Amazon Mining Announces Encouraging Economic Assessment Results for Cerrado Verde Project

Amazon Mining Holding Plc (TSX VENTURE:AMZ) has announced the receipt of a positive Preliminary Economic Assessment from SRK Consulting and ECM S/A Projetos Industriais on Amazon's wholly-owned Cerrado Verde project located in Minas Gerais, Brazil.

The PEA evaluated the technical and the financial aspects of the mine operation and beneficiation facility. The Scoping Study assumed open pit mining and pyrometallurgy process for the production of ThermoPotash product.

The Study supports Amazon's positive outlook on Cerrado Verde's value and represents a significant milestone toward full development of the Project. Amazon took a conservative base case approach to the Scoping Study, limiting the production rate to 1.1 Mt per year of ThermoPotash at 8.34% K₂O. ECM estimates that with a production rate of 1.1 Mt per year and the inferred resource base of 105 million tonnes at 10.3% K₂O determined by Coffey Mining, the Project has a projected life of around 100 years, 40 years was assumed for the analysis. Amazon also evaluated a second scenario with a production rate of 2.2 Mt per year.

• Estimated Project Capital Cost of US$155.3 million, plus $23.3 million in contingency and $18.2 million of pre-construction costs
• Estimated Operating Cost (including production, work force, and variable costs) of US$37.01 per tonne plus estimated marketing and administrative costs of US$4.79 per tonne for a total cost of US$41.80 per tonne of ThermoPotash
• Net Present Value of US$455.4 million at a 10% discount rate
• Net Present Value of US$339.1 million at a 12% discount rate
• Estimated after-tax and royalty Internal Rate of Return (IRR) of 32.9%
• Payback of the initial Capital Expenditure: 2.38 years

• Estimated Project Capital Cost of US$218.4 million, plus $32.8 million in contingency and $18.2 million of pre-construction costs
• Estimated Operating Costs (including production, work force, and variable costs) of US$32.12 per tonne plus estimated marketing and administrative cost of US$4.24 per tonne for a total cost of US$36.36 per tonne of ThermoPotash
• Net Present Value of US$858.1 million at a 10% discount rate
• Net Present Value of US$652.6 million at a 12% discount rate
• Estimated after-tax and royalty Internal Rate of Return (IRR) of 40.2%
• Payback of the initial Capital Expenditure: 1.87 years

The Scoping Study utilized the weighted average delivery-adjusted sales prices of US$151.82/t and $133.23/t for the 1.1 and 2.2Mt, respectively, based on the independent market study conducted by Agroconsult Consultoria & Marketing. (Please refer to the news release on October 26, 2010.) The Marketing Study assumed an FOB Vancouver potash (KCl) price of $400/t long term.

With the encouraging results of the Scoping Study, the Company will continue to study the feasibility of the Project led by Mr. Pedro Ladeira, Vice President of Engineering and Mr. Mauricio Sampaio, Vice President of Operations. President & CEO, Cristiano Veloso, said "We are very pleased with the results of the study. Based on cement production cost estimates, we had previously estimated the operating costs before marketing and administrative costs to be approximately $53 per tonne. This study lowers the estimates by 30% to $37 per tonne. Also, the total capital expenditure associated with the development of the Project is well within the range of our expectations and is significantly lower than other potash projects under development." Mr. Sampaio added, "Our strategy to incorporate ThermoPotash in NPK removes much of the adoption risk, as 90% of all fertilizer in Brazil is sold as an NPK formulation. The Study's projected low operating costs combined with the strong ThermoPotash prices estimated by Agroconsult should secure future profitability with first production slated for early 2013."

The Company will file a NI 43-101 PEA report of the Study on the Cerrado Verde project with Canadian securities regulators within 45 days of this release.

Conference Call

A conference call to discuss the results of the Scoping Study has been scheduled for Wednesday, November 3, 2010 at 10:00 am ET (7:00 am PT). Conference Call details can be found below:

Qualified Persons

Neal Rigby of SRK Consulting is the Principal author of the Technical Report and incorporated the results of the Resource Estimate prepared by Porfirio Cabaleiro Rodrigues of Coffey Mining. All persons are Qualified Persons, independent of Amazon Mining within the meaning of section 1.4 of NI 43-101, SRK Consulting has reviewed and approved the technical information within this news release.

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