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Emerald & indicator rocks LAPIDARY  INVESTMENT
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.. Summary  
Background Security Expertise Supply Financing Conclusion

Lapidary: The sculpture in or engraving of precious and semi-precious stones or the art of cutting them, excluding diamonds.
Gemstones: Diamonds, Rubies, Emeralds, Sapphires.
Semi-precious gemstones: All other minerals or petrified material which when cut and polished can be used in jewellery or as ornaments.


BACKGROUND:
Gemstones captivated man's imagination through the ages. Many a war has been fought over them, some nations and tribes even wiped out for their wealth in gems (South American Indian tribes). An item of adoration, desire, pleasure, beauty and many more attributes, including value and investment security. What other way can be more secure and fulfilling, as an investment, than having a major share in your own lapidary?

Africa is one of the major sources of gemstones in the world. There are many gem specimens found in Africa which are available nowhere else, yet just about anything found in the rest of the world is available from Africa. At the moment, the wealth of Africa is a major source of income to many nations and corporations around the world. The rough material from Africa is purchased at a very low price, cut and polished sold at a large profit. Countries like India, Thailand, Israel, Belgium, Holland, England and many more, have none or very little gemstones of their own, yet they are considered the main suppliers of gemstones to the jewellery industry.

Africa is poor, Africa is under developed yet it possesses most of the gemstone mines in the world. It is estimated that less than 2% of Africa's wealth is processed locally. Often the rough material is even exported at highly reduced values to save on custom and export duties, thus even earning less income for the producing country.

We have the following situations:

Southern Africa produce just about every type of gemstone
African people are naturally very art-orientated
Labour in most African countries is very cheap
African people are mostly uneducated and unskilled
One of Africa's biggest problems are unemployment and poverty
Many a gemstone supply in Africa is not even discovered yet

Let us say a Zambian mine sells one kilogram of emeralds (fair quility), they will obtain in the range of US$175,000. The export duties to the Zambian government is about US$8,750. In total Zambia will get approximately US$183,750 per kilogram of emeralds.

The yield of these emeralds when cut is about 25%, (1 kg = 5,000 carats) thus giving 1,250 carats of gems. These will sell at prices ranging from US$200 to US$3,000 per carat.  At an average of US$400 per carat earning US$500,000. The country in which those emeralds are cut thus earns US$290,000 - more than the producing country!!  The cost for cutting those emeralds at could be  maximum US$15,000. When sold to the public these emeralds will fetch around US$750,000 and when set as jewellery the price increases ten fold!

Why can Africa not process its own products? We certainly have enough people and are able! There is NO reasons at all except that maybe the public think it is difficult and we lack the expertise.

I want to establish a range of lapidaries throughout Southern Africa and looking more specifically in Zambia, Mozambique and Tanzania at the moment. My motivations are that these countries produce most of the African gemstones, labour costs with very   little labour unrest. Being able to cut 50% of Zambian emeralds alone could possibly mean an extra $100+ million income for that particular country. In addition to emeralds there are garnets, tourmaline, amethyst, citrine, aquamarine, morganite, agates, perodot, rose quartz, rock quartz and many others! It is not even possible to estimate figures for Mozambique and Tanzania!!

There are three main problem areas to address:

1. Security
2. Expertise
3. Supply & demand
4. Financing


SECURITY:
This is one of the biggest problems preventing people from developing lapidaries on a large scale. I  do have the answer to this problem. working on a bonus scheme, tight control, electronics and other measures. Since this is my biggest advantage and will seriously affect my ability and prevent competition, this information will only be revealed to the investor, once a secure deposit has been made. I do not expect to lose more than 3 % of our products.


EXPERTISE:
I have plans on all the machinery needed to run a lapidary. These machines are my own design, will cost very little to manufacture, are highly precise and even semi-automated. To operate these machines will require very little expertise from the operator. Supervisors need to be more intelligent and they would be trained by myself. Once the basic shop with machines has been set up, the workers will work on a mass production basis and from pre-set 'recipies'. We will also encourage the people's own creativity.

In every country we will have a workshop, able to manufacture and maintain all our lapidary equipment. The aim is to set up various lapidary workshops around the country - close to the producing areas.

In our lapidaries we will be able to produce the following: faceted gemstones, cabochon gems, tumbled stones, engraved stones, inlay work, ornaments, and carving. At a later stage we can contemplate jewellery as well.

To sum up: Mass production, very little expertise, high quality and low cost with little loss.  Ideal and possible!!


SUPPLY & DEMAND:
Supplies are no problem at all. We will be able to offer better prices to the mines by being locally available, saving on import duties, transport and insurance costs. The miners can bring their production direct to our offices, without having to wait for the buyers to come from far off countries. We can also establish agreements for first select with the producers, thus enabling us to obtain the best material.

The market is already there, we will just re-route the purchasers to us, especially when we get to take a substantial portion of the rough stones. Our people can also market the products world wide at a later stage. By supplying a finished item from the producing country, we can compete with any other company world wide.


FINANCING:
This is why I approach you. I need capital to get the initial stages of this venture running. The required investment is either US$30,000 or US$80,000.

Once on line and proven, more capital will internally be generated for expansion and for setting up the sub-lapidaries around the country.


CONCLUSION:
This is another unique opportunity. For me personally it depends on which is first - the mine development or the lapiday and where the investment is to be. There is more money to be made in the mine development, but the lapidary option is more secure on the short term. Long term plans and other information on these projects will only be shared with the investor.

Intended share of profit offered:

25% to the investor
25% to the developer and senior management
30% for further investment in other projects in the country (shared 50% each by investor and developer).
20% shared by factory workers on bonus basis

The folowing are tables summarising the various options.  Do keep in mind the facts I have used very high purchase prices for rough matererial an very low prices for the selling of products. In reality I do expect the profit to be rather 200% higher.

  BASIC MAIN SATELLITE MINI
Investment US$30,000 US$80,000 US$15,000 US$4,500
Initial stock $7,000 $20,000 $4,000 not financed
Personnel 16 50 15 4
Running cost per month (Maximum) $8,000 $25,000 $6,000 $500
Capability (Gemstones per month) 7,000 20,000 6,000 500
Annual profit at 70% production $200,000+ $520,000+ $200,000+ $14,000+
         
Re-invest 30% $60,000 $156,000 $60,000 n/a

.Index.

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E-MAIL: emeraldmine@hotmail.com . . . . . . . .Last Updated: 15 June 1998