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Venga Aerospace Systems Inc.

November 3, 2010
Suite 803 – 121 Richmond Street West
Toronto, Ontario, Canada M5H 2K1 All rights reserved!
Phone: 514-489-7175

The Most Powerful Name In Corporate News and Information

With The Increase In The Price Of Gold, Venga Aerospace Systems Inc. Chose The Right
Time To Diversify And Venture Into A Project In Liberia While Also Maintaining A 30%
Interest In Their 3D Photo Processing Business, Which Is Also A Business On The Rise
famed Snowbirds aerial demonstration Mr. Kwinter: Initially, the mandate of
squadron. The Company’s 3D imaging Venga was developing and marketing a
unit holds a 30% interest in a U.S. based fully composite jet fighter plane known as
joint venture that was created to provide a the TG-10 Brushfire. The program ran
range of advanced 3D imaging products into trouble in 1998, when, as a result of
and services for both the consumer and a fire, we lost the prototype of our air-
commercial marketplaces. Venga also craft. This event and the ensuing 5 year
owns a 20% interest in Global Mineral period it took to settle the litigation that
Investments Inc. LLC, ("GMI") a U.S. arose from the destruction of the plane
private corporation which was granted required management to look for another
Class 'B' Gold Mining and Export Li- business opportunity in a high tech field
cences by the Ministry of Lands, Mines that we could work and develop. In late
and Energy of the Republic of Liberia for 1999, we identified and created what was
four concession each comprising ap- then an advanced 3D graphic business:
Business Development proximately 900 square acres located in Deep Focus Art which provided 3D prod-
(VAV-TSXV) the Sanquin Mining Zone, Sinoe County ucts and services to the consumer and
in the Republic of Liberia. The company commercial marketplace. Eventually this
also holds an option to increase its own- business unit was sold to an American
ership interest in GMI to 25%. GMI, based joint venture of which the Com-
which commenced its Liberian dredging pany still retains a 30% interest in. With
and land based mining operations in June the prices of commodities reaching new
of 2009, temporarily suspended mining levels, management in 2007 also decided
operations in late July, 2009 as a result of to make an investment in the mining
the onset of the Liberian rainy season. business, with the Company securing a
GMI's Liberian gold mining operations 20% interest in a gold mining operation
were resumed in November 2009, when in Liberia, which has been in production
Hirsh Kwinter initial set up and dredging activities were in the Sanquin Mining Zone, Sinoe
President re-commenced at GMI's Dugbe River site. County, Liberia since June of 2009.
In February of 2010, GMI signed a letter While the current mining operation is a
Company Profile: of intent with RAM Consulting Group of water based dredging operation in the
Venga Aerospace Systems Inc. is a pub- Charlotte, North Carolina to raise $12 Tartweh River System it was initially our
licly held company based in Toronto, million dollars to fund GMI's planned intention to start a land-based operation.
Canada, whose shares are traded on the land based mining operations at GMI's The logistical obstacles, the amount of
TSX Venture Exchange under the symbol Kumasi Hill project in Sinoe County, capital required and start-up costs of our
"VAV". The Company operates or holds Liberia. proposed land based operation were so
interests in three separate business units: significant that the Liberian Ministry of
aerospace; 3D imaging and gold mining Interview conducted by: Lands, Mines and Energy strongly en-
in West Africa. Venga’s aerospace divi- Lynn Fosse, Senior Editor couraged us to start our initial mining
sion was engaged in the development of a efforts with a more scaled down dredging
full scale, composite jet drone/aircraft operation. We adopted this advice and
known as the TG-10 Brushfire and has CEOCFO: Mr. Kwinter, Venga is clearly commissioned a company in California to
made a formal proposal to the Canadian more than just aerospace company these build a custom dredge for us which we
government to supply replacement jet days; what are you currently doing? shipped over to Liberia. We were re-
aircraft for the Canadian Armed Forces’ quired to build a road that would provide
access to our concession areas, but once fense to help and support our proposal to ment awaiting a final decision. In the
we built the basic roads we were able to replace the Snowbirds' aging fleet of air- event they gave us the go ahead, we
set up the dredge and start dredging the craft. Our proposal, together with other would have to identify alternate aircraft,
rivers that our geologists and field man- competing proposals from other major since the Hawk aircraft that we had op-
agers had identified as most promising. aerospace providers, is still sitting before tioned, has now been sold to the Finnish
the Canadian government. To use their government. So we have to identify other
CEOCFO: Is the aerospace division own expression, the Canadian Govern- suitable aircraft that are in the market
active? ment has now completed internal ‘apples and find a major service provider to
Mr. Kwinter: Right now our aerospace to oranges’ comparisons of these compet- maintain these aircraft for us. That is
division has made an unsolicited proposal ing proposals. We believe our proposal is where that Snowbirds' aircraft proposal
to the Canadian government, to replace one of the best, with the real 'kicker' be- stands. The Company has made an an-
the Canadian Armed Forces’ famed ing that ours was not going to cost the nouncement that it is holding our original
Snowbirds, aerial aerobatic team's current Canadian government any additional proposal in abeyance until some positive
fleet of aircraft. The Snowbirds are cur- money over what the Canadian Govern- feedback from the Canadian government
rently flying CL-41Tutor aircraft which ment was currently expending on the is received.
are more than 40 years old. In fact, I be- Snowbirds' program. We were going to
lieve the Canadian Armed Forces is the lease the newer Hawk aircraft to them on CEOCFO: How involved are you with
only air force that is currently flying and a turnkey operation. ARINC was going to 3D?
operating these venerable but antiquated provide ongoing service for the aircraft Mr. Kwinter: The Company is actively
aircraft. Venga came up with involved in the field of ad-
what Management thought was We are in a unique situation here where we vanced 3D graphics. Venga is
a very creative option. We had have a clean balance sheet, we have operating a 30% interest holder in an
identified eighteen much accounts payable and we have no long term active joint venture that was
newer, higher performing debt. Our share price is the same price it was created to market and sell a
Hawk MK 66 fighter planes
when we had nothing, when we didn’t have any range of 3D products and ser-
that were owned by the Swiss vices for both consumer and
government but were not using. investments. Today, however, we now have ac- commercial applications. For
We were able negotiated a very tive businesses in both gold and 3D and I think accounting and legal purposes,
favorable option on these air- you will agree that 3D is a buzz word today… we have no management rights
craft and a substantial quantity While we have a good and diverse mix between with respect to this 3D joint
of replacement parts. Though what we see as growing markets: gold and 3D, venture. This is done for many
these optioned aircraft had been reasons. First, if we had man-
initially developed and built by
our share price does not reflect these opportuni- agement we would have ac-
British Aerospace, the planes ties. When we didn’t have any of these busi- counting/reporting issues im-
contained U.S. designed avion- nesses we were selling at a higher price, so it is posed on the Company that
ics and support systems which an opportunity. - Hirsh Kwinter would have made our involve-
in turn required Venga to ob- ment onerous if not impracti-
tain U.S. State Department clearance to within the existing budget limits that the cable. That being said, we are actively
complete the planned purchase of the Canadian Government were expending to involved in the 3D business in the sense
aircraft. Though Venga is a public com- fly the much older Tutor aircraft that the of promoting, making introductions, act-
pany and was the planned purchaser of Snowbirds are currently flying. However, ing as consultants and attempting to de-
these aircraft, it was necessary for the we have yet to receive a decision with velop new products and services in the
senior executives of the Company to ob- respect to our proposal. As a result of the rapidly expanding field of 3D imagery
tain clearances from the U.S. State De- time delays that it has taken for the Ca- and technology. Our new 3D joint ven-
partment to complete the purchase which nadian Government to come to a decision ture, which is based in Houston, Texas
clearances were ultimately secured. Our and the amount of money that was put has purchased specialized 3D
proposal to the Canadian government was into the proposal by both ARINC and print/processing equipment which is
made in conjunction with and supported ourselves, ARINC was forced to with- unique in North America. We have the
by a major, multi - international aero- draw from the program. Another factor in capabilities of producing high resolution
space company, ARINC Incorporated the ARINC decision to withdraw was that 3D hard copy images and 3D images
which is most noted for designing and ARINC was going through an acquisition from both analogy and digital 3D cam-
installing standardized radio communica- by the Carlisle Group, which is one of the eras. There are hundreds of thousands of
tion systems in major airports across the largest private equity groups in the world. analogy or filmed based 3D cameras in
globe. This major and renowned aero- After purchasing ARINC, the Carlisle the marketplace whose owners have no
space company joined and fully supported Group made the decision that they were North American based production facility
our proposal. They repeatedly came to going to disband that company's aircraft which can print their images. While this
Ottawa with us and met with various lev- maintenance division. That being said we analog based source was the initial mar-
els of the Department of National De- have not pulled our proposal, which is ket that we had targeted, we are entering
still sitting before the Canadian govern-
the digital age and we are now in the in the past and they began scouring the raise money for a land based operation,
process of attempting to secure a promi- countryside looking for possible conces- where we can move and process a lot
nent place in this ever expanding market sions that should be retained. Once we more earth and ultimately recover higher
where we can hopefully provide an excit- identified areas that were of interest to us, levels of gold using heavy equipment. In
ing line of 3D products and services for preliminary testing and assays were con- the gold business it comes down to how
the digital marketplace. ducted to assess the potential levels of many ounces of gold per tonne you are
mineralization. This field work and test- recovering. Obviously, the more tonnes
CEOCFO: What special knowledge does ing allowed us to identify 4 concessions you are able to move, the more gold you
the company have that would lead some- that were of interest to us. Once we were are going to produce. We signed a letter
one to believe you made a good choice in able to secure those concessions, we de- of intent with a company out of Charlotte,
the areas you have chosen to invest in? cided to organize and start as quickly as North Carolina, RAM Consulting, and
Mr. Kwinter: Part of it is diversification. possible a fully operational dredging op- they are in the process of trying to raise
Part of it is serendipity. When we went eration. Carrying on any business, let $12 million for us for a land based opera-
down to New Orleans to speak to the in- alone a mining operation, in any part of tion.
vestors who ultimately did make a private Equatorial West Africa is a challenge.
placement allowing us to purchase our The devastated state of Liberia's economy CEOCFO: Do you find it is loosening up
current 3D production equipment, one of and infrastructure only makes that gen- a bit for the gold investments?
the brokers who helped make introduc- eral challenge even greater. Problems Mr. Kwinter: Money is tight right now
tion to investors was Jon O'Regan who such as no electricity, no running water, in general, but there are many ways of
had been in mining operations in Liberia severe climatic conditions and lack of raising money. You can go after strategic
before that country's devastating civil access to our chosen areas of operation investments, where entities have a man-
war. The civil war forced Jon, like most made our proposed mining operation very date to help developing countries and are
businesses, to close operations and leave difficult. Our concessions are in an inac- implementing a broad range of assistive,
the country. When the civil war ran its cessible part of the country where we had investment and development funding
course and the Harvard University trained to build our own roads. In should be programs to help these targeted countries'
Ellen Johnson Sirleaf came into power as noted however, that we are going after economic development. You also have
the new president of Liberia, the Liberian alluvial gold, which is gold deposits that those ever present venture capitalists
government made every effort to attract are random in the earth. We are not go- looking for promising and diversified
U.S. based companies to return to the ing after bedrock. Bedrock mining re- investments when traditional areas such
now shattered country. Jon O'Regan was quires a significantly larger amount of as real estate are not as attractive as be-
invited by the Liberian government to start up time, heavy equipment, man fore. I can say from our experience when
return and re-commence his mining op- power and thus capital than our planned we tell them we have an operating and
erations and help provide work for the dredging operation. The fastest, most active gold operation, this peaks their
now 80% of the Liberian working popula- economical way to get into immediate interest. So if I had to choose one area to
tion that was unemployed. We started to production was to start dredging. That is try and raise money in these uncertain
discuss with Mr. O'Regan Venga becom- what we have done and we have found times, I believe a project related to gold is
ing involved in a Liberian gold mining gold. Granted, we haven’t found as much among one of your best chances to raise
operation that he was considering re- gold as we were hoping to, but our recov- money.
creating. Management thought that this ery levels to date should, in our opinion,
was a unique opportunity. Commodities, be viewed as a proof of concept. This CEOCFO: And Africa is an up and com-
especially gold, was an area where you season we recovered approximately 38 ing area!
want to be in, since most commodities ounces of gold with the previous season Mr. Kwinter: Africa, and especially Li-
had seen a precipitous rise in prices. seeing us finding a little less. But it's all beria. There are very few areas of the
When we started talking to John O'Regan part of the learning curve. Our crews had world that have alluvial gold that have
about Venga's participation in a possible to learn how to use our new equipment not been exploited. Liberia has not been
Liberian based gold operation, our projec- and our divers had to learn how to iden- exploited. The area we are in is basically
tions were based on gold trading between tify those parts of the river that could virgin territory. All the easily accessible
$600 and $900 an ounce. Since then gold promise the greatest return. We are quite gold in the world, like oil, has been
is now trading at world record highs in excited that we have found gold. There largely identified and heavily mined.
the $1350 an ounce range. While we are mining companies that spend millions Now you have to go after areas where
never anticipated gold going this high, I of dollars on exploration looking for gold. gold is much deeper in the ground and
thought it was a good diversification, if We have already found it and it is our much harder to get at and the cost of pro-
not a unique opportunity, because the belief that if there is gold in the river duction is much higher. Liberia is a
Liberian government was fully and there will be gold on the surrounding unique opportunity, rich in many re-
demonstratively supportive of the pro- lands because the gold in the river repre- sources, that for many reasons, including,
posed project. So Mr. O'Regan went to sents the gold that washed into it over the and obviously recent political ones, has
Liberia and reconnected with some of the millennium through erosion on the sur- not been exploited. So we look at our
geologists and people that he worked with rounding lands. We are now trying to
Liberian gold mining operation as a po- sions, we can confirm that there is inter- Company. We can’t be more in line with
tentially huge opportunity for us. est because it is a growing, if not hot, the shareholders and we couldn’t be more
business. So we view 3D as a potentially committed. The people working at Venga
CEOCFO: Why should potential inves- growing business. As well, many com- are skilled and the very fact that we were
tors be interested in Venga? modities, such as gold, are in high de- able to structure these deals whether it
Mr. Kwinter: From an investor’s point mand. This demand and pricing strength was with the Canadian, Liberian or Swiss
of view, they are always looking to get in is reflected by the current high price of governments, the US State Department or
at the bottom; everybody wants to adopt gold which some market experts are pre- with major international companies like
the tried and true axiom of buying low dicting may reach $1,500 an ounce, if not ARINC, we have been able to get their
and selling high. We are in a unique higher, in the near future. So gold is a approval and backing. It is an opportunity
situation here where we have a clean bal- good area to be in also. While we have a in that respect. Nevertheless, despite the
ance sheet, we have operating accounts good and diverse mix between what we potential that our business units may
payable and we have no long term debt. see as growing markets: gold and 3D, our have, as with all equity investments, there
Our share price is the same price it was share price does not reflect these oppor- are significant attendant risks that any
when we had nothing, when we didn’t tunities. When we didn’t have any of potential investor or current shareholder
have any investments. Today, however, these businesses we were selling at a must carefully considered prior to pur-
we now have active businesses in both higher price, so it is an opportunity. We chasing or otherwise dealing with our
gold and 3D and I think you will agree also have structured deals in such a way Company's shares including the financial
that 3D is a buzz word today. Recently, that we have no downside risk. We have viability of our various business units; the
Hollywood announced that they are pro- no further funding requirements in either Company's overall liquidity and our
ducing 26 3D movies next year and they of these business opportunities. We made Company's continuing ability to success-
have produced at least 22 this year. The a one-time investment in them which if fully meet and maintain the TSX Venture
largest all-time grossing film was a 3D they make money we partake in it and if Exchange's listing requirements. Any
film called Avitar. So 3D is not just a fad they lose money we have no further cash investment decision with respect to the
or curiosity anymore. All of the major TV investment/contribution obligations. So I purchase, sale or the continuing holding
manufacturers are coming out with their think that is a compelling story. and retention of our Company's shares
respective versions of 3D TVs. Toshiba should be fully and carefully discussed
announced that by the end of the year CEOCFO: Final thoughts, what should with a qualified financial adviser so that
(2010), they were going to launch a 'no people take away about Venga Aerospace all foreseeable risks can be canvassed and
glasses' 3D TV and Samsung and Sony Systems? considered. I would note that these risks
have also said that they have similar Mr. Kwinter: Present management takes are more fully discussed and reviewed in
technology. So 3D is an area that is grow- no salaries and thus can be viewed as our disclosure documentation.
ing and we are in the 3D business. We truly being in lockstep with the share-
are trying to find a strategic partner who holders. Even our joint venture partners
can help us market our product line. are major shareholders in the Company.
While I can’t discuss our ongoing discus- Everybody is trying to add value to the

Venga Aerospace Systems Inc.

Suite 803 – 121 Richmond Street West
Toronto, Ontario, Canada M5H 2K1
Phone: 514-489-7175