Mineral exploration work and exploratory drilling was intensified since the last report. Re-interpretations were undertaken and, because of the various types of mineralization present, which display a large range of phosphate concentrations, the mineralization was separated into two principal groups: high grade (HG) and low grade (LG).

A value of =10% P2O5 was adopted for the DANF Santiago Project in order to designate the HG mineralization, which was referred to as the phosphorites group. Rocks that contained concentrations below that value, but above 3% P2O5, are referred to herein as LG mineralization, which are simply referred to as phosphatic rocks. The company has studied and continues to study processes for the separation and concentration of the low-grade material, which would increase the economic potential of the LG mineralization in the deposit. Although the literature defines phosphorite as having grades that are quite higher than those that were adopted by the company, the limit of 10% that was applied herein sought to provide objectivity and be compatible with the processing routes that were evaluated.

High grade (phosphorite): The rocks that are included in this group can be separated into brecciated, laminated and clayey phosphorite.

Low grade (phosphated rocks): Within the study area, this category of rock is the most abundant. These rocks include various kinds of siltites that vary from being solid to having either paralle ........

The economic analysis was based on potentially recoverable resources and is defined as a mineral inventory. The study was prepared in two phases,
- Short Term Mining Plan – First three years, a detailed mine plan to support GUIA mining activities;
- Long Term Mining Plan – Continuous yearly mining plan, from the fourth year, to complete the Life of Mine Plan.

The mining operations at the DANF Santiago Project will be executed via a conventional mining fleet, making use of wheel loaders, dump trucks and bulldozers. The mining operation will be contracted, to reduce capital costs and allow flexibility in the timing of extraction during the year.

The phosphate and waste rock material shall be loaded directly onto trucks with excavators or front loaders. The transport of phosphate rock to the plant located in Campos Belos, 28 km away from Santiago mining site, will be performed with road-legal trucks that have a nominal capacity of 20t. The transport of the waste rock material, to the waste dump, close to the mine face, will be performed with the same trucks.

It is projected that the LG mineralized material, which have a P2O5 grade above 3% and below 10%, will be stockpiled in the mine area, avoiding major transport distances, and allowing easy recovery in the future, in case this LG material becomes suitable for concentration or other final uses.

The disposal of waste rock, and LG mineralized material will be executed on a ........

Because it is a natural product and no processing other than crushing and screening is required, no metallurgical process testing was completed, and the agronomical quality can be ascertained from the market that the product has generated within local agribusiness. This was attained during the previous "trial mining" phase with mining activities permitted by the mineral exploration, known as the GUIA.

Preliminary economic assessment concludes for a potentially viable project, considering a production rate of 100,000 tpy of DANF, for 12.5 years, producing 543kt @ 12%P2O5 and 635kt @15%P2O5 products.