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UPDATE ON INVESTMENT OPTION OF WEB SITE:

Below are the three main options for developing the gemstone fields in Zambia and Mozambique. I have combined some of the prospects to make it more attractive and easier to manage. The concession owners will still get their rightful shares from their properties.

Due to the lack of geo-physical knowledge, I strongly suggest the use of a South African surveying company - with practical knowledge of pegmatite type strata - to do a full scale survey on all plots. At present, to the best of my knowledge, no such survey has been done on any of the Zambian properties. Until recently the main obstacle was the density of the overburden (being of clay type origin) which prevented the older type equipment to read deeper than five metres or so.

I have arranged with I.S.S. in South Africa and received a quotation from them to do the following: Survey of 100 ha with a survey track every 80 metres, using both GPR (Ground Penetrating Radar) and SR (Seismic Refraction). From this data a fully processed underground map will be plotted and digital copies supplied. Dr White of I.S.S. has the latest available in technology and excellent referrals as a geologist. We would be able to get quite accurate readings of up to 60 metres deep. These maps will enable us to be very specific and accurate in determining the placing of the mine pits.

The cost of the above survey will be around US$10,000 but should result in a major saving of time and expenses.


ZAMBIA 1 - Plot 5G (Carollee Mine)

INVESTMENT: US$250,000 (Reserved until 15 August 1998)

ACTIVATION OF INVESTMENT - US$250,000-00

PHASE 1: BEGIN up to three weeks: Capital needed US$60,000-00 (ZAR 365,000)

EQUIPMENT:
    Legal papers, registrations, bank fees, transport      $  2,000-00
    2 x Chain saws                                                      $       800-00
    1 x 60 - 80 Kw tractor with trailer and ripper         $ 15,000-00
    1 x Support vehicle (4x4 LDV)                              $    5,000-00
    1 x TLB                                                                 $ 20,000-00
    1,500 Litre diesel                                                   $    1,200-00
    Labour 15 hands @ $100-00 p/m                          $    1,500-00
    Surveillance, security & hand tools                          $    4,500-00
WORK PROGRAM:
    Geological survey with Geophysics Radar    $ 10,000-00
    Log trees and store at camp site
    Clear off vegetation area 200 x 150 metre
    Rip area and search with pick / shovel for crystals

PHASE 2: FROM 3rd TO 12th WEEK: Capital needed US$117,000-00 (ZAR 715,000)

EQUIPMENT:
    Transport to Zambia (equipment)                    $    5,000-00
    1 x 210 Excavator                                          $ 25,000-00
    2 x 20 Ton tipper trucks                                 $ 30,000-00
    1 x Grater for road maintenance                     $ 15,000-00
    1 x TLB                                                         $ 20,000-00
    15,000 Litre diesel                                         $ 12,000-00
    Labour 20 hands @ $100-00 per month        $   4,000-00
    Expected maintenance                                    $    6,000-00
WORK PROGRAM:
    Remove overburden (Rate 1,000 m 3 / day) 50,000 m 3 area 70 x 100 metre slope 1/10 down to 15 metre

PHASE 3: FROM 12th WEEK (ORE BODY EXPOSED) ONWARDS: $35,000-00 (ZAR215,000)

EQUIPMENT:
    1 x TLB                                                                 $ 20,000-00
    1 x Pneumatic drilling system, 4 x jack hammers      $   7,500-00
    1 x Generator / arc welder                                      $    2,500-00
    Power tools, material and motor for washing plant  $    5,000-00
WORK PROGRAM:
    Continue shifting pit South, 50 m per month
    Construct washing and sorting plant
    Process over burden through plant
    Start ore mining in pits, using TLB, jack hammers & hand labour

RUNNING COST PER MONTH: $18,000-00 (R110,000-00) per month
    Diesel                                                                 $ 10,000-00
    Labour (30 labourers & $100 ave p/month)        $ 3,000-00
    Maintenance                                                       $ 5,000-00

CAPITAL GENERATION: (per month)
    Timber estimated at US$60,000 per ha (clearing 1 ha per month ave for six months)    $ 60,000
    Low prices crystals - Citrine, Beryl, Quartz, Tourmaline, Aquamarine 100 kg                 $ 40,000
    From 5th month excavator & one truck could be rented to neighbouring mines                $ 10,000
    Other options include: engraving, tiles and mineral water.

CAPITAL RELEASE DATES: (Illustrative)
    1st Day                          $ 15,000-00
    7th Day                         $ 45,000-00
    21st Day                       $ 30,000-00
    31st Day                       $ 60,000-00
    45th Day                       $ 27,000-00
    3rd Month                     $ 35,000-00
    Reserve Fund                $ 38,000-00

From third month onwards the mine should be self supporting as we can expect emerald production.


ZAMBIA 2 - Mining Licence 80 & 93 (Plot 10/1 & 19)

INVESTMENT: US$150,000

Located in the centre of the emerald producing area, just South of the large state owned mine, KAGEM, where an Israel/Swiss/Indian consortium obtained 50% shares for US$6 million early 1998. Both mines are on the Southern bank of the Kafubu river. ML 80 are located on the Northern part of the well known Piralla vein, just where the Piralla stream runs into the Kafubu river. The main 'emerald belt' is running right across this property.  ML 93 is slightly further East. Other main producing neighbours are: Fwaya-Fwaya, Piralla and Bumbwa. These plots (#10/1 and 93) are only about 1 km apart.

Although these two plots belong to different licence holders, I plan to mine them as one entity. We will manage our own labour force and machinery combined but will split the production according to the location.

I have only obtained the rights on these two plots on 10 th  July 1998. My personal opinion is that both these plots are excellent prospects - more so if both can be mined at the same time!

All mining operations, financing and responsibilities will reside with the developer. Profit sharing will be as follows: 40% to Owner, 20% to Developer and 40% to the Investor. No further inputs are required from the owner or the investor.

ACTIVATION OF INVESTMENT - US$150,000-00

PHASE 1: BEGIN up to three weeks: Capital needed US$40,000-00 (ZAR 240,000)

EQUIPMENT:
    Legal papers, registrations, bank fees, transport     $   2,000-00
    2 x Chain saws                                                      $       800-00
    1 x 60 - 80 Kw tractor with trailer and ripper        $ 15,000-00
    1 x Support vehicle (4x4 LDV)                             $    5,000-00
    1,500 Litre diesel                                                  $    1,200-00
    Labour (15 hands @ $100-00 p/m)                      $    1,500-00
    Surveillance, security & hand tools                        $    4,500-00
WORK PROGRAM:
    Geological survey with Geophysics Radar             $ 10,000-00
    Log trees and store at camp site
    Clear off vegetation area 200 x 150 metre
    Rip area and search with pick / shovel for crystals

PHASE 2: FROM 3rd TO 12th WEEK: Capital needed US$95,000-00 (ZAR 580,000)

EQUIPMENT:
    Transport to Zambia (Equipment)                     $    5,000-00
    1 x 210 Excavator                                           $ 25,000-00
    2 x 10 Ton tipper trucks                                   $ 15,000-00
    1 x Grater for road maintenance                       $ 15,000-00
    1 x TLB                                                           $   20,000-00
    10,000 Litre diesel                                           $    7,300-00
    Labour (15 hands @ $100-00 per month)        $   3,000-00
    Expected maintenance                                      $    4,700-00
WORK PROGRAM:
    Remove overburden (Rate 600 m 3  / day) 30,000 m 3  area 60 x 80 metre slope 1/10 down to 12 metre

PHASE 3: FROM 12th WEEK (ORE BODY EXPOSED) ONWARDS: $15,000-00 (ZAR90,000)

EQUIPMENT:
    1 x Pneumatic drilling system, 4 x jack hammers         $ 7,500-00
    1 x Generator / arc welder                                         $ 2,500-00
    Power tools, material and motor for washing plant      $ 5,000-00
WORK PROGRAM:
    Continue shifting pit South, 30 m per month
    Construct washing and sorting plant
    Process over burden through plant
    Start ore mining in pits, using TLB, jack hammers & hand labour

RUNNING COST PER MONTH: $15,000-00 (ZAR90,000) per month
    Diesel                                                                 $ 8,000-00
    Labour (20 labourers & $100 ave p/month)        $ 2,000-00
    Maintenance                                                       $ 5,000-00

CAPITAL GENERATION: (Per month)
    Timber estimated at US$40,000 per ha (clearing 1 ha per month ave for six months)   $40,000
    Low prices crystals - Citrine, Beryl, Quartz, Tourmaline, Aquamarine 100 kg             $ 40,000
    From 5th month excavator & one truck could be rented to neighbouring mines             $10,000
    Other options include: engraving, tiles and mineral water.

CAPITAL RELEASE DATES: (Illustrative)
    1st Day               $ 10,000-00
    7th Day               $ 30,000-00
    21st Day             $ 30,000-00
    31st Day             $ 40,000-00
    45th Day             $ 25,000-00
    Reserve Fund     $ 15,000-00

From third month mine should be self supporting. We can expect emerald production from FOURTH Month.


MOZAMBIQUE- Maria III & Sominah

INVESTMENT: US$100,000

Mozambique is more risky than Zambia with regards to mining. There is no infrastructure, difficult roads and still some bandit problems. Regardless of these obstacles the best opportunities for mining are in this country. There are a number of abandoned mines available, especially in the gemstone field and investment requirements are considerably lower.

In co-operation with a Mozambican agricultural and trading company, we have obtained the development rights on two mines in the Zambezia province, located about 230 km North East of Quelimane close to the towns Uape, right in the main Tantalite producing region. The geology of these mines is very similar to that of Zambia. The Maria III concession is about 20 sq/km big and has plenty of scope for expansion.

Maria III produced emeralds, aquamarine, quartz, citrine and some tourmalines. From the Sominah mine, about 20 km away, tourmalines, beryl group gems, quartz, garnets and other gemstones were retrieved. This mine also produced the mineral TANTALITE in concentrates of 25 - 35%, selling as raw for around US$65 per Kg. Both these mines are to be worked as one entity and belong to the same concession holder.

MARIA III was mined mainly for emeralds by Hagoura mining (Israeli / Swiss) until 1993, when they withdrew due to the war between Renamo and Frelimo. This mine has two mining pits at present. The first one is right on the river bank, stretching North about 600 metres and about 100 metres wide. The pegmatite ore body is fully exposed on the eastern high wall for about 500 metres, and covers about 70% of the floor. The pit is about 30 metres deep. The second pit is much smaller and located about 300 metres away.

Due to water erosion over the years, there is a high probability of alluvial deposits down stream. These should be quite easy to mine during a dry season, as expected for the next two to three years. Only very basic and minimum equipment is required for this operation and would be considered a side line operation.

The investor is only required to supply the machinery for the mining venture. The running costs regarding diesel and labour will mainly be supplied by the concession owner. The developer and investor retain full supervision and involvement as much as they require.

Profit sharing is 65% to the owner and 35% shared by the investor and developer.

Another big plus point for this venture: We can operate this mine and our presence in the area will give us the rights and opportunity to explore other options and obtain our own 100% mining concessions. For a smaller investment and long term expansion option this is the best!!

ACTIVATION OF INVESTMENT - US$100,000

Capital needed US$100,000-00 (We might be able to get away with a smaller investment - US$70,000)

EQUIPMENT:
    Legal papers, registrations, bank fees, transport         $   2,000-00
    2 x TLB                                                                    $ 30,000-00
    2 x 6 Ton tipper trucks                                               $ 25,000-00
    1 x Support vehicle (4x4 LDV)                                 $    4,000-00
    55 Kw Tractor with trailer & PTO water pump         $ 10,000-00
    1 x Jack hammer head for TLB                                 $    1,500-00
    1 x Generator / arc welder                                        $    1,500-00
    Power tools, material and motor for washing plant    $    5,000-00
    Surveillance, security & hand tools                          $    2,000-00
WORK PROGRAM:
    Rip area and search with pick / shovel for crystals
    Continue excavating present pit
    Construct washing and sorting plant
    Search through river gravel deposits

RUNNING COST PER MONTH: $5,500-00 (ZAR34,000) per month
    Diesel                                                                 $ 2,000-00
    Labour (10 labourers & $50 ave p/month)          $    500-00
    Maintenance                                                       $ 3,000-00

CAPITAL GENERATION: (per month)
    Low price crystals - Citrine, Beryl, Quartz, Tourmaline, Aquamarine$ 20,000-00

CAPITAL RELEASE DATES: (Illustrative)
    1st Day           $ 35,000-00
    31st Day        $ 55,000-00
    2nd Month     $ 10,000-00

From the second month onwards these mines should be self supporting.
We can expect emerald (and other gemstones) from the FIRST month.