In mid-2007 Redstone Resources identified and acquired the Aneba Potassium Project in Amazon State, Brazil. The project is situated 60km from two massive potassium deposits totaling 1.146Bt @ 22.7%KCl. 27 exploration licence applications (approx 2,600km²) have been approved by the Mineral Department of Brazil (DMPM) with a further 6 applications pending.

The project is located in close proximity to two international ports (Manaus and Itaquatiara) along the Amazon River. There is a sealed road crossing the region with secondary roads accessing most of the tenements.

The Amazon Basin has one of the largest evaporite sequences in the world. The salt-rich evaporites are within the Nova Olinda Formation, deposited during the Permian period. Two world-class deposits of potassium are known in the Middle Amazon Basin at depths of 950-1,050m. The reserves are 520Mt @ 28.8% KCl (Fazendinha) and 659Mt @ 17.7% KCl (Arari). The main potassium salt is sylvinite (NaCl.KCl) in beds having an average composite thickness of 2.7m.

Redstone has targeted the Aneba Sub Basin, a region 60 to 120km north of the deposits where target stratigraphy occurs at a shallower position (100 to 450m) than the known deposits and in part of the Basin where old drill holes for oil exploration have detected thick layers of salt (40-80m thick). The area specifically targeted is coincident to a gravity low and where there is a swarm of interpreted salt diapirs. These dome shaped bodies carry the salt towards the surface. The interpreted size of the diapirs range from 8 to 22km in diameter, indicating a very large volume of salt in each intrusion.

Dr Joao Orestes Santos, the Exploration Manager for Redstone Resources, South America, has worked in the Amazon Basin for many years and participated in the Arari and Fazendinha drilling programs establishing the potassium reserves.

Redstone's Aneba Tenements

Potassium Market Information

Approximately 95% of the current global consumption of potassium is used for fertilisers and potassium chloride or muriate of potash (MOP) is the most popular potassium fertiliser. There are no substitutes for potassium as an essential nutrient for plants, animals and humans.

Potash is produced in only 12 countries. Over 83% of the potash produced worldwide is imported by both producing and non-producing countries to meet their needs. Canada is the world's largest producer and exporter of potash, accounting for a third of total production and 40% of world trade.

The outlook for potash demand remains strong in importing counties such as the United States, China, Brazil and India. World population growth will require more food to be grown on less land. None of the important Asian rice growing countries have their own potash resources. As a consequence, half of the top ten importers of potash on the world market are from Asia.

Potash is currently trading at around $1,000 per tonne.