capital costs by category for the initial period plus all
sustaining capital needed for the Santana Phosphate Project. Initial mine equipment capital is
US$ 13.1 million. Sustaining capital, which is required for mine fleet increase and
replacement, amounts to US$ 23.3 million. Total capital during the life of the project is US$
36.4 million.
Table 21.1.1_2 shows the equipment unit prices used for this study. The following is noted:
Base equipment prices are shown in constant 2nd quarter 2010 US. It is assumed that
payment for the equipment is made at the time of delivery
The costs for major equipment are based on quotes obtained by NCL for this project
during the second quarter of 2010
The capital costs shown include delivery to the site and assembly
Exchange rate of 1.60 Brazilian Real per every US dollar was considered for mine
equipment, when applicable

6005 Australia
Page: 126
Contingency is not included in the mine capital cost. It is possible that final negotiated
sales prices, with fleet discounts, will be somewhat lower than the budget quotes used
for this study
Table 21.1.1_1
Summary of Mine Capital Costs (US$000)
Initial
Capital
Sustaining
Capital
Total
Capital
Major Equipment
9,553
18,790
28,343
Support Equipment
1,333
3,799
5,133
Engineering/Safety Equipment
1,850
1,850
Category
MINE EQUIPMENT:
Shop Tools
96
100
Spare Parts
278
720
998
Subtotal Equipment
13,109
23,314
36,423
TOTAL
13,109
23,314
36,423
Table 21.2.1_2
Equipment Unit Costs (US$000)
EQUIPMENT UNIT COST ('000)

Mine Major Equipment:
Lifetime
Capital Cost Spare parts
hr
KUS$
KUS$
Atl a s copco Expl ora c R50
30,000
1,382
28
Vol vo EC460B (3.5 cu m)
30,000
661
13
Vol vo L220 F (4.4 cu. m)
25,000
752
15
30,000
1,079
22
Sc ni a Truck (39mt)
30,000
456
24
CATD9T Tra ck Dozer
35,000
1,704
34
CAT160M Gra der
35,000
681
14
Sca ni a Wa ter Truck (20000 l i ter)
24,000
278
6
0
0
Mine Support Equipment:
Capital Cost Spare parts
KUS$
KUS$
Fl a tbed Truck (7.3 mt)
102
2
Mecha ni cs Truck (4x4)
114
2
Sca ni a Fuel Truck (12000 l i ter)
90
2
Ba ckhoe Loa der (1 cu m)
142
3
Pi ckup Truck (4x4)
31
1
Li ght Pl a nts
27
1
Mi ne Ra di os
1
Wa ter Pi pe - (per 1000m)
128
Mi ne Pumps
48
-

6005 Australia
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21.1.2
Mine & Industrial Sites Capital Costs

Project Santana Capital Costs have been estimated to August 2011 rates base, which was
based on Project Arraias Capital Cost. Total capital costs for the Project are estimated to be
US$385 million, including US$73 million in contingencies. Table below show all Capital Cost
breakdown.
The accuracy assumed for the CAPEX is 15%.
B$/US$ exchange rate considered was 1.60.
Table 21.4.2_1
Capital Cost Breakdown

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21.2
Operating Costs (OPEX)
21.2.1
Mine Operating Costs

Mine operating costs were developed from the recommended equipment requirements
presented in section 0 and the personnel requirements presented in section 0. The mine
operating costs include all the parts, supplies, and labor costs associated with mine
supervision, operation, and maintenance. The table below summarizes the total mine
operating costs. Total cost, unit cost per total tonne of material, and unit cost per ore tonne
are shown.
Table 21.2.5_1
Summary of Mine Operating Costs (US$000)
Category
Commercial production
Total Cost
Cost Per
Cost Per
(US$'000)
Total Tonne
Ore Tonne
179,173
1.90
5.42
Given that the ore outcrops to surface, no material movement is required before the start of
commercial production.
Total mine operating cost during commercial production is US$ 179.2 million. This amounts to
US$ 1.90 per total tonne of material and US$ 5.42 per tonne of ore during this period.
Operating hours were calculated from estimated productivities for the selected mine
equipment. Hourly costs were also estimated for the mine equipment, summarized in Table
21.2.1_2.
Table 21.2.1_1
Hourly Cost per Equipment
HOURLY COST PER EQUIPMENT
Equipment Type:
Total
US$/hr
Diesel
Tyres
Lube-Oil-FiltersWear Items Others Reparis
lt/hr US$/hr lt/hr US$/hr hrs/set US$/h
US$/h
US$/h US$/h
Atl a s copco Expl ora c R50

Vol vo L220 F (4.4 cu. m)
Sc ni a Truck (39mt)
CATD9T Tra ck Dozer
CAT160M Gra der
Sca ni a Wa ter Truck (20000 l i ter)
257.57
64.78
83.68
113.60
37.64
160.64
68.64
27.92
68.75
35.13
25.00
53.75
18.75
62.50
32.13
15.00
60.74
31.03
22.09
47.49
16.57
55.22
28.38
13.25
3.59
1.75
4.94
0.11
1.73
0.74
2.00
10.99
6.29
3.06
8.64
0.19
3.02
1.30
3.50
75.85
19.05
19.05
25.09
7.12
6.32
62.50
18.75
18.75
10.00
6.25
6.25
55.22
16.57
16.57
8.84
5.52
5.52
0.79
0.37
0.37
1.00
0.20
0.10
1.38
0.65
0.65
1.75
0.35
0.18
Fl a tbed Truck (7.3 mt)

Mecha ni cs Truck (4x4)
Sca ni a Fuel Truck (12000 l i ter)
Ba ckhoe Loa der (1 cu m)
Pi ckup Truck (4x4)
Li ght Pl a nts
30,000
6,020
14.32
4.37
7.50
5.02
133.71
7.93
1.52
12.94
19.56
4.15
-
2.16
26.67
-
49.98
19.52
42.69
44.53
16.51
56.16
27.32
6.15
3.75
0.59
0.59
2.50
0.50
-
3.00
-
0.63
0.63
-
12.50
0.63
0.63
12.00
0.75
0.63
51,540
17,496
The following factors are considered for the operating cost calculations:
Local unit costs for consumable items such as diesel fuel and blasting agents
6005 Australia
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Local hourly labor rates and fringe benefits were used
Local costs for tires and spare parts were used
Constant exchange rate of 1.60 Brazilian Real per US dollar
The general activities that are included in the operating cost estimate are as follows:
Construct the initial out-of-pit mine access roads from the pit area to the ore crusher and
waste storage areas
Removal and storage of the topsoil within the pit area
Preproduction development required to expose ore for initial production
Mine and transport ore to the crusher area. Mine and transport waste material from the
pit to the waste storage areas
Maintain all the mine work areas, in-pit haul roads, and external haul roads. Also
maintain the waste storage areas

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Table 21.2.1_3
Summary of Mine Operating Costs - Total Dollars
Total
Mining
Grade
Hourly General General
Loading Hauling Auxiliary
Material
Control
Labor
Mine
Maint.
Year
(ktonne)
G&A
Cost/
Cost/
Tonne
TOTAL
Ore
of Total
Tonne
Material
Y01
4,108
69
980
876
1,119
1,748
749
51
1,948
7,540
1.835
5.026
Y02
4,117
68
984
952
1,119
1,784
1,078
51
1,659
7,695
1.869
5.167
Y03
4,096
68
978
950
1,119
1,784
971
51
1,659
7,580
1.851
5.107
Y04
4,043
68
964
1,034
1,119
1,855
1,083
51
1,660
7,834
1.938
5.290
Y05
4,037
68
963
1,088
1,119
1,891
1,094
50
1,661
7,934
1.965
5.389
Y06
4,113
69
980
1,086
1,119
1,891
734
51
1,661
7,592
1.846
5.028
Y07
4,105
68
982
993
1,119
1,819
844
51
1,660
7,536
1.836
5.093
Y08
4,110
68
984
1,088
1,119
1,891
1,122
51
1,661
7,984
1.943
5.418
Y09
4,114
69
982
1,143
1,119
1,927
841
51
1,661
7,793
1.894
5.196
Y10
4,135
69
988
1,051
1,119
1,855
904
52
1,660
7,698
1.862
5.146
Y11
4,057
68
968
1,042
1,119
1,855
1,144
51
1,660
7,908
1.949
5.342
Y12
4,093
69
975
1,107
1,119
1,891
699
51
1,661
7,573
1.850
5.034
Y13
4,058
66
973
1,154
1,119
1,927
1,028
51
1,661
7,980
1.967
5.548
Y14
4,098
67
983
1,090
1,119
1,891
985
51
1,661
7,847
1.915
5.408
Y15
4,124
65
994
1,117
1,119
1,891
896
52
1,661
7,795
1.890
5.477
Y16
4,104
67
985
1,029
1,119
1,855
653
51
1,660
7,419
1.808
5.118
Y17
4,122
65
993
1,060
1,119
1,855
653
52
1,660
7,457
1.809
5.231
Y18
4,123
66
991
1,086
1,119
1,891
653
52
1,661
7,519
1.824
5.211
Y19
4,093
66
983
1,167
1,119
1,927
653
51
1,661
7,627
1.863
5.275
Y20
4,029
67
961
1,125
1,119
1,891
652
50
1,661
7,527
1.868
5.130
Y21
4,136
69
986
1,231
1,119
1,963
653
52
1,662
7,735
1.870
5.115
Y22
4,040
40
1,005
1,077
1,119
1,891
652
51
1,514
7,350
1.819
8.403
Y23
3,804
49
950
1,183
1,119
1,725
651
48
1,503
7,227
1.900
6.812
Y24
461
108
186
559
952
153
1,052
3,024
6.557
16.503
Total
Cost/
Tonne
of Total
Mat'l
Percent
94,319
1,517
22,640
24,917
26,292
43,856
19,545
1,179
39,228 179,173
1.900
5.422
0.016
0.240
0.264
0.279
0.465
0.207
0.013
0.416
1.900
1%
13%
14%
15%
24%
11%
1%
22%
100%
1.900
5.422
Commercial Production - Total Cost, Unit Cost Per Total Tonne, and Unit Cost Per Ore Tonne
179,173

6005 Australia
Page: 131
Table 21.2.1_4
Summary of Mine Operating Costs US$ per tonne
Total
Cost
$US
1000
Mining
Year
Total
Material
(ktonne)
Y01
4,108
0.017
0.239
0.213
0.272
0.425
0.182
0.013
0.474
1.835
7,540
Y02
4,117
0.017
0.239
0.231
0.272
0.433
0.262
0.013
0.403
1.869
7,695
Y03
4,096
0.017
0.239
0.232
0.273
0.435
0.237
0.013
0.405
1.851
7,580
Y04
4,043
0.017
0.238
0.256
0.277
0.459
0.268
0.013
0.411
1.938
7,834
Y05
4,037
0.017
0.239
0.269
0.277
0.468
0.271
0.013
0.411
1.965
7,934
Y06
4,113
0.017
0.238
0.264
0.272
0.460
0.179
0.013
0.404
1.846
7,592
Y07
4,105
0.017
0.239
0.242
0.273
0.443
0.206
0.013
0.404
1.836
7,536
Y08
4,110
0.016
0.239
0.265
0.272
0.460
0.273
0.013
0.404
1.943
7,984
Y09
4,114
0.017
0.239
0.278
0.272
0.468
0.204
0.013
0.404
1.894
7,793
Y10
4,135
0.017
0.239
0.254
0.271
0.449
0.219
0.013
0.402
1.862
7,698
Y11
4,057
0.017
0.239
0.257
0.276
0.457
0.282
0.013
0.409
1.949
7,908
Y12
4,093
0.017
0.238
0.271
0.273
0.462
0.171
0.013
0.406
1.850
7,573
Y13
4,058
0.016
0.240
0.284
0.276
0.475
0.253
0.013
0.409
1.966
7,980
Y14
4,098
0.016
0.240
0.266
0.273
0.462
0.240
0.013
0.405
1.915
7,847
Y15
4,124
0.016
0.241
0.271
0.271
0.459
0.217
0.013
0.403
1.890
7,795
Y16
4,104
0.016
0.240
0.251
0.273
0.452
0.159
0.013
0.405
1.808
7,419
Y17
4,122
0.016
0.241
0.257
0.271
0.450
0.158
0.013
0.403
1.809
7,457
Y18
4,123
0.016
0.240
0.263
0.271
0.459
0.158
0.013
0.403
1.824
7,519
Y19
4,093
0.016
0.240
0.285
0.273
0.471
0.159
0.013
0.406
1.863
7,627
Y20
4,029
0.017
0.239
0.279
0.278
0.469
0.162
0.013
0.412
1.868
7,527
Y21
4,136
0.017
0.238
0.298
0.271
0.475
0.158
0.013
0.402
1.870
7,735
Y22
4,040
0.010
0.249
0.267
0.277
0.468
0.161
0.013
0.375
1.819
7,350
Y23
3,804
0.013
0.250
0.311
0.294
0.453
0.171
0.013
0.395
1.900
7,227
Y24
461
0.018
0.234
0.403
1.213
2.065
0.331
0.013
2.280
6.560
3,024
Total
Percent
94,319
0.016
0.240
0.264
0.279
0.465
0.207
0.013
0.416
1.900
179,173
1%
10%
11%
12%
20%
9%
1%
18%
100.0%
21.2.2
Grade
Hourly General General
Loading Hauling Auxiliary
G&A TOTAL
Control
Labor
Mine
Maint.
Mine & Industrial Sites Operating Costs

Operational expenditure costs (OPEX) for Santana Phosphate Project have been organized
into five categories:
Labor
Electric power
Reagents and consumables
Maintenance
Miscellaneous

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Annual costs have been estimated as of the project operation commencement except for
maintenance since spare parts and first fill for the first year were included in the CAPEX.
The accuracy assumed for the OPEX is 10%. A contingency of 10% was also included in the
estimates.
Estimating methodology
The following summarizes the methods used for Santana Phosphate Project OPEX.
Labor
Labor relates to personnel including position, manpower quantity, salaries and social charges
for the plant as defined by MBAC. The direct labor, indirect labor and administrative personnel
were considered as a single group.
Direct labor includes beneficiation, fertilizer, granulation, acidulation and sulphuric acid plants
and utilities. Indirect labor includes laboratory, plant maintenance, asset security, supporting
services, internal transportation and logistics personnel. Finally, the administrative group
relates to all administrative area personnel, management position level and higher.
Electricity
Electrical power consumption was calculated in kWh/a across the process plant by applying
utilization and efficiency factors to the installed power for each motor and multiplying by the
number of hours in a year. Power costs were calculated by multiplying the calculated power
consumption of each motor by the electricity rate. A rate of R$ 72.92/kWh was applied due the
combination of co-generation and contracted power from the concessionaire. It was assumed
a cost of R$ 271.09/kWh and a load reduction of 62.255 MWh/year from the demand study
due to the power generation presumed from the sulphuric acid production.
Reagents and Consumables

Consumption of reagents and consumables are based on consumption rates applied to the
mass balance outflow. Prices for reagents have been based on in-house data information.
Table 21.2.2_1 shows the reagents consumption and supplier.

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Table 21.2.2_1
Reagent
Unit
Reagent Consumption and Vendor

Unit
Consumption
Price
ku/year
USD/unit
Vendor
Collector
kg
470
0.58
Miracema Nuodex Indstria

Qumica: LIACID 1815 (Soy bean
oil) IPI exemption, 7% ICMS
included, CIF.
Alcaline sodium
silicate
kg
364
1.39
Riberqumica Produtos Qumicos.

Supplier to bear freight costs.
Caustic
soda100%
kg
2,377
0.39
Braskem S.A. Final price with taxes

included. FOB plant.
Flocculant
kg
13
2.89
BASF: Magnafloc 1011. ICMS,

PIS/CONFINS and IPI excluded.
Material at So Paulo.
Hydrated lime
kg
0.13
Sasil Comercial e Industrial de

Petroqumicos Ltda. Freight CIF and
ICMS included.
Aditives
(covering)
kg
1,620
2.00
Consumables for this project are listed in Table 21.2.2_2 Annual consumption of mill grinding
media and linings were estimated from rates based in ATS Projetos previous experience in
similar projects. Firewood consumption includes firewood for the granulate superphosphate
drying and sulphuric acid steam. Water consumption based on the water balance and plant
water cost relates costs to threat the water to a level suitable for plant consumption.
Table 21.2.2_2
Consumable
Unit
Grinding media/linings
Firewood
Industrial water
Consumables Summary
Consumption
Unit Price
ku/year
USD/unit
Rate source
kg
303.70
1.92
ATS database
m st
m3
99.59
4527.00
33.75
0.12
ATS database
ATS database
Raw materials are summarized in Table 21.2.2_3.

Table 21.2.2_3
Raw Material
Sulphur
Unit
t
Raw Material Summary

Consumption
Unit Price 2011
ku/year
USD/unit (1)
82.20
350.00
Rate source
Based on an independent
authority in fertilizer industry
Note: (1) The Sulphur cost through 2020 was based on Sulphur prices FOB Tampa furnished by a leading independent authority
in fertilizer industry. For the period after 2020, the price was escalated at a rate of 2% per annum

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Maintenance
Maintenance costs were budgeted from plants costs based on quotations or experience
derived from other similar projects. Maintenance costs were defined by applying a CAPEX
factor upon the total costs. Maintenance includes spare parts and lubricants
Table 21.2.2_4
Shows the CAPEX factor for each project area.
Description
CAPEX Factor (%)
Infra-structure
Beneficiation
Shipment
Acidulation
1
3
Granulation
Sulphuric Acid Plant
Utility System
Support Installations
Energy, Telecommunication, Automation
1
1
Miscellaneous
Miscellaneous costs are those related to specialized outsourced work and other activities
such as community relationship, insurance, building maintenance, etc. Total of miscellaneous
annual costs estimates is US$ 4.9 million.
21.2.3
Extra Operating Costs

Besides the costs of mining and industrialization, an estimate of the concentrate freight costs
has been prepared. The concentrate will be transported from the Mine Site to the Industrial
Site.
The total annual freight cost of the concentrate amounts to R$ 3.9M, which refers to an
annually transport of 353k tonnes of an intermediary product (phosphate concentrate with
85% of solids).
In addition to freight costs, it was considered the payment to CFEM (Brazilian Federal
Contribution of Mineral Exploration) that represents 2% of the total cost of the Concentrate
and a payment of royalties of 1% also of the total cost of the Concentrate.
21.2.4
Total SSP Annual Cost

Based on all operating costs assumptions, Project Santana SSP annual cost at site is
US$127/tonne. Table below shows SSP cost breakdown. A 10% contingency was included in
these estimates.
R$/US$ exchange rate considered was 1.60.

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Page: 135
Figure 21.2.4_1
SSP Annual Costs
22
ECONOMIC ANALYSIS
Please note that this preliminary economic assessment is preliminary in nature, includes
inferred mineral resources that are considered too speculative to have the economic
considerations applied to turn that would enable them to be categorized as mineral reserves,
and there is no certainty that this preliminary economic assessment will be realized. Mineral
resources that are not mineral reserves do not have demonstrated economic viability.
22.1
SSP Long term price

The SSP price through 2020 was based on TSP prices furnished by a leading independent
authority in fertilizer industry (FOB Morocco) and adjusted for additional logistics costs for
freight to the targeted market for the Project. For the period after 2020, the price was
escalated at a rate of 2% per annum.
The table below shows the real prices from 2015 to 2020 that were contemplated to the
project economic analysis. Prices considered currency of 2011.
Table 22.1_1
Real SSP Prices (US$/tonne)
22.2
22.2.1
2015
2016
2017
2018
2019
2020
$ 350.9
$ 352.8
$ 354.6
$ 358.3
$ 363.8
$ 352.6
Valuation model
Assumptions
The PEA indicates that the Project is expected to generate robust returns. The assumptions
for the economic analysis are as follows:
Capital Cost
The estimated capital cost is US$ 385 M including US$ 73 M of contingencies and US$ 23 M
of working capital.

6005 Australia
Page: 136
Capital Expenditure (US$ 362 M) will be spent through the years 2013, 2014 and 2015 in a
ratio of 10%, 25%, and 65% respectively. The remaining US$ 23 M of working capital will be
spent in 2015.
Sustaining Capital
The total sustaining distribution is shown below
Sustaining Capital US$ 1 M each year and additional of US$ 2 M every 3 years
Mine Equipment: US$ 23.3 M starting in 2016 and used during the whole mine life
Closure Cost: US$ 20 M, being US$ 10 M in 2037 and US$ 10 M in 2038
Operating Costs
Operating Costs include labor, electricity, consumables, fuel and lubricant, equipment
maintenance, management and administrative expenditures, and all others costs
contemplated in the section 21.2. The model also contemplated selling costs of R$ 4.0 M
(currency of 2011).
Depreciation
All Investments, except land, were depreciated with no residual value at a rate of 10% in ten
years, (Straight Line Method).
Working Capital
Working Capital was estimated using average number of days of receivables, payables and
stocks, as shown below:
22.2.2
Receivables : 90 days
Payables : 30 days
Stocks : 70 days
Economics
Project Life
Project life is 24 years after ramp-up, from 2015 to 2038.
Economic Evaluation
The Economic Evaluation of the Project was done using the Discounted Cash Flow Approach.
Sales
Sales were calculated net of taxes.

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Page: 137
Taxes
Taxes on Profits calculated according to Brazilian Tax Law.
Income Tax: 15% plus 10% on the excess of R$ 240,000.00
Social Contribution: 9%
A reduction of 75% in the Income Tax was considered according to fiscal incentives (SUDAM
area) during the period between 2016 and 2025.
Economic Indicators
Based on project assumptions preliminary financial model indicates robust project economics
with a Net Present Value of US$ 423 million as at Q3 2013 (the estimated start of
construction). This figure does not include US$20 million required for exploration and
engineering development during 2011 and 2012.
The following economic indicators were used in the financial analysis:
22.2.3
Weighted Average Cost of Capital (WACC): 10%
Internal Rate of Return (IRR): 26.27%
Net Present Value @ WACC: US$ 423,340,292
Payback Period: 4.53 years
Sensitivity Analysis
Risk Analysis was done using the sensitivity of relevant inputs creating scenarios.
The Sensitivity Analysis showed low risk. All scenarios in the sensitivity analysis were feasible
as shown in the table below (in US$ million):
Table 22.2.3_1
NPV at Q3 2013 Sensitivity Analysis by SSP and Sulphur prices
USD Million
SSP Price (%VAR)
Sulphur Price
CIF SAN
(%VAR)
-20%
-10%
0%
10%
20%
-20%
222.8
336.9
450.1
563.4
676.7
-10%
209.2
323.5
436.7
550.0
663.3
0%
195.5
310.1
423.3
536.6
649.9
10%
181.8
296.7
409.9
523.2
636.5
20%
168.1
283.3
396.5
509.8
623.1

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Table 22.2.3_2
NPV at Q3 2013 Sensitivity Analysis by SSP Price and Total CAPEX
USD Million
SSP Price (%VAR)
Total CAPEX
(%VAR)
-20%
-10%
0%
10%
20%
-20%
257.5
372.1
485.3
598.6
711.9
-10%
226.5
341.1
454.3
567.6
680.9
0%
195.5
310.1
423.3
536.6
649.9
10%
164.5
279.1
392.3
505.6
618.9
20%
133.5
248.1
361.3
474.6
587.9
Table 22.2.3_3
NPV at Q3 2013 Sensitivity Analysis by SSP Price and Total OPEX
USD Million
Total OPEX
(%VAR)
SSP Price (%VAR)

-20%
-10%
0%
10%
20%
-20%
291.3
404.5
517.8
631.1
744.4
-10%
243.5
357.3
470.6
583.9
697.1
0%
195.5
310.1
423.3
536.6
649.9
10%
147.4
262.6
376.1
489.4
602.7
20%
99.4
214.6
328.9
442.1
555.4
Table 22.2.3_4
NPV at Q3 2013 Sensitivity Analysis by SSP Price and WACC
USD Million
SSP Price (%VAR)
WACC
(%)
-20%
-10%
0%
10%
20%
8%
290.6
431.2
570.3
709.5
848.7
9%
239.4
366.1
491.4
616.7
742.1
10%
195.5
310.1
423.3
536.6
649.9
11%
157.6
261.7
364.4
467.2
569.9
12%
125.0
219.7
313.3
406.8
500.3

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23
ADJACENT PROPERTIES
There are no adjacent or nearby phosphate permits to those of MBAC. The Santana
Phosphate Project is related to the east extension of the regional 450km long northwestsoutheast Cui-Cui - Tocantinzinho lineament which also hosts several important gold
deposits including the Palito mine, Tocantinzinho deposit and Cui-Cui, Bom Jardim and
Batalha gold prospects.
24
OTHER RELEVANT DATA AND INFORMATION

Amazon/NCL is not aware of other relevant data pertaining to the Santana Phosphate Project.
25
INTERPRETATION AND CONCLUSIONS

The style of phosphate mineralization is unique to phosphate occurrences in Brazil and will
potentially change the current mind set of explorers for this commodity in this region.
MBAC has undertaken a systematic exploration program in the last year that has been
successful in defining significant resources of phosphate in close proximity to one of the
largest agricultural centres in Brazil.
The drilling has defined an inferred mineral resource which will require additional exploration
work to increase the current resource confidence. Overall, Amazon Geoservices concludes
that there are no fatal flaws in the current resource data.
NCL has undertaken a study of the mine production schedule and plant feed schedule, based
on the pit contained resources inventory, for a processing rate of 1.5 million tonnes per year
and a life of mine of 24 years, for an average annual production rate of 300,000 tonnes of
concentrate with an average grade of 34% P2O5. Based on project assumptions preliminary
financial model indicates robust project economics with a NPV of US$ 423 million.
The pertinent observations and interpretations which have been developed in producing this
report are detailed in the sections above.
It is not anticipated that there are any reasonable foreseeable risks or uncertainties on the
potential viability of this project.

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26
RECOMMENDATIONS
26.1
Exploration and Resources

Drilling and studies completed to date have defined an inferred mineral resource at Santana.
The data collected is considered to be of moderate quality and suitable for resource
estimation.
Further scope exists to improve the geological and mineral resource estimation confidence in
the regions currently defined as an inferred mineral resource. Amazon Geoservices makes
the following specific recommendations:
26.2
To review the RC and DC twin holes to determine the grade effect of the wet RC drilling
that has been observed by Amazon (RC data was minimal in the current mineral
resource estimate). If wet samples are biasing the RC results then RC drilling should be
suspended until dry samples can be guaranteed by the drilling contractor
To improve the survey accuracy of both drillhole collars and topography
Increase the drill density to 50m by 50m to allow indicated and potentially measured
resources to be defined
To follow up on the failed certified standards and blank material and to actively review
this QAQC data on a batch by batch basis
To test via deeper drilling the lower grade phosphate and CaO potential
Mining
Using an updated mineral resource estimation, which should include a significant proportion of
higher confidence Indicated category resources, and utilizing the results of the Pre-Feasibility
study, a mineral reserve estimation will be reported. With these results, more detailed mine
planning and production schedules should be generated for the open pit.
The following activities necessary to complete a pre-feasibility study need be carried out: infill
resource definition drilling, geotechnical and metallurgical studies, and EIA-SIA work, and the
mining permitting.

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26.3
Mineral resource and Evaluation Budget

MBAC has also provided Amazon/NCL with an ongoing exploration and evaluation budget,
summarised in Table 26.3_1 below.
Table 26.3_1
Proposed Resource and Evaluation Expenditure
Activity
Total (US$)
DC and RC drilling
Assaying and Characterization
Geology
Pre-Feasibility Work
Travel and accommodation
Field supervision and support
Administration
Sub-total
$ 3,000,000
$ 200,000
$
50,000
$ 500,000
$
30,000
$ 150,000
$
70,000
$4,050,000
The proposed expenditure of US$ 4,050,000 in Year 1 is considered to be consistent with the
potential of the Santana Phosphate Project and is adequate to cover the costs of the
proposed programs.

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27
REFERENCES
AusIMM. 1995. Code and Guidelines for Assessment and Valuation of Mineral Assets and
Mineral Securities for Independent Expert Reports (The Valmin Code) Issued April
1998. AusIMM.
AusIMM. 1998. Code and Guidelines for Assessment and Valuation of Mineral Assets and
Mineral Securities for Independent Expert Reports (The Valmin Code), issued April
1998. The Australasian Institute of Mining and Metallurgy.
2011 MBAC Internal technical Report on Santana Phosphate Project L Silva, MH Waring,
R Lepine, M. Tedesco, P. Xavier, D. Lopes
ALS laboratory group- Mineral Division- Informe de Anlisis Mineralogico MLA. N0
IF10170088. February, 7, 2011.
LCT-USP- Resultado de Identificao de fases por difratometria de raios-X- LCT 2281152.HPF a 228-1170.HPF.
Estudo exploratrio de flotao. Projeto Santana do Araguaia/PA. RT-PROC-SAN001.
Campos Belos, Abril 2010.
Ensaios Work Index de Bond. RPT HDA/MBAC01/11 Rev.0-31/08/2011
Resultados detalhados de flotao com amostras de furos de sonda. Santana. Planilha Excel
02/09/2011
GLS Consultores Associados Ltda. Primeiro Relatrio de Andamento. Testes de laboratrio
para cido fosfrico. DOC n 0 018-2011 MBAC REV 00.

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28
DATE AND SIGNATURE PAGE

The qualified persons (within the meaning of NI43-101) for the purposes of this report are
Beau Nicholls, who is an employee of Amazon Geoservices and Carlos Guzman, who is an
employee of NCL. The effective date of this report is 22 September 2011.
(signed by)
Beau Nicholls
Principal Consulting Geologist
Amazon Geoservices Ltda.
B.Sc Geol. MAIG
Signed on the 22 September 2011
(signed by)
RM Chilean Mining Commission
Carlos Guzmn
Principal /Project Director
NCL Brasil Ltda.
Signed on the 22 September 2011

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29
CERTIFICATES OF QUALIFIED PERSONS
Amazon Geoservices Ltda.
Certificate of Qualified Person

I, Beau Nicholls, do hereby certify that:
1.
I have been working since 2010 as the Principal Consulting Geologist with the firm Amazon Geoservices
Ltda. of 105/1203 Muzambinho Avenue, Anchieta, Belo Horizonte,-MG, Brazil, CEP 30310-280. My
residential address is 463 Alameda Das Quaresmeiras, Rio Acima - MG, Brazil, CEP - 34300-000
2.
I am a practising geologist with 17 years of Mining and Exploration geological experience. I have worked in
Australia, Eastern Europe, West Africa and the Americas. I am a member of the Australian Institute of
Geoscientists (MAIG)
3.
I am a graduate of Western Australian School of Mines Kalgoorlie and hold a Bachelor of Science Degree
in Mineral Exploration and Mining Geology (1994)
4.
I have practiced my profession continuously since 1995
5.
I am a qualified person as that term is defined in National Instrument 43-101 Standards of Disclosure for
Mineral Projects (the Instrument)
6.
I have visited the Santana Phosphate Project between the 25 and 27 July 2011
7.
I am responsible for sections 4 to 12, 14 and jointly responsible of sections 1 to 3 and 23 to 27 of the
technical report dated effective 22 September 2011 and titled Preliminary Economic Assessment- Santana
Phosphate Project, Para State, Brazil(the Report)
8.
I am independent of MBAC Fertilizer Corp pursuant to section 1.5 of the Instrument
9.
I have read the Instrument and Form 43-101F1 (the Form) and the Report has been prepared in
compliance with the Instrument and the Form
10.
I do not have nor do I expect to receive a direct or indirect interest in the Santana Phosphate Project of
MBAC Fertilizer Corp and I do not beneficially own, directly or indirectly, any securities of MBAC Fertilizer
Corp or any associate or affiliate of such company
11.
I have not had any prior involvement with the Santana Phosphate Project of MBAC Fertilizer Corp
12.
As of the date of this certificate, to the best of my knowledge, information and belief, the Report contains all
scientific and technical information that is required to be disclosed to make the Report not misleading
th
th
Dated at Belo Horizonte, Brazil, on 22 September, 2011
(signed by)
Beau Nicholls
Principal Consulting Geologist
BSc(Geology) MAIG

6005 Australia
Page: 145
NCL Brasil Ltda.
Certificate of Qualified Person

I, Carlos Guzmn, do hereby certify that:
1.
I have been working since 2001 as the Principal Mining Engineer and Project Director with the firm NCL
Brasil Ltda. of Alameda da Serra 500/315, Nova Lima,-MG, Brazil, CEP 34000-000
2.
I am a practising mining engineer and registered member with the Chilean Mining Commission
3.
I am a graduate of the Universidad de Chile and hold a Mining Engineer title (1995)
4.
I have practiced my profession continuously since 1995
5.
I am a qualified person as that term is defined in National Instrument 43-101 Standards of Disclosure for
Mineral Projects (the Instrument)
6.
th
th
I have visited the Santana Phosphate Project between the 25 and 27 July 2011
7.
I am responsible for sections 13, 15 to 22 and participation in sections 1 to 3, and 23 to 27 of the technical
report dated effective 22 September 2011 and titled Preliminary Economic Assessment - Santana
Phosphate Project, Para State, Brazil (the Report)
8.
I am independent of MBAC Fertilizer Corp pursuant to section 1.5 of the Instrument
9.
I have read the Instrument and Form 43-101F1 (the Form) and the Report has been prepared in
compliance with the Instrument and the Form
10.
I do not have nor do I expect to receive a direct or indirect interest in the Santana Phosphate Project of
MBAC Fertilizer Corp and I do not beneficially own, directly or indirectly, any securities of MBAC Fertilizer
Corp or any associate or affiliate of such company
11.
I have not had any prior involvement with the Santana Phosphate Project of MBAC Fertilizer Corp
12.
As of the date of this certificate, to the best of my knowledge, information and belief, the Report contains all
scientific and technical information that is required to be disclosed to make the Report not misleading
Dated at Belo Horizonte, Brazil, on 22 September, 2011
(signed by)
RM, Chilean Mining Commission
Carlos Guzmn
Principal Mining Engineer / Project Director

6005 Australia
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Preliminary Economic Assessment Santana Phosphate Project, Para State,

Consulting Geologist (Amazon Geoservices Ltda)

BSc (Geo) MAIG

Consulting Mining Engineer (NCL Brasil Ltda)

Mining Engineer, Registered Member of the

Path & File Name:

D:\P Drive\Projects\MBAC\Reports\43101 Sanatana Res est July 2011\PEA_MBAC_43-101 Santana_22Sept2011_FINAL.docx

Amazon GeoServices Ltda ABN 52 065 481 209

Geology and Mineralization......................................................................................... 11

Mineral Processing and Metallurgical Testing.............................................................. 11

Mineral Resources ...................................................................................................... 12

Indicative Economics .................................................................................................. 13

Conclusions and Recommendations ........................................................................... 16

In trodu c tion ........................................................................................................................... 17

Scope of Work ............................................................................................................ 17

Forward Looking Information....................................................................................... 17

Principal Sources of Information.................................................................................. 18

Qualifications and Experience ..................................................................................... 18

Units of Measurements and Currency ......................................................................... 18

Re lia n c e o n Oth e r Exp e rts .................................................................................................... 20

P ro p e rty De s c rip tion an d Lo c a tio n ...................................................................................... 21

Project Location .......................................................................................................... 21

Tenement Status ........................................................................................................ 22

Royalties and Agreements .......................................................................................... 23

Environmental Liabilities ............................................................................................. 23

Ac c e s s ib ility, Clim a te , Lo c a l Re s ou rc e s , In fra s tru c tu re a nd Ph ys iog ra ph y ...................... 24

Project Access ............................................................................................................ 24

Physiography and Climate .......................................................................................... 24

Local Infrastructure and Services ................................................................................ 24

Ge o lo gic a l S e ttin g a nd Min e ra liza tio n ................................................................................. 25

Regional Geology ....................................................................................................... 25

Local and Property Geology........................................................................................ 26

Exp lo ra tion ............................................................................................................................ 30

Ground Magnetic Survey ............................................................................................ 30

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Ground Penetrating Radar .......................................................................................... 30

Auger Drilling .............................................................................................................. 31

Bulk Density Determinations ....................................................................................... 31

S a m p le P rep a ra tion , An a lys e s a n d S e c u rity ....................................................................... 35

MBAC Sampling Method............................................................................................. 35

Diamond Core ....................................................................................................... 35

Reverse Circulation ............................................................................................... 35

Sample Security ......................................................................................................... 36

ALS Laboratory Sample Preparation and Analysis ...................................................... 36

Da ta Ve rific a tio n .................................................................................................................... 37

Geological Database .................................................................................................. 37

Min e ra l P ro c e s s ing an d Me ta llu rg ic a l Te s tin g..................................................................... 43

RC Drilling Results and Quality ............................................................................. 32

Samples Preparation and Methods ............................................................................. 43

Drill Core Samples ................................................................................................ 44

Results and Discussion ............................................................................................... 47

Drill Core Samples ................................................................................................ 50

Concentrate Characteristics ........................................................................................ 54

Recovery Evaluation ................................................................................................... 54

Solubility Tests ........................................................................................................... 55

Min e ra l Re s o u rc e Es tim a te s ................................................................................................. 57

Geological Modeling ................................................................................................... 57

Block Model Development .......................................................................................... 60

Statistical Analysis ...................................................................................................... 61

Grade Estimation ........................................................................................................ 61

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Model Validation ......................................................................................................... 62

Mineral Resource Reporting ....................................................................................... 62

Min e ra l Re s e rve Es tim a te s ................................................................................................... 66