Redstone's Apui Phosphate Project comprises 18 tenements (approx. 1,800km²) covering the whole of the mineralised sedimentary basin in south east Amazon State. Redstone selected this phosphate project area based on the potential for discovery of large tonnages of phosphate mineralisation as preliminary exploration identified mineralisation over a wide area, indicating the existence of a major new source of phosphate.

The Project is strategically located along the Trans-Amazon Highway near two major agricultural areas, the Apui agricultural pole and the north Mato Grosso soy belt which is the continent's largest soy producing area. The project covers the entire area of the Jatuarana Basin which was identified by the Brazilian Geological Survey in the 1980s. Sampling carried out at that time revealed surface phosphorite mineralisation between 7% and 9.3% P₂O₅. These are very significant results given that the sampling was of a broad reconnaissance nature and conducted over a large area, indicating widespread mineralisation. Due to the high degree of weathering under the wet Amazon environment, it is likely that surface mineralisation is depleted and that higher grade mineralisation will exist at depth.

The Apui Project is one of the few known sedimentary phosphate projects in Brazil. Sedimentary phosphate rock is considered to have better applicability for fertiliser than igneous type because of its higher solubility. The phosphorite mineralisation is also inter-bedded with glauconite-rich rock which may be of economic value, because glauconite is a source of soluble potassium.

The sedimentary rock hosting the phosphate mineralisation is flat-lying and all known occurrences of phosphate mineralisation within the basin are exposed at surface, allowing rapid and efficient exploration which indicates the potential for open-pit mining.

Redstone's Apui Tenements

Phosphate Market Information

Phosphorous (mined as rock phosphate) is an essential component in most types of fertilier and has no substitute in agriculture.

Population growth remains the fundamental driver of the increasing demand for phosphate worldwide. Changes in diet in favour of meat and dairy products and the growth of the bio-fuel industry have also resulted in the strong growth in fertiliser demand. The price of rock phosphate has increased almost tenfold since 2000, and phosphoric acid has seen price increases from a US$200 per tonne range to more than US$1,000 per tonne in the past year.

Brazil is one of the world's largest agricultural producers. It is currently the third largest consumer of fertiliser in the world and the second largest importer of phosphate (US$1.1 billion/year). These needs are expected to increase as a result of the rapidly expanding agricultural sector of the Brazilian economy. Phosphate is strategic for Brazilian efforts to limit deforestation of the Amazon rainforest by increasing productivity of existing agricultural land through the use of fertilisers and, therefore, decreasing further forest clearings.

There are significant transport and import replacement cost advantages for any fertiliser mineral deposit in Brazil. Given the cost of intercontinental transportation (with shipping costs alone having risen 200% in the past year), deposits of fertiliser minerals will increasingly be ranked in terms of their proximity to markets such as Brazil.

Each of the world's three largest mining companies (BHP-Billiton, Rio Tinto and Vale) are currently developing fertiliser mineral projects, with the most recent announcements being Vale's US$479 million investment to develop the Bayovar Phosphate Project in Peru and BHP-Billiton's US$284 million acquisition of Canadian junior explorer Anglo Potash (which holds a 25% interest in potassium exploration permits in Canada). This activity highlights the increasing worldwide focus on exploration and development of fertiliser mineral projects.