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BUSINESS PLAN

FOR

PROSPECTING AND EXTRACTION

OF

GOLD & OTHER HIGH-VALUE MINERALS

IN UGANDA

USING A HIGH-TECH 3D GROUND SCANNER

AND METAL DETECTOR

BY

OOLITE MINING COMPANY LIMITED

OOLITE MINING COMPANY LIMITED


P.O. BOX 16623,
KAMPALA,
UGANDA.
Cell Phone: +256-782-521 983/701-521 983
Landline: +256------------------
Fax: +256------------------
E‐Mail: oolite@yahoo.co.ug

OCTOBER 2015
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PROSPECTING FOR PRECIOUS MINERALS & TREASURE-HUNTING BY OOLITE MINING CO. LTD.
A. TABLE OF CONTENTS

S/NO. DESCRIPTION PAGE

1.0 EXECUTIVE SUMMARY 1


1.1 Introduction 1
1.2 Products and Services 2
1.3 Target Geographical Areas of Activity 2
1.4 The Project Financing 2
1.5 Mission Statement 3
1.6 Vision Statement 3
1.7 Management Team 3
1.8 Sales Forecasts 3
1.9 Our Investment Partnership Support Expectations 4
1.10 Expansion Plan 5

2.0 BUSINESS DESCRIPTION 6


2.1 Industry Overview 6
2.2 Value-Chain Analysis 6
2.3 Mission Statement 7
2.4 Vision Statement 7
2.5 Objectives 8
2.6 Company Ownership 9
2.7 Project Costs and Financing 9

3.0 PRODUCTS 10

4.0 UGANDA MINING SECTOR 11


4.1 Mining Policy and Regulation 11
4.2 Size and Structure 14
4.3 Status of Economic Activity in the Sector 16
4.4 Demand Drivers and Resource Base Factors 18
4.5 Current Mining Projects 19
4.6 Mineral Production 21
4.7 Mineral Exports 23
4.8 Key Trends 24
4.9 Sector Investment & Outlook 25
4.10 Business Opportunities 26

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5.0 MARKETING PLAN 29
5.1 Marketing Objectives 29
5.2 Marketing Strategies 29

6.0 MANAGEMENT AND ORGANIZATION PLAN 30


6.1 Corporate Organization 30
6.2 Operations Unit Management 31

7.0 PROJECT OPERATIONS 32


7.1 Location 33
7.2 Operation Description 33
7.3 Machinery Requirement 35
7.4 Operating Margin 36

8.0 TECHNICAL DESCRIPTION OF EQUIPMENT 39

9.0 GOLD & GEMSTONE PROSPECTING AND TREASURE-HUNTING 47


9.1 Prospecting Gemstones and Gold 47
9.2 Steps in Treasure-Hunting 47
9.3 Finding Buried Treasure Boxes/Caches and Hoards 48

10.0 FINANCIALS 51
10.1 Underlying Assumptions 51
10.2 General Assumptions 51
10.3 Sensitivity Analysis 51
10.4 Financial Summary 52
10.5 Financing Programme 52
10.6 Expected Results 53
10.7 Cash Flow Present Value 54

11.0 COST BENEFIT ANALYSIS FOR MINING PROJECTS 55

12.0 CONCLUSIONS 58

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B. LIST OF TABLES

T/NO. DESCRIPTION PAGE

1 Projected 3-Year Profit and Loss 4

2 Types of Mineral Rights 13

3 Uganda GDP by economic activity at current prices 14

4 Mineral Production 2002 - 11 23

5 Commodity Exports (tonnes) – 2002 - 2010 24

6 Commodity Exports (value in UShs) – 2002 - 2010 24

7 Mineral Investment – 2003-11 26

8 Gold Price Forecast 36

9 Gold (Au) Production Targets 36

10 Product Value 37

11 Operating Costs 37

12 Operating Margin 38

13 Calculation of EBITDA 38

14 General Assumptions 51

15 3-Year Projection Financial Summary 52

16 Debt Service Schedule 53

17 Projected Net Income Statement 53

18 Cash Flow Present Value 54

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C. LIST OF FIGURES

F/NO. DESCRIPTION PAGE

1 Performance Highlights (PY1 – PY3) 4

2 Statistical Analysis of Growth of Mining Activity vis-a-vis GDP Growth 16

3 Testing gold recovery at Tira mine 19

4 Site Layout of AUC Mining (U) Ltd at Kamalenge 20

5 Mining of Vermiculite Mica at Namekara 21

6 Quarrying of limestone for cement manufacture at Tororo during 2009 22

7 Distribution of Mineral Deposits 25

8 Overall Corporate Organization 30

9 High-value Mineral Field Operations Unit Management 31

10 Gold Field Operations Unit Management 31

11 General flow chart of the gold mining process 34

12 General Gold Beneficiation and Process Flow Diagram 35

13 Impact of capital investment and operational expenditures 57

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D. LIST OF MAPS

M/NO. DESCRIPTION PAGE

1: Distribution Of Mineral Deposits in Uganda 14

2: Processed airborne survey map of Uganda 28

E. LIST OF APPENDICES

A/NO. DESCRIPTION PAGE

1. Mining Sector Licensing Requirements 59

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PROSPECTING FOR PRECIOUS MINERALS & TREASURE-HUNTING BY OOLITE MINING CO. LTD.
1.0 THE EXECUTIVE SUMMARY

The purpose of this business plan is to raise a total capital investment of US$ 50,000 for
the acquisition of a highly-sophisticated 3D Ground Scanner eXp 5000 Metal Detector
for use in exploration and prospecting for high value gold and gemstones deposits
located in Uganda, the Republic South Sudan and the DR Congo. This same piece of
prospecting equipment will also be applied in hunting for deep-buried treasure caches
and hoards in areas around the Ruwenzori mountain range on either side of the
Uganda-DR Congo border that is known to have a high occurrence of such depth
treasure caches and hoards in various locations. The business plan also showcases the
expected financials and operations over the next three years based on exploitation of the
prospected gold deposits using this kind of prospecting equipment. OOLITE MINING
COMPANY LIMITED (―the Company‖) is a Ugandan-based corporation that will
excavate gold and other high-value minerals from leased mines within Uganda, South
Sudan and the DR Congo. The Company was founded by Mr. Kasirye Mohammed and
Mr. Opio Moses and five other directors.

1.1 Introduction

OOLITE MINING COMPANY LIMITED is a newly established private company


whose main objective is to process, explore, and mine valuable gold and other high-
value mineral resources in Uganda, the Republic South Sudan and the DR Congo.
Incorporated in the Republic of Uganda on 20th February, 2015, the Company is set to
launch in Uganda its first gold exploration and prospecting operation by January 2016.
This Business Plan is a seminal document that paves the way for the initiation of
negotiations and dialogues with an interested mining investment partner to supply the
much-needed technical equipment in exploration, prospecting, extracting and
processing/refining these gold and high-value mineral ores.

The founders and pioneers of OOLITE MINING COMPANY LIMITED are committed
to a culture of partnership and the values underpinning such a culture: trust,
transparency, shared responsibility and accountability, and a sense of emotional and
financial ownership.

This culture has also nurtured a powerful operating model. Right from the start,
OOLITE MINING COMPANY LIMITED is a lean and nimble mining enterprise, with
minimal bureaucracy. The Company’s core business strategy centres on operating a
small head office for routine business management with a balance of
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entrepreneurialism and prudence, focusing on only a few core activities: defining and
implementing strategy, allocating human and financial capital, and fulfilling the
obligations required of a private company. Leaders at the field operational level will
have to have greater autonomy, responsibility, and accountability, functioning as
business owners. Free from bureaucracy and middle management, they will focus on
maximizing free cash flow, while the head office will focus on allocating that cash flow
to maximize shareholder returns.

This is the vision that we all share for OOLITE MINING COMPANY LIMITED today.

1.2 Products and Services

The Company intends to acquire land leases on properties known to have gold and
other high-value mineral deposits. The business will then explore and prospect for the
gold and other high-value mineral commodity mines on these properties with the intent
to extract, smelt, and package the gold into bars for sale onto the open market. The
initial investment capital of US$ 50,000 being sought in this business plan will allow the
business to acquire the basic exploration and prospecting equipment needed to
prospect for gold and other high-value minerals (including deeply-buried treasure
caches and hoards) deposits before extracting them out and promptly selling them to
the existing high-value mineral global markets. It should be noted that at all times, the
business will comply with all applicable national, and local laws (including
environment, health and safety regulations) in order to ensure the safety of all
employees working at the Company site(s).

1.3 Target Geographical Areas of Activity

OOLITE MINING COMPANY LIMITED proposes to prospect and mine gold and
gemstones in Uganda, the newly-created Republic of South Sudan, as well the eastern
part of the Democratic Republic of the Congo – which have proven to be extensive but
still unexploited lodes/veins of alluvial gold deposits whose quality and quantities
rank among some of the highest on the African continent.

1.4 The Project Financing

At this time, the Company is seeking a financial capital investment input of US$
50,000.00 of private funds to enable the Company carry out intensive mineral

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prospecting operations in extended areas within the three (3) countries mentioned
above.

It is expected and projected that Capitalization would be paid back in 24 months or less
from initial discovery and extraction of the gold and other high-value minerals and that
the Company’s debt would be nil by then. Sales revenue would reach more than US$
2.819 million by December 2017 (end of Year 2). Profits are presented below to further
understand the business opportunity and how as an investor generally able to capitalize
and capture a higher Return on Investment (ROI).

1.5 Mission Statement

OOLITE MINING COMPANY LIMITED’s mission is to cost effectively explore,


extract and process gold and other high value minerals from known precious metal
deposits in Uganda, the Republic of South Sudan, and the DR Congo with the intent to
sell the refined precious metal and other high value minerals and treasure commodities
to the open market. In doing so, the Company seeks to use the most advance
technology, with high grade of efficiency at the most competitive price.

1.6 Vision Statement

OOLITE MINING COMPANY LIMITED’s vision is to become one of the most


relevant mining companies in Uganda, the Republic of South Sudan, and the DR Congo
by creating sustainable value for shareholders, employees, contractors, suppliers,
customers, business partners and the host communities.

1.7 Management Team

The Company was founded by Mr. Kasirye Mohammed and Mr. Opio Moses and five
other directors with a combined mining industry experience more than 15 years–
mostly gathered in small-scale artisanal mining (ASM) operations in Uganda. Through
their expertise, the Company shareholders will be able to bring the operations of the
business to profitability within its first year of operations.

1.8 Sales Forecasts

The Company expects a strong rate of growth at the start of operations. Presented
below in Table 1 are the expected financials over the next three years.
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Table 1: Projected 3-Year Profit and Loss (In US Dollars)
Year PY 1 PY 2 PY 3
Sales 1,409,789 2,819,578 2,819,578
Operating Costs 789,349 1,448,717 1,448,832
EBITDA 620,440 1,370,861 1,370,746
Taxes, Interest and Depreciation 196,632 419,518 417,104
Net Profit 423,808 951,343 953,642

Figure 1: Performance Highlights (PY1 – PY3)


Sales EBITDA Net Profit

3,000,000

2,500,000

2,000,000
US$

1,500,000

1,000,000

500,000

0
PY 1 PY 2 PY 3

1.9 Our Investment Partnership Support Expectations

Type of Mining Investment Partner that we seek:


We are looking at partnering with an experienced mining investment partner with
expertise in the prospecting, production (extraction) and processing of gold and other
high-value mineral deposits and buried treasures, as well as acquiring the requisite
project capital equipment capacity and marketing/sales know-how of the gold and
other high-value mineral products and treasure commodities on the international
market.

Our Expectations from the Prospective Business Partner:


Capital Financing including project finance; gold and high-value mineral exploration
and prospecting equipment; gold and high-value mineral extraction equipment and
facilities and know-how; gold and high-value mineral processing equipment and

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facilities and know-how; financial control plus accounting/financial planning, and the
marketing/sales expertise for gold and other high-value minerals on the international
gold and other high-value mineral commodity markets.

1.10 Expansion Plan

The Company expects that the business will aggressively expand during the first three
years of operation. As the business becomes profitable it will make substantial
reinvestments into the Company’s gold mining and treasure-hunting infrastructure.
Additionally, the Company may seek to acquire additional land leases on proven
grounds for gold and other high-value mineral mining.

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2.0 BUSINESS DESCRIPTION

OOLITE MINING COMPANY LIMITED already has a sizeable mining concession in


Kasese district of western Uganda totaling 350 Acres that it holds in partnership with
one of the area locals.

As a commodity producer, the company will be focused on product distribution on


international markets, especially in the Middle East (Dubai), EU, India, and China etc.

For the nervous amongst us, looking at the headlines of the leading newspapers in
Uganda and elsewhere can be a form of torture, what with high oil prices, global
instability, trade imbalances, and worldwide financial crisis. But optimists should take
cheer from the upward trends that favour the precious metal, gold has become the most
secure investment in the world and the best backing of capital invested.

2.1 Industry Overview

The worldwide metal industry goes through an expansion period and the gold and
copper are not an exception. Companies that shape this economic sector focus its efforts
in making systems, products and more effective value chains.

2.2 Value Chain Analysis

The value chain talks about the value that acquires the mineral resources since they are
extracted until they are processed. The minerals acquire an added value at each stage of
the productive process and in the process generate linkages 1 between the diverse
productive sectors of the economy, by creating job opportunities, saving of hard
currency, generating economies of scales, and facilitating improvements in the
distribution of wealth, among other benefits.

The value chain shows how the activity is developed in a company. A gold and high-
value mineral ores mining company is exposed to cost and margin links that are

1In the value chain the linkages exist backwards (that are the supplier of supplies and equipment) and
towards ahead or the sides (towards the industries processors and user as well as to services and
activities closely related). All activity this linked with others. The linkages depend as much on the factors
of the demand (derived from supplies and factors) like of their relation with technological and productive
factors.
Source: http://www.innovamineria.cl/contenidos.phtml?contenido=167&seccion=28
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organized through wealth generation. This situation demands permanent strategic
monitoring; so that the plans are carried out according to predetermined analysis and
forecasts.

OOLITE MINING COMPANY LIMITED, through its value chain efficiency in the
performed operations, provides excellent portfolio management and market share,
when a cost-benefit analysis is made. This offers not only solid experience but also a
good projection of the enterprise’s business potential in the medium- to long-term
perspective.

Also, the mining sector operations and its value-chain outputs contribute significant
benefits to the country and the economy at large by positively impacting on the
development of the areas of intervention, the sector workers, the mining industry
infrastructure, the corporate social responsibility aspects, as well as other productive
sectors of the economy, in spite of the existence of some areas of conflict between
mining operations and other industrial value-chain actors. These mining industry
results and outcomes are now being assumed by the government and the private sector
mining companies in Uganda.

2.3 Mission Statement

OOLITE MINING COMPANY LIMITED’s mission is to cost effectively explore,


extract and process gold and other high value minerals from known precious metal
deposits in Uganda, the Republic of South Sudan, and the DR Congo with the intent to
sell the refined precious metal and other high value minerals and treasure commodities
to the open market. In doing so, the Company seeks to use the most advance
technology, with high grade of efficiency at the most competitive price.

2.4 Vision Statement

OOLITE MINING COMPANY LIMITED’s vision is to become one of the most


relevant mining companies in Uganda, the Republic of South Sudan, and the DR Congo
by creating sustainable value for shareholders, employees, contractors, suppliers,
customers, business partners and the host communities.

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2.5 Objectives

OOLITE MINING COMPANY LIMITED has the commitment to develop the projects,
according to the expected results and the conditions estimated.

Our Investment Objectives:-


 Our main objective is to become a profitable prospecting and mining company.

 The key objective of OOLITE MINING COMPANY LIMITED is to identify and


acquire mineral resource properties that have a high potential for a proven
reserve, and to establish one or more proven reserves, that can be either further
developed towards production or sold to as a proven resource.

 We therefore aim either to find, or to acquire and develop, gold and other high-
value mineral prospects and deep-buried treasure assets in Uganda, the Republic
of South Sudan, and the DR Congo.

 We plan to adopt a twin-track approach - which is not only to start production


by opening up new gold and other high-value minerals mining areas with
promise in Uganda, the Republic of South Sudan, and the DR Congo but also to
keep on adding to the overall resource base through continued exploration
before and after the mines have re-opened.

 According to the phase in which the projects are, the explorations and
prospecting will be optimized with the permanent search of better mining zones
with higher gold and other high-value mineral ore grades and the application of
better extraction possibilities to deliver lasting benefits and deal with any
adverse social or environmental impacts. We find ways to lift all aspects of the
company performance so that it stands out by setting or reflecting best practice
and by contributing to the global transition to sustainable development.

 Sustainable Development at OOLITE MINING COMPANY LIMITED


encompasses our commitment and policy towards health, safety, the
environment and the community. To ensure improved performance, we have set
specific targets in these areas.

 The project development will create resources to link other local and external
projects, to diversify the company products portfolio. The company will
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continuously seek to find new internal and out-of-the-country mining
concessions that could be acquired, especially with proven mineral resources, to
assure more lasting benefits for the organization. In this way, not only will the
Company be able to diversify its products portfolio but will also guarantee the
continuity and permanence of its activities and other mineral wealth generation
sources.

 Financing the projects and assuring the enterprise’s permanence also involves
the investment portfolio, diversifying it with financial instruments to entail risk
coverage (price). The company will strive to create strategic alliances with
suppliers of fuel, lubricants, transportation, food, security and other service
suppliers, in order to reduce costs, time and assure clients’ satisfaction.

2.6 Company Ownership

OOLITE MINING COMPANY LIMITED is a registered for-profit mining company


with 4 investors whose shareholding stake is distributed as follows:

No. Shareholder Shares held [UGShs.] [%age]


1. Kasirye Mohammad 600,000 30%
2. Tusuubira Dennis 200,000 10%
3. Nasejje Joweria 200,000 10%
4. Kuloba Eva 200,000 10%
5. Angulu Ratib Ronald 200,000 10%
6. Byarugaba Vincent 200,000 10%
7. Opio Moses 400,000 20%
8. TOTAL 2,000,000 100%

2.7 Project Costs and Financing

The total project cost for acquisition of a sophisticated precious metal and treasure
cache prospecting and detection equipment is estimated at US$ 50,000. This is the only
asset that the Company so far needs at the moment to initiate its mineral prospecting
operations while the successive operational aspects of mining including extraction,
refining and marketing will be taken care of by the already-identified high-value
mineral commodity buyers based in Kenya.

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3.0 PRODUCTS

As stated in the executive summary, OOLITE MINING COMPANY LIMITED intends


to operate as a gold/gemstone and treasure cache prospecting and extraction Company.
Prior to the onset of operations, OOLITE MINING COMPANY LIMITED will have
acquired land leases on the properties that are known to have gold and precious stones
(gemstones) deposits as well as a proven existence of treasure caches/hoards. At this
time, it is unclear as to the method that OOLITE MINING COMPANY LIMITED will
use in order to extract the gold and gemstone minerals. The most profitable method of
extracting gold for instance would be to lease an existing gold mine facility with the
intent to pan gold deposits from the underlying soil. This manual method of gold
acquisition would provide the greatest return on investment for the business. OOLITE
MINING COMPANY LIMITED, depending on its land leases, may engage in
sluicing/dredging if the land is known to have a significant amount of gold of
gemstones that are buried deep within the ground. OOLITE MINING COMPANY
LIMITED is also working in partnership with international gold mining companies
based in East Africa to source the necessary equipment so that the business can
immediately begin its operations once the land leases have been acquired. The gold
mining facility will also have all of the necessary chemical treatment and smelting
equipment to allow the business to shape its collected gold into 1 kilogram bars for
resale to the open market.

Competition will be present without a doubt, but with the existing waiting period time
of one (1) month or more before any gold ore from the other small scale miners can be
processed, OOLITE MINING COMPANY LIMITED will have more than enough to
process and will definitely have a clear head start advantage the majority of the existing
players. The demand is so high that our annual production goal of 1,680MT minimum
would hardly touch the current backlog time and overall market in general.

Other products that OOLITE MINING COMPANY LIMITED targets to prospect,


extract and process include but are not limited to: gemstones (e.g. green garnet, red
garnet, blue sapphire, diamonds, rubies, etc.) and deep underground treasure
caches/hoards containing a variety of very high-value minerals such as red mercury,
processed uranium, gold and diamonds that are exist in a few known repository sites
along the Mt. Rwenzori and Mt. Elgon mountain ranges.

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4.0 UGANDA MINING SECTOR

4.1 Mineral Policy and Regulation

The focus of the policy that the government has adopted is to ensure that a number of
sectoral constraints are addressed in order to enable Uganda’s mineral sector to be
attractive to investment.

The government accords a high priority to development of the mineral sector and has
put in place the Mineral Policy of 2001.

The policy aims at establishing an internationally competitive investment environment


for the sector, which provides conducive, stable, predictable, legal and fiscal
environments to attract foreign and local investment for exploration and mine
development.

The policy objectives are:


 To stimulate mining sector development by promoting private-sector
participation;
 To ensure that mineral wealth supports national economic and social
development;
 To regularize and improve artisanal and small-scale mining;
 To minimize and mitigate the adverse social and environmental impacts of
mineral exploitation;
 To remove restrictive practices on women’s participation in the mineral sector
and protect children against mining hazards;
 To develop and strengthen local capacity for mineral development; and
 To add value to mineral ores and increase mineral trade.

MINERAL LEGISLATION
Before 2003, when a new Mining Act was put in place, the 1964 Mining Act was the
basic mining legislation in Uganda.

However, changes in the international mining scene necessitated its revision with
participation of relevant stakeholders, including mining-sector regulators, civil society,
local government authorities, mining investors and academia resulting in the current
Mining Act 2003.

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In order to operationalize the revised Mining Act, new Regulations were gazetted in
2004. Some of the key provisions in the new law include:

Ownership of minerals: is vested in the Government, which grants mineral rights to


carry out exploration and exploitation of minerals.

The licensing regime: has various types of mineral rights (Prospecting Licence,
Exploration Licence, Retention Licence, Location Licence and Mining Lease) as well as
other licences do deal in minerals. The Mineral Legislation is summarized in Table 2
below.

Royalties:
All minerals obtained from any mineral right are subjected to royalty payment – for
example: precious stones 10% of the gross value, precious metals; 5% on the gross
value, base metals and ores; 5% of the gross value, and industrial minerals vary from
USh500/ton toUSh10,000/ton.

GENERAL INVESTMENT INCENTIVES


Uganda’s economy has been fully liberalized and government involvement in
business has been greatly reduced.
Government no longer controls commodity and financial markets, while market forces
determine foreign exchange rates. The Investment Code, 1991 (as amended) gives a
number of incentives that are applicable to the mineral sector. For example:
 Mineral exploration expenditures are expensed100%;
 Import taxes such as customs duty for all mining equipment is zero-rated; and
 There is externalization of dividends and profits.

Adequate compensation:
The law provides for fair compensation on disturbance of surface rights of land-owner
or lawful occupier.

Mineral agreements:
The law requires the investor and government sign agreements relating to operations to
stabilize legal, social and economic obligations of either party.

Environment:
The law has provision on environment protection peculiar to mining operations.

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Taxation:
Due to the unique nature of the sector, a variable-rate income tax that ranges from a
minimum 25% to maximum 45% has been put in place based on the level of profitability
of a particular project in the sector.

Mining regulations:
These cover the following:
 Mineral licensing Regulations;
 Beacons, boundaries and surveys;
 Registration of licences;
 Protection of environment;
 Movement of minerals; and
 Financial provisions (fees).

Table 2: TYPES OF MINERAL RIGHTS


Licence Prospecting Exploration Licence Retention Location Licence Mining
Type Licence (PL) (EL) Licence (RL) (LL) Lease (ML)
Purpose Search for Mineral exploration Granted to the Granted to citizens Mining
minerals and and quantification of holder of EL in of Uganda or in operations.
evaluation. mineral reserves. cases when the case of
identified mineral corporations, the
deposit cannot be citizens hold 51%
exploited due to and licence is for
economic reasons. operations of a
smaller investment
not exceeding
USh10 million.
Area Over the Maximum area of 500 Same as the Varies in size Not exceeding
country but km2. existing EL. depending on the the area of EL.
outside existing type of the licence.
Licence.
Maximum One year and Three years, renewable Three years and Two years and 21 years and
duration not renewable. for two terms of two renewable once for renewable every renewable for
years each and half two years. after two years. 15 years.
area relinquished on Sometimes the
each renewal. life of the
reserve is
considered.
Application fees, Surface Rentals, Annual Ground Rent, Annual Mineral Rights Fees of these licences and other licence to deal in
minerals can be obtained from the Mining Regulations on website: www.uganda-mining.go.ug

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4.2 Size and Structure

Uganda lies within the African Plate which is a continental crust. Precambrian rocks
ranging from Achaean, Lower Proterozoic to Middle Proterozoic (4500 - 600 Million
Years) dominate the geology. Close to the eastern border with Kenya, lies a number of
Cretaceous to Miocene (145.5 - 5.3 Million Years) intrusive alkaline carbonatite
complexes. The Rift Valley contains Cenozoic (65 - 0.01 Million Years) to Recent
sediments up to 4000 metres thick. These rocks are endowed with a wide variety of
minerals as evidenced by past mining records and the numerous mineral occurrences in
many parts of the country.

Uganda’s mining sector is at an early stage of development. Uganda, currently,


produces a number of minerals valued at more than Ushs.200 billion per year. In terms
of output value the most produced minerals as of end of 2010 were: Limestone, Cobalt,
Wolfram, Tin, Kaolin and Pozzolana. Its contribution to GDP is small but has been
steadily growing as the table below shows.

Table 3: Uganda GDP by economic activity at current prices (Shs in Billions); Shs, fiscal
year
Year 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
Mining and quarrying 73 81 106 134 175 186 204
Source: UBOS Statistical Abstract 2012

The airborne geophysical survey, done in ....estimates that there are over 27 types of
minerals in significant commercial viable reserves.

The country-wide distribution of mineral deposits is presented in the Map of Uganda


below.

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Map 1: Distribution Of Mineral Deposits in Uganda

Source: Ministry of Energy and Mineral Development

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Figure 2: Statistical Analysis of Growth of Mining Activity vis-a-vis GDP Growth
20

15
Growth Rates

10
Mining Growth Rates
GDP Growth Rates
5 Mining as % of GDP

0
2009/10 2010/11 2011/12 2012/13 2013/14

-5
Fiscal Years

4.3 Status of Economic Activity in the Sector

There are three main categories of activities in the mining sector:

(i) Large scale, formal mining;


This is practiced by big companies like Tororo Cement Ltd, Hima Cement, Kilembe and
Katwe Salt mines. All mining activities big or small operate under leases for a specified
period of time. The operations are somewhat mechanized, but also rely highly on local,
manual labour.

Although companies holding mining leases may be considered ―large scale‖ in Uganda
(both in terms of the legal framework and relative scale of activities), internationally
these activities are considered to be comparatively small operations. As a simple
comparison of ―scale‖, large scale mines around the World are increasingly processing
ore at rates of up to 100,000 tonnes per day, while the extraction rate on some Uganda
mining leases is on the order of 1,200 tonnes per day

(ii) Exploration;
Most active exploration in Uganda involves smaller Ugandan and/or foreign venture
capital funded companies that are working at a much smaller scale. Although an

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exploration license provides neither the right to buy or mine minerals, a number of
these companies are reportedly buying from artisanal miners.

Many other companies seem to be speculators, holding exploration licenses with the
intent of selling them to larger exploration investors. In addition to these companies, in
Uganda (as in most countries), companies holding licenses to mine are also exploring
with the intent of extending their mine life (by proving more reserves) or identifying
new resources for development.

(iii) Artisanal and small scale mining (ASM);


Across Uganda, almost 200,000 Ugandan women and men use basic tools (like pick
axes, hammers, shovels etc.) to extract a wide range of minerals. These activities are
predominantly informally organized, un-mechanized and often characterized by
hazardous working conditions, lack of planning and issues related to child labour, poor
health conditions and gender inequalities.

Since artisanal and small scale mining is largely informal and unlicensed (and in many
cases undertaken seasonally to supplement agricultural livelihoods), contributions to
mineral production and local economies are rarely captured by official statistics and
men and women miners are often invisible to the mainstream or, in some cases,
regarded as criminals.

Consequently, they rarely receive adequate, if any, support to formalize and improve
their activities in order to realize full development potential. In most countries where
ASM is taking place, miners face major challenges in formalizing and licensing their
activities, largely due to challenges related to bureaucracy, cost, and literacy, among
others. Exploration companies often use the presence of artisanal miners as an
indication of mineral potential and, therefore, availability of ―free‖ areas for licensing
poses an additional challenge.

Each of the above groups is subject to different licensing provisions under the mining
legislation.

Current Structure of players in the sector

At the beginning of 2010, a total of 611 mineral prospecting and exploration licenses
were issued. Of these, 99 were Prospecting Licenses (PL), 66 Exploration Licenses (EL),
32 Location Licenses (LL), 33 Mineral Dealers Licenses (MDL), 2 Blasters Certificates
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(BL) and 2 Goldsmith’s Licenses (GL), while 15 Exploration (ELs), and 5 Location
Licenses (LLs) were renewed.

Prospecting is performed under licence by individuals, companies and sometimes


government to discover minerals.

 Exploration is performed under licence to establish availability of viable


quantities of minerals. This stage involves more capital to perform detailed
geological surveys including diamond drilling to ascertain mineral concentration
and volumes.
 Commercial mining is performed under a mining lease. At present limestone is
mined on a commercial / large scale and used to make cement. The main players
are Lafarge, locally known as Hima Cement and Tororo Cement Ltd. Hima
Cement mines limestone mainly from Kasese and Kamwenge. Tororo Cement
Ltd mines limestone from Karamoja.
 Mining leases for phosphates, gold and Iron Ore have been issued for mines at
Tororo, Tira, in Busia District, Kisita in Mubende district and Ntungamo.
 Location licences are issued to mainly individuals and communities operating at
a very small unmechanised scale.
 There many unlicensed individuals mining gold as artisan miners spread across
several parts of the country in Karamoja, Bude – Kitodha in Namayingo, and
Buhweju.

4.4 Demand Drivers and Resource Base Factors

Demand Drivers
 Demand for industrial minerals such as copper and Iron Ore is driven by global
economic growth. Sustained growth in China and India is the main cause of
increased demand for industrial minerals. Coltan, a mineral found in several
locations across Uganda is used in making mobile phones and electronic devices.
Demand for Coltan is fuelled by the demand for mobile phones.
 Gold is held in reserve by governments. The global economic crisis has led to an
increase in demand for Gold as governments stockpile it to boost their reserves
instead of holding currencies like the US$ and Euro.
 High demand for precious stones, rare minerals including Gold and Diamonds is
driven by increase in the personal wealth of individuals who use the gems as
jewels.

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 Cultures in some parts of the world require gifts in form of precious stones like
diamonds or gold jewellery
 Uganda’s conducive investment climate in terms of human resources, friendly
tax regimes, physical resources like land and financial resources among others.
 Favourable export markets within and outside the East African countries.

Resource Base Factors


 Uganda has an abundant mineral resources base that has not yet been fully
commercially exploited.

4.5 Current Mining Projects

Since the government put recent interventions in the sector, the country has
experienced an upward growth in exploration and production for various minerals.

For example in 2003, one year before the Sustainable Management of Mineral Resources
Project (SMMRP) was implemented, there were 100 mineral licences. By the end of 2012,
the total number of mineral licences has increased to 726. Some of the companies
currently in mining in the country are:

Busitema Mining Company Ltd undertakes underground and open gold mining at Tira
mine, (Figure 3) near the border town of Busia, Busia district. Gold appears in quartz
veins in the greenstones and banded iron formation of Archaean age.

Figure 3: Testing gold recovery at Tira mine

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Kisita Mining Company and AUC Mining (U) Ltd, incorporated in Uganda in 2007,
operate small-scale gold operations in Mubende district (Figure 4). Gold in the area
occurs in multiple quartz veins and in shear zones and resource target of over 5Moz of
gold has been identified in quartz veins.

The company has so far acquired heavy machinery including excavators, dump trucks,
bulldozers and cranes to be utilized in processing of both alluvial and hard rock
material. In addition, the company has put in place access roads to site, water and
power plants and buildings for administration, servicing machinery, accommodation
and the plant itself.

Figure 4: Site Layout of AUC Mining (U) Ltd at Kamalenge

Kasese Cobalt Company Ltd (KCCL) with an installed 1,000t/y cobalt cathode plant
processes the cobalt-sulphide concentrate at Kasese produced from the Kilembe Cu-Co
Mine.

Gulf Resources operates a vermiculite mine at Namekara since September 2009. This
mine was previously operated by Rio Tinto Exploration that changed its name to East
African Vermiculite in August 2009.

Rio Tinto Exploration had bought the mine in April 2007 from Canmin Resources, a
subsidiary of International Business Initiative of Canada (IBI), which started operations
in 2003.

The new operators have installed a new ball mill with production capacity of 80t/day,
however, the current production is 50-60t/day (Figure 5).

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Recent exploration at Namekara has delineated a resource of around 4Mt of high-
quality large-size vermiculite, which is probably one of the best known at present in the
world.

Figure 5: Mining of Vermiculite Mica at Namekara

4.6 Mineral Production

From 2002 to 2004, there was no iron-ore production because no mining licence was
issued, while for cobalt there was no production from 2002 to 2003 as a result of the
temporary closure of the KCCL plant.

Mineral production in 2004 was almost double that in 2003 due to strong world prices
for vermiculite, gold and cobalt. Canmin Resources (U), which acquired a mining
licence for vermiculite in the previous year, increased production due to the global
demand. Gold production rose as Busitema Mining Cie started open-pit mining. Cobalt
production increased, because a plant re-opened in February that was able to process
259t of cobalt by the end of the year.

In 2005, production of limestone, pozzolana, and gypsum increased due to demand for
cement. However, the production of cobalt decreased due to lower prices that
consequently led the production to be suspended in the middle of the year. Production
of wolfram fell as the major wolfram mine went into receivership.

The production of cobalt and vermiculite rose in 2006 compared with the previous year
due to higher prices of these commodities.

Production declined in 2008 from 2007, partly due to a reduction of limestone


production as a result of increased production costs caused by high fuel prices. In

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addition, there was no production of vermiculite as Rio Tinto was still re-organising
after buying the mine in 2007.

In 2009, mineral production increased compared with 2008 due to increased production
of limestone (Figure 6) and pozzolanic materials to meet cement demand. Gold
production declined as a consequence of non-production by Busitema Mining Cie,
which was locked in a conflict with artisanal miners in Busia.

Figure 6: Quarrying of limestone for cement manufacture at Tororo during 2009

Additionally, Kisita Gold Mining Co was not operational most of the year and also
Gold Location Licences (LLs), which mines most of the gold in the country, reported
very low production. Production of cobalt reduced also because of the low price.

In 2010, wolfram production increased in response to surging prices to US$260/t


compared with US$60/t in the previous year.

Gold production fell in 2011 as companies undertook mineral exploration activities,


while output was also low from the artisanal and small-scale miners.

On the other hand, limestone output notably increased during 2011 (up to 930,000t) in
comparison to the earlier levels (see Table 4).

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Table 4: Mineral Production 2002 - 11
Production (tonnes)
Mineral 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Limestone 140,023 226,408 428,776 540,756 425,611 447,463 274,669 588,945 634,673 932,348
Pozzolana 12,388 65,587 134,644 138,933 213,640 280,522 332,636 440,292 446,316 690,911
Gold 0.003 0.04 1.45 0.05 0.02 0.03 1.86 0.001 0.004 0.001
Vermiculite 664 1,724 2,688 2,574 3,512 3,269 _ _ 1,121 7,960
Cobalt _ _ 459 638 689 636 662 389 568 673
Wolfram 25 2.2 80 45 95 108 61 9 55 10
Iron Ore _ _ _ 209 _ 366 1,740 972 3,795 2,134
Columbite- 6.46 16.24 0.38 0.27 0.10 0.10 0.01 0.05 0.01 0.01
Tantalite
Gypsum 5 43 181 285 121 168 84 _ _ _
Grand 153,111.5 293,780.45 566,829.8 683,440.3 643,668.1 732,532.1 609,853.9 1,030,607.1 1,086,528.1 1,634,036

Total
Source of Information: Annual Reports of the Ministry of Energy and Mineral Development

4.7 Mineral Exports

Mineral exports from 2002 to 2010 (Tables 5 and 6) in terms of tonnages and Uganda
shillings are explained below as follows:

In 2003, revenue from mineral exports declined compared with 2002 as gold exports
dropped by 3.4 tons (Table 5) and there were no exports of cobalt as the Kasese plant
was still closed.

However, in 2004 mineral exports picked up once again due to higher gold exports and
there-opening of the cobalt plant early in the year.

In 2005, fewer minerals were exported compared with the previous year, yet the export
value was higher due to improved commodity prices, especially for gold.

In 2007, the value of mineral exports dropped from the previous year due to the drastic
drop of vermiculite exports, which subsequently led to the eventual transfer of the
mineral right to M/S Rio Tinto Exploration. The closure of both the Busitema gold mine
and Kitaka lead-gold mine in the same year contributed to the low export value.

In 2008, there was decline in mineral production due to the persistent low price of
vermiculite. However, the value of mineral exports increased as cobalt prices picked up,
resulting in the export of some stockpiled material.
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The year 2009 showed very low mineral production, but because of re-exporting the
imported gold, the revenues were very high compared with those of the previous year.

In 2010, the wolfram price increased to US$260/ton compared to US$60/ton in the


previous year.

Table 5: Commodity Exports (tonnes) – 2002 - 2010


Production (in tonnes)
Mineral 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gold 7.6 4.2 7.2 5.9 6.1 3.6 1.7 0.4 0.5
Vermiculite 724 2,280 5,979 2,353 4,468 924 _ 20 15,470
Cobalt _ _ 459 253 200 485 645 _ _
Wolfram 50.4 34 38 5 78 32 80 5 100
Columbite- 3.4 6.1 0.05 0.05 _ 8 3 _ 0.15
Tantalite
Grand 785.4 2,324.3 6,483.3 2,617 4,752.1 1,452.6 729.7 25.4 15,570.7
Total
Source of Information: Annual Reports of the Ministry of Energy and Mineral Development

Table 6: Commodity Exports (value in UShs) – 2002 - 2010


Total value (in ‘000 USh)
Mineral 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gold 131,546 88,097 151,879 164,138 119,242,758 75,639,295 60,036,666 29,904,925 32,607,056

Vermiculite 246 775 2,033 800 834,681 178,031 _ 6,800 8,957

Cobalt _ _ 2,752 11,036 5,279,780 12,186,413 26,237,608 _ _

Wolfram 79 38 42 5.6 48,000 36,307 2,538,876 196,226 3,457,500

Columbite- 50 92 7 0.8 _ 36,133 458,000 _ 4,262

Tantalite
Grand 131,921 89,002 156,713 175,980.4 125,405,219 88,076,179 89,271,150 30,107,951 36,077,775
Total
Source of Information: Annual Reports of the Ministry of Energy and Mineral Development

4.8 Key Trends

The Government of Uganda has identified the development of the country’s mineral
resources as a major economic priority and has put in place an extensive plan to bring
this to fruition. Investment in mineral exploration is projected to increase from the
current US$3 million to over US$50 million annually over the next five years. It is
projected that the industry will be the major driver in employment creation and GDP
growth over time. In addition, the lifeline industries will spur growth in the
manufacturing, infrastructure development, agriculture and ICT industries.
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Figure 7, below shows the trend of licenses issued between 1999 and 2010 where the
numbers grew from 66 licenses in 1999 to 611 in 2010 – an impressive growth.

Figure 7: Distribution of Mineral Deposits

No. of Mineral Licences Issued


700
No. of Mineral Licenses Issued

600 611

500 517 515

400 402

300 No. of Mineral Licences


229 Issued
200
164
100 106 103 91 111
66 76
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Years

4.9 Sector Investment and Outlook

The favourable investment climate created by the current NRM government since 1986
has contributed to development of the mineral sector to date.

Total investment in mineral exploration for example since the Sustainable Management
of Mineral Resources Project (SMMRP) started in 2004 increased from US$5 million to a
cumulative US$340 by end of 2011 (Table 7).

This situation has led to expansion of the national economy, thus benefiting the
population.

Also since the implementation of the project, there has been a cumulative increase in
licence fees and royalties from US$0.5 million in 2003 to US$14.6 million by the end of
2011 (Table 7) and increment in non-tax rates per annum will increase after new rates
were put in place by December 2011.

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Table 7: Mineral Investment – 2003-11
Project Outcome Indicator 2003 2004 2005 2006 2007 2008 2009 2010 2011
Cumulative Exploration and 5.0 5.0 45.7 96.2 151.1 201.8 252.6 298.1 333.9
Development (US$ million)
Cumulative fiscal revenues
(NTR) from mining (US$ 0.5 1.1 2.7 4.5 6.2 7.9 9.3 10.9 14.6
million)
Total Mineral Licences granted 91 111 164 207 250 293 232 284 331
Number of Exploration Licences 19 78 55 57 105 119 66 138 138
granted
Source of Information: Department of Geological Survey and Mines

FUTURE OUTLOOK

The general improvement in the country’s macro-economic conditions coupled with the
improving infrastructure will likely increase mineral investment confidence in the
country.

The recently concluded SMMRP led to the acquisition of adequate geo-scientific data
that, when properly followed up on the ground, is expected to lead to the discovery of
new mineral deposits.

The discovery of mineral deposits will encourage international mining companies to


become more interested in developing mines, and an increase in mineral production
would help contribute to the social and economic transformation of the country.

4.10 Investment and Business Opportunities

Prospecting
 Mineral prospecting

Exploration
 Mineral exploration

Value Addition
 Production of gold, copper, Iron & steel, and fertilizers
 Production of columbium and tantalum for export
 Cement manufacturing for local consumption and export
 Mining and use of Uranium for electricity generation

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 Cutting and polishing stone (like granite, marble and quartzite)
 Making ventilation bricks, tiles, charcoal stoves and other ceramics
 Carving stone (like marble) into candle holders, sculptures, ashtrays and other
products.
 Jewellery production

Mine Development & exploitation


 Mechanized mining
 Establishment of mineral processing plants
 Mining of Coltan for export
 Quarry development
 Revival and operation of Kilembe Copper Mines and processing plants under
Public Private Partnership

Sector Specific Licensing Requirements


 These are available from the Department of Geological Surveys and Mining of
the Ministry of Energy and Mineral Development. (Refer to Appendix 3)

Sector Specific Incentives for Investors


 A minimum of 25% and a maximum of 45% VRIT depending on the level of
profitability.
 Duty free importation of mining plant and equipment with Value Added Tax
(VAT) deferment facilities.
 Investment protection under the Multilateral Investment Guarantee Agency
(MIGA)
 Mineral exploration expenditures are expensed 100%
 Import taxes such as customs duty for all mining equipment is zero-rate
 There is externalization of dividends and profits
 Generous depreciation allowance at 30% for all depreciable mining assets

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Map 2: Processed airborne survey combining both magnetic and radiometric data into a Relative
Maxima Map. Hill-shaded airborne magnetic map in grey is used as background. The map
serves well in target selection for mineral exploration, e.g. zones with only high uranium are
visible in bright blue (e.g. north of Kampala). Also areas with potassium-rich soils (important for
agriculture) can be inferred as magenta colour in the northwest. Map by GTK Consortium/Tapio
Ruotoistenmäk

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5.0 MARKETING PLAN

The marketing campaigns required by OOLITE MINING COMPANY LIMITED are


minimal as the business will sell its mined gold other high-value minerals directly to
the open market. As such, it is imperative that any marketing expenditures undertaken
by the Company focus on developing relationships with gold and other high-value
mineral wholesalers and property management firms that will seek and lease land to
the business.

5.1 Marketing Objectives

 Develop relationships with individual mineral land property holders and


specialty property management firms that will lease land to the business for its
gold and other high-value mining operations.
 Establish relationships with gold and other high-value mineral wholesalers
within the targeted market.
 Pursue a clearly defined, and ambitious, commercial aspiration.
 Implement a robust product-market strategy.
 Define and implement a clear set of choices on which parts of the mining value
chain participate in.
 Formulate and deliver well-honed levers to capture commercial value, including
pricing, contract management, trading, branding, and key account management.
 Apply a powerful commercial operating system.

5.2 Marketing Strategies

Prior to the onset of operations, the Company will develop ongoing purchase order
relationships (based on market prices) with national and international gold and other high-
value mineral dealers and wholesalers that will acquire the Company’s inventory of mined gold
and other high-value minerals. In order to complete this aspect of OOLITE MINING
COMPANY LIMITED marketing operations, the Company’s business executives will directly
contact well known gold and other high-value mineral wholesalers. As these buyers are
constantly searching for new gold and other high-value mineral sources, developing these
relationships will not be an issue. Additionally, the Company will make its presence known
among individual mineral land property holders and real estate agents that specialize in the
sale and placement of leases for land that is known to carry precious metal/mineral deposits.
Much like with the gold and other high-value minerals wholesalers/dealers, the Company’s
business executives will directly contact these individuals/real estate companies in order to
develop mutually sustainable and enduring working relationships.
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6.0 MANAGEMENT AND ORGANIZATIONAL PLAN

The management and organization of the Company is defined by two (2) structures: the
corporate organization structure (Figure 8) at the top and the field operations unit
management structure (Figure 9).

6.1 Corporate Organization

Figure 8: Overall Corporate Organization

Board of Directors

Directors

Senior Management

Operations Manager Administrative


Manager

Gold Mining Staff Accounting

Gemstones Mining Sales – Marketing


Staff

Administrative

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6.2 Operations Unit Management

Figure 9: High-value Mineral Field Operations Unit Management


High-value Minerals
Project Management

Sub-Project
Management

Bought Plant Logistics & Prospecting


Minerals Maintenance

Figure 10: Gold Field Operations Unit Management


Gold Project
Management

Sub-Project
Management

Mine Plant Logistics & Prospecting


Maintenance

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7.0 PROJECT OPERATIONS

7.1 Location

The first mining property to be considered for mining operations is located


approximately 5 km from Kilembe town/mines along the Kilembe-Kasese access road
in Kasese District of western Uganda. This property measures 350 acres in size.
Agreement between the property holder and OOLITE MINING COMPANY LIMITED
that was ratified on the 2nd April 2015.

Additional areas in Uganda being specifically targeted for acquisition mining


leases/concessions are located in Karamoja sub-region of north-eastern Uganda, and
Bundibugyo and Kabarole districts (Toro sub-region) of western Uganda.

In the Republic of South Sudan, the Company considers acquiring concessions and
concentrating its mining activities in Western Equatoria province in such places that
include but are not limited to areas around Yei, Maridi and Yambio where the
Company expects to mine for gold, diamonds, green garnet, and other gemstones.

Accessibility
The Kilembe area mining concession is located approximately 380 km (5 hours’ drive)
west of Kampala, the capital city of Uganda through the Kampala – Fort Portal main
road, and approximately 435 km (5 hours 40 minutes’ drive)from Kampala using the
Kampala – Mbarara – Kasese route. Access to the site using either of the two routes is
by paved road. The DR Congo border is about 66 km (56 minutes’ drive) to the west.

Local Resources and Infrastructure


Although there are good local resources and physical infrastructure in the area
surrounding the Kilembe property, this entire zone is still economically very poor with
cobalt mining & processing, artisanal mining works, and small-scale rural agriculture
being the only economic activities of note in the area; therefore a good level of
understanding and mutuality of co-operation between the local population and mining
companies is expected. Current administrative facilities consist of offices for local
government functions in Kasese town and other sub-county headquarters spread
around the district. An electric power line runs from Kasese town to Kilembe town and
its once-famous copper mines parallel to the road linking the two towns. Many skilled
and unskilled workers live around this zone. Basic food supplies and accommodation
can be obtained locally.
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7.2 Operation Description

Right now, there are not any available mineral processing plants in the Kasese-Kilembe
area to process the Mining district gold and high value mineral ore production, besides
the Kasese Cobalt Company Ltd (KCCL) cobalt mining and process plant near Kasese
town.

For this project, investments in explorations and development of the mines, as well as
the acquisition of equipment for the mine operation and the improvement of the
processing plant up to a capacity of 10 MTD, have been projected to guarantee the
proper operation of the mining business. The production levels are considered in: 5
MTD and 10 MTD during the first year and the second year respectively.

Figures 11 and 12 below are flow chart views of the gold mining and beneficiation
processes respectively that are common in the gold segment of the mining industry.

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Figure 11: General flow chart of the gold mining process

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Figure 12: General Gold Beneficiation and Process Flow Diagram

7.3 Machinery Requirement

The only machinery and equipment required is the highly-sophisticated 3D Ground


Scanner eXp 5000 Metal Detector that the Company will use in locating with high
precision and accuracy the treasure caches/hoards buried in the Rwenzori mountain
range on either side of the Uganda-DR Congo border, and also for prospecting for gold
and gemstone deposits in the areas being targeted for exploration of precious metals

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and gemstones in western Uganda, north-eastern Uganda, eastern DR Congo, and
South Sudan.

The price for this German-made high-precision ground scanning and metal detector is
US$ 50,000 and its specifications are provided in the next Section 8.0 of this business
plan.

7.4 Operating Margin

The operating margin by metric tonne (MT) differs in the bought mineral from the own
mineral, as the conditions of commercialization, as well as the operating costs change.

In both cases we consider the same prices projections:

Table 8: Gold Price Forecast


Price Forecast YEAR 0 YEAR 1 YEAR 2 YEAR 3
Gold (Oz) $1,194 $1,194 $1,194 $1,194

(I) Production

The production considers the bought mineral and own mineral treatment.

Table 9: Gold (Au) Production Targets


CONCENTRATES OF AU YEAR 0 YEAR 1 YEAR 2 YEAR 3
OWN PRODUCTION
MTD 5 10 10
MTA 1,680 3,360 3,360

MINERALS BOUGHT
MTD 5 5 10 10
MTA 1,680 1,680 3,360 3,360

TOTAL PRODUCTION
MTD 0.5 1.0 2.0 2.0
MTA 1,680 3,360 6,720 6,720

Legend:
MTD: Metric Tons/Day
MTA: Metric Tons/Annum

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(II) Product Value

The unit value by MT of bought mineral, own mineral and the annual turnover
generated are:

Table 10: Product Value


YEAR 0 YEAR 1 YEAR 2 YEAR 3
ORE VALUE (US$/MT)
Own Ore 419.58 419.58 419.58
Bought Ore 419.58 419.58 419.58 419.58

TOTAL ORE VALUE (US$) 704,894 1,409,789 2,819,578 2,819,578


Own Ore 0 704,894 1,409,789 1,409,789
Bought Ore 704,894 704,894 1,409,789 1,409,789

(III) Operating Costs

Unit costs (variable & fixed) by MT of mineral and the total annual costs are:

Table 11: Operating Costs


US$/MT YEAR 0 YEAR 1 YEAR 2 YEAR 3
OWN MINERAL COSTS 142.4 123.1 123.1
VARIABLE MINE COSTS 29.6 29.6 29.6
VARIABLE PLANT COSTS 20.8 20.8 20.8
FIXED MINE COSTS 53.0 53.0 53.0
FIXED PLANT COSTS 8.8 4.5 4.5
OTHER FIXED COSTS 30.2 15.2 15.2

BOUGHT MINERAL COSTS 344.2 327.5 308.1 308.1


PURCHASE COST 267.6 267.6 267.6 267.6
VARIABLE PLANT COSTS 20.8 20.8 20.8 20.8
(US$)
FIXED MINE COSTS (US$) 17.8 8.8 4.5 4.5
OTHER FIXED COSTS (US$) 37.9 30.2 15.2 15.2

TOTAL COSTS (US$) 578,175 789,349 1,448,717 1,448,832


Own mineral 0 239,232 413,616 413,616
Bought mineral 578,175 550,117 1,035,101 1,035,216

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The average purchase of bought mineral ore is:

Gold tenor g/t 12g


Humidity penalty (%) 2%
Metallurgical recuperation (%) 90%
Processing Fee (US$/MT) 50
Gold price (US$/Oz) 1,194
Management fee US$ 9
Average purchase value (US$/MT) 267.6

(IV) Operating Margin

The operating margin by MT of mineral (without including the depreciation and


amortization of intangible), are:

Table 12: Operating Margin


YEAR 0 YEAR 1 YEAR 2 YEAR 3
OWN MINERAL
Sale value (US$/MT) 419.58 419.58 419.58
Operation cost (US$/MT) 142.4 123.1 123.1
Operating margin (US$/MT) 277.18 296.48 296.48
Operating margin (%) 66.06% 70.66% 70.66%

BOUGHT MINERAL
Sale value (US$/MT) 419.58 419.58 419.58 419.58
Operation cost (US$/MT) 344.2 327.5 308.1 308.1
Operating margin (US$/MT) 75.43 92.13 111.51 111.48
Operating margin (%) 17.98% 21.96% 26.58% 26.57%

(EBITDA) Earnings before Interests, Taxes, Depreciation and Amortization are:

Table 13: Calculation of EBITDA


YEAR 0 YEAR 1 YEAR 2 YEAR 3
TURNOVER (US$) 704,894 1,409,789 2,819,578 2,819,578
TOTAL COSTS (US$) 578,175 789,349 1,448,717 1,448,832
EBITDA 126,720 620,440 1,370,861 1,370,746
Current gold market price (October 2015): USD 1,194.28/oz; 1 troy ounce = 31.10
grams weight of gold

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8.0 TECHNICAL DESCRIPTION OF EQUIPMENT

Metal detector with video eye-glasses

The Earth Imagers are the stars of our "FS - Future Serie". They can represent graphical
measuring results without using any additional computer. The large number of
optional accessories makes them our most individually adaptable devices. Every
customer can purchase only that what he needs for his purposes.

eXp 5000 main unit with video eyeglasses during operation in Russia

The Metal Detector

A metal detector helps you to locate objects which are buried under the ground. It is
used to find targets under the surface of the ground without the need to dig. A metal
detector can locate all type of metals like gold, silver, copper, aluminium, iron targets
and other valuable targets. The indication of a detected object can be via acoustical
signal, a digital display, an analog display, a signal lamp or an image or curve. The
metal detector eXp 5000 is a measuring instrument

A measuring instrument measures the anomalies of the underground. So it is possible


to locate buried objects, underground voids, water deposits or foundations which are
located under the ground. It is a measuring instrument of newest technology and has
been developed in particular for professional use. Through the supplied video
eyeglasses buried objects like boxes, pipes, metals but also cavities and grave chambers
under the surface becomes visible immediately. Furthermore the video eyeglasses are

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optimised for the search during the night and also protects against perturbing sunlight
at day.

Beschreibung 1 Beschreibung 2

Compact equipment and easy handling

The Earth Imager are high technology metal detectors with graphical representation of
the searched underground. The Earth Imager eXp 5000 includes an easily removable
control unit which makes it easier to use in different areas. With its compact equipment
the device is also easy to handle in terrains which are difficult to access.

Fast processing of measured data

The device allows measurements in brilliant resolutions. All recorded data is processed
immediately through the integrated pc-module and becomes visible through the video
eyeglasses. The size of any measurement is almost indefinite and only limited by the
storage capacity of 256 MB. All collected measured data can be transferred afterwards
to a laptop or personal computer to analyse the results professionally with the help of
the software program Visualizer 3D. Besides the measuring values additional
information like:

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 the date and time,
 the used antenna,
 the data of the GPS - Global Positioning System

GPS is a satellite based navigation system consisting of 24 satellites which permanently


transmit the position and time. By calculating the travel time of the signals GPS receiver
determine the position and velocity. In combination with a metal detector the position
of the current search field can be stored to be used for navigation at a later time. GPS
coordinates (if GPS has been activated) and

 the current measurement settings will be stored in every graphical representation


automatically. Date and time settings can be adapted individually to the actual
time zone.

Beschreibung 1 graphical representation of a grave

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Individual operating modes

The geophysical instrument and metal detector eXp 5000 supports different operating
modes which can be used for specific underground investigations. According to your
personal requirements one of the following operating modes comes into operation:

 Magnetometer

A magnetometer is a scientific instrument used to measure the strength and/or


direction of the magnetic field and their disturbances. So it is possible to locate buried
targets. Magnetometers are used in geophysical surveys to find deposits of iron because
they can measure the magnetic field variations caused by the deposits. Magnetometers
are also used to detect archaeological sites, shipwrecks and other buried or submerged
objects. Magnetic anomaly detectors detect submarines for military purposes. The
Magnetometer mode of FS Future Series devices mostly is used to locate ferrous objects
which are located near to the surface of the ground. This function is very useful to
eliminate small trash from the surface and in fact prepare the scan area for a
professional measurement in the Ground Scan mode.

 Ground Scan

Ground Scan is the operating mode where the searcher is able to receive a 3d image of
the underground by scanning an area. The searcher has to walk over the ground with
an antenna to scan an area. So it is possible to visualize the underground and its
anomalies. In the mode Ground Scan it is also possible to measure the position, depth
and size of underground objects or voids. Ground Scan (create colored representations
of the underground in 3D).

 Discrimination

Discrimination is the capability to distinguish between different types of metals such as


gold, silver, iron, aluminium and others. By the help of a metal detector with metal
discrimination you will be able to determine the exact type of material located under
the ground.

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Discrimination (Metal Discrimination)

Metal discrimination is the possibility to find out the type of metal which is buried
under the ground. There is a regulator on the antenna or device, which can be adjusted
on a specific type of metal like gold, silver, iron or aluminium. The metal detector filters
out all materials which you don’t like to detect. This feature prevents the treasure
hunter who is only searching for precious metals from useless digging. Some antennas
can discriminate between ferrous and nonferrous metals and other antennas can tell
you the exact type of metal. (metal discrimination : precious metals / base metals)

 Metal Detector

A metal detector helps you to locate objects which are buried under the ground. It is
used to find targets under the surface of the ground without the need to dig. A metal
detector can locate all type of metals like gold, silver, copper, aluminium, iron targets
and other valuable targets. The indication of a detected object can be via acoustical
signal, a digital display, an analog display, a signal lamp or an image or curve.

Metal Detector (Metal Discrimination)

Metal discrimination is the possibility to find out the type of metal which is buried
under the ground. There is a regulator on the antenna or device, which can be adjusted
on a specific type of metal like gold, silver, iron or aluminium. The metal detector filters
out all materials which you don’t like to detect. This feature prevents the treasure
hunter who is only searching for precious metals from useless digging. Some antennas
can discriminate between ferrous and nonferrous metals and other antennas can tell
you the exact type of metal. (metal discrimination : gold, silver, iron and aluminium)

 Live Scan ( live display of the underground )


 Thermograph ( measure differences in temperature )
 Thermo Scan ( create infrared images in 3D )

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mixed Gold and silver coins

The integrated GPS - Global Positioning System

GPS is a satellite based navigation system consisting of 24 satellites which permanently


transmit the position and time. By calculating the travel time of the signals GPS receiver
determine the position and velocity. In combination with a metal detector the position
of the current search field can be stored to be used for navigation at a later time. GPS
receiver refers every recorded measurement to its appropriate measured area. If you do
not know exactly where a measurement was performed, the metal detector eXp 5000 is
able to navigate you to the corresponding place.

Beschreibung 1 Beschreibung 2

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Optional accessories as specialization

With different antennas the metal detector eXp 5000 can be optimized on special
purposes:

 GPR-antennas ( 25 cm, 50 cm, 75 cm, 100 cm ) to scan the underground in 3D


 Tunnel Sensor ( antenna for tunnel and cavity detection )
 DDV system ( Antenna for Metal Discrimination
 Super Sensor for high resolution Ground Scan
 VLF emitters ( 4 pieces ) to optimize the measurement
 Livestream Sensor for live display of buried objects
 FS-Thermoscan to create infrared images in 3D

Beschreibung 1 Beschreibung 2

VLF emitter

By positioning the 4 VLF emitters onto the ground the search for metallic objects will be
optimised. In that way the scan images of the underground looks much better and
hidden objects are much easier to find.

Livestream Sensor

The Livestream Sensor shows hidden objects immediately. As soon as you move the
antenna over an object it will be shown in the video eyeglasses of the Earth Imager eXp
5000.

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Beschreibung 1 Beschreibung 2

Beschreibung 1 Beschreibung 2

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9.0 GOLD & GEMSTONE PROSPECTING AND TREASURE-HUNTING

9.1 Prospecting Gemstones and Gold

Gemstones are highly collectible minerals. Many people use them for jewelry; others
assemble them in a display case. Only crystalline gemstones are considered minerals
(an inorganic naturally occurring substance with distinct chemistry). While a metal
detector itself won’t target gemstones, an entire category of detectors is designated for
gold prospecting. Gold is often found with other precious and metal-bearing minerals,
including iron. These are called indicator minerals. Among the indicator minerals likely
to be encountered with gold are Quartz, Magnetite, Garnet, Corundum (Sapphire),
Emerald and (happily) Diamonds. So, it is indirectly that your metal detector will lead
you to gemstones.

With the right tools and knowledge, a gold and gemstones prospector like OOLITE
MINING COMPANY LTD. can find gold pieces, gold veins, gold shavings and gold
nuggets. With the rising price of gold today, people can make a career out of
prospecting gold with a metal detector and selling their finds.

9.2 Steps in Treasure-Hunting

Step 1: Separate Fact from Fiction

The first step on any treasure hunt is to try and separate truth from folklore. Many
rumors and legends about underground treasure caches, or hoards, are based on some
factual details. Throughout history, people have buried their valuables out of greed or
in fear of advancing armies and other marauders, hoping to someday return and
reclaim their treasure. Even today, this practice is not uncommon.

So, before you invest in equipment or travel great distances, do as much research as
possible beforehand. Look for any clues that may have been written down or passed
down verbally from generation to generation. Keep a record of even small details; they
may come in handy later.

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Step 2: Determine How Deep the Treasure is Buried

The second step is to determine, based on field research, how far down the treasure is
located. Frequently, individuals bury treasure far beneath the earth in large containers.
Some of the largest hoards recovered to date have been found using deep penetrating
metal detectors.

If searching for gold or other precious metals that are buried deeper than one meter, a 2-
box metal detector is needed. Unlike traditional coin detectors, which are made to find
smaller individual items, a ground two-box metal detector can penetrate the earth using
special search coils that transmit signals. Once the signal reaches the treasure, it bounces
back to the metal detector, which pinpoints the location.

Until recently, deep-detecting metal detectors could not identify the type of buried
metal. However, with the advent of newer technologies, such as the OKM brand 3D
Ground Scanner eXp 5000 Metal Detector, it is now possible to identify the type of
metal in the ground.

Step 3: Pick the Right Deep Seeking, 2-Box Metal Detector for You

When it comes to picking out a deep-searching, 2-box metal detector, take the time to
select the best unit you can afford. This investment can provide big returns. A basic unit
of the high-tech 3D Ground Scanner eXp 5000 Metal Detector goes for US$ 50,000.

9.3 Finding Buried Treasure Boxes/Caches and Hoards

Treasure chests, caches and hoards of gold… are they really out there? Can they
actually be found? Movies such as National Treasure can inspire any enthusiast to take
off on an adventure to locate a buried war chest or hoard of gold coins. But the reality
and logistics behind actually locating a hidden treasure cache can take the wind out of
anyone’s sail. With greater rewards come greater difficulty and the necessity to have
more sophisticated metal detecting equipment. But, if you have your heart set on cache
hunting—you’ve picked the right time to embark upon this hobby. Today’s advanced
metal detectors are capable of finding deep caches that went undetected by the best
treasure hunters decades ago.

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9.3.1 People Hid their Valuables out of Necessity

When you think about it, it makes sense that people buried their valuables. There were
no banks hundreds of years ago, and it was unsafe to leave money or gold lying
around. Some cultures buried heirlooms as an "offering." Others, like an Indian tribe
that resided in the Rocky Mountains, were uprooted and forced to leave their
homeland. They left behind caches of coins and other treasures which they planned to
recover later.

Some historians and detectorists say there are treasure caches hidden throughout the
world. These caches come in many forms: iron boxes filled with gold or jewels, jars
filled with silver coins, a tobacco tin filled with bills, any type of container stashed with
valuables or just a big hole hastily dug to hide loot from a robbery. Remember—
anything is possible. There are many reasons people stashed their money and
belongings. Rumor has it that in some parts of East Africa: the colonialists (especially
the Germans) hid treasures like the German Duss Cooking Stove, Ironing Boxes and
other items containing substantial quantities of the very highly priced red mercury
material in hard-to-reach caves and mountain hide-outs for safe-keeping. It was meant
to be left for future generations and to preserve the items. Now, after more than a
century some of these caves and mountain hide-outs are being discovered. They are
ripe for the picking with a highly-sophisticated and sensitive ground scanner/metal
detector. Renowned author, metal detector designer and expert detectorist Charles
Garrett says, "There are literally millions of dollars stashed in the ground waiting to be
found. If you persist, sooner or later you will hit a cache. It may only be a few hundred
dollars (e.g. gold coins). Then again, some treasure hunters have become quite wealthy
from pursuing treasure caches."

9.3.2 Steps for Finding Hidden Treasure Caches and Hoards

Hunting for a treasure cache is much different than searching for individual coins,
jewelry or relics. Not only does it require the use of different equipment and techniques,
there is need to know where to look! Finding a deeply buried container doesn’t usually
just happen on a leisurely afternoon hunt. Cache hunters conduct extensive research
before they decide which equipment to use or where to begin their search. If you’ve
ever seen a treasure map before, you’ve noticed landmarks and terrain markers. Even
geo-cachers have GPS coordinates to go by.

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So, where do you start when searching for a treasure cache or hoard? Some of the
treasure sites in Uganda have already been identified by the land owners of the
locations where they are positioned. Treasure sites in Uganda as a rule-of-thumb
contain the red mercury substance in substantial quantities which may be up to several
Coke-zed bottles within a single treasure box/trove. Since red mercury has strong
radioactive properties, the presence of such treasure caches can easily be detected from
the surface through the radioactive emissions that they continuously emit to the surface
and other related physico-chemical characterization indicators. It may even behoove
you to seek out people who know about "said" treasure to find out what they know.
Some cache hunters actually pay for information and leads; others offer a percentage of
the cache.

Other factors to consider for the successful recovery of a buried treasure cache or hoard
include:

 Geographical location and ground condition of the treasure site


 Mineral content of the soil
 Size of the cache- how large or small
 Depth of the cache
 Changes that may have occurred at the site since the cache was buried. (It may
not look like the description written long ago. Changes in trees, vegetation,
erosion and sedimentation are all possible)
 Most suitable detector and search coil for locating the cache

Some cache hunters spend years compiling information before they set out in search of
the prospective treasure. Others have the means and the knowledge to launch their
search within just weeks or months of acquiring a solid lead. Regardless of the
inspiration behind the treasure hunt, it is necessary to spend as much time as possible
researching and preparing, so that the search will be successful.

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10.0 FINANCIALS

10.1 Underlying Assumptions

 The Company seeks US$ 50,000 in funding from a local mining investment
partner to develop the business.
 The required US$ 50,000 will be used to kick-start the business by acquiring a
sophisticated ground scanning metal detector to pinpoint with high accuracy and
precision the location of gold deposits and treasure caches/hoards/boxes in the
Company prospecting area.
 OOLITE MINING COMPANY LIMITED will have an annual revenue growth
rate of 100% in Year 1 and Year 2 and then remains even for Year of the business
plan.

10.2 General Assumptions

Table 14: General Assumptions


Year 1 2 3
Short-Term Interest Rate 22.0% 22.0% 22.0%
Long-Term Interest Rate 20.0% 20.0% 20.0%
Uganda Corporate Tax Rate 30.0% 30.0% 30.0%
Personnel Taxes 15.0% 15.0% 15.0%

10.3 Sensitivity Analysis

In the event of an economic downturn, the business may have a decline in its revenues.
In an economic recession, the demand for gold decreases as people will have less
discretionary income. However, in today’s economic climate, inflation has become a
serious concern, and investors have driven up the per ounce price of gold substantially
as a safe investment to hedge against inflationary risks. As such, the business should
have very few issues regarding top line income.

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10.4 Financial Summary

Table 15: 3-Year Projection Financial Summary


Investment : Required: US$ 50,000
- Invested: US$ 240,000
(US$ 140,000 Fixed Assets; US$ 100,000 Working
Capital)

Sales volume estimated (Year 3): US$ 2,819,578


Total Operation Cost (Year 3): US$ 1,448,832
Net Income (Year 3): US$ 1,370,746
Self-sufficiency: Sustainability with Margin: EBIT Margin: 47.54%
the implementation of After tax EBIT:
several concessions 32.78%
Expected Results: Economic: NPV US$ 1,673,922 IRR 60%
Financial: NPV US$ 1,802,503 IRR 200%

10.5 Financing Programme

The mining project will seek a mining investment partner to partner with or a capital
financier to facilitate 100% of the required capital funding.

The period of execution of the investment is of 10 months, canceling the interests of the
loan during the period of investment.
The conditions of financing are as follows:
- Debt: US$ 50,000.00
- Interest Rate: 20% annual
- Time: 3 years

The charges that the mining project is subject to, as current debt, are displayed in Table
16 below:

DEBT AMOUNT US$ 50,000.00


Pre-Operating Interests US$ 10,000.00

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Table 16: Debt Service Schedule
Year Financial Cost Annual Total Debt Debt Balance
(20% p.a.) Repayment Service (US$) (US$)
(US$)
0 10,000 0 10,000 10,000
1 10,000 16,000 26,000 50,000
2 6,800 17,000 23,800 34,000
3 3,400 17,000 20,400 17,000

10.6 Expected Results

The projected results that show the economic capacity of the project are reflected in the
generation of revenue and availability of funds in Table 17 below.

Table 17: Projected Net Income Statement


US$ YEAR 0 YEAR 1 YEAR 2 YEAR 3
Turnover 704,894 1,409,789 2,819,578 2,819,578
EBITDA 126,720 620,440 1,370,861 1,370,746
Depreciation 0 5,000 5,000 5,000
EBIT 126,720 615,440 1,365,861 1,365,746
Interest 10,000 10,000 6,800 3,400
EBT 116,720 605,440 1,359,061 1,362,346
Taxes and deductions 35,016 181,632 407,718 408,704
NET INCOME 81,704 423,808 951,343 953,642

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10.7 Cash Flow Present Value

Table 18: Cash Flow Present Value


US$ YEAR 0 YEAR 1 YEAR 2 YEAR 3
Investment -50,000 -170,000 0 -100,000
EBITDA 126,720 620,440 1,370,861 1,370,746
Taxes and Deductions -35,016 -181,632 -407,718 -408,704
Free cash flow (economic) 41,704 268,808 963,143 862,042
Debt 50,000 0 0 0
Debt Payments + Interest (Year 1) -10,000 -26,000 -23,800 -20,400
Free cash flow (financing) -3,000 -7,800 -7,140 -6,120

NPV IRR (%) NPV/Investment


ECONOMIC EVALUATION 1,673,922 60% 1.41x
FINANCIAL EVALUATION 1,802,503 200% 1.52x
MAIN ASSUMPTIONS Weighted Average Capital Cost 20.0%
Shareholders Capital Cost 30.0%

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11.0 COST-BENEFIT ANALYSIS FOR MINING PROJECTS

Economic Impact Assessments in mining deal with the evaluation of potential impacts
of a particular project on the economic environment of the receiving area. It analyses
potential changes in production output, Gross Value Added, and employment during
all relevant life-cycle phases of the proposed mining project (i.e. construction,
operations, closure, land-use after mining). More specifically, EIA assesses the way in
which the direct benefits and costs of a proposed project affect the local, regional, or
national economy.

The intervention can be in the form of new investment in infrastructure, new


development, adoption of a new policy or services, expansion of current operations, etc.
The types of economic impacts can be:

 Positive can include the creation of additional jobs, generation of business sales
and value-added, improved quality of life, increase in disposable income, and
growth of government revenue in the form of taxes and royalties.
 Negative, through the loss of foregone alternative livelihoods/business activities
(e.g. change in land-use from agriculture to mining, loss of future tourism
potential) and negative social and environmental externalities2.

Assessment of economic impacts requires knowledge of expenditure on the


construction of the mine and operating costs borne once mining commences.
Conversion of these input data into economic impacts is done by using an econometric
model. For the model to be considered valid, all the various assumptions must be
adhered to and it is essential that the data required be as precise as possible, since the
quality of the model’s output is directly related to the quality of the data inserted into
the model.

An intervention into an economy (on any scale) not only creates direct benefits to the
investor, but has spill-over effects on the other economic agents. These spill-over effects
could be positive or negative. As illustrated in Figure 13 below, three types of economic
impacts are generally assessed:

2Ineconomics, an externality is a cost or benefit which affects a party who did not choose to incur that
cost or benefit.

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 Direct economic effects 3 are generated when the new business (e.g. mining
project) creates new jobs and purchases goods and services to operate the new
facility. Direct impact results in an increase in job creation, production, business
sales, and household income;
 Indirect economic effects occur when the suppliers of goods and services to the
new businesses experience larger markets and potential to expand. Indirect
impacts result in an increase in job creation, Gross Geographic Product (GGP),
and household income; and
 Induced economic effects represent further shifts in spending on food, clothing,
shelter and other consumer goods and services as a consequence of the change in
workers and payroll of directly and indirectly affected businesses. This leads to
further business growth/decline throughout the local economy.

Economy-wide impacts refer to the sum of the direct, indirect and induced effects.

3Direct impacts include initial and first round impacts. Initial impact: This is the change in a final demand
component which occurs or is assumed, for example, a USD1 billion capital investment in a project, or
additional operational expenditure on a sectors output. First round effects (also referred to as first order
effects): These effects are the changes in business activity and production occurring as a direct
consequence of a project (initial impact). These include the impact of sectors required to produce more to
meet the demand from the project. For example, constructing a mining plant will create a need for brick,
mortar, steel, machinery and so on, so the other sectors in the economy need to supply these materials.
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Figure 13: Impact of capital investment and operational expenditures

Capital investment/Operational expenditure

Production of sector Employment of the sector

Direct impact

Equipment, supplies,
services, etc. Household goods

Production Employment Production Employment

Indirect impact (related business Indirect impact (business benefitting


Household
upstream and downstream) from household expenditure)
goods

Economy-wide positive social benefits


 Increased income
 Improved quality of life
 Skills development

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PROSPECTING FOR PRECIOUS MINERALS & TREASURE-HUNTING BY OOLITE MINING CO. LTD.
12.0 CONCLUSIONS

 The required start-up capital investment for the gold and other high-value
minerals prospecting and mining projects is only US$ 50,000.00
 The economic results, as well as the availability of funds projected are positive in
all of the projected periods.
 The company on both projects has a consolidated NPV of US$ 1,802,503.00, five
times the total investment and an IRR of 60.08%.
 However, the returns will be much higher than the projections in this business
plan if the indeterminate market value of the treasure box contents is factored in.
The market value of the treasure box items will be determined by the net weight
and prevailing market rate of the very high value minerals found inside them.
 The figures reveal the financial feasibility of OOLITE MINING COMPANY
LIMITED through its projections; international gemstone and gold prices
encourage the results. However, the costs can be managed in order to create the
revenues expected.
 The company needs to increase its resources on the properties by engaging in
consistent and continuous future prospecting and exploration activities.
 At the present time, OOLITE MINING COMPANY LIMITED has a mining
property measuring 350 acres near Kilembe town in western Uganda with
substantial high-value mineral deposits (vide attached Agency Agreement).

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PROSPECTING FOR PRECIOUS MINERALS & TREASURE-HUNTING BY OOLITE MINING CO. LTD.
APPENDIX 1: MINING SECTOR LICENSING REQUIREMENTS

ISSUING AUTHORITY LICENSE


Department of Geological Surveys  Prospecting License
and Mines (DGSM)  Exploration License
 Location License
 Mineral Dealers License
 Mining Lease
 Environmental Impact Assessment /
Environmental Audits
 Goldsmith’s License Permit to export
minerals
 Permit to import minerals

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