Summary
After two year detailed exploration of 130 hectares mining area rich in emeralds, a total of three production wellheads are constructed - #1 & #2 are shafts, and #3 is open-pit.
The infrastructure has been completed, including construction of the mining area with access road & bridge, offices, cafeterias, dorms, explosives warehouse, emerald rough selection & washing, cutting & polishing process.The project is ready for operation and production.
No Longer Available
Location and Access
Rural-Mirangaba-BA, Brazil
Description
Project Brief financial analysis
The emerald mine held by the company is rich in reserves and the product quality is very good. It is a rare high-quality emerald mine in the world.
For details, please see the exploration report. Since the current mine construction is basically completed, the infrastructure basically does not need to be reinvested, so the financial analysis only calculates the production cost, sales price and profit. In addition, the sale of emeralds in US dollars is a world-recognized pricing method, so the depreciation of the Brazilian currency is a positive factor for the company.
Calculated at normal production speed, the company has two shafts, which are expected to produce 10,000 carats of emeralds per year. The gemstones are cut and polished, and the products are emerald bare stones, which are directly sold to large jewelers.
Sales revenue:
Special grade: 10,000 carats x 10% x ($10,000/carat to $30,000/carat) = $10 million to $30 million
First grade: 10,000 carats x 10% x ($7,000/carat to $10,000/carat) = $7 million to $10 million
Second grade: 10,000 carats x 15% x ($5,000/carat to $7,000/carat) = $7.5 million to $10.5 million
Third grade: 10,000 carats x 25% x ($3,000/carat to $5,000/carat) = $7.5 million to $12.5 million
Fourth grade: 10,000 carats x 15% x ($1,500/carat to $3,000/carat) = $2.25 million to $4.5 million
Fifth grade: 10,000 carats x 25% x ($500/carat to $1,500/carat) = $1.25 million to $3.75 million
Total annual sales revenue: $35.5 million to $71.25 million
Cost of production:
Labor costs 700,000 US dollars / year + mine costs 300,000 US dollars / year = 1 million US dollars / year
Sales expense:
Long-term and stable wholesale clients, no sales expenses
Management costs:
500,000 USD / year
Unforeseen expenses:
500,000 USD / year Tax (export tax + certificate of origin): 2 million US dollars (production cost + sales expenses + management fees + unforeseen expenses) x3% = 60,000 US dollars
Production cost + sales expense + management fee + unforeseen expenses + tax = $2.06 million
Annual profit:
$35.5 million - $2.06 million = $33.44 million
$71.25 million - $2.06 million = $69.19 million
Total annual profit: between $33.44 million and $69.19 million
Emerald prices have increased by 10%-15% per year in the past five years
Geology
Geology Report available upon request
Additional Information
List of main property equipment:
1. emerald mining rights (permanently held under Brazilian law)
2.130 hectares of land (the total area of the mining area is 500 hectares, the company has bought and owned the land of all the 130 hectares )
3. Two sets of underground mining shaft systems (including the construction of two wellheads, lifting drainage ventilation systems,
wellhead houses)
4. Emerald gem sorting system
5. Office,canteen and staff dormitories
6. explosive magazine
7. power supply equipment
8. Equipment tools currently in normal production (including cars, forklifts, etc.)
