MBAC, through its subsidiary is the sole registered and beneficial holder of eight exploration properties
with an additional three exploration permits under application for a total of 97,949 hectares. The Santana
Project is located in the southeast of Pará State, Brazil (see map below).
The target Phosphate markets for the Project are the northern and eastern regions of Mato Grosso State and southern region of Pará State.
Mato Grosso State is the largest soybean producer in Brazil, while Pará State is the largest beef producer in
Brazil (which is the largest market for the animal supplement DCP).
SSP demand in Mato Grosso State alone is approximately 1.7 million tonnes per annum.
This demand is expected to grow at least 25% by 2015, with an estimated demand of SSP in 2015/16 in the range
of 2.1 and 2.2 million tonnes of SSP per year.
The Project will have significant competitive advantage as its target market is located far from the main phosphate
fertilizer producers. Currently most of the fertilizer brought into the region is imported and comes through Paranaguá Port
, located approximately 2,150 km. away. Other potential suppliers are located in southern Minas Gerais State which is
approximately 1,000 km. away. Phosphate products can also be imported from the Itaquí Port in the northern part of Brazil
which is approximately 1,400 km. away, but the inland logistics to reach the region are poor.
Summary of the Resource Estimate
The Santana inferred resource estimate is based on 53 diamond drill holes (2,386m) and 6 reverse circulation (“RC”) holes
(238m) drilled at a spacing of approximately 200m by 200m. Only data received as at July 31, 2011 has been used in this estimate.
MBAC has an ongoing infill drilling and extensional drill hole program underway.
Santana is defined by flat lying phosphate rich metavolcaniclastic and carbonate rocks belonging to the Iriri group of Precambrian
age. The main mineralization is located within a supergene enriched saprolite zone and is between 10m and 80 m thick. Additional
large widths of fresh hydrothermally altered carbonate rocks have been intercepted in three deeper drill holes down to 200m depth,
but this has not been estimated due to lack of data.
The resource estimate has focused on this main 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. The inferred mineral resource estimate,
comprising 33.5Mt with an average P2O5 grade of 12.39% (using a 3% P2O5 cut-off) is summarized in Table 1 below.
Note: Appropriate rounding has been applied
*Mineral resources that are not mineral reserves do not have demonstrated economic viability.
As of the end of August the Company had completed drilling of over 170 holes and only 59 of these
drill holes have been used for the current inferred mineral resource estimate. The ongoing extensional
drilling found mineralized holes at 400m on the east and the west of the current block model showing the
mineralization remains open in both sides.
Other regional investigation is being carried on and other drilling targets are yet to be defined. The
geology setting found at the current drilling targets are present in other areas of the MBAC claims and
the aim of the regional investigation is to define new drilling targets.
Summary of the Project Economics
The PEA indicates that the Project is expected to generate robust returns. The assumptions for the economic
analysis are as follows:
Note: (1) The SSP price through 2020 was based on TSP prices 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