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Zambia 1 - US$250,000 Zambia 2 - US$150,000 Mozambique - $100,000
Gem Trading Services Timber Water Weak crystals Ornaments

A. CAPITAL INVESTMENT

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.

As security for you funds an incorporated company could be registered in Zambia and/or Mozambique of which the Investor holds a 100% share. This Inc. will own all assets purchased with the investment. I will retain my mining rights and the mine owners will retain their ownerships. An agreement will be registered as follow:

  1. The Owner will give the developer full rights to mine his property.
  2. The Investor will give the developer full right to use his assets in Zambia.
  3. All emeralds from the mine will be sold and proceeds divided as follow (after taxes): * 50% towards a joint bank account for running the mine (operation account owned as follow: 40% Investor, 40% Mine owner, 20% Developer).
    * 20% paid out to the Owner
    * 20% paid out to the Investor
    * 10% paid out to the Developer.
  4. Once the initial investment has been returned to the investor with 20% interest per year, a new joint company will be registered in Zambia. )The investor still retains 100% of his company and machinery). The shares of the new company will be divided ONE THIRD each to the Owner, Investor and Developer.
  5. This new company will be registered with 30,000,000 (US$300,000 at 1 cent each) shares and aim at getting listed on the stock exchange.
  6. Should no emeralds be produced, the Investor may withdraw, at will, and retain all his assets.
  7. Depending on the investor, above can be done with every mine separately or we can create a development company with 50% share each to the Investor and developer. This company will have agreements with the mine owners individually.

Besides Emerald products, once we have obtained the large scale mining licence and gemstone traders licence we will create additional income to cover running costs. This income will come from by products such as:

Prices for machinery are based on South African supplies, used machines in excellent or reconditioned state. We budget to maintain the operation for up to three months until gemstone trading and timber sales can support the running costs.

Index

ZAMBIA 1 - Plot 5G (Carollee Mine)

INVESTMENT: US$250,000 (Reserved until 15 August 1998)
For more information about Plot 5G, refer to the rest of this prospectus as Plot 5G was used as model.

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.

Index

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.

Index

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.

Index

B. CAPITAL GENERATION (Optional)

1. Gemstone Trading Centre.
The range of Zambian gemstones include: Diamonds, Emeralds, Tourmalines, Garnets, Amethysts, Citrines, Aquamarines, Precious Beryls, Quartz, etc. Establish a full gemstone trading centre with collection points throughout the country. Once we have secured a full gemstone traders licence, we are allowed to purchase any gemstone from any person. From this little trade alone I expect we can yield a profit in excess of US$20,000 per month within the first six months.

2. Services to mines.
Supply store - Estimate profit here at US$1,000 per month.
Geological services - One or two percent of their production. Estimate income here at US$10,000 per month within the first six months.

3. Timber.
One large commodity on this and some neighbouring plots is timber - mostly Miombo trees were observed, but also some other hardwood species - similar to teak wood. I estimate most of them to be in the range of 100 to 150 years old. Normally the miners simply bulldoze them over then cover them with the overburden. This timber value is quite high.

On two of our plots there are an estimate of 400 to 1,000 trees per hectare. Trees are standing from 10 to 40 metres high and some are about 2 metres around the base. Valued at the all low of US$50 per tree (value could be as high as US$200 per tree) we can yield more than US$20,000 per hectare. We have more than 224 hectares available!

There is a restriction on the export of timber from Zambia to ensure that Zambia has sufficient supply for its own industries. However, these restrictions have slackened now for there is an over supply in the local market. Since the government are serious about assisting development in the emerald field, we would probably obtain licences for export of timber - especially if it will pay for mining expansion and machinery. Our excavations will eventually cover about 40 ha. Income potential - more than US$850,000.

4. Water.
The water of the region is VERY mineral rich. From the photo of one of the pits the slight green / lime colour can clearly be seen. Investigation should be made into the possibilities of bottling and exporting this water. I noted an unusual high content of copper, zinc, magnesium and lime. The high rainfall in the area (1200 mm per year), abundant underground water and fountains makes this an unlimited source. Some other sales factors are that this is close to the origins of the mighty Kafue and Zambezi rivers. Water from the Zambezi has magical value in the African traditions. Also, for the metaphysical (spiritual) people this water is highly energized by contact with various crystals - especially the crystal of eternal youth, (emerald) and that of spiritual insight, (amethyst). Income potential in the range of US$5,000 per year.

5. Weak crystals.
Astonishing! Unimaginable! The whole area is crystalized. I am talking of a block about 100km long and 70 km wide. This also extends into the southern regions of the Republic of Congo (ex Zaire). This is probably the richest crystal area in the world. What amazes me is the fact that most people are interested in copper, diamonds and - some people - emeralds. I found, on the road, some beautiful quartz crystals - smoky quartz, clear rock crystal, white crystals, green beryl and even citrine! These are absolutely ignored by the local people - not only in the restricted area, but also on the main roads between Ndola and Kitwe, Kitwe and the Congo. Items of interests are the weak emerald / beryl crystals. They can be cleaned, heat treated, colour dyed and sold on the market to the metaphysical shops (spiritual types) around the world as well as to mineral collectors. At present they are not marketed at all! Beautiful clear facetable rock crystals were found - dumped - another source of income. From this, once fully operational, I expect a monthly profit of not less than US$7,000.

6. Ornaments.
In the mining pits of our neighbours I observed large top quality crystal blocks - sometimes measurable in tons. These can be chopped into ornaments, 'light' rocks, candles and bedlamps. Beautiful African theme carvings can be made from these - as is, or even by using colour dye techniques. This will create income and employment in the region. In the present operating mines I observed green granite type rocks coloured by copper traces. They can be cut into bricks or even tiles and exported all over the world. More investigations will be needed as to the feasibility of this option but I estimate not less than US$5,000 per month.

Index

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E-MAIL: emeraldmine@hotmail.com . . . . . . . .Last Updated: 12 June 1998